Exhibit 2(a)
ASSET PURCHASE AGREEMENT
AMONG
KENDLE INTERNATIONAL INC.
CLINICAL PHARMACOLOGIC RESEARCH, INC.
THOMAS S. CLARK, M.D.
E. STUART CLARK
AND
CHARLES T. CLARK
January 29, 2002
TABLE OF CONTENTS
PAGE
1. DEFINITIONS................................................................1
2. PURCHASE AND SALE OF ACQUIRED ASSETS.......................................7
(a) BASIC TRANSACTION......................................................7
(b) PURCHASE PRICE.........................................................7
(c) NET WORKING CAPITAL ADJUSTMENT.........................................8
(d) THE CLOSING............................................................9
(e) DELIVERIES AT THE CLOSING..............................................9
(f) ALLOCATION.............................................................9
3. REPRESENTATIONS AND WARRANTIES OF KENDLE..................................10
(a) ORGANIZATION OF KENDLE................................................10
(b) AUTHORIZATION OF TRANSACTION..........................................10
(c) NONCONTRAVENTION......................................................10
(d) CAPITALIZATION........................................................11
(e) SEC REPORTS...........................................................11
(f) BROKERS' FEES.........................................................11
4. REPRESENTATIONS AND WARRANTIES OF CPR.....................................12
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER......................12
(b) CAPITALIZATION........................................................12
(c) NONCONTRAVENTION......................................................13
(d) BROKERS' FEES.........................................................13
(e) TITLE TO ASSETS.......................................................13
(f) SUBSIDIARIES..........................................................13
(g) FINANCIAL STATEMENTS; NET WORKING CAPITAL.............................14
(h) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END......................14
(i) UNDISCLOSED LIABILITIES...............................................16
(j) LEGAL COMPLIANCE......................................................16
(k) TAX MATTERS...........................................................16
(l) REAL PROPERTY.........................................................17
(m) INTELLECTUAL PROPERTY.................................................18
(n) TANGIBLE ASSETS.......................................................21
(o) CONTRACTS.............................................................21
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(p) NOTES AND ACCOUNTS RECEIVABLE.........................................22
(q) POWERS OF ATTORNEY....................................................22
(r) INSURANCE.............................................................23
(s) LITIGATION............................................................23
(t) EMPLOYEE BENEFITS.....................................................24
(u) GUARANTIES............................................................25
(v) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.............................25
(w) CERTAIN BUSINESS RELATIONSHIPS WITH CPR...............................26
(x) DISCLOSURE............................................................27
5. [INTENTIONALLY DELETED]...................................................27
6. POST-CLOSING COVENANTS....................................................27
(a) GENERAL...............................................................27
(b) LITIGATION SUPPORT....................................................27
(c) TRANSITION............................................................27
(d) CONFIDENTIALITY.......................................................28
(e) KENDLE SHARES.........................................................28
(f) OPENING BALANCE SHEET AUDIT...........................................28
(g) WHITE PAPER...........................................................29
(h) NON-COMPETITION COVENANT..............................................30
(i) PAYMENT OF EXCLUDED LIABILITIES AND ASSURED LIABILITIES...............30
(j) CPR CASE REPORT DOCUMENTS.............................................31
7. CONDITIONS TO OBLIGATION TO CLOSE.........................................31
(a) CONDITIONS TO OBLIGATION OF KENDLE....................................31
(b) CONDITIONS TO OBLIGATION OF CPR AND THE SELLERS.......................33
8. REMEDIES FOR BREACHES OF THIS AGREEMENT...................................34
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................34
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF KENDLE......................34
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS.................35
(d) MATTERS INVOLVING THIRD PARTIES.......................................35
(e) DETERMINATION OF ADVERSE CONSEQUENCES.................................36
(f) [Intentionally deleted]...............................................37
(g) OTHER INDEMNIFICATION PROVISIONS......................................37
(h) LIMITATIONS ON INDEMNIFICATION........................................37
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9. TAX COVENANTS.............................................................37
10. TERMINATION..............................................................38
(a) TERMINATION OF AGREEMENT..............................................38
(b) EFFECT OF TERMINATION.................................................39
11. MISCELLANEOUS............................................................39
(a) NATURE OF CERTAIN OBLIGATIONS.........................................39
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS...............................39
(c) NO THIRD-PARTY BENEFICIARIES..........................................39
(d) ENTIRE AGREEMENT......................................................39
(e) SUCCESSION AND ASSIGNMENT.............................................39
(f) COUNTERPARTS..........................................................40
(g) HEADINGS..............................................................40
(h) NOTICES...............................................................40
(i) GOVERNING LAW.........................................................41
(j) AMENDMENTS AND WAIVERS................................................41
(k) SEVERABILITY..........................................................41
(l) EXPENSES..............................................................41
(m) CONSTRUCTION..........................................................42
(n) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES.....................42
(o) SPECIFIC PERFORMANCE..................................................42
(p) SUBMISSION TO JURISDICTION............................................42
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EXHIBITS
Exhibit A - Form of Note
Exhibit B - Escrow Agreement
Exhibit C - Financial Statements
Exhibit D - Form of Consulting Agreement
Exhibit E - Form of Non-Competition and Non-Disclosure Covenants
Exhibit F - Form of Opinion of Counsel to Kendle
Exhibit G - Form of Right of First Offer Agreement
Exhibit H - Form of Investor Letter
Exhibit I - Form of Registration Rights Agreement
Exhibit J - Form of Opinion of Counsel to CPR
Annex I Distribution of Purchase Price to CPR Shareholders
Annex II Allocation of Purchase Price
Disclosure Schedule Exceptions to Representations and Warranties
Concerning CPR
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into
this 29th day of January 2002 among KENDLE INTERNATIONAL INC., an Ohio
corporation ("Kendle"), CLINICAL AND PHARMACOLOGIC RESEARCH, INC., a West
Virginia corporation ("CPR"), THOMAS S. CLARK, M.D. ("TC"), CHARLES T. CLARK
("CC"), and E. STUART CLARK ("EC") (TC, CC, and EC, collectively, the
"Sellers"). Kendle, CPR and the Sellers are referred to herein collectively as
the "Parties".
R E C I T A L S:
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A. The Sellers, together with certain other shareholders of CPR, own
all of the issued and outstanding capital stock of CPR.
B. This Agreement contemplates a transaction in which Kendle will
purchase from CPR and CPR will sell to Kendle, substantially all of the assets
of CPR and Kendle will assume certain obligations of CPR in return for cash,
promissory notes convertible into Kendle Shares and Kendle Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings and agreements herein made, the Parties agree as follows:
1. DEFINITIONS.
"ACQUIRED ASSETS" means all right, title, and interest in and to all of
the assets of CPR, including all of its: (a) real property, leaseholds and
subleaseholds therein, improvements, fixtures, and fittings thereon, and
easements, rights-of-way, and other appurtenants thereto (such as appurtenant
rights in and to public streets); (b) tangible personal property (such as
machinery, office equipment, inventories of raw materials and supplies,
furniture, automobiles, trucks, and other materials); (c) Intellectual Property,
including the names "CPR" and "Clinical and Pharmacologic Research", goodwill
associated therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions;
(d) leases, subleases and rights thereunder; (e) agreements, contracts,
indentures, mortgages, instruments, Security Interests, guaranties, other
similar arrangements and rights thereunder including, but not limited to, all
agreements and arrangements with Mylan; (f) accounts, notes executed in favor of
CPR and other receivables; (g) claims, deposits, prepayments, refunds, causes of
action, choses in action, rights of recovery, rights of set off and rights of
recoupment; (h) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances and similar rights obtained from governments and
governmental agencies; and (i) books, records, ledgers, files, documents,
correspondence, lists, plats, architectural plans, drawings and specifications,
creative materials, advertising and promotional materials, studies, reports, and
other printed or written materials; PROVIDED, however, that the Acquired Assets
shall not include any Excluded Asset.
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"ADVERSE CONSEQUENCES" means all damages, dues, penalties, fines,
costs, amounts paid in settlement, Liabilities, obligations, Taxes, losses,
expenses and fees, including (without limitation) court costs and reasonable
attorneys' fees and expenses.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"AFFILIATED GROUP" means any affiliated group within the meaning of
Code sec. 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
"ASSUMED LIABILITIES" means (a) all Liabilities of CPR set forth in the
Most Recent Balance Sheet, (b) all Liabilities of CPR which have arisen after
the Most Recent Fiscal Month End in the Ordinary Course of Business (other than
any Liability resulting from, arising out of, relating to, in the nature of, or
caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law, and (c) all obligations of CPR under the agreements,
contracts, leases, licenses, and other arrangements referred to in the
definition of Acquired Assets either (x) to furnish goods, services, and other
non-cash benefits to another party after the Closing or (y) to pay for goods,
services, and other non-cash benefits that another party will furnish to it
after the Closing; PROVIDED, however, that the Assumed Liabilities shall not
include any Excluded Liability.
"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction that forms or could form the basis for any
specified consequence.
"CASH COMPONENT" has the meaning set forth in sec. 2(b)(ii) below.
"CLOSING" has the meaning set forth in sec. 2(d) below.
"CLOSING DATE" has the meaning set forth in sec. 2(d) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code sec. 4980B.
"CPRC" means CPR Communications, Inc., a West Virginia corporation.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of CPR that, as of the date hereof, is not generally
available to the public.
"CONTROLLED GROUP" has the meaning set forth in Code sec. 1563.
"CPR" has the meaning set forth in the first recital above.
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"CPR SHARE" means any share of the common stock, par value $.05 per
share, of CPR.
"DISCLOSURE SCHEDULE" has the meaning set forth in sec. 4 below.
"EMPLOYEE BENEFIT PLAN" means any: (a) nonqualified deferred
compensation or retirement plan or arrangement or any severance, stock option,
incentive, bonus or fringe benefit plan; (b) qualified defined contribution
retirement plan or arrangement that is an Employee Pension Benefit Plan; (c)
qualified defined benefit retirement plan or arrangement that is an Employee
Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare
Benefit Plan or material fringe benefit or other retirement, bonus, or incentive
plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
sec. 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
sec. 3(1).
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means each entity which is treated as a single
employer with CPR for purposes of Code sec. 414.
"ESCROW AGREEMENT" has the meaning set forth in sec. 2(b)(ii) below.
"EXCLUDED ASSETS" means (i) rights in and with respect to the assets
associated with the Employee Benefit Plans; (ii) any claims, causes of action,
counterclaims, setoffs or defenses CPR may have with respect to any Excluded
Liability; (iii) any CPR corporate-level sponsorships, programs and literature
for the benefit of CPR's organization and businesses generally; (iv) any rights
with respect to insurance policies; (v) Tax refunds, rights of recovery relating
to Taxes and rights of recoupment relating to Taxes; (vi) any of the rights of
CPR under this Agreement (or under any other agreement between CPR on the one
hand and Kendle on the other hand entered into on or after the date of this
Agreement); (vii) any vehicle leases entered into by or on behalf of CPR, the
Sellers or any CPR Shareholders in effect as of the date of this Agreement;
(viii) any securities, limited liability company interests (including interests
in SMT,
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LLC), ownership interest or right to acquire any equity interest in any other
Person; (ix) any contracts or agreements between CPR and any Affiliate thereof,
including CPRC; (x) the notes receivable from William Carrington, Kim Johnson
and Yolanda Williams; (xi) the personal computer equipment of CPR that has been
maintained by the Sellers at their residences prior to the date of this
Agreement and the other personal items set forth on sec. 7(a) of the Disclosure
Schedule; (xii) the corporate charter, qualifications to conduct business as a
foreign corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute books,
stock transfer books, blank stock certificates, and other documents relating to
the organization, maintenance, and existence of CPR as a corporation; and (xiii)
any of the rights of CPR under this Agreement (or under any side agreement
between CPR and Kendle entered into on or after the date of this Agreement).
"EXCLUDED LIABILITIES" means (i) any Liability of CPR for Taxes (with
respect to the Acquired Assets or otherwise) for periods ending on, prior to, or
(for the portion of such taxable period ending at the close of business on the
day prior to the Closing Date) including, the close of business on the day prior
to the Closing Date; (ii) any Liability for transfer, sales, use and other Taxes
arising in connection with the consummation of the transactions contemplated
hereby; (iii) any Liability of CPR for the unpaid Taxes of any Person under
Treas. Reg. sec. 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract or otherwise; (iv) any
obligation of CPR to indemnify any Person by reason of the fact that such Person
was a director, officer, employee or agent of any Person or was serving at the
request of any such entity as a partner, trustee, director, officer, employee,
or agent of another entity (whether such indemnification is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses
or otherwise and whether such indemnification is pursuant to any statute,
charter document, bylaw, agreement or otherwise); (v) any Liability for any
litigation or proceeding pending against CPR (with respect to the Acquired
Assets or otherwise) on the Closing Date; (vi) any Liability of CPR for costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby; (vii) any Liability arising from or relating to the
employment, or termination of employment of any Person by CPR, of any
individual, including, but not limited to, any Liability under any Employee
Benefit Plan; (viii) any Liability or obligation of CPR under this Agreement (or
under any other agreement between CPR and Kendle entered into on or after the
date of this Agreement); (ix) any Liabilities, claims or actions alleging or
relating to any tort, product liability, warranty, Environmental, Health and
Safety Requirements or Taxes of CPR or the Acquired Assets or for breach of
contract or otherwise seeking damages and relating to the ownership or leasing
of the Acquired Assets prior to the Closing and Liabilities, claims or actions
relating to properties or operations of CPR except to the extent specifically
included in the Assumed Liabilities; (x) any Liability relating to any of the
Excluded Assets; (xi) any Liability relating to any notes or other indebtedness
between CPR, on the one hand, and any Affiliate, employee or consultant of CPR,
on the other hand; (xii) any Liability related to any payroll or other payment
for services provided by CPR employees or other Persons on behalf of CPRC,
Seneca Way Horse Farm or any Person other than CPR, or (xiii) all other
Liabilities which are not expressly assumed by Kendle pursuant to this
Agreement.
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"FIDUCIARY" has the meaning set forth in ERISA sec. 3(21).
"FINANCIAL STATEMENT" has the meaning set forth in sec. 4(g) below.
"GAAP" means United States generally accepted accounting principles, as
in effect from time to time.
"INDEMNIFIED PARTY" has the meaning set forth in sec. 8(d) below.
"INDEMNIFYING PARTY" has the meaning set forth in sec. 8(d) below.
"INTELLECTUAL PROPERTY" means: (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof; (b) all trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith; (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith; (d) all mask
works and all applications, registrations, and renewals in connection therewith;
(e) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals); (f) all computer software
(including data and related documentation); (g) all other proprietary rights;
and (h) all copies and tangible embodiments thereof (in whatever form or
medium).
"KENDLE" has the meaning set forth in the preface above.
"KENDLE SHARES" means shares of Kendle common stock, no par value.
"KNOWLEDGE" means, with respect to CPR and/or the Sellers or any of the
Sellers, actual personal knowledge of any of the Sellers, J. Hiller Hardie and
Yolanda F. Williams after reasonable investigation.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including (without limitation) any liability for Taxes.
"MARKET VALUE" has the meaning set forth in sec. 2(b) below.
"MOST RECENT BALANCE SHEET" means the balance sheet contained within
the Most Recent Financial Statements.
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"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in sec.
4(g) below.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in sec. 4(g)
below.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in sec. 4(g)
below.
"MYLAN" means Mylan Laboratories, Inc., a Pennsylvania corporation.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA sec. 3(37).
"NOTE" has the meaning set forth in sec. 2(b)(ii) below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA sec. 406
and Code sec. 4975.
"PURCHASE PRICE" has the meaning set forth in sec. 2(b) below.
"REPORTABLE EVENT" has the meaning set forth in ERISA sec. 4043.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than: (a) mechanic's, materialmen's,
and similar liens; (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings; (c)
purchase money liens and liens securing rental payments under capital lease
arrangements; and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"SELLERS" has the meaning set forth in the preface above and "Seller"
shall mean any of such persons.
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"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"THIRD PARTY CLAIM" has the meaning set forth in sec. 8(d) below.
"TRANSACTION DOCUMENTS" means, collectively, the Note, Escrow
Agreement, Registration Rights Agreement any other documents described in this
Agreement as necessary for the consummation of the transactions contemplated by
this Agreement.
2. PURCHASE AND SALE OF ACQUIRED ASSETS.
(a) BASIC TRANSACTION.
On and subject to the terms and conditions of this Agreement, Kendle
agrees to purchase CPR and CPR agrees to sell, transfer, convey and deliver to
Kendle, all of the Acquired Assets at the Closing for the consideration
specified below in this sec. 2. On and subject to the terms and conditions of
this Agreement, Kendle agrees to assume and become responsible for all of the
Assumed Liabilities at the Closing. Kendle will not assume or have any
responsibility, however, with respect to any other obligation or Liability of
CPR not included within the definition of Assumed Liabilities including, but not
limited to, the Excluded Liabilities.
(b) PURCHASE PRICE.
(i) At the Closing, the Buyer shall pay to CPR an aggregate
purchase price of approximately Twenty Million Dollars ($20,000,000) (the
"Purchase Price"). Depending on the "Market Value" (as defined
hereinafter) of the "Total Shares" (as defined hereinafter), the Purchase
Price will be no less than Eighteen Million Five Hundred Thousand Dollars
($18,500,000) and no more than Twenty One Million Two Hundred Thousand
Dollars ($21,200,000).
(ii) Eight Million Dollars ($8,000,000) of the Purchase Price
shall be paid in cash at the Closing (the "Cash Component"). Half of the
Purchase Price remaining after payment of the Cash Component shall be
paid by the delivery by Kendle
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to CPR of a subordinated promissory note convertible into Kendle Shares
in the form attached hereto and incorporated herein as Exhibit A
(the "Note"). The Kendle Shares issuable upon conversion of the Note are
hereinafter referenced to as the "Convertible Shares." The other half of
the Purchase Price remaining after payment of the Cash Component shall be
paid to CPR in Kendle Shares, valued at the "Market Value." The Kendle
Shares issuable to CPR at the Closing are hereinafter referenced to as
the "Closing Shares." Together, the Convertible Shares and the Closing
Shares are referenced to hereinafter as the "Total Shares." Of the
Closing Shares, Kendle Shares having, in the aggregate, a Market Value of
One Million Five Hundred Thousand Dollars ($1,500,000) shall be paid at
the Closing to Fifth Third Bank, as escrow agent under the Escrow
Agreement in the form attached hereto and incorporated herein as Exhibit
B (the "Escrow Agreement").
(iii) The "Market Value" of Kendle Share Consideration shall be
the historical average of the NASDAQ National Market system closing bid
price for a share of Kendle common stock during the twenty (20) trading
days beginning twenty five (25) trading days immediately preceding the
Closing.
(iv) If the "Market Value" of a Kendle Share is equal to or
greater than Sixteen Dollars ($16.00) per Kendle Share but less than
Twenty Dollars ($20.00) per Kendle Share, the number of Kendle Shares
comprising the Total Shares shall be calculated as follows:
$12,000,000/Market Value per Kendle Share. If the "Market Value" of a
Kendle Share is equal to or greater than Twenty Dollars ($20.00) per
Kendle Share but less than Twenty Two Dollars ($22.00) per Kendle Share,
the number of Kendle Shares comprising the Total Shares shall be Six
Hundred Thousand (600,000). If the "Market Value" of a Kendle Share is
equal to or greater than Twenty Two Dollars ($22.00) per Kendle Share,
the number of Kendle Shares comprising the Total Shares shall be
calculated as follows: $13,200,000/Market Value per Kendle Share.
(v) If the "Market Value" of a Kendle Share is equal to or
greater than Fourteen Dollars ($14.00) per Kendle Share but less than
Sixteen Dollars ($16.00) per Kendle Share, the number of Kendle Shares
comprising the Total Shares shall be Seven Hundred Fifty Thousand
(750,000). If the "Market Value" of a Kendle Share is less than Fourteen
Dollars ($14.00) per Kendle Share, Kendle and CPR shall attempt to
renegotiate the Purchase Price in good faith but either Kendle or CPR
shall have the right to terminate this Agreement without liability if
agreement on the renegotiated Purchase Price is not reached after five
(5) business days of such good faith negotiations.
(vi) The Parties contemplate that within thirty (30) days after
the Closing, CPR will distribute the Purchase Price to its shareholders
in the amounts and allocations set forth on Annex I hereto.
(c) NET WORKING CAPITAL ADJUSTMENT.
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The Purchase Price shall be adjusted on a dollar-for-dollar basis by
the extent to which the "Net Working Capital" (as defined hereinafter) of CPR as
of the Closing either exceeds or is less than Six Hundred Twenty Five Thousand
Dollars ($625,000) in accordance with Section 6(f). As used in this Agreement,
"Net Working Capital" shall mean current assets (as defined by GAAP) that are
included in the definition of "Acquired Assets" less current liabilities (as
defined by GAAP) that are included in the definition of "Assumed Liabilities"
calculated in accordance with GAAP and the principles set forth on Schedule 2(c)
attached hereto and incorporated herein. The resulting number shall then be
adjusted by subtracting Deferred Charges (as that term is defined in the Most
Recent Financial Statements), adding Deferred Revenue (as that term is defined
in the Most Recent Financial Statements) and subtracting One Hundred Twenty Five
Thousand Dollars ($125,000). To the extent that a downward adjustment to the
Purchase Price is made under this sec. 2(c) and in accordance with Section 6(f),
Kendle shall not be entitled to a second recovery due to any breach of sec. 4(g)
arising out of the same facts.
(d) THE CLOSING.
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Keating, Muething & Klekamp,
P.L.L., 1400 Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202,
commencing at 9:00 a.m., local time on the date hereof or such other date as
Kendle and CPR may mutually determine (the "Closing Date").
(e) DELIVERIES AT THE CLOSING.
At the Closing, (i) CPR will deliver to Kendle the various
certificates, instruments and documents referred to in sec. 7(a) below, (ii)
Kendle will deliver to CPR the various certificates, instruments and documents
referred to in sec. 7(b) below, (iii) CPR shall deliver to Kendle assignments
and other transfer documents (including real property and Intellectual Property
transfer documents) and such other instruments of sale, transfer, conveyance,
and assignment as Kendle and its counsel reasonably may request, and (iv) Kendle
will deliver to CPR the consideration specified in sec. 2(b) above.
(f) ALLOCATION.
The Parties agree to allocate the Purchase Price (and all other
capitalizable costs) among the Acquired Assets for all purposes in accordance
with Annex II hereto.
(i) Kendle and CPR agree that Kendle and CPR shall allocate
the sum of the Purchase Price and the Assumed Liabilities among the
Acquired Assets and the covenant not to compete (set forth in sec. 6(h)
of this Agreement) as of the Closing Date, in accordance with Annex II,
Section 1060 of the Code and the regulations promulgated thereunder.
(ii) Kendle and CPR shall timely file with the appropriate tax
authorities the IRS Form 8594 and shall use the allocation set forth in
Annex II in the
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preparation of IRS Form 8594 and of all Tax Returns (including any
attachments thereto) and for all other tax purposes. In the event any
party hereto receives notice of an audit in respect of the allocation
of the Purchase Price, and Assumed Liabilities specified herein, such
party shall notify the other party in writing as to the date and
subject of such audit as promptly as reasonably practicable.
(iii) If any Tax Return filed by Kendle or CPR relating to the
transactions contemplated hereby is challenged by the tax authority
with which such Tax Return was filed on the basis of the allocation set
forth in Annex II as finally adjusted, the filing party shall assert in
good faith the validity and correctness of such allocation. If any such
Tax Return is challenged as herein described, the party filing such Tax
Return shall keep the other party apprised of its decisions and the
current status and progress of all administrative and judicial
proceedings, if any, that are undertaken at the election of such party
with respect thereto.
3. REPRESENTATIONS AND WARRANTIES OF KENDLE.
Kendle represents and warrants to CPR that the statements contained in
this sec. 3 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this sec. 3).
(a) ORGANIZATION OF KENDLE.
Kendle is a corporation organized, validly existing and in good
standing under the laws of the State of Ohio.
(b) AUTHORIZATION OF TRANSACTION.
Kendle has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of Kendle, enforceable in accordance with its terms and conditions, except as
such enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws from time to time in effect affecting
creditors' rights generally or by principles governing the availability of
equitable remedies. Assuming the truth and correctness of CPR's statements in
this Agreement, Kendle need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.
(c) NONCONTRAVENTION.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will: (A) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government,
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governmental agency, or court to which Kendle is subject or any provision of its
charter or bylaws; or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
material agreement, contract, lease, license, instrument, or other arrangement
to which Kendle is bound or to which any of its assets is subject.
(d) CAPITALIZATION.
Kendle's authorized equity securities consist of Forty Five Million
(45,000,000) shares of common stock, no par value per share, and One Hundred
Thousand (100,000) shares of undesignated preferred stock, no par value per
share. On August 13, 1999, the Board of Directors of Kendle declared a dividend
of one right ("Right") for each outstanding share of Kendle common stock and
Kendle entered into the Shareholder Rights Agreement between Kendle and Fifth
Third Bank, as Rights Agent (the "Shareholder Rights Agreement"). The
description and terms of the Rights are set forth in the Shareholder Rights
Agreement and Kendle's Form 8-A filing on September 7, 1999 with the SEC
(defined below). As of December 1, 2001, Twelve Million Three Hundred Ninety One
Thousand Two Hundred Sixty Six (12,391,266) shares of common stock were issued
and outstanding, Seventeen Thousand Two Hundred Eighty (17,280) shares of common
stock were held in treasury and, other than any securities that may deemed to be
outstanding in connection with the Rights and the Shareholder Rights Agreement,
no shares of undesignated preferred stock were issued and outstanding. The
Kendle Shares to be received by CPR in connection with the transactions
contemplated hereby will be duly authorized, validly issued, fully paid and
non-assessable shares of common stock free of any claim of preemptive rights and
free and clear of any and all Encumbrances other than restrictions on transfer
imposed by federal and state securities laws and regulations.
(e) SEC REPORTS.
Kendle has timely filed with the Securities and Exchange Commission
("SEC") all materials and documents required to be filed by it under the
Securities Exchange Act of 1934 (the "Exchange Act"). All the materials and
documents filed with the SEC by Kendle since January 1, 1999 are hereinafter
referred to as the "Kendle SEC Reports." The Kendle SEC Reports, copies of which
have been delivered to the Sellers, are true and correct in all material
respects, including the financial statements and other financial information
contained therein, and do not omit to state any material fact necessary to make
the statements in such Kendle SEC Reports, in light of the circumstances in
which they were made, not misleading. The financial statements included in the
Kendle SEC Reports fairly present in all material respects the financial
condition and the results of operations, changes in stockholders' equity and
cash flow of Kendle and its subsidiaries as at the respective dates of and for
the periods referred to in such financial statements, all in accordance with
GAAP.
(f) BROKERS' FEES.
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Kendle has no Liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which CPR could become liable or obligated.
4. REPRESENTATIONS AND WARRANTIES OF CPR.
CPR represents and warrants to Kendle that the statements contained in
this sec. 4 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this sec. 4), except as set forth in the disclosure schedule
delivered by CPR to Kendle on the date hereof and initialed by the Parties (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this sec. 4.
CPR represents and warrants to Kendle that the Disclosure Schedule and this
Agreement have been reviewed by all of the Sellers and all of the shareholders
of CPR (the "CPR Shareholders") prior to the date hereof and none of the
Sellers or CPR Shareholders have brought to the attention of any of the Sellers
or CPR any fact or circumstance required to be disclosed in the Disclosure
Schedule that has not been disclosed.
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER.
CPR is a corporation organized, validly existing and in good standing
(or the local law equivalent) under the laws of West Virginia. CPR is duly
authorized to conduct business and is in good standing (or local law equivalent)
under the laws of each jurisdiction where such qualification is required except
where the failure to be so qualified and in good standing (or the local law
equivalent) would not have a material adverse effect on CPR. CPR has full
corporate power and authority and all material licenses, permits, and
authorizations necessary to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. sec. 4(a) of the Disclosure
Schedule lists the directors and officers of CPR as of the date hereof. CPR has
delivered to Kendle correct and complete copies of the charter and bylaws of CPR
(as amended to date). The minute books (containing the records of meetings of
the stockholders and the board of directors, and any committees of the board of
directors) of CPR are correct and complete in all material respects. The stock
certificate books and the stock record books of CPR are true, correct and
complete. CPR is not in default under or in violation of any provision of its
charter or bylaws. CPR has full power and authority (including full corporate
power and authority) to execute and deliver this Agreement and the Transaction
Documents and to perform its obligations hereunder and thereunder. Without
limiting the generality of the foregoing, the board of directors of CPR and
CPR's shareholders have duly authorized the execution, delivery and performance
of this Agreement and the Transaction Documents by CPR. This Agreement and the
Transaction Documents constitute valid and legally binding obligations of CPR,
enforceable in accordance with their terms and conditions.
(b) CAPITALIZATION.
The authorized capital stock of CPR consists of One Hundred Thousand
(100,000) CPR Shares, of which Twenty Three Thousand Five Hundred Twenty Nine
(23,529)
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CPR Shares are issued and outstanding and no CPR Shares are held in treasury.
All of the issued and outstanding CPR Shares have been duly authorized, are
validly issued, fully paid and nonassessable, and are held of record by the
Persons as set forth in sec. 4(b) of the Disclosure Schedule. Except for the
options issued and outstanding under the CPR 2000 Stock Incentive Plan further
described in the Disclosure Schedules, which will be exercised in full prior to
Closing, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require CPR to issue, sell, or otherwise
cause to become outstanding any of its capital stock. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to CPR. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of the capital
stock of CPR.
(c) NONCONTRAVENTION.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will: (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which CPR is subject or any provision of the charter or bylaws of CPR;
or (ii) except for which waivers or consents have been obtained or notices have
been provided, conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any material
agreement, contract, lease, license, instrument, or other arrangement to which
CPR is a party or by which it is bound or to which its assets is subject (or
result in the imposition of any Security Interest upon any of its assets). CPR
is not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for it to consummate the transactions contemplated by this Agreement.
(d) BROKERS' FEES.
Except as set forth in the Disclosure Schedule, CPR has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
(e) TITLE TO ASSETS.
CPR has good and marketable title to, or a valid leasehold interest in,
the properties and assets used by it, located on its premises, or shown on the
Most Recent Balance Sheet or acquired after the date thereof, free and clear of
all Security Interests, except for properties and assets disposed of in the
Ordinary Course of Business since the date of the Most Recent Balance Sheet.
(f) SUBSIDIARIES.
CPR has no Subsidiaries.
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(g) FINANCIAL STATEMENTS; NET WORKING CAPITAL.
Attached hereto as Exhibit C are the following financial statements
(collectively the "Financial Statements"): (i) unaudited balance sheets and
statements of income and changes in stockholders' equity as of and for the
fiscal years ended December 31, 1998, December 31, 1999 for CPR; and (ii)
audited balance sheets and statements of income, changes in stockholders'
equity, and cash flow (the "Most Recent Financial Statements") for the year
ended December 31, 2000 (the "Most Recent Fiscal Year End") and as of and for
the nine (9) months ended September 30, 2001 (the "Most Recent Fiscal Month
End") for CPR. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby (except that the items described in (i) above were not
prepared using the completed contract accounting method), present fairly in all
material respects the financial condition of CPR as of such dates and the
results of operations of CPR for such periods, are correct and complete and are
consistent with the books and records of CPR (which books and records are
correct and complete in all material respects). None of the Sellers have any
Knowledge of any material fact or circumstance that invalidates or makes
unreasonable any of the assumptions upon which the anticipated expenses
contained in the financial projections for the period from Closing to December
31, 2002 set forth in sec. 4(g) of the Disclosure Schedule were based; PROVIDED,
however, that the Sellers make no representation as to the effect, if any, on
such assumptions caused by or arising out of market conditions, or economic or
political developments (including changes in laws) applicable to businesses
similar to CPR's business generally. The Net Working Capital of CPR as of the
Closing shall not be less than Six Hundred Twenty Five Thousand Dollars
($625,000).
(h) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END.
Since the Most Recent Fiscal Month End, there has not been any material
adverse change in the business, financial condition, operations, or results of
operations of CPR. Without limiting the generality of the foregoing, since that
date, except as set forth in the Disclosure Schedule:
(i) CPR has not sold, leased, transferred, or assigned any of
its assets, tangible or intangible, other than for a fair consideration
in the Ordinary Course of Business;
(ii) CPR has not entered into any agreement, contract, lease,
or license (or series of related agreements, contracts, leases, and
licenses) either involving more than Twenty Five Thousand Dollars
($25,000) or outside the Ordinary Course of Business;
(iii) no party (including CPR) has accelerated, terminated,
modified, or canceled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses)
involving more than Twenty Five Thousand Dollars ($25,000) to which CPR
is a party or by which it is bound;
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(iv) CPR has not imposed any Security Interest upon any of its
assets, tangible or intangible;
(v) CPR has not made any capital expenditure (or series of
related capital expenditures) either involving more than Twenty Five
Thousand Dollars ($25,000) or outside the Ordinary Course of Business;
(vi) CPR has not made any capital investment in, any loan to,
or any acquisition of the securities or assets of, any other Person (or
series of related capital investments, loans, and acquisitions) either
involving more than Twenty Five Thousand Dollars ($25,000) or outside
the Ordinary Course of Business;
(vii) CPR has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness
for borrowed money or capitalized lease obligation either involving
more than Twenty Five Thousand Dollars ($25,000) singly or Fifty
Thousand Dollars ($50,000) in the aggregate;
(viii) CPR has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary Course of
Business;
(ix) CPR has not canceled, compromised, waived, or released
any right or claim (or series of related rights and claims) either
involving more than Twenty Five Thousand Dollars ($25,000) or outside
the Ordinary Course of Business;
(x) CPR has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the
charter or bylaws of CPR;
(xii) CPR has not issued, sold, or otherwise disposed of any
of its capital stock, or granted any options, warrants, or other rights
to purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock;
(xiii) other than a distribution to the Sellers prior to the
Closing as described in the Disclosure Schedule, which shall be subject
to the last sentence of sec. 4(g) hereof (the "Permitted Pre-Closing
Distribution"), CPR has not declared, set aside, or paid any dividend
or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of
its capital stock;
(xiv) CPR has not experienced any material damage,
destruction, or loss (whether or not covered by insurance) to its
property;
(xv) CPR has not made any loan to, or entered into any other
transaction with, any of its directors, officers or employees outside
the Ordinary Course of Business;
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(xvi) CPR has not entered into any written employment contract
or collective bargaining agreement or modified the terms of any
existing such contract or agreement;
(xvii) CPR has not granted any increase in the base
compensation of any of its directors, officers, or employees outside
the Ordinary Course of Business;
(xviii) CPR has not adopted, amended, modified, or terminated
any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors,
officers, or employees (or taken any such action with respect to any
other Employee Benefit Plan);
(xix) CPR has not made any other change in employment terms
for any of its directors, officers, or employees outside the Ordinary
Course of Business;
(xx) CPR has not made or pledged to make any charitable or
other capital contribution outside the Ordinary Course of Business;
(xxi) to the Sellers' Knowledge, there has not been any other
material occurrence, event, incident, action, failure to act, or
transaction outside of the Ordinary Course of Business involving CPR;
and
(xxii) CPR has not committed to any of the foregoing.
(i) UNDISCLOSED LIABILITIES.
CPR has no Liability except for: (i) Liabilities set forth in the
Most Recent Balance Sheet; and (ii) Liabilities which have arisen after the Most
Recent Fiscal Month End in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or violation of
law).
(j) LEGAL COMPLIANCE.
CPR has complied in all material respects with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or, to any Seller's Knowledge, commenced against CPR alleging any failure
so to comply.
(k) TAX MATTERS.
(i) CPR has filed all Tax Returns and all Forms 1099 that it
was required to file. All such Tax Returns were correct and complete in
all material respects. All Taxes owed by CPR (whether or not shown on
any Tax Return) have been paid or
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been provided for. CPR has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third
party. CPR currently is not the beneficiary of any extension of time
within which to file any Tax Return. No claim has ever been made in
writing by an authority in a jurisdiction where CPR does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
There are no Security Interests on any of the assets of CPR that arose
in connection with any failure (or alleged failure) to pay any Taxes
that were due prior to Closing.
(ii) CPR does not expect any authority to assess any
additional Taxes for any period for which Tax Returns have been filed.
To the Sellers' Knowledge, there is no dispute or claim concerning any
Tax Liability of CPR either (A) claimed or raised by any authority in
writing delivered to CPR or its tax preparer or (B) as to which any of
the Sellers and the directors and officers (and employees responsible
for Tax matters) of CPR and its Subsidiaries has Knowledge based upon
personal contact with any agent of such authority. CPR has delivered to
Kendle correct and complete copies of all federal income Tax Returns,
examination reports, and statements of deficiencies filed against or
agreed to by CPR since January 1, 1998.
(iii) CPR has not waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(l) REAL PROPERTY.
(i) CPR owns no real property.
(ii) sec. 4(l)(ii) of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to CPR. CPR has
delivered to Kendle correct and complete copies of the leases and
subleases listed in sec. 4(l)(ii) of the Disclosure Schedule (as
amended to date). With respect to each lease and sublease listed in
sec. 4(l)(ii) of the Disclosure Schedule:
(A) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(B) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby;
(C) CPR is not in breach or default of the lease or
sublease, and no event under CPR's control has occurred which,
with notice or lapse of time, would constitute a breach or
default or permit termination, modification or acceleration
thereunder;
(D) to the Knowledge of any of the Sellers no party
to the lease or sublease other than CPR is in breach or
default, and no event under the control
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of a party other than CPR has occurred which, with notice or
lapse of time, would constitute a breach or default or permit
termination, modification or acceleration thereunder;
(E) CPR has not repudiated any provision of the lease
or sublease;
(F) to the Knowledge of any of the Sellers, no party
to the lease or sublease other than CPR has repudiated any
provision thereof;
(G) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(H) with respect to each sublease, the
representations and warranties set forth in subsections (A)
through (G) above are true and correct in all material
respects with respect to the underlying lease;
(I) CPR has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold;
(J) all facilities leased or subleased thereunder
have received all approvals of governmental authorities
(including licenses and permits) required in connection with
the operation thereof and have been operated and maintained in
all material respects in accordance with applicable laws,
rules, and regulations;
(K) all facilities leased or subleased thereunder are
supplied with utilities and other services reasonably
necessary for the operation of said facilities in accordance
with past practice; and,
(L) the owner of the facility leased or subleased has
good and marketable title to the parcel of real property, free
and clear of any Security Interest, easement, covenant, or
other restriction, except for installments of special
easements not yet delinquent and recorded easements,
covenants, and other restrictions which do not impair the
current use, occupancy, or value, or the marketability of
title, of the property subject thereto.
(m) INTELLECTUAL PROPERTY.
(i) CPR owns or has the right to use pursuant to license,
sublicense, agreement or permission all material Intellectual Property
necessary for the operation of its business as presently conducted.
Each item of Intellectual Property owned or used by CPR immediately
prior to the Closing hereunder will be owned or available for use by
CPR on identical terms and conditions immediately subsequent to the
Closing hereunder. CPR has taken all necessary action to maintain and
protect each item of Intellectual Property that it owns or uses.
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(ii) To the Sellers' Knowledge, CPR has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of third parties. CPR has not received
any written charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation
(including any claim that CPR must license or refrain from using any
Intellectual Property rights of any third party). To the Sellers'
Knowledge, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of CPR.
(iii) Sec. 4(m)(iii) of the Disclosure Schedule identifies
each patent or registration which has been issued to CPR with respect
to any of its Intellectual Property, identifies each pending patent
application or application for registration which CPR has made with
respect to any of its Intellectual Property, and identifies each
license, agreement or other permission which CPR has granted to any
third party with respect to any of its Intellectual Property (together
with any exceptions). CPR has delivered to Kendle correct and complete
copies of all such patents, registrations, applications, licenses,
agreements, and permissions (as amended to date) and have made
available to Kendle correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of
each such item.sec. 4(m)(iii) of the Disclosure Schedule also
identifies each trade name or unregistered trademark used by CPR in
connection with any of its businesses. With respect to each item of
Intellectual Property required to be identified in sec. 4(m)(iii) of
the Disclosure Schedule:
(A) CPR possess all right, title, and interest in and
to the item, free and clear of any Security Interest, license,
or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of any of the Sellers and the directors
and officers (and employees with responsibility for
Intellectual Property matters) of CPR, is threatened which
challenges the legality, validity, enforceability, use, or
ownership of the item; and
(D) CPR has not agreed to indemnify any Person for or
against any interference, infringement, misappropriation or
other conflict with respect to the item.
(iv) sec. 4(m)(iv) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that CPR
uses pursuant to license, sublicense, agreement, or permission. CPR has
made available to Kendle correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each item of Intellectual Property required to
be identified in sec. 4(m)(iv) of the Disclosure Schedule:
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(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and
in full force and effect;
(B) the license, sublicense, agreement, or permission
will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the
consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in sec.
2 above);
(C) CPR is not in breach or default of the license,
sublicense, agreement or permission, and no event under CPR's
control has occurred which, with notice or lapse of time,
would constitute a breach or default or permit termination,
modification or acceleration thereunder;
(D) to the Knowledge of any of the Sellers, no party
to the license, sublicense, agreement or permission other than
CPR is in breach or default and no event under the control of
a party other than CPR has occurred which, with notice or
lapse of time, would constitute a breach or default on permit
termination, modification or acceleration thereunder;
(E) CPR has not repudiated any provision of the
license, sublicense, agreement or permission; to the Knowledge
of any of the Sellers, no party to the license, sublicense,
agreement, or permission other than CPR has repudiated any
provision thereof;
(F) with respect to each sublicense, the
representations and warranties set forth in subsections (A)
through (E) above are true and correct with respect to the
underlying license;
(G) the underlying item of Intellectual Property is
not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(H) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of any of the Sellers and the directors
and officers (and employees with responsibility for
Intellectual Property matters) of CPR, is threatened which
challenges the legality, validity, or enforceability of the
underlying item of Intellectual Property; and
(I) CPR has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or
permission.
(v) To the Sellers' Knowledge, CPR will not interfere with,
infringe upon, misappropriate, or otherwise come into conflict with,
any Intellectual Property rights of third parties as a result of the
continued operation of its businesses as presently conducted.
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(vi) None of the Sellers have any Knowledge of any new
products, inventions, procedures, or methods of manufacturing or
processing that any competitors or other third parties have developed
which reasonably could be expected to supersede or make obsolete any
product or process of CPR.
(n) TANGIBLE ASSETS.
CPR owns or leases all buildings, machinery, equipment, and other
tangible assets necessary for the conduct of its business as presently
conducted. Each such tangible asset has been maintained in accordance with
normal industry practice, is in good operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it presently
is used.
(o) CONTRACTS.
Sec. 4(o) of the Disclosure Schedule lists the following contracts and
other agreements to which CPR is a party:
(i) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease
payments in excess of Twenty Five Thousand Dollars ($25,000) per annum;
(ii) any agreement (or group of related agreements) for the
purchase or sale of supplies, products, or other personal property, or
for the furnishing or receipt of services, the performance of which
will extend over a period of more than one year, result in a material
loss to CPR, or involve consideration in excess of Twenty Five Thousand
Dollars ($25,000);
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, in excess of
Twenty Five Thousand Dollars ($25,000) or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality pursuant to which
CPR is obligated to keep a third party's Confidential Information
confidential or noncompetition;
(vi) any agreement with any of the Sellers or Affiliates of
the Sellers (other than CPR);
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance or other material plan
or arrangement for the benefit of current or former directors, officers
and employees;
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(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of Twenty Five Thousand Dollars ($25,000) or
providing severance benefits;
(x) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xi) any agreement under which the consequences of a default
or termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of any of CPR; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of Twenty Five
Thousand Dollars ($25,000).
The Sellers have delivered to Kendle a correct and complete copy of each written
agreement listed in sec. 4(o) of the Disclosure Schedule (as amended to date).
With respect to each such agreement listed in sec. 4(o) of the Disclosure
Schedule: (A) the agreement is legal, valid, binding, enforceable, and in full
force and effect; (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (C) CPR is not in breach
or default under the agreement, and no event under CPR's control has occurred
which with notice or lapse of time would constitute a breach or default, or
permit termination, modification or acceleration under the agreement; (D) to the
Knowledge of any of the Sellers, no party to the agreement other than CPR is in
breach or default under the agreement, and no event under the control of any
party other than CPR has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification or
acceleration under the agreement; (E) CPR has not repudiated any provision of
the agreement; and (F) to the Knowledge of any of the Sellers, no party other
than CPR has repudiated any provision of the agreement. Mylan has not orally or
in writing repudiated or threatened to repudiate any provision of any written or
oral agreement between CPR and Mylan. None of the Sellers have any Knowledge of
any fact or circumstance he may reasonably believe will result in the breach,
threatened breach, termination or threatened termination of any written or oral
agreement between CPR and Mylan.
(p) NOTES AND ACCOUNTS RECEIVABLE.
All notes and accounts receivable of CPR are reflected properly on its
books and records, are valid receivables subject to no setoffs or counterclaims,
are current, and are expected to be collected in accordance with their terms at
their recorded amounts, subject only to the reserve for bad debts set forth on
the face of the Most Recent Balance Sheet as adjusted for the passage of time
through the Closing Date in accordance with past custom and practice.
(q) POWERS OF ATTORNEY.
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There are no outstanding powers of attorney executed on behalf of CPR,
other than the power of attorney held by Deloitte & Touche to discuss tax
matters with IRS representatives.
(r) INSURANCE.
Sec. 4(r) of the Disclosure Schedule sets forth the following
information with respect to each material insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which CPR currently is a party, a named
insured, or otherwise the beneficiary of coverage:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder,
and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are calculated
and operate) of coverage; and
(v) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) the policy will continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (C) CPR is not in breach or default (including with respect to the
payment of premiums or the giving of notices) under the policy, and no event
under CPR's control has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification or
acceleration under the policy; (D) to the Knowledge of any of the Sellers, no
party to the policy other than CPR is in breach or default (including with
respect to the payment of premiums or the giving of notices) under the policy,
and no event under the control of any party other than CPR has occurred which
with notice or lapse of time would constitute a breach or default, or permit
termination, modification or acceleration under the policy; (E) CPR has not
repudiated any provision of any policy; and (F) to the Knowledge of any of the
Sellers, no party other than CPR has repudiated any provision of any policy. CPR
has been covered during the past 10 years by insurance in scope and amount
customary and reasonable for the businesses in which it has engaged during the
aforementioned period. sec. 4(s) of the Disclosure Schedule describes any
self-insurance arrangements affecting CPR.
(s) LITIGATION.
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Sec. 4(s) of the Disclosure Schedule sets forth each instance in which
CPR (i) is subject to any outstanding injunction, judgment, order, decree,
ruling, or charge or (ii) is a party or, to the Sellers' Knowledge, is
threatened to be made a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in sec. 4(s) of the Disclosure Schedule could
reasonably be expected to result in any material adverse change in the business,
financial condition, operations or results of operations, or future prospects of
CPR. The Sellers have no reason to believe that any such action, suit,
proceeding, hearing, or investigation may be brought or threatened against CPR.
(t) EMPLOYEE BENEFITS.
(i) Sec. 4(t) of the Disclosure Schedule lists each Employee
Benefit Plan that CPR maintains or to which CPR contributes or has any
obligation to contribute.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in all
material respects with the applicable requirements of ERISA, the Code
and other applicable laws.
(B) All contributions (including all employer contributions
and employee salary reduction contributions) which are due have been
paid to each such Employee Benefit Plan which is an Employee Pension
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 Pension Benefit Plan or accrued in accordance with the past
custom and practice of CPR. All premiums or other payments for all
periods ending on or before the Closing Date have been paid with
respect to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
(C) Each such Employee Benefit Plan which is an Employee
Pension Benefit Plan meets the requirements of a "qualified plan" under
Code sec. 401(a), has received a favorable determination letter from
the Internal Revenue Service that it is a "qualified plan," and none of
the Sellers are aware of any facts or circumstances that could result
in the revocation of such determination letter.
(D) CPR has delivered to Kendle correct and complete copies of
the plan documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service, the
most recent Form 5500 Annual Report, and all related trust agreements,
insurance contracts and other funding agreements which implement each
such Employee Benefit Plan.
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(ii) With respect to each Employee Benefit Plan that CPR and any
ERISA Affiliate maintains or ever has maintained or to which any of them
contributes, ever has contributed, or ever has been required to contribute:
(A) There have been no Prohibited Transactions with respect to
any such Employee Benefit Plan. No Fiduciary has any Liability for
breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any
such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to the administration or the investment of
the assets of any such Employee Benefit Plan (other than routine claims
for benefits) is pending or , to the Knowledge of any of the Sellers,
threatened. None of the Sellers and the directors and officers (and
employees with responsibility for employee benefits matters) of CPR has
any Knowledge of any Basis for any such action, suit, proceeding,
hearing, or investigation.
(B) CPR has not incurred any Liability to the PBGC (other than
PBGC premium payments) or otherwise under Title IV of ERISA (including
any withdrawal liability as defined in ERISA sec. 4201) or under the
Code with respect to any such Employee Benefit Plan which is an
Employee Pension Benefit Plan.
(iii) CPR does not contribute to, has never contributed to, or
has been required to contribute to any Multiemployer Plan or has any
Liability (including withdrawal liability as defined in ERISA sec. 4201)
under any Multiemployer Plan.
(iv) CPR does not maintain or contribute, never has contributed,
or ever has been required to contribute to any Employee Welfare Benefit
Plan providing medical, health, or life insurance or other welfare-type
benefits for current or future retired or terminated employees, their
spouses, or their dependents (other than in accordance with COBRA).
(u) GUARANTIES.
CPR is not a guarantor or otherwise is liable for any Liability or
obligation (including indebtedness) of any other Person.
(v) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) CPR has complied and is in compliance in all material
respects with all Environmental, Health, and Safety Requirements.
(ii) Without limiting the generality of the foregoing, CPR has
obtained and complied in all material respects with, and is in material
compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for the
occupation of its facilities and the operation of
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its business; a list of all such permits, licenses and other
authorizations is set forth on the attached "Environmental and Safety
Permits Schedule."
(iii) Except as set forth on the Disclosure Schedule, CPR has not
received any written or oral notice, report or other information regarding
any actual or alleged material violation of Environmental, Health, and
Safety Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to its
facilities arising under Environmental, Health, and Safety Requirements.
(iv) None of the following exists at any property or facility
owned or operated as of the date of this Agreement by CPR: (1) underground
storage tanks, (2) asbestos-containing material in any form or condition,
(3) materials or equipment containing polychlorinated biphenyls or (4)
landfills, surface impoundments or disposal areas.
(v) With respect to any facilities CPR owns or occupies as of the
date of this Agreement, CPR has not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or owned
or operated any property or facility (and no such property or facility is
contaminated by any such substance) in a manner that has given or would
give rise to material liabilities, including any liability for response
costs, corrective action costs, personal injury, property damage, natural
resources damages or attorney fees, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA") or any other
Environmental, Health, and Safety Requirements.
(vi) To the Sellers' Knowledge, neither this Agreement nor the
consummation of the transaction that is the subject of this Agreement will
result in any obligations for site investigation or cleanup, or
notification to or consent of government agencies or third parties,
pursuant to any of the so-called "transaction-triggered" or "responsible
property transfer" Environmental, Health, and Safety Requirements.
(vii) To the Sellers' Knowledge, no facts, events or conditions
relating to the present facilities, properties or operations of CPR will
prevent, hinder or limit continued compliance with Environmental, Health,
and Safety Requirements, give rise to any investigatory, remedial or
corrective obligations pursuant to Environmental, Health, and Safety
Requirements, or give rise to any other liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) pursuant to Environmental,
Health, and Safety Requirements, including without limitation any relating
to onsite or offsite releases or threatened releases of hazardous
materials, substances or wastes, personal injury, property damage or
natural resources damage.
(w) CERTAIN BUSINESS RELATIONSHIPS WITH CPR.
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Except as set forth on the Disclosure Schedule, none of the
Sellers or CPRC is directly or indirectly interested in any material contract or
informal arrangement with CPR, except for services as an officer, director and
employee of CPR, and none of the Sellers or CPRC owns any asset, tangible or
intangible, which is used in the business of CPR.
(x) DISCLOSURE.
The representations and warranties contained in this sec. 4 do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this sec. 4 not misleading.
5. [Intentionally Deleted]
6. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the
Closing.
(a) GENERAL.
In case at any time after the Closing any further action is necessary
or desirable to carry out the purposes of this Agreement, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as any other Party reasonably may request,
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under sec. 8 below).
(b) LITIGATION SUPPORT.
In the event and for so long as any Party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand in connection with (i) any transaction contemplated
under this Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving CPR,
each of the other Parties will cooperate with him or it and his or its counsel
in the contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under sec. 8 below).
(c) TRANSITION.
Neither CPR nor any Seller will take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of CPR from maintaining the same business
relationships with Kendle after the Closing
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as it maintained with CPR prior to the Closing. Each Seller and CPR will refer
to Kendle all customer inquiries relating to the business of CPR from and after
the Closing.
(d) CONFIDENTIALITY.
Each of the Sellers and CPR will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to Kendle or
destroy, at the request and option of Kendle, all tangible embodiments (and all
copies) of the Confidential Information which are in its or his possession. In
the event that CPR or any Seller is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, such Seller or CPR, as the case may be, will notify
Kendle promptly of the request or requirement so that Kendle may seek an
appropriate protective order or waive compliance with the provisions of this
sec. 6(d). If, in the absence of a protective order or the receipt of a waiver
hereunder, such Seller or CPR, as the case may be, is, on the advice of counsel,
compelled to disclose any Confidential Information to any tribunal or else stand
liable for contempt, such Seller or CPR, as the case may be, may disclose the
Confidential Information to the tribunal; PROVIDED, HOWEVER, that such Seller or
CPR, as the case may be, shall use his or her reasonable best efforts to obtain,
at the reasonable request of Kendle, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Kendle shall designate. The foregoing
provisions shall not apply to any Confidential Information which is generally
available to the public immediately prior to the time of disclosure.
(e) KENDLE SHARES.
Each Kendle Share will be imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON _____, 2002, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR THE LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF (a) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS OR (b) AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Each holder desiring to transfer Kendle Shares first must furnish Kendle with a
written opinion reasonably satisfactory to Kendle in form and substance from
counsel reasonably satisfactory to Kendle by reason of experience to the effect
that the holder may transfer Kendle Shares as desired without registration under
the Securities Act.
(f) OPENING BALANCE SHEET AUDIT.
Not later than twenty (20) days after the Closing Date, CPR shall
deliver to Kendle an estimated unaudited balance sheet (the "Opening Balance
Sheet") for the period ended
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as of the Closing Date which reflects a minimum Net Working Capital amount of
Six Hundred Twenty Five Thousand Dollars ($625,000). Kendle's independent public
auditors ("Kendle Auditors") shall audit the Opening Balance Sheet provided by
CPR and deliver to CPR and Kendle no more than sixty (60) days after the Closing
a copy of their report thereof (the "Report"). Should the Kendle Auditors
determine that the Net Working Capital on the Closing Date (the amount so
determined being hereinafter referred to as the "Kendle Net Working Capital
Amount") is less than Six Hundred Twenty Five Thousand Dollars ($625,000), then
CPR shall pay to Kendle in cash, on a dollar-for-dollar basis the difference
between the Kendle Net Working Capital Amount and Six Hundred Twenty Five
Thousand Dollars ($625,000) within thirty (30) days after receiving such Report.
Should the Kendle Auditors determine that the Net Working Capital on the Closing
Date is greater than Six Hundred Twenty Five Thousand Dollars ($625,000), then
Kendle shall pay to CPR in cash, on a dollar-for-dollar basis, the difference
between the Kendle Net Working Capital Amount and Six Hundred Twenty Five
Thousand Dollars ($625,000) within thirty (30) days after receiving such Report.
Notwithstanding the provisions of this Section 6(f) to the contrary, if CPR
disputes the Kendle Net Working Capital Amount, and delivers to Kendle within
fifteen (15) days of his receipt of the Report a letter specifying in reasonable
detail CPR's objections to the determination of the Kendle Net Working Capital
Amount, (a) the parties shall try to in good faith resolve the matters set forth
in CPR's letter and if the parties fail to reach an agreement in good faith on
or before the fifteenth (15th) day after receipt by Kendle of CPR's letter then
the dispute shall be referred for final binding resolution to a mutually
acceptable partner at a mutually acceptable firm of certified public accountants
("Independent Auditors") (whose determination shall be made in accordance with
GAAP and shall be conclusive and binding on the parties), and (b) no payment
shall be due hereunder on the 30th day following receipt of the Report, but CPR
shall pay to Kendle or Kendle shall pay to CPR, as appropriate, the difference,
if any, between the Kendle Net Working Capital Amount, as modified, by the final
determination of the Independent Auditors, and Six Hundred Twenty Five Thousand
Dollars ($625,000) within thirty (30) days of such final determination. If the
dispute is resolved by the Independent Auditors in favor of CPR, Kendle shall
pay the costs and fees charged by the Independent Auditors in connection with
such resolution; if the dispute is resolved by the Independent Auditors in favor
of Kendle, CPR shall pay the costs and fees charged by the Independent Auditors
in connection with such resolution.
(g) WHITE PAPER.
Not later than sixty (60) days after the Closing Date, Kendle shall
have received from CC a white paper describing in reasonable detail the
investigations, research, projections, evaluations and conclusions with respect
to the possible geographic and other expansion of CPR. This paper will include,
at a minimum, the cities considered, the parameters used to evaluate locations,
the reasons why the parameters were chosen and the analysis for each of the
sites considered. All materials and documents gathered and prepared during this
investigation shall be attached as appendices to this white paper.
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(h) NON-COMPETITION COVENANT.
For a period of four (4) years from and after the Closing Date (the
"Non-Competition Term") CPR shall not, directly or indirectly, as a consultant,
principal, partner, member, shareholder or otherwise, other than on behalf of
Kendle or its subsidiaries or assigns, successors or transferees or for its or
their benefit: (i) engage in the business of a contract research organization
(within the meaning of 21 CFR Part 312.3 as in effect on the date hereof),
providing clinical research, pharmacological research and drug development
services to pharmaceutical and biotechnology companies or engage in the business
of providing regulatory consulting services to pharmaceutical, medical devices
and food products companies (the "Business") in any state of the United States
of America or in any other jurisdiction or country outside the United States of
America: (x) in which CPR or any of its subsidiaries or affiliates conducted
business or had operations immediately prior to consummation of the transactions
contemplated by the APA; or (y) in which Kendle, at any time during the
Non-Competition Term, engages in the Business (the "Territory"); or (ii) solicit
or accept orders that relate specifically to the Business from any customer or
active potential customer of CPR existing on the Closing Date; or (iii) hire,
solicit or endeavor to entice away from Kendle any person who is or was employed
by Kendle at any time during the Non-Competition Term or approach any such
person for any such purpose or authorize or knowingly cooperate with the taking
of any such action by any other individual, person or entity; provided, however,
that the parties acknowledge and agree that CPR shall be permitted to own
legally or beneficially securities only that are listed on a national securities
exchange or traded actively in the over-the-counter market having no more than
five percent (5%) of the outstanding equity or voting power of any Person that
is engaged in the Business, and, provided further, that CPR may be shareholder
of CPRC or any successors in interest of CPRC to the extent that CPRC is engaged
in the business of performing post-marketing data collection, patient surveys,
clinical database development for Phase IIIB and Phase IV services only,
clinical website development, physician and pharmacy call center services,
patient, pharmacist and physician education services and patient registry
services for the pharmaceutical and biotechnology industries, including, without
limitation, for Mylan and its affiliates (the "CPRC Business") and that CPRC may
continue to conduct the CPRC Business as described above and CPRC may continue
to market and solicit the services of Mylan and other Persons in the
pharmaceutical and biotechnology industries only in connection with the conduct
of the CPRC Business.
(i) PAYMENT OF EXCLUDED LIABILITIES AND ASSURED LIABILITIES.
CPR shall pay and discharge on a timely basis all Excluded Liabilities
consistent with past practice. CPR shall have the right to dispute in good faith
the timely payment of any Excluded Liability as long as CPR provides notice to
Kendle not later than ten (10) days from the date that CPR becomes aware of an
Excluded Liability that it intends to dispute in good faith. Kendle shall pay
and discharge on a timely basis all Assumed Liabilities consistent with past
practice. Kendle shall have the right to dispute in good faith the timely
payment of any Assumed Liability as long as Kendle provides notice to CPR not
later than ten (10) days from the date that Kendle becomes aware of an Assumed
Liability that it intends to dispute in good faith.
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(j) CPR CASE REPORT DOCUMENTS.
Kendle acknowledges that it shall receive, as part of the Acquired
Assets, all of the documentation necessary to complete case report forms,
including without limitation, informed consents, existing up to and including
the Closing Date (the "CPR Case Report Documents"). In the event that Kendle
elects at any time and from time to time after the Closing Date to destroy any
of the CPR Case Report Documents, Kendle shall provide to TC written notice of
Kendle's intent to destroy part of the CPR Case Report Documents (the
"Destruction Notice"). TC shall have the right to take title to and possession
of any CPR Case Report Documents subject to the Destruction Notice by providing
written notice to Kendle within 30 days after receipt of the Destruction Notice,
and Kendle shall cause such CPR Case Report Documents to be transferred to TC.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF KENDLE.
The obligation of Kendle to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in sec. 4
above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) CPR and each of the Sellers shall have performed and
complied in all material respects with all of its or his, as the case
may be, covenants hereunder through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of Kendle to own the
Acquired Assets, or (D) affect adversely the right of CPR to own its
assets and to operate its business (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(iv) CPR shall have delivered to Kendle a certificate to the
effect that each of the conditions specified above in sec.
7(a)(i)-(iii) is satisfied in all respects;
(v) CPR shall have executed certificates, assignments, bills
of sale and other documentation reasonably satisfactory to Kendle and
its counsel for the purpose of delivering, transferring, assigning and
conveying to Kendle the Acquired Assets;
(vi) Kendle and TC shall have entered into a one (1) year
renewable consulting agreement substantially in the form of Exhibit D
hereto ("Consulting
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Agreement") and Kendle and CC shall have entered into a three (3)
month Consulting Agreement;
(vii) each of the CPR Shareholders shall have executed and
delivered the Non-Competition and Non-Disclosure Covenant in the form
of Exhibit E hereto (the "Covenant");
(viii) no material adverse change in the business, assets,
liabilities, income, financial condition or business prospects of CPR
("CPR Material Adverse Change") shall have occurred; provided,
however, if a CPR Material Adverse Change shall have occurred, Kendle
and CPR shall negotiate in good faith with respect to a reasonable
adjustment of the Purchase Price. If agreement is not reached with
respect to such an adjustment within twenty (20) days, either party
may terminate this Agreement for failure of a condition precedent;
(ix) the Parties shall have received all other
authorizations, consents, and approvals (the "Approvals") of
governments and governmental agencies referred to in sec. 4(c) above
and all Approvals of third parties to material agreements, leases,
licenses, contracts, instruments and other arrangements that require
or contemplate such Approvals in connection with the consummation of
the transactions contemplated hereby;
(x) Kendle shall have received from counsel to CPR an
opinion in form and substance as set forth in Exhibit F attached
hereto, addressed to Kendle, and dated as of the Closing Date;
(xi) Kendle, CC and CPRC shall have executed the Right of
First Offer Agreement in the form of Exhibit G hereto;
(xii) all holders of any options or other rights to purchase
any securities of CPR shall fully exercise such options or other
rights and convey, transfer and assign all such securities of CPR to
Sellers prior to the Closing;
(xiii) all actions to be taken by CPR and the Sellers in
connection with consummation of the transactions contemplated hereby
and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Kendle;
(xiv) CPR shall have received from CC and CPRC a written
commitment to change the name of CPRC to a new name that in no way
reflects or intimates either of the names "Clinical and Pharmacologic
Research" or "CPR" (collectively, the "Names"). Such commitment shall
include an agreement (i) to make all appropriate filings with the
appropriate Secretaries of State to give full force and legal effect
to such name change not later than fifteen (15) days after the Closing
Date, and (ii) to cease any and all incidental uses of the Names by CC
and CPRC not later than April 30, 2002. CPR shall deliver to Kendle a
similar commitment on CPR's own behalf with respect to the Names; and
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(xv) Each of the Sellers, Yolanda F. Williams, J. Hiller
Hardie and Jennifer M. Ogden shall execute the Investor Letter in the
form attached hereto as Exhibit H.
Kendle may waive any condition specified in this sec. 7(a) if it executes a
writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF CPR AND THE SELLERS.
The obligation of CPR and the Sellers to consummate the transactions to
be performed by them in connection with the Closing is subject to satisfaction
of the following conditions:
(i) the representations and warranties set forth in sec. 3 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) Kendle shall have performed and complied in all material
respects with all of its covenants hereunder through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
(iv) Kendle shall have delivered to CPR a certificate to the
effect that each of the conditions specified above in sec. 7(b)(i)-(iii)
is satisfied in all respects;
(v) Kendle shall have delivered the Note and the Closing Shares;
(vi) Kendle shall have executed and delivered, and shall cause
the escrow agent to execute and deliver, the Escrow Agreement;
(vii) Kendle shall have executed and delivered the Registration
Rights Agreement in the form of Exhibit I hereto;
(viii) TC and CC shall have executed and delivered the Consulting
Agreements;
(ix) no material adverse change in the business, assets,
liabilities, income, financial condition or business prospects of Kendle
("Kendle Material Adverse Change") shall have occurred; provided,
however, that if a Kendle Material Adverse Change shall have occurred,
CPR and Kendle shall negotiate in good faith with respect to a reasonable
adjustment to the Purchase Price. If agreement is not reached with
respect
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to such an adjustment within twenty (20) days, either Party may
terminate this Agreement for failure of a condition precedent;
(x) the Parties shall have received all Approvals of governments
and governmental agencies referred to in sec. 4(c) above;
(xi) CPR shall have received from counsel to Kendle an opinion in
form and substance as set forth in Exhibit J attached hereto, addressed
to CPR, and dated as of the Closing Date; and
(xii) all actions to be taken by Kendle in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to CPR.
The Sellers may waive any condition specified in this sec. 7(b) if he executes a
writing so stating at or prior to the Closing.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All of the representations and warranties of CPR contained in
sec. 4(c)-(d), sec. 4(f)-(j), sec. 4(l)-(u) and sec. 4(w)-(y) above shall
survive the Closing hereunder and continue in full force and effect through and
until the second anniversary of the Closing Date; PROVIDED, however, that the
other representations and warranties of the Parties contained in this Agreement
(including the representations and warranties of the CPR contained in sec.
4(a), sec. 4(b), sec. 4(e), sec. 4(k) and sec. 4(v) above) shall survive the
Closing and continue in full force and effect forever thereafter (subject to
any applicable statutes of limitations). All of the representations and
warranties of Kendle contained in this Agreement shall survive the Closing
hereunder and continue in full force and effect through and until the second
anniversary of the Closing Date; provided, however that the representations and
warranties contained in sec. 3(b) and sec. 3(d) shall survive the Closing and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations).
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF KENDLE.
(i) In the event CPR breaches any of its representations,
warranties, and covenants contained herein (other than the covenants in
sec. 2(a) above and the representations and warranties in sec. 4(a) and
sec. 4(e) above), and, if there is an applicable survival period
pursuant to sec. 8(a) above, provided that Kendle makes a written claim
for indemnification against CPR pursuant to sec. 11(h) below within
such survival period, then each of the Sellers jointly and severally
agrees to indemnify Kendle from and against the entirety of any Adverse
Consequences Kendle may suffer through and after the date of the claim
for indemnification (including any Adverse Consequences Kendle may
suffer
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after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach
(or the alleged breach). In addition, provided that Kendle makes a
written claim for indemnification against CPR pursuant to sec. 11(h)
below within the applicable survival period, then each of the Sellers
jointly and severally agrees to indemnify Kendle from and against the
entirety of any Adverse Consequences Kendle may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences Kendle may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the nature of,
or caused by the Excluded Liabilities (or any of them).
(ii) In the event CPR breaches any of its covenants in sec.
2(a) above or any of its representations and warranties in sec. 4(a)
and sec. 4(e) above, and, if there is an applicable survival period
pursuant to sec. 8(a) above, provided that Kendle makes a written claim
for indemnification against CPR pursuant to sec. 11(h) below within
such survival period, then each of the Sellers jointly and severally
agrees to indemnify Kendle from and against the entirety of any Adverse
Consequences Kendle may suffer through and after the date of the claim
for indemnification (including any Adverse Consequences Kendle may
suffer after the end of any applicable survival period resulting from,
arising out of, relating to, in the nature of, or caused by the breach
(or the alleged breach).
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS.
(i) In the event Kendle breaches any of its
representations, warranties, and covenants contained herein, and, if
there is an applicable survival period pursuant to sec. 8(a) above,
provided that CPR or any of the Sellers makes a written claim for
indemnification against Kendle pursuant to sec. 11(h) below within such
survival period, then Kendle agrees to indemnify each of the Sellers or
CPR, as the case may be, from and against the entirety of any Adverse
Consequences any of the Sellers or CPR, as the case may be, may suffer
through and after the date of the claim for indemnification (including
any Adverse Consequences any of the Sellers or CPR, as the case may be,
may suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach). In addition, provided that CPR or the
Sellers make a written claim for indemnification against Kendle
pursuant to sec. 11(h) below within the applicable survival period,
then Kendle agrees to indemnify CPR or the Sellers, as the case may be,
from and against the entirety of any Adverse Consequences CPR or the
Sellers may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in the
nature of, or caused by the Assumed Liabilities (or any of them).
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other
Party (the "Indemnifying Party") under this sec. 8, then the
Indemnified Party shall promptly notify each Indemnifying Party thereof
in writing;
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PROVIDED, however, that no delay on the part of the Indemnified Party
in notifying any Indemnifying Party shall relieve the Indemnifying
Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing within
15 days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligations hereunder, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing
business interests of the Indemnified Party, and (E) the Indemnifying
Party conducts the defense of the Third Party Claim actively and
diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with sec. 8(d)(ii)
above, (A) the Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not
to be withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in sec. 8(d)(ii)
above is or becomes unsatisfied, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into
any settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain responsible for
any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this sec. 8.
(e) DETERMINATION OF ADVERSE CONSEQUENCES.
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The Parties shall take into account the time cost of money (using the
Prime Rate as then reported in the Midwest edition of the WALL STREET JOURNAL as
the interest rate) in determining Adverse Consequences for purposes of this sec.
8. All indemnification payments under this sec. 8 shall be deemed adjustments to
the Purchase Price.
(f) [Intentionally deleted].
(g) OTHER INDEMNIFICATION PROVISIONS.
Except with respect to claims involving fraud or intentional breach or
inaccuracies with respect to the representations, warranties or covenants of a
Party, the foregoing indemnification provisions are exclusive and no other
statutory, equitable, or common law remedy (including without limitation any
such remedy arising under Environmental, Health, and Safety Requirements) any
Party might otherwise have with respect to the transactions contemplated by this
Agreement shall be available to such entity.
(h) LIMITATIONS ON INDEMNIFICATION.
Except in the case of fraud or intentional breach or inaccuracies with
respect to the representations, warranties or covenants of an Indemnifying Party
contained in this Agreement, such Indemnifying Party shall not be required to
indemnify any Indemnified Party under sec. 8(b) unless the aggregate of all
amounts for which indemnity would otherwise by payable by the Indemnifying Party
pursuant to sec. 8(b) exceeds Forty Thousand Dollars ($40,000.00) (the
"Deductible Amount") and, in such event, the Indemnifying Party shall be
responsible to pay for all Adverse Consequences in excess of the Deductible
Amount. Except with respect to the Excepted Provisions (defined below), the
maximum aggregate liability of the Sellers for indemnification under Section 8
of this Agreement or any other provision of this Agreement or otherwise in
connection with the transactions contemplated by this Agreement shall be limited
to sum of (i) the aggregate original principal amounts of all Notes outstanding
as of the Closing Date issued pursuant to this Agreement and (ii) the Kendle
Shares deposited on the Closing Date with Fifth Third Bank pursuant to the
Escrow Agreement (the "Maximum Indemnification Obligation"); provided, however,
that the Maximum Indemnification Obligation shall not be applicable to limit the
maximum aggregate liability of CPR or the Sellers for indemnification for
breaches in representations or warranties contained in sec. 4(e), sec. 4(k) or
sec. 4(v) hereof (collectively, the "Excepted Provisions"), the maximum
aggregate liability for breach of such Excepted Provisions being the Purchase
Price.
9. TAX COVENANTS.
CPR shall cause to be timely and properly prepared and executed, and
timely filed, all income Tax Returns of CPR relating to all taxable periods of
CPR ending on or before the Closing Date, and CPR shall be responsible for the
timely payment of all taxes to which such Tax Returns relate. All such Tax
Returns shall be prepared, and all elections with respect to such Tax Returns
shall be made, in a manner consistent with past practice with respect to CPR to
the
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extent permitted under applicable law and at the expense to CPR. CPR shall
provide a copy of any such Tax Return to Kendle at least fifteen (15) days prior
to the filing thereof for its reasonable review and comment.
10. TERMINATION.
(a) TERMINATION OF AGREEMENT.
Certain of the Parties may terminate this Agreement as provided
below:
(i) Kendle and CPR may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) Kendle and CPR may terminate this Agreement if the Market
Value of a Kendle Share is less than Fourteen Dollars ($14.00) per
Kendle Share on the terms set forth in sec. 2(b) above;
(iii) Kendle may terminate this Agreement by giving written
notice to CPR on or before the 30th day following the date of this
Agreement if Kendle is not reasonably satisfied with the results of its
continuing business, legal, environmental, and accounting due diligence
regarding CPR and its Subsidiaries;
(iv) Kendle may terminate this Agreement by giving written
notice to CPR at any time prior to the Closing (A) in the event CPR or
any of the Sellers has breached any material representation, warranty,
or covenant contained in this Agreement in any material respect, Kendle
has notified CPR and the Sellers of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before
February 28, 2002, by reason of the failure of any condition precedent
under sec. 7(a) hereof (unless the failure results primarily from
Kendle itself breaching any representation, warranty, or covenant
contained in this Agreement); and
(v) CPR may terminate this Agreement by giving written notice
to Kendle at any time prior to the Closing (A) in the event Kendle has
breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, CPR has notified Kendle of
the breach, and the breach has continued without cure for a period of
30 days after the notice of breach or (B) if the Closing shall not have
occurred on or before February 28, 2002, by reason of the failure of
any condition precedent under sec. 7(b) hereof (unless the failure
results primarily from CPR or any of the Sellers themselves breaching
any representation, warranty, or covenant contained in this Agreement).
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(b) EFFECT OF TERMINATION.
If any Party terminates this Agreement pursuant to sec. 10(a) above,
all rights and obligations of the Parties hereunder shall terminate without any
Liability of any Party to any other Party (except for any Liability of any Party
then in breach).
11. MISCELLANEOUS.
(a) NATURE OF CERTAIN OBLIGATIONS.
The covenants of CPR in sec. 2(a) above concerning the sale of the
Acquired Assets to Kendle and the representations, warranties, and covenants in
this Agreement are joint and several obligations as to the Sellers. This means
that each Seller will be responsible to the extent provided in sec. 8 above for
the entirety of any Adverse Consequences Kendle may suffer as a result of any
breach thereof.
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS.
No Party shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the Closing without
the prior written approval of Kendle and CPR; PROVIDED, HOWEVER, that any Party
may make any public disclosure it believes in good faith after consultation with
counsel is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use commercially reasonable efforts to advise the other Parties prior to
making the disclosure).
(c) NO THIRD-PARTY BENEFICIARIES.
This Agreement shall not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns.
(d) ENTIRE AGREEMENT.
This Agreement (including the documents referred to herein) constitutes
the entire agreement among the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties, written or oral, to the
extent they related in any way to the subject matter hereof.
(e) SUCCESSION AND ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of his or its rights, interests,
or obligations hereunder without the prior written approval of Kendle and CPR;
PROVIDED, HOWEVER, that Kendle may (i) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (ii) designate one or
more of
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its Affiliates to perform its obligations hereunder (in any or all of which
cases Kendle nonetheless shall remain responsible for the performance of all of
its obligations hereunder).
(f) COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together will constitute one
and the same instrument.
(g) HEADINGS.
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
(h) NOTICES.
All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to CPR or the Sellers: THOMAS S. CLARK, M.D.
Seneca View
RR-4
Box 161-H
Bruceton Mills, WV 26525
Attention: Dr. Thomas S. Clark, M.D.
with a required copy
(which shall not constitute
notice) to: REED SMITH LLP
435 Sixth Avenue
Pittsburgh, PA 15219
Attention: Frank T. Guadagnino, Esq.
If to Kendle: KENDLE INTERNATIONAL INC.
441 Vine Street
700 Carew Tower
Cincinnati, Ohio 45202
Attention: Paul F. Ritter, Esq.
Vice President, Secretary
& General Counsel
Attention: Rafael Mancera
Senior Director of M&A
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with a required copy
(which shall not constitute
notice) to: KEATING, MUETHING & KLEKAMP, P.L.L.
One East Fourth Street
1400 Provident Tower
Cincinnati, Ohio 45202
Attention: Edward E. Steiner, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(i) GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Ohio without giving effect to any choice or
conflict of law provision or rule (whether of the State of Ohio or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Ohio.
(j) AMENDMENTS AND WAIVERS.
No amendment of any provision of this Agreement shall be valid unless
the same shall be in writing and signed by Kendle and CPR. No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(k) SEVERABILITY.
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
(l) EXPENSES.
Each of the Parties will bear his or its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
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(m) CONSTRUCTION.
The Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
(n) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES.
The Exhibits, Annexes, and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
(o) SPECIFIC PERFORMANCE.
Each of the Parties acknowledges and agrees that the other Parties
would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the Parties agrees that the other Parties
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the matter
(subject to the provisions set forth in sec. 10(p) below), in addition to any
other remedy to which they may be entitled, at law or in equity.
(p) SUBMISSION TO JURISDICTION.
Each of the Parties submits to the non-exclusive jurisdiction of any
state or federal court sitting in Hamilton County, Ohio or Monongalia County,
West Virginia in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each Party also agrees not to bring
any action or proceeding arising out of or relating to this Agreement in any
other court. Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other Party with respect
thereto. Any Party may make service on any other Party by sending or delivering
a copy of the process to the Party to be served at the address and in the manner
provided for the giving of notices in sec. 10(h) above. Nothing in this sec.
10(p), however, shall affect the right of any Party to bring any action or
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proceeding arising out of or relating to this Agreement in any other court or to
serve legal process in any other manner permitted by law or at equity. Each
Party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
(Remainder of page intentionally blank; signature page follows)
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
KENDLE INTERNATIONAL INC.,
By: /s/ Paul F. Ritter
--------------------------------------
Name: Paul F. Ritter
Title: Vice President, Secretary
and General Counsel
CLINICAL AND PHARMACOLOGIC
RESEARCH, INC.
By: /s/ Thomas S. Clark
--------------------------------------
Name: Thomas S. Clark
Title: CEO
THE SELLERS:
/s/ Thomas S. Clark
-----------------------------------------
THOMAS S. CLARK, M.D.
/s/ Charles T. Clark
-----------------------------------------
CHARLES T. CLARK
/s/ E. Stuart Clark
-----------------------------------------
E. STUART CLARK