<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 1999
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
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NORTH CAROLINA 340-23520 56-1714315
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification Number)
</TABLE>
4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 200,
DURHAM, NORTH CAROLINA 27703-8411
(Address of principal executive offices)
(919) 998-2000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On January 5, 1999, Quintiles announced the completion of its
previously announced acquisition of substantial assets of Hoechst Marion
Roussel's Kansas City-based Drug Innovation and Approval facility and the
opening of a Kansas City contract research facility. A copy of the Agreement for
the Provision of Research Services and Purchase of Business Assets between
Hoechst Marion Roussel, Inc. and Quintiles, Inc. is attached hereto as
Exhibit 10.01 and incorporated herein by reference.
In connection with certain acquisitions accounted for as pooling of
interests which were consummated between January 1, 1996 and September 30, 1998,
Quintiles Transnational Corp. (the "Company") has restated certain of its
historical consolidated financial data, as included in the Company's Current
Report on Form 8-K dated January 27, 1999, and provides the restated selected
consolidated financial data table below.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected Consolidated Statement of Income Data set forth below for each
of the years in the three-year period ending December 31, 1997 and the
Consolidated Balance Sheet Data set forth below as of December 31, 1996 and 1997
are derived from the audited consolidated financial statements of the Company
and notes thereto, as restated for certain pooling transactions, included in
this Current Report on Form 8-K dated January 27, 1999. The selected
Consolidated Statement of Income Data set forth below for the years ended
December 1994 and 1993, and the Consolidated Balance Sheet Data set forth below
as of December 31, 1995, 1994 and 1993 are derived from the audited consolidated
financial statements of the Company as subsequently restated for certain pooling
transactions. The data provided as of September 30, 1998 and for the nine months
ended September 30, 1997 and 1998 are derived from unaudited consolidated
financial statements included in the Company's Quarterly Report on Form 10-Q for
the period ended September 30, 1998, as subsequently restated herein for certain
pooling transactions, but in the opinion of management, contain all adjustments,
consisting only of normal recurring accruals, which are necessary for a fair
statement of the results of such periods. The consolidated financial statements
of the Company have been restated to reflect material acquisitions by the
Company in transactions accounted for as poolings of interests. However, the
consolidated financial statements have not been restated to reflect certain
other acquisitions accounted for as pooling of interests where the Company
determined that the consolidated financial data would not have been materially
different if the pooled companies had been included. For such immaterial pooling
of interests transactions, which include two transactions in 1997 and two
transactions in 1996, the Company's financial statements for the year of each
transaction have been restated to include the pooled companies from January 1 of
that year, but the financial statements for years prior to the year of each
transaction have not been restated because the effect of such restatement would
be immaterial. The selected consolidated financial data presented below should
be read in conjunction with the Company's audited and unaudited consolidated
financial statements and notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included herein.
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<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
-------------------------------------------------------------- ----------------
1997 1996(1) 1995(1) 1994(1) 1993(1) 1998 1997
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
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Net revenue $852,900 $600,100 $368,056 $230,583 $169,623 $848,379 $608,436
Income from operations 88,812 43,851 25,900 17,456 12,545 88,654 63,387
Income before income taxes 86,535 24,241 24,655 16,567 9,785 86,737 61,387
Net income available for common
shareholders 55,683 7,648 14,626 10,598 5,230 58,914 38,862
Basic net income per share 0.76 0.11 0.23 0.18 0.11 0.77 0.53
Diluted net income per share $ 0.74 $ 0.11 $ 0.23 $ 0.18 $ 0.10 $ 0.76 $ 0.52
Weighted average shares outstanding(2):
Basic 73,739 69,148 63,171 58,128 49,681 76,476 73,283
Diluted 75,275 71,785 64,946 58,512 50,191 77,987 74,967
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<TABLE>
<CAPTION>
As of December 31, As of September 30,
------------------------------------------------------------ -------------------
1997 1996(1) 1995(1) 1994(1) 1993(1) 1998 1997
---- ---- ---- ---- ---- ---- ----
(In thousands, except employees)
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Cash and cash equivalents $ 80,247 $ 74,474 $ 84,569 $ 52,011 $ 18,188 $ 88,499 $ 77,338
Working capital 164,987 99,787 72,102 48,245 18,879 197,667 141,204
Total assets 814,027 554,619 352,277 208,944 136,272 937,952 741,544
Long-term debt including current portion 185,511 185,493 52,662 21,386 20,855 191,570 187,690
Shareholders' equity $388,639 $150,528 $165,943 $ 90,193 $ 89,015 $464,947 $339,628
Employees 11,540 7,896 4,835 3,115 2,346 14,682 9,682
</TABLE>
(1) Prior to the Company's November 29, 1996 share exchange with Innovex
Limited (Innovex), Innovex had a fiscal year end of March 31 and the
Company had (and continues to have) a fiscal year end of December 31.
As a result, the pooled data presented above for 1993 through 1995
include Innovex's March 31 fiscal year data in combination with the
Company's December 31 fiscal year data. In connection with the share
exchange, Innovex changed its fiscal year end to December 31.
Accordingly, the pooled data presented above for 1996 include both
Innovex's and the Company's data on a December 31 year end basis.
Because of the difference between Innovex's fiscal year end in 1995
compared with 1996, Innovex's quarter ended March 31, 1996 data are
included in the Company's pooled data for both 1995 and 1996.
(2) Restated to reflect the two-for-one stock splits of the Company's
Common Stock effected as a 100% stock dividend in November 1995 and
December 1997.
On February 12, 1999, Kenneth Hodges ("Plaintiff") filed a civil
lawsuit in the State Court of Fulton County Georgia naming as defendants Richard
L. Borison, Bruce I. Diamond, BASF Corporation, Pfizer, Inc., Merck & Company,
Inc., Wyeth-Ayerst Laboratories Company, Zeneca, Inc., Janssen Pharmaceutica
Inc., Smithkline Beecham Corporation, Hoechst Marion Roussel, Inc., Glaxo
Wellcome, Inc., Abbott Laboratories, Bristol-Myers Squibb Company,
Warner-Lambert Company, Monsanto Company, Novartis Pharmaceuticals Corporation
and Quintiles Laboratories Limited, a subsidiary of the Company. The complaint
alleges that certain drug trials conducted by Drs. Borison and Diamond in which
Plaintiff alleges he participated between 1988 and 1996 were not properly
conducted or supervised, that Plaintiff had violent adverse reactions to many of
the drugs and that his schizophrenia was aggravated by the drug trials.
Consequently, Plaintiff alleges that he was subject to severe mortification,
injured feelings, shame, public humiliation, victimization, emotional turmoil
and distress. The complaint alleges claims for battery, fraudulent inducement to
participate in the drug experiments, medical malpractice, negligence in
conducting the experiments, and intentional infliction of emotional distress.
Plaintiff seeks to recover his actual damages in unspecified amounts, medical
expenses, litigation costs, and punitive damages.
Nowhere in the complaint are found any specific allegations against
Quintiles Laboratories Limited nor any specific factual connection between the
Company and the Plaintiff's claims. The Company believes the claims alleged
against it are vague and meritless, and the recovery sought is baseless. The
Company intends to vigorously defend against these claims.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
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<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
<S> <C>
10.01 Agreement for the Provision of Research Services and Purchase of
Business Assets between Hoechst Marion Roussel, Inc. and
Quintiles, Inc., dated January 1, 1999 [Note: Certain
confidential portions of this exhibit have been omitted, as
indicated in the exhibit by an asterisk (*), and filed
separately with the Securities and Exchange Commission.]
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QUINTILES TRANSNATIONAL CORP.
By: /S/ RACHEL R. SELISKER
---------------------------------------
Dated: March 3, 1999 Rachel R. Selisker
Chief Financial Officer and Executive Vice
President Finance
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
<S> <C>
10.01 Agreement for the Provision of Research Services and Purchase of
Business Assets between Hoechst Marion Roussel, Inc. and
Quintiles, Inc., dated January 1, 1999 [Note: Certain
confidential portions of this exhibit have been omitted, as
indicated in the exhibit by an asterisk (*), and filed
separately with the Securities and Exchange Commission.]
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<PAGE> 1
AGREEMENT FOR THE PROVISION OF RESEARCH SERVICES AND
PURCHASE OF BUSINESS ASSETS
BETWEEN
HOECHST MARION ROUSSEL, INC.
AND
QUINTILES, INC.
[Note: Certain confidential portions of this exhibit have been omitted, as
indicated herein by an asterisk (*), and filed separately with the Securities
and Exchange Commission.]
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TABLE OF CONTENTS
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1. DEFINITIONS...............................................................................................1
2. PURCHASE AND LEASE OF ASSETS, LICENSED ASSETS TO BE TRANSFERRED, EXCLUDED ASSETS..........................9
2.1 LEASE AND SUBSEQUENT SALE TO QUINTILES OF FACILITY......................................................9
2.2 SALE TO QUINTILES OF PURCHASED PROPERTY.................................................................9
2.3 ASSUMPTION BY QUINTILES OF LEASED PROPERTY.............................................................10
2.4 LICENSE FOR HMR LICENSED TECHNOLOGY....................................................................11
2.5 RIGHTS NOT TRANSFERRED TO QUINTILES....................................................................11
2.6 ASSIGNMENT OF THE ASSUMED CONTRACTS; RELATED MATTERS...................................................12
2.7 REAL ESTATE............................................................................................14
3. CONTRACT RESEARCH SERVICES...............................................................................14
3.1 RESEARCH SERVICES......................................................................................14
3.2 RESERVED CAPACITY......................................................................................18
3.3 TERMS OF PROJECTS......................................................................................21
3.4 PAYMENT FOR RESEARCH SERVICES..........................................................................22
3.5 REDUCTIONS OR ALTERATIONS IN HMR'S COMMITMENTS.........................................................25
3.6 QUALITY-RELATED MATTERS................................................................................26
3.7 RESEARCH SERVICES AT OTHER QUINTILES SITES; PRIOR ENGAGEMENTS..........................................28
3.8 DEFINITION OF PRICE PER OUTPUT UNIT....................................................................29
3.9 ESTABLISHMENT OF COMMITTEES............................................................................31
3.10 FACILITY COMMITMENT FEE................................................................................33
3.11 YEAR 2000 PROVISION....................................................................................34
4. LIABILITIES AND INDEMNIFICATION..........................................................................35
4.1 QUINTILES ASSUMING NO LIABILITIES......................................................................35
4.2 HMR GENERAL INDEMNITY..................................................................................35
4.3 QUINTILES GENERAL INDEMNITY............................................................................36
4.4 LIMITATIONS ON INDEMNITY...............................................................................37
4.5 HMR'S RESPONSIBILITY AND INDEMNITY RE: TRANSFERRING EMPLOYEES..........................................39
4.6 QUINTILES'RESPONSIBILITY AND INDEMNITY RE: TRANSFERRING EMPLOYEES......................................40
4.7 PROCEDURES RE: GENERAL AND EMPLOYEE INDEMNITIES........................................................40
4.8 HMR INDEMNITY RE: ENVIRONMENTAL CLAIMS.................................................................42
4.9 QUINTILES'INDEMNITY RE: ENVIRONMENTAL CLAIMS...........................................................43
4.10 NUCLEAR MATERIALS LICENSE AND "RAD-BUILDING"...........................................................44
5. EMPLOYMENT AND BENEFITS OF TRANSFERRING EMPLOYEES........................................................45
5.1 QUINTILES'EMPLOYMENT OF TRANSFERRING EMPLOYEES.........................................................45
5.2 BENEFITS FOR TRANSFERRING EMPLOYEES....................................................................47
5.3 APPORTIONMENTS.........................................................................................48
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5.4 KEY TRANSFERRING EMPLOYEE RETENTION....................................................................49
5.5 RAIDING OF OTHER PARTY'S EMPLOYEES.....................................................................49
6. WARRANTIES...............................................................................................49
6.1 HMR WARRANTIES.........................................................................................49
6.2 EXCLUSION OF OTHER EXPRESS OR IMPLIED WARRANTIES.......................................................51
6.3 QUINTILES WARRANTIES...................................................................................51
7. CLOSING AND CONDITIONS TO CLOSING........................................................................52
7.1 CLOSING................................................................................................52
7.2 QUINTILES'CONDITIONS TO CLOSING........................................................................53
7.3 HMR'S CONDITIONS TO CLOSING............................................................................55
8. TERMINATION..............................................................................................57
8.1 QUINTILES'RIGHT TO TERMINATE DURING THE INITIAL PERIOD.................................................57
8.2 HMR'S RIGHT TO TERMINATE DURING THE INITIAL PERIOD.....................................................58
8.3 TERMINATION FOR INSOLVENCY.............................................................................59
8.4 QUINTILES'OPTION TO CONTINUE TO LEASE..................................................................59
8.5 CONSEQUENCES OF TERMINATION............................................................................60
8.6 RIGHTS OF HMR AND QUINTILES, AND EXCLUSION OF CONSEQUENTIAL LOSS.......................................61
9. COVENANTS................................................................................................62
9.1 PRE-CLOSING COVENANTS..................................................................................62
9.2 POST-CLOSING COVENANTS.................................................................................65
10. PUBLICITY................................................................................................70
11. CONFIDENTIALITY..........................................................................................70
12. BROKERAGE FEES, EXPENSES OF THE PARTIES..................................................................70
12.1 NO BROKERS FEES........................................................................................70
12.2 EACH PARTY TO BEAR ITS OWN COSTS.......................................................................71
13. LAW AND ARBITRATION......................................................................................71
13.1 LAW....................................................................................................71
13.2 ARBITRATION............................................................................................71
14. TAX ALLOCATION...........................................................................................72
14.1 SALES TAX..............................................................................................72
14.2 INDEMNIFICATION OF HMR BY QUINTILES....................................................................73
14.3 INDEMNIFICATION PROCEDURE..............................................................................73
15. MISCELLANEOUS............................................................................................75
15.1 ENTIRE AGREEMENT.......................................................................................75
15.2 ASSIGNMENT.............................................................................................75
15.3 INVALIDITY.............................................................................................76
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15.4 WAIVER.................................................................................................76
15.5 SCHEDULES..............................................................................................77
15.6 COUNTERPARTS...........................................................................................77
15.7 CONFLICTS..............................................................................................77
15.8 FORCE MAJEURE..........................................................................................77
15.9 NO THIRD PARTY BENEFICIARIES...........................................................................77
15.10 NOTICES................................................................................................78
15.11 HEADINGS...............................................................................................79
</TABLE>
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SCHEDULE INDEX
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1.5 ASSUMED CONTRACTS
1.27 LEASE
1.30 MASTER SERVICES AGREEMENT
1.34 OPERATION, MAINTENANCE AND UTILITY SERVICE AGREEMENT
1.47 REAL ESTATE SALE AGREEMENT
1.60 LIST OF TRANSFERRING EMPLOYEES
2.2(a) LIST OF CERTAIN PURCHASED PROPERTY
2.2(b) LIST OF VEHICLES OWNED BY HMR
2.3(a)(i) LIST OF LEASED PROPERTY
2.3(a)(ii) LIST OF VEHICLES LEASED BY HMR
2.3(b) LIST OF RETAINED HMR CONTRACTS
3.2(c) LIST OF DEDICATED EMPLOYEES
3.8 LIST OF FACTORS FOR MEASURING OUTPUT
4.2 REPRESENTATIONS AND WARRANTIES OF HMR
4.3 REPRESENTATIONS AND WARRANTIES OF QUINTILES
4.10 PROPOSAL FOR LEASE OF RADIOACTIVE MATERIALS STORAGE BUILDING
5.1(a) FORMS OF OFFER LETTERS
5.1(b) LIST OF NONIMMIGRANT EMPLOYEES
5.4(a) OPTION RECIPIENTS
5.4(b) OPTION AGREEMENT
5.5(a) EXCLUDED EMPLOYEES LIST
5.5(b) HMR OFFER RECIPIENTS
</TABLE>
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AGREEMENT FOR THE PROVISION OF RESEARCH SERVICES AND
PURCHASE OF BUSINESS ASSETS
This Agreement for the Provision of Research Services and Purchase of
Business Assets (the "Agreement") is made as of January 1, 1999, by and between
Hoechst Marion Roussel, Inc. a Delaware corporation (hereinafter referred to as
"HMR"), and Quintiles, Inc., a North Carolina corporation (hereinafter referred
to as "Quintiles").
W I T N E S S E T H:
WHEREAS, HMR operates a research facility in Kansas City, Missouri and
is the owner of, or has a beneficial interest in, certain Assets (as
hereinafter defined); and
WHEREAS, HMR wishes to sell, lease or license, as the case may be, to
Quintiles and Quintiles wishes to purchase, lease or license from HMR, the
Assets, on the terms and subject to the conditions set forth herein; and
WHEREAS, Quintiles seeks commitments from HMR that it will purchase
contract research services from Quintiles and HMR is willing to make certain
commitments.
NOW THEREFORE, in consideration of the mutual promises and covenants
provided herein, the parties hereto hereby agree as follows:
1. DEFINITIONS
1.1 "Accounts Receivable" shall mean any payments due to HMR as
more particularly described in Section 2.5(c).
1.2 "Affiliate" shall mean any company or corporation or other
business entity controlling, controlled by or under common control with the
respective party. "Control" (including "controlling," "controlled by" and
"under common control with") of any party, company, corporation or other
business entity shall mean the direct or indirect ownership of
<PAGE> 7
more than fifty percent (50%) of the voting or income interest in such party,
company, corporation or other business entity, respectively.
1.3 "Assets" shall mean the Purchased Property, Leased Property,
the Facility, and the HMR Licensed Technology, as those terms are defined
below.
1.4 "Assignment and Assumption Agreement" shall mean that
agreement to be entered into at Closing, pursuant to which HMR will assign to
Quintiles the rights it has in certain Leased Property and Quintiles will
assume certain obligations of HMR set forth in the Assumed Contracts relating
to the Leased Property.
1.5 "Assumed Contracts" shall mean those contracts set forth in
Schedule 1.5 hereto and as to which Quintiles will assume the obligations of
HMR set forth therein.
1.6 "Bill of Sale and Undertaking" shall mean that document
pursuant to which the Purchased Property will be conveyed to Quintiles by HMR
and pursuant to which Quintiles will assume certain liabilities related to the
Purchased Property.
1.7 "Closing" shall mean the closing of the purchase of the
Purchased Property effective as of 12:01 a.m., January 1, 1999 and to occur on
the date hereof, or as soon thereafter as conditions are satisfied or waived,
or such other date(s) as the parties mutually agree in writing.
1.8 "Damages" shall have the meaning set out in Section 4.2.
1.9 "Dedicated Employees" shall have the meaning set out in
Section 3.2(c).
1.10 "Disclosure Memorandum" shall mean the disclosure memorandum
delivered by HMR to Quintiles of even date with this Agreement.
2
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1.11 "Employee Lease Agreement" shall mean the agreement
contemplated by Section 5.2(b) and to be entered into at Closing.
1.12 "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions or causes of action, suits, obligations,
liabilities, losses, proceedings, executory decrees, judgments, penalties,
fees, demands, demand letters, orders, directives, claims (including any claims
involving toxic torts or liability in tort, strict, absolute or otherwise),
liens, notices of noncompliance or violation, or legal fees or costs of
investigations, monitoring or proceedings, relating in any way to any
Environmental Law or any Environmental Permit issued under any such
Environmental Law, or arising from the presence, Release or threatened Release
(or alleged presence, Release or threatened Release) into the environment of
any Hazardous Materials (hereinafter "Claims") including, without limitation,
and regardless of the merit of such Claim, any and all Claims by any
governmental or regulatory authority or by any third party for enforcement,
cleanup, remediation, removal, response, remedial or other actions or damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
pursuant to any Environmental Law or for any injury (including death of any
person or persons) or threat of injury to health, safety, natural resources or
the environment.
1.13 "Environmental Laws" shall mean all applicable past, present
and future statutes, regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, guidelines, authorizations, concessions, franchises,
and similar items, of all governmental agencies, departments, commissions,
boards, bureaus, or instrumentalities of the United States, and the states and
political subdivisions thereof, and all principles of common law pertaining to
the regulation and protection of human health, safety, and damages to natural
resources, including without limitation Releases and threatened Releases or
otherwise relating to the operation,
3
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manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Hazardous Materials. Environmental Laws include, but
are not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"); the Federal Insecticide,
Fungicide and Rodenticide Act, as amended ("FIFRA"); the Resource Conservation
and Recovery Act, as amended ("RCRA"); the Toxic Substances Control Act, as
amended ("TSCA"); the Food, Drug, and Cosmetic Act ("FDA"), as amended; the
Clean Air Act, as amended ("CAA"); the Federal Water Pollution Control Act, as
amended ("FWPCA"); the Oil Pollution Act of 1990, as amended ("OPA"); the Fish
and Wildlife Coordination Act, as amended ("FWCA"); the Endangered Species Act,
as amended ("ESA"); the Wild and Scenic Rivers Act, as amended ("WSRA"); the
Rivers and Harbors Act of 1899, as amended ("1899 Rivers Act"); the Water
Resource Research Act of 1984, as amended ("WRRA"); the Occupational Safety and
Health Act, as amended ("OSHA"); and the Safe Drinking Water Act, as amended
("SDWA"); and their state and local counterparts or equivalents, as amended
from time to time.
1.14 "Environmental Permits" shall mean all permits, approvals,
identification numbers, licenses and any other authorizations required under
any applicable Environmental Law.
1.15 "Environmental Report Date" shall have the meaning set forth
in Section 4.8.
1.16 "Facility" shall mean the real property in Kansas City,
Missouri and the fixtures and improvements located thereon, all of which are
the subject of the Lease referred to in Section 2.1 and the Real Estate Sale
Agreement (giving effect to the Subsequent Lease as defined therein).
4
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1.17 "Finance Committee" shall mean the subcommittee of the
Steering Committee defined in Section 3.9(e).
1.18 "Guaranteed Revenue" shall have the meaning set forth in
Section 3.1(a).
1.19 "Hazardous Materials" shall mean (a) any chemicals,
materials, substances or wastes which are now or hereafter become defined as or
included in the definition of "hazardous substances," "hazardous materials,"
"toxic substances," "extremely hazardous substances," "toxic pollutants," or
words of similar import, under any applicable Environmental Law; (b) any
petroleum, petroleum products (including, without limitation, crude oil or any
fraction thereof), natural gas, natural gas liquids, liquefied natural gas or
synthetic gas useable for fuel (or mixtures of natural gas and such synthetic
gas) or oil and gas exploration or production waste, polychlorinated biphenyls
("PCBs"), asbestos-containing materials, mercury and lead-based paints; and (c)
any other chemical, material, substances, or waste, exposure to which is
prohibited, limited or regulated by any government or regulatory authority.
1.20 "HMR Licensed Technology" shall have the meaning ascribed
thereto in the Intellectual Property License.
1.21 "Information Technology Transition Services Agreement" shall
mean the agreement for transition services with respect to information
technology assets to be entered into at Closing.
1.22 "Initial Period" shall mean the period from the date of
Closing through December 31, 2003.
1.23 "Intellectual Property License" shall mean the agreement
contemplated by Section 2.4 to be entered into at Closing.
5
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1.24 "Items" shall mean the items referred to and defined in
Section 15.5.
1.25 "Interim Period" shall mean the period of time between
Closing and the completion of the Transfer of HMR's Environmental Permits to
Quintiles.
1.26 "Lab Lease" shall mean the lease for the laboratory in
Building D by Quintiles from HMR to be entered into at Closing.
1.27 "Lease" shall mean the lease for the Facility with respect to
the period from the Closing to the Real Estate Closing attached hereto as
Schedule 1.27.
1.28 "Leased Property" shall mean personal property currently
leased by HMR and as to which Quintiles will assume certain obligations of HMR
set forth in the Assumed Contracts, as described more fully in Section 2.3.
1.29 "Letter Agreement" shall have the meaning set forth in
Section 3.3.
1.30 "Master Services Agreement" shall mean the agreement
attached hereto as Schedule 1.30.
1.31 "1998 Output" shall have the meaning set forth in Section
3.8.
1.32 "Nuclear Materials License" shall have the meaning attributed
to it in Section 4.10.
1.33 "Offer Limit" shall have the meaning set forth in Section
3.1(b).
1.34 "Operation, Maintenance and Utility Service Agreement" shall
mean that agreement attached hereto as Schedule 1.34.
1.35 "Option Recipients" shall have the meaning set forth in
Section 5.4.
1.36 "Parent Guaranty" shall mean the guaranty to be executed at
Closing by HMR Pharma, Inc. and Hoechst Marion Roussel AG on behalf of HMR and
by Quintiles Transnational Corp. on behalf of Quintiles, respectively.
6
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1.37 "Permitted Carryover" shall have the meaning set forth in
Section 3.4.
1.38 "Persistent Material Failure" shall have the meaning set
forth in Section 8.2 below.
1.39 "Prevailing Competitive Rates" shall have the meaning set
forth in Section 3.1(b).
1.40 "Price Per Output Unit" shall mean the calculation computed
in accordance with Section 3.8.
1.41 "Project(s)" shall mean any project(s) for Research Services
pursuant to the Master Services Agreement.
1.42 "Proprietary Material" shall mean the material more
particularly described in Section 2.5(a) below.
1.43 "Purchased Property" shall mean the personal property
currently owned by HMR and that Quintiles will purchase as more fully described
in Section 2.2.
1.44 "Quality Committee" shall mean the subcommittee of the
Steering Committee defined in Section 3.9(e).
1.45 "Quintiles Transnational" shall mean Quintiles Transnational
Corp.
1.46 "Real Estate Closing" shall mean the closing of the sale of
the Facility according to the Real Estate Sale Agreement.
1.47 "Real Estate Sale Agreement" shall mean the purchase and sale
agreement attached hereto as Schedule 1.47.
1.48 "Release" shall mean any emission, spill, seepage, leak,
escape, leaching, discharge, injection, pumping, pouring, emptying, dumping,
disposing or release of Hazardous Materials.
7
<PAGE> 13
1.49 "Relevant Departments" shall have the meaning set out in
Section 3.2(a).
1.50 "Research Services" shall mean contract research services
required by HMR to be performed in the United States.
1.51 "Reserved Capacity" shall have the meaning set out in Section
3.2(a) below.
1.52 "Services Agreement" shall mean the agreement for
miscellaneous non-utility services related to the Facility to be entered into
at Closing.
1.53 "Stability Storage Areas Access Agreement" shall mean the
agreement providing for sharing of the stability storage rooms in Buildings A
and C between HMR and Quintiles to be entered into at Closing.
1.54 "Standards Committee" shall mean the committee referred to
and defined in Section 3.9(e) below.
1.55 "Steering Committee" shall mean the committee referred to and
defined in Section 3.9(a) below.
1.56 "Subsequent Lease" shall mean the lease for portions of
Buildings A, B and F by HMR from Quintiles to be executed and delivered at the
time of the Real Estate Closing, as contemplated by Real Estate Sale Agreement.
1.57 "Supervisory Committee" shall mean the committee referred to
and defined in Section 3.9(f) below.
1.58 "Transaction Documents" shall mean the Assignment and
Assumption Agreement, the Bill of Sale and Undertaking, the Information
Technology Transition Services Agreement, the Intellectual Property License,
the Lease, the Lab Lease, the Stability Rooms Access Agreement, the Subsequent
Lease, the Parent Guarantees, the Real Estate Sale
8
<PAGE> 14
Agreement, the Operation, Maintenance and Utility Service Agreement, the
Employee Lease Agreement, the Master Services Agreement, and the Services
Agreement.
1.59 "Transfer" shall mean the registration, application,
re-registration, reapplication, amendment, assignment, change of ownership or
transfer of HMR's Environmental Permits to Quintiles for transferred Assets
subject to Environmental Permits
1.60 "Transferring Employees" shall mean each of the HMR employees
listed in Schedule 1.60 and to whom Quintiles has made an offer of employment.
2. PURCHASE AND LEASE OF ASSETS, LICENSED ASSETS TO BE TRANSFERRED,
EXCLUDED ASSETS
2.1 LEASE AND SUBSEQUENT SALE TO QUINTILES OF FACILITY
Upon the terms and subject to the conditions of this Agreement, at the
Closing HMR and Quintiles shall each execute:
(a) the Lease;
(b) the Lab Lease;
(c) the Stability Storage Areas Access Agreement; and
(d) the Real Estate Sale Agreement.
2.2 SALE TO QUINTILES OF PURCHASED PROPERTY
Upon the terms and subject to the conditions of this Agreement, at the
Closing HMR and Quintiles shall each execute the Bill of Sale and Undertaking,
pursuant to which HMR shall sell to Quintiles and Quintiles shall purchase from
HMR the following assets:
(a) All machinery, tools, equipment and other personal
property: (i) located on the Facility on December 4,
1998 that is owned by HMR and used primarily in Drug
Innovation & Approval; (ii) the moveable and
9
<PAGE> 15
unattached laboratory equipment (excluding all
fixtures and case work) in the stability
laboratories on the second floor of Building D
adjoining the Facility; and (iii) purchased by HMR
prior to the date of Closing and used or held by HMR
wherever located on the Kansas City site with the
intent for use, primarily in the provision of Drug
Innovation & Approval activities in the Facility.
Without limiting the foregoing provisions of this
paragraph, all items of personal property that have
been capitalized by HMR (including without
limitation any personal property having an original
acquisition price of not less than $2,500) and that
are to be conveyed are listed in Schedule 2.2(a).
(b) Those vehicles owned by HMR that are listed in
Schedule 2.2(b) hereto.
(c) All research animals and animal foodstuffs contained
on the Facility on the Closing.
On the date of Closing, Quintiles shall pay to HMR by wire transfer of
immediately available funds the purchase price of $18,000,000 for the Purchased
Property.
2.3 ASSUMPTION BY QUINTILES OF LEASED PROPERTY
(a) Upon the terms and subject to the conditions of this
Agreement, at the date of Closing HMR and Quintiles
shall, subject to Section 2.6(a), each execute the
Assignment and Assumption Agreement, pursuant to
which HMR shall assign its interest in the following
Leased Property:
(i) All machinery, tools, equipment and other
personal property in and on the Facility on
the Closing that are leased by HMR and used
by HMR primarily for the provision of Drug
Innovation & Approval
10
<PAGE> 16
activities pursuant to either Assumed
Contracts, all of which personal property
is listed on Schedule 2.3(a)(i) hereto.
(ii) Those vehicles leased by HMR that are
listed in Schedule 2.3(a)(ii) hereto.
(b) Upon the terms and subject to the conditions of this
Agreement, at the date of Closing, HMR shall,
subject to Section 2.6(b), grant to Quintiles the
right to use all machinery, tools, equipment and
other personal property in and on the Facility on
the Closing that are leased by HMR and used by HMR
primarily for the provision of Drug Innovation &
Approval activities pursuant to those agreements as
described in Schedule 2.3(b).
2.4 LICENSE FOR HMR LICENSED TECHNOLOGY
Upon the terms and subject to the conditions of this Agreement, at the
Closing HMR and Quintiles shall each execute the Intellectual Property License.
2.5 RIGHTS NOT TRANSFERRED TO QUINTILES
Assets shall not include, and Quintiles shall not acquire any rights
(subject to the provisions of the Intellectual Property License or any Letter
Agreement) to:
(a) HMR's or its Affiliates' Proprietary Material, which
shall include: compounds; compositions of matter;
formulations; medicaments and modes of their
administration; micro-organisms; cells or parts
thereof, cell lines and the progeny thereof,
including modified or recombined DNA molecules, and
vectors and hosts containing the same; natural and
11
<PAGE> 17
synthetic antibodies, antigens, source materials and
fragments thereof and clinical, biological,
pharmaceutical and characterizing data; regulatory
correspondence, submissions, filings, approvals and
other reports or materials; and any other trade
secrets or intellectual property, general
procedures, methods of research, computer programs
and other methods or information of HMR;
(b) any trademark of HMR or its Affiliates or trade name
including, but not limited to, the names "Hoechst",
"Hoechst Marion Roussel" and "Aventis";
(c) any income, royalties, damages and payments
due to HMR (collectively "Accounts Receivable") in
respect of the operation by HMR of the Facility
prior to the date of Closing, which Accounts
Receivable are expressly excluded from this
Agreement; or
(d) any rights of HMR or its Affiliates to
receive any payment, including PILOTS and EATS,
under the TIF Agreement and Plan (each as defined in
the Real Estate Sale Agreement).
2.6 ASSIGNMENT OF THE ASSUMED CONTRACTS; RELATED MATTERS
(a) HMR shall use commercially reasonable efforts to
have the Assumed Contracts assigned to Quintiles,
and Quintiles shall cooperate with HMR to facilitate
such assignment. In the event that any Assumed
Contract(s) cannot be assigned to Quintiles, then
HMR shall, at the request of Quintiles and after
consultation between Quintiles and HMR, either (i)
terminate such Assumed Contract(s) at Quintiles'
cost (including any
12
<PAGE> 18
termination or other cost resulting from
termination) or, (ii) if permitted thereunder,
continue the Assumed Contract(s) for the benefit of
Quintiles for the remainder of the unexpired term of
such Assumed Contract(s), in which case Quintiles
shall fully perform all of the obligations under
such Assumed Contract(s) arising after the date of
Closing and unrelated to HMR's performance of such
Assumed Contracts prior to the date of Closing,
including payment of rent and other expenditures;
provided, however, if any Assumed Contract is not
permitted to be continued by HMR for the benefit of
Quintiles, then HMR shall remain responsible for any
continuing payments or costs of termination under
such Assumed Contract. To the extent that Quintiles
cannot obtain the use of any such Leased Property
pursuant to this Section 2.6 and to the extent such
Leased Property is necessary to provide the Reserved
Capacity, (i) Quintiles shall use its best efforts
to replace such Leased Property, and (ii) until such
Leased Property is replaced, Quintiles shall be
excused from the performance of Research Services
impacted by such Leased Property.
(b) HMR shall use commercially reasonable
efforts to permit use by Quintiles of, and if
applicable to convey its interest in, the Leased
Property held by HMR pursuant to vendor agreements,
other than the Assumed Contracts, which cannot be
assigned to Quintiles because HMR is retaining the
benefit of such agreement for its ongoing operations
(the "Retained HMR Contracts"). In consideration
thereof, Quintiles shall reimburse HMR for its pro
rata costs under such agreements relating to
13
<PAGE> 19
such Leased Property pursuant to periodic invoices
from HMR. To the extent that Quintiles cannot obtain
the use of any such Leased Property pursuant to this
Section 2.6 and to the extent such Leased Property
is necessary to provide the Reserved Capacity, (i)
Quintiles shall use its best efforts to replace such
Leased Property, and (ii) until such Leased Property
is replaced, Quintiles shall be excused from the
performance of Research Services impacted by such
Leased Property.
2.7 REAL ESTATE
(a) On the date of Closing, Quintiles shall pay to HMR
by wire transfer of immediately available funds the
sum of $* as a non-refundable earnest money
deposit payment for the Facility, as contemplated by
the Real Estate Sale Agreement.
(b) Subject to the provisions of the Real
Estate Sale Agreement, on the date of Real Estate
Closing, Quintiles shall pay to HMR by wire transfer
of immediately available funds the remaining
purchase price of $* for the Facility.
3. CONTRACT RESEARCH SERVICES
3.1 RESEARCH SERVICES
(a) During the Initial Period, HMR and/or its Affiliates
shall purchase annually, and Quintiles shall make
available annually, the Reserved Capacity. The
annual purchase price ("Guaranteed Revenue") for the
Reserved Capacity shall be as set forth in the
following table:
14
<PAGE> 20
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
GUARANTEED REVENUE (IN MILLIONS OF 1999 U.S. DOLLARS)
----------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 Total
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
* * * * * 436
----------------------------------------------------------------------------------------------
</TABLE>
The Guaranteed Revenue for any year shall be
adjusted for inflation occurring after December 31,
1998 and through the first day of such year using
the Employment Cost Index for total compensation for
private industry workers in service occupations
excluding sales, published by the Bureau of Labor
statistics; provided if at any time such index is no
longer published, then the Steering Committee shall
choose such published index as they shall agree is
most similar thereto. Notwithstanding the foregoing,
no such adjustment shall be made to the amount of
the Guaranteed Revenue payable in 1999.
(b) HMR shall offer Quintiles the opportunity to perform
all Research Services during the Initial Period up
to the Offer Limit. All Research Services shall be
provided pursuant to Letter Agreements that state on
their face (subject to actual payment at different
rates in cases involving Reserved Capacity or other
Research Services up to the Offer Limit, as set
forth herein below) financial terms based on
Quintiles' Prevailing Competitive Rates (defined as
the average rates at which Quintiles wins business
in the United States comparable to the Projects);
provided, however notwithstanding anything to the
contrary in this Agreement and
15
<PAGE> 21
the Transaction Documents, that: (i) Guaranteed
Revenue will be credited against all Research
Services that utilize Reserved Capacity at the Price
Per Output Unit as defined in Section 3.8, and not
at Quintiles Prevailing Competitive Rate as stated
in the Letter Agreement, and such credits at the
Price Per Output Unit shall be reflected in the
reconciliation process and the payment calculation
as each is described in Section 3.4; and (ii)
payments for Research Services that do not utilize
Reserved Capacity shall be adjusted for any
applicable discount as set forth herein below in
this Section 3.1(b) and such discount shall be
reflected in the reconciliation process and the
payment calculation as each is described in Section
3.4. The Steering Committee shall review and
confirm, from time to time, that the rates being
charged by Quintiles (before adjustment for any
applicable discount as set forth herein below in
this Section 3.1(b)) for Research Services (other
than Research Services that utilize Reserved
Capacity) constitute its then Prevailing Competitive
Rates, and Quintiles shall provide such support
therefor as may be reasonably requested by HMR's
member representatives on the Steering Committee.
HMR's obligation to offer Quintiles the opportunity
to perform Research Services terminates as to any
year when HMR shall have paid (or be deemed to have
paid in accordance with Section 3.5) to Quintiles an
aggregate during such year of $* million for
Research Services, such amount for any given year
being adjusted annually beginning on January 1,
2000, for
16
<PAGE> 22
inflation occurring after December 31, 1998 using
the methodology set forth in Section 3.1(a) above,
and such amount as adjusted being referred to
hereinafter as the "Offer Limit"). HMR may, but
shall have no obligation to, offer Quintiles the
opportunity to perform Research Services that become
part of HMR's pipeline of projects as a result of
any merger, consolidation or other combination after
the date hereof. Up to the Offer Limit, HMR shall
offer Quintiles the opportunity to perform all
Research Services prior to utilizing any additional
research and development facilities that are, or
will as a result of a signed agreement, become
owned, leased, licensed, controlled or beneficially
held, directly or indirectly, in whole or in part,
by HMR or its Affiliates by virtue of any merger,
consolidation or other combination after the date
hereof. Payments for Research Services in excess of
the Guaranteed Revenue, up to a maximum of the Offer
Limit, shall be reduced by the following applicable
volume discount percentage:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
VOLUME DISCOUNT PERCENTAGES
------------------------------------------------------------------------------------------------------
YEAR 1999 2000 2001 2002 2003
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VOLUME DISCOUNT * * * * *
PERCENTAGE
------------------------------------------------------------------------------------------------------
</TABLE>
During the Initial Period, once HMR has paid the
Offer Limit for any particular year, HMR and
Quintiles shall have a non-exclusive preferred
provider/customer relationship; provided however,
HMR shall have no
17
<PAGE> 23
obligation by virtue of such relationship to offer
Quintiles, nor shall Quintiles have any obligation
by virtue of such relationship to accept, the
opportunity to perform additional Research Services
for such year.
(c) After the Initial Period, Quintiles shall have no
obligation under this Agreement to provide Research
Services to HMR and HMR shall have no obligation to
purchase or offer to purchase Research Services from
Quintiles, except pursuant to Letter Agreements or
other contractual obligations then existing.
3.2 RESERVED CAPACITY
(a) Quintiles shall employ at the Facility personnel in
numbers and expertise in the departments of the
relevant areas of study conducted at the Facility as
of the date of Closing (namely biodynamics, drug
regulatory affairs, data management, pharmaceutics,
analytics, drug metabolism & pharmacokinetics and
clinical operations (the "Relevant Departments"))
such that Quintiles has the capacity to provide
Research Services equivalent to the * Output (the
"Reserved Capacity"). The initial allocation of the
Reserved Capacity among each Relevant Department
shall be determined by the Steering Committee based
on each Relevant Department's contribution to *
Output. If Quintiles expands its expertise and areas
of study from those identified as the Relevant
Departments, Quintiles and HMR may (but shall be
under no obligation to) agree that any and all such
expanded expertise and areas of study be included
within the defined term "Relevant Departments". In
any such
18
<PAGE> 24
case, the Steering Committee shall determine for
purposes of Section 3.8 below the Price Per Output
Unit to be associated with any output that may
result from the expanded expertise or areas of study
and shall reallocate the Reserved Capacity among the
Relevant Departments, as newly constituted.
Similarly, the Steering Committee shall regularly
evaluate the Relevant Departments to determine
whether it would be in both parties' interests to
eliminate any Relevant Department or to reallocate
the Reserved Capacity among the Relevant Departments
and, if so determined, reallocate the Reserved
Capacity appropriately.
(b) The annual Reserved Capacity for each Relevant
Department shall be divided by twelve (12) to
calculate the monthly Reserved Capacity for each
Relevant Department. HMR shall endeavor to offer
Quintiles the opportunity to perform Research
Services in a manner that fully and reasonably
utilizes the monthly Reserved Capacity for each
Relevant Department. HMR's failure to offer
Quintiles the opportunity to perform Research
Services in a manner that fully utilizes the
Reserved Capacity for each Relevant Department in
any month shall not affect the right of Quintiles to
receive and retain the entire monthly payment of
Guaranteed Revenue. For the avoidance of doubt, to
the extent HMR does not, for any reason, offer
Quintiles the opportunity to perform Research
Services in a manner that reasonably utilizes the
entire monthly allocation of Reserved Capacity for
any Relevant Department, Quintiles shall (i) have no
obligation to perform Research Services with respect
to such nonutilized
19
<PAGE> 25
Research Capacity and (ii) be deemed to have earned
and be entitled to retain all of the Guaranteed
Revenue for the relevant month. Such event shall not
confer on Quintiles any right to terminate this
Agreement and Quintiles' sole and exclusive remedy
for HMR's failure to offer such opportunities in a
manner that utilizes the monthly Reserved Capacity
shall be to retain the corresponding Guaranteed
Revenue without any obligation to perform Research
Services with respect to such nonutilized Reserved
Capacity. HMR shall be deemed to offer Quintiles the
opportunity to perform Research Services in a manner
that reasonably utilizes the Reserved Capacity if
such services could be performed utilizing Reserved
Capacity (not then already utilized by Projects),
and such Services could be performed with similar
available capacity and upon the terms being
requested by HMR either in-house or by another
contract research organization in the ordinary
course of its business.
(c) Attached as Schedule 3.2(c) is a list of
approximately 25 Transferring Employees who are
expected to become employees of Quintiles and who
are to be assigned duties by Quintiles as described
below (the "Dedicated Employees"). HMR may designate
up to 10 additional non-manager level Transferring
Employees as additional "Dedicated Employees." The
Dedicated Employees identified on Schedule 3.2(c) as
managers shall be made available to HMR on a
reasonable first priority basis as necessary for HMR
to access key corporate memory. Unless otherwise
agreed to by HMR in writing, the non-manager
Dedicated Employees shall be assigned
20
<PAGE> 26
to Projects exclusively. The Steering Committee
shall review the utilization of such Dedicated
Employees quarterly, and temporarily release any
Dedicated Employees from the foregoing commitments
or add new Dedicated Employees as appropriate such
that the total number of Dedicated Employees does
not exceed 35 (and the number of managers does not
exceed the original number of managers set forth on
Schedule 3.2(c)). The Steering Committee shall
attribute to each Dedicated Employee a constant
output level for his or her services (and a
corresponding Price Per Output Unit) which shall be
counted as Research Services (except with respect to
periods during which such Dedicated Employee is
released from the foregoing commitments). Such
constant output level will be based upon the
assumption that the Dedicated Employee is working at
full capacity (whether or not the Dedicated Employee
is actually working at full capacity).
3.3 TERMS OF PROJECTS
(a) The terms and conditions applying to each
Project will be as set forth in (i) the Master
Services Agreement and (ii) a separate Letter
Agreement in which the services to be performed and
the results to be achieved will be defined in detail
and agreed upon by both parties. Each Letter
Agreement will define material items, which may
include detailed tasks, a description of the
expected results, quality goals, timelines,
milestones, fixed budgets and provisions for dealing
with change orders. In addition, each Letter
Agreement will contain payment terms based on a
21
<PAGE> 27
set of milestones, including a completion milestone
and a meaningful final payment, in a manner that the
parties intend to be cash neutral to Quintiles when
considering all Letter Agreements in the aggregate.
Payment terms of any Letter Agreement shall in no
way qualify or affect HMR's obligation to pay the
Guaranteed Revenue in accordance with Section
3.4(a).
(b) If Quintiles is offered an opportunity to
perform Research Services and does not respond to
HMR within 14 days after delivery of such offer,
then HMR shall notify in writing one of Quintiles'
Steering Committee representative members of such
offer. If HMR does not receive written confirmation
from Quintiles within seven days after delivery of
notification to such member, then Quintiles shall be
deemed to have rejected such offer.
(c) If the parties fail to enter into a Letter
Agreement within 30 days after acceptance by
Quintiles of an offer to perform Research Services,
then any matter in dispute respecting such Letter
Agreement shall be referred to the Steering
Committee for resolution in accordance with the
terms of this Agreement. The Steering Committee
shall also resolve any dispute of whether an offer
constitutes reasonable utilization of the Reserved
Capacity.
3.4 PAYMENT FOR RESEARCH SERVICES
(a) Quintiles shall invoice HMR for the
Guaranteed Revenue due each year in equal monthly
installments on the first business day of each
month,
22
<PAGE> 28
commencing in January 1999. HMR shall pay each such
invoice to Quintiles by the seventh business day of
such month. The obligation of HMR to make such
payments shall not be conditioned upon Quintiles
being offered by HMR the opportunity to perform
Research Services. Notwithstanding anything in this
Agreement to the contrary, HMR may terminate its
obligation to pay the Guaranteed Revenue only by
exercising one of its express rights to terminate
this Agreement under Article 8 below.
(b) The Guaranteed Revenue and the Offer Limit
shall exclude any third-party costs for which
Quintiles is reimbursed without mark-up in
accordance with the terms of the relevant Letter
Agreement including, but not limited to,
investigator costs, travel expenses, Investigational
Review Board/Ethics Committee fees, investigator
meeting expenses, focus panel costs, costs of
advertising for patients, and submission and filing
fee, and any other payments to third parties passed
through to HMR which payments (if any) shall be made
in accordance with the terms of the relevant Letter
Agreement. Notwithstanding the foregoing, HMR shall
in 1999 receive a credit against actual pass-through
billable expenses incurred by Quintiles for Projects
in the amount of those project-related and billable
travel and entertainment expenses that the Steering
Committee concludes are included in the Financial
Schedule referred to in clause (i) of Section 12 of
Schedule 4.2 for 1999, provided that Reserved
Capacity and the corresponding Guaranteed Revenue
shall be reduced by the amount of
23
<PAGE> 29
such credit. HMR shall receive a similar credit in
each of the years 2000 through 2002, the amount of
which shall be a percentage of the 1999 credit
adjusted for inflation using the methodology set
forth in Section 3.1(a), as follows: (i) *% in
2000, (ii) *% in 2001 and (iii) *% in 2002, and in
each such year reductions shall be made in Reserved
Capacity and Guaranteed Revenue in amounts equal to
such credit.
(c) Promptly following the execution of this Agreement,
the parties shall establish a process by which
amounts due under the Letter Agreements and this
Agreement will be reconciled, on a monthly basis,
with the rights and obligations set forth herein.
The purpose (among others) of such reconciliation
process shall be to determine the extent to which
Research Services rendered during a given month
utilize Reserved Capacity for such month (crediting
Guaranteed Revenue at the Price Per Output Unit
against Research Services that utilize Reserved
Capacity as described in Section 3.1(b)) to
determine what, if any, additional amounts are
payable to Quintiles for such Research Services.
Such reconciliation process shall account for, among
other factors, with respect to each Relevant
Department for the relevant month: the amount of the
Reserved Capacity utilized by HMR; the amount of any
Permitted Carryover; the amount, if any, of Research
Services that do not utilize Reserved Capacity; and
the application of any discount provided for in
Section 3.1(b) to the amounts payable to Quintiles
for Research Services that do not utilize Reserved
Capacity. At the end of each month, Quintiles shall
24
<PAGE> 30
prepare, and deliver to HMR, a separate monthly
invoice reflecting such reconciliation process for
each ongoing Project. Any amount reflected as
remaining due to Quintiles after such reconciliation
process shall be paid by HMR within thirty (30) days
after receipt of an invoice prepared pursuant to the
reconciliation, except to the extent disputed in
good faith by HMR in accordance with this Agreement.
HMR shall have the right to audit upon reasonable
request Quintiles' adherence to, and implementation
of, such reconciliation process.
(d) When used herein, the term "Permitted
Carryover" shall mean, with respect to each Relevant
Department, HMR's right to apply an up to ten
percent (10%) cumulative shortfall or excess in
utilization of the monthly Reserved Capacity for
such Relevant Department against a future month's
corresponding excess or shortfall, respectively. A
Permitted Carryover for any given month may be
continued from month-to-month but in no event shall
the cumulative Permitted Carryover for all months
ever exceed an amount equal to ten percent (10%) of
the Reserved Capacity for the Relevant Department
for one month. The existence of a Permitted
Carryover does not relieve HMR from paying the
regular monthly payment of the Guaranteed Revenue
for months in which a Permitted Carryover exists.
3.5 REDUCTIONS OR ALTERATIONS IN HMR'S COMMITMENTS
(a) If Quintiles rejects an offer to perform
Research Services for which it has capacity and
capability within the Reserved Capacity, HMR's
25
<PAGE> 31
obligation to pay the Guaranteed Revenue for the months
during which such Research Services would have been performed
shall be reduced by the relevant Price Per Output Unit
multiplied by the projected output of such Research Services
in each relevant month. Such rejection shall not reduce the
Offer Limit or, in and of itself, grant to HMR any other
remedies hereunder. For purposes of this Agreement,
Quintiles' refusal to enter into a Letter Agreement (unless
resolution by the Steering Committee is pending in accordance
with Section 3.3(c)), or failure to respond to an offer to
perform Research Services as set forth in Section 3.3(b),
shall be deemed to be a rejection of an offer to perform
Research Services.
(b) If Quintiles rejects an offer to perform Research
Services for which it does not have capacity and capability
within the Reserved Capacity because such capacity and
capability is already fully utilized on other Projects, such
rejection (or deemed rejection) shall not reduce the
Guaranteed Revenue. However, if Quintiles had the capacity
and capability beyond the Reserved Capacity to enable it to
accept such offer, such rejection (or deemed rejection) shall
reduce the Offer Limit accordingly for such year.
(c) If any Research Services are postponed due to the
failure of Quintiles to perform in accordance with the terms
and conditions of the Letter Agreement relating to such
Research Services, such Research Services shall, for purposes
of determining utilization of the Reserved
26
<PAGE> 32
Capacity, be considered to have been performed in the period
in which the performance was originally due. However, if any
Research Services are postponed due to HMR's actions, the
Research Services shall be considered to have been performed
in the period in which the work is actually performed.
3.6 QUALITY-RELATED MATTERS
(a) If the Steering Committee determines that HMR has
suffered damage because Quintiles has materially
failed to perform in accordance with the terms and
conditions applicable to any Letter Agreement, then
Quintiles will, within seven business days after
such determination, pay, subject to any limitations
in the Letter Agreement, the Master Services
Agreement, or this Agreement, to HMR compensation
for such breach as determined by the Steering
Committee. The amounts so paid shall not reduce the
amount previously paid or payable pursuant to
Section 3.1 as Guaranteed Revenue. Examples of
situations in which such a payment may (depending
upon the seriousness and materiality of Quintiles'
actions) be due may include, among others, the
failure of Quintiles to meet quality or timeliness
objectives or quality standards set forth in the
relevant Letter Agreement. This provision shall be
superseded to the extent the Master Services
Agreement provides specific corrective actions for
such events.
(b) This Section 3.6(b) relates only to Research Services
offered to Quintiles under Section 3.1(b) which do
not utilize the Reserved
27
<PAGE> 33
Capacity. HMR's obligation to offer such
opportunities is subject to HMR's reasonable
identification of a material deficiency in the
quality or timeliness of Research Services performed
previously by Quintiles, or in the ability of
Quintiles to perform the proposed Research Services,
which material deficiency HMR determines would
adversely impact the proposed Research Services. HMR
shall give written notice of such material
deficiency to Quintiles and Quintiles shall have the
opportunity to promptly provide adequate assurance
reasonably satisfactory to HMR that such identified
material deficiency has been remedied or otherwise
addressed. Until Quintiles has provided such
adequate assurance, HMR shall be relieved of its
obligation to provide to Quintiles the opportunity
to perform Research Services which are reasonably
expected to be affected by such material deficiency,
provided, however, that HMR's obligation under
Section 3.1(b) shall remain in effect for other
Research Services of a nature or type that are not
reasonably expected to be affected by such material
deficiency.
3.7 RESEARCH SERVICES AT OTHER QUINTILES SITES; PRIOR ENGAGEMENTS
(a) Research Services for which Reserved
Capacity is available may be carried out by
Quintiles at Quintiles' sites other than the
Facility if the parties mutually agree in writing,
in which event such Research Services shall count
toward the utilization of the Reserved Capacity. If
the Reserved Capacity is fully utilized by Projects,
or if the Research Services
28
<PAGE> 34
are not covered within the Relevant Departments,
then Quintiles may perform Research Services at any
Quintiles site located in the United States
reasonably selected by Quintiles (or any other
facility if mutually agreed by the parties in
writing) and the performance of such Research
Services shall not count toward utilization of the
Reserved Capacity.
(b) Except as contemplated by this Agreement
or the Master Services Agreement, Research Services
or any other contract research services that were
purchased, ordered, or negotiated for purchase on or
prior to the date of Closing by HMR and/or its
Affiliates from Quintiles and/or its Affiliates
shall not be deemed Research Services, whether or
not such services are performed at the Facility
after the date of Closing.
29
<PAGE> 35
3.8 DEFINITION OF PRICE PER OUTPUT UNIT
The Research Services to be made available by Quintiles to HMR in
exchange for the Guaranteed Revenue shall be determined based on the amount and
nature of drug innovation and approval services provided by the Transferring
Employees of the Kansas City Drug Innovation and Approval Unit of HMR in *.
The foregoing shall be determined by reference to a list of factors for
measuring project-specific outputs that are attached to this Agreement as
Schedule 3.8. The Steering Committee shall, within 90 days of the Closing (the
"Assessment Period"), by selecting and giving appropriate weight to one or more
of the factors set forth on Schedule 3.8, or such other factors as the Steering
Committee deems appropriate because of situations where the list of factors is
not viewed as providing appropriate guidance, determine the amount and nature
of drug innovation and approval output provided by the Transferring Employees
of the Kansas City Drug Innovation and Approval unit of HMR in * (the "*
Output").
As set forth in Section 3.2(a), the Steering Committee shall allocate
annually an appropriate portion of the total Reserved Capacity for the given
year to each Relevant Department (the "Departmental Reserved Capacity"). The
Steering Committee shall also allocate annually a corresponding proportion of
(i) the * Output to each Relevant Department (the "* Departmental Output"), and
(ii) the Guaranteed Revenue for the given year to each Relevant Department (the
"Departmental Guaranteed Revenue"). Following such allocations, the Steering
Committee shall establish, as of the beginning of each year, a rate card for
each Relevant Department for such year (the "Reserved Capacity Rate Card"). Each
Reserved Capacity Rate Card shall assign a rate to each person in the applicable
Relevant Department by allocating all Departmental Guaranteed Revenue for the
given year among employees, with appropriate distinction for compensation,
expertise, length of service and other relevant factors.
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The Steering Committee shall then determine on a general basis, which may be
varied as appropriate on a project-by-project basis due to distinguishing
factors, the allocation of labor (the "Resourcing Allocation") necessary to
complete given tasks or create specific deliverables ("Project Outputs"). The
Resourcing Allocation shall be ascertained by reference to, and shall be
consistent with, the resourcing allocations that were used to produce the
Project Outputs which, in the aggregate, created the * Departmental Output.
The product of the relevant chargeable rates from the Reserved Capacity Rate
Card and the Resourcing Allocation shall establish the charge for any given
unit of Project Output (a "Price Per Output Unit") during the given year.
Monthly billings under Letter Agreements should reflect the percentage of
completion of relevant Project Outputs to facilitate the reconciliation process
under Section 3.4(c). As Quintiles brings in new personnel resources to the
Facility, it shall have the option to provide the Reserved Capacity using
personnel not originally employed in any Relevant Department. Such personnel
shall be assigned a rate on the applicable Reserved Capacity Rate Card
consistent with the rates of the original department personnel having
comparable length of service, expertise, and other relevant factors. Except as
specifically set forth in Section 3.2(c) of this Agreement, Quintiles is not
required to provide the Reserved Capacity through any specific personnel. The
Steering Committee shall have flexibility from year to year to make appropriate
adjustments to the Reserved Capacity Rate Card so that the relative rates
assigned to all personnel in each department are appropriate; provided,
however, that any such adjustment shall satisfy the objective of maintaining
measurements that accurately track, for any given year: (i) HMR's utilization
of the Reserved Capacity, (ii) the corresponding allocation of Guaranteed
Revenue, and (iii) the availability of the Reserved Capacity.
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3.9 ESTABLISHMENT OF COMMITTEES
(a) Upon execution of this Agreement, Quintiles
and HMR shall establish a liaison committee
("Steering Committee") consisting of an equal number
of representative members from each company. HMR
shall designate one of its representative members as
Chairperson. The Steering Committee will, among
other things, plan, oversee and guide the drug
development process, discuss the status of current
and future Projects, review recommendations from the
Quality, Finance and Standards Committees, review
and confirm Prevailing Competitive Rates and resolve
any disputes between the parties or in the Quality,
Finance or Standards Committees.
(b) The Steering Committee shall, if possible,
make its decisions on a unanimous basis. If the
Steering Committee cannot reach a unanimity, then
decisions shall be determined in accordance with the
provisions of Article 13.
(c) Formal quarterly meetings will be held by
the Steering Committee to ensure that operational
and financial performance and communications are
satisfactory to both HMR and Quintiles. At these
meetings, the Steering Committee will plan future
workload, discuss the status of current and future
Projects to be assigned to Quintiles, and approve an
operating plan for the following 12 months. Such an
operating plan will include estimates of resources
requirements and performance objectives, including
quality and financial targets. In addition, any
representative member of
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the Steering Committee may call a telephonic meeting
on five days' written notice to the other members.
(d) Formal annual meetings, which will coincide
with each fourth quarterly meeting, will be held by
the Steering Committee to review calculations of
Price Per Output Unit.
(e) Quality, financial and standards issues
will be addressed by a quality committee (the
"Quality Committee"), a finance committee (the
"Finance Committee"), and a standards committee (the
"Standards Committee"), respectively. The Quality
Committee will have the right to initiate audits and
analyses, and based on these ensure at all times an
appropriate quality of performance and will
recommend remedies or refer any areas of deficiency
to the Steering Committee. The Quality Committee
shall be composed of an equal number of
representative members from each party and HMR shall
designate one of its representative members as
Chairperson. The Finance Committee will conduct
financial analyses of Projects to provide the
Steering Committee with a reasonable basis for
judgment of budget utilization, cash flow and cash
neutrality and other financial information, as well
as performance and output measures. The Finance
Committee shall be composed of an equal number of
representative members from each party and Quintiles
shall designate one of its representative members as
Chairperson. The Standards Committee will determine
standards for all functional and infrastructure
areas and ensure compliance therewith. The Standards
Committee shall be
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composed of an equal number of representative
members of each party and co-chaired by a
representative member from each party.
(f) There will be a Supervisory Committee
composed of an equal number of representative
members of each company and co-chaired by a
representative member from each company
("Supervisory Committee"). The Supervisory Committee
shall consider disputes and other matters related to
the relationship between HMR and Quintiles and shall
meet at least annually to explore additional
opportunities for Quintiles and HMR to collaborate
on additional business ventures.
(g) Each party's representative members on any
committee shall be entitled to one vote in total. No
Chairperson of any of the above committees shall
have a second, casting or deciding vote. Actions of
each committee shall require a unanimous vote. Each
of the Finance, Quality and Standards Committees
shall make recommendations to the Steering Committee
and shall not have separate decision-making
authority except as specifically provided herein.
Disputes shall be resolved in accordance with the
provisions of Article 13. Actions of each committee
will be documented in meeting minutes signed by a
member from each of HMR and Quintiles.
3.10 FACILITY COMMITMENT FEE
In addition to the payment of Guaranteed Revenue and other obligations
hereunder, HMR shall pay to Quintiles a $* million facility commitment fee in
consideration for Quintiles
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reserving sufficient capacity within the Facility to retrain staff, develop
standard operating procedures and make other changes to operate as a contract
research organization to meet HMR's requirements for Research Services during
the Initial Period. The fee shall be paid by wire transfer of immediately
available funds to Quintiles at the Closing. The facility commitment fee shall
not be refundable or repayable to HMR or any of its Affiliates in any
circumstances whatsoever.
3.11 YEAR 2000 PROVISION.
If, after the Closing, Quintiles continues to implement the Drug
Innovation & Approval portion of HMR's Year 2000 Program (as defined in
paragraph 11 of Schedule 4.2) in materially the same manner, and applying
materially the same level of resources, as HMR had planned for Drug Innovation
& Approval in 1999, (i) Quintiles will be excused from performance of any
obligation for Research Services contemplated under the Agreement, or any other
services contemplated under a Letter Agreement, but only to the extent such
performance is adversely affected, directly or indirectly, by the failure of
any Asset, system or computer software application to function properly due to
a Year 2000 Problem (as defined in paragraph 11 of Schedule 4.2), attributable
specifically to such Asset, system or computer software application Quintiles
acquires or obtains use of pursuant to this Agreement or any Transaction
Document, and (ii) HMR shall not be relieved from its obligations to make
payments of Guaranteed Revenue or otherwise be entitled to a refund or credit
of payments corresponding to the affected Research Services (including but not
limited to Guaranteed Revenue).
In any such event, Quintiles shall use its best efforts to (i)
mitigate its potential damages; (ii) minimize the impact of the Year 2000
Problem on Projects, (iii) address Project delays on a priority basis over
non-Project work being performed at the Facility, and (iv) remediate the Year
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2000 Problem. The Steering Committee may, if possible without negative impact
on any Project, adjust the timelines for deliverables for such Project in an
equitable manner (provided that, with respect to Projects involving Reserved
Capacity, periods in which Research Services cannot be performed based upon a
Year 2000 Problem shall be treated as if HMR failed to utilize the Reserved
Capacity). The condition that Quintiles "continues to implement the DI&A
portion of HMR's Year 2000 Program in a reasonable manner" shall be deemed
satisfied to the extent HMR fails to support Quintiles' reasonable requests for
HMR's support in implementing the DI&A portion of HMR's Year 2000 Program.
Notwithstanding anything to the contrary, no Year 2000 Problem
attributable to an Asset or to any software application Quintiles obtains from
HMR shall constitute a breach by Quintiles of, or otherwise form a basis for
HMR terminating, this Agreement, any Letter Agreement or any other Transaction
Document.
4. LIABILITIES AND INDEMNIFICATION
4.1 QUINTILES ASSUMING NO LIABILITIES
HMR and Quintiles acknowledge and agree that Quintiles is assuming no
liabilities of HMR associated with HMR's ownership of, or beneficial interest
in, the Assets or operation of the Facility except liabilities associated with
Quintiles' possession or use of the Assets, operation of the Facility and
liabilities arising from the Assumed Contracts after the date of Closing.
4.2 HMR GENERAL INDEMNITY
Subject to the provisions of Sections 4.3, 4.4, 4.6 and 4.7 below, HMR
shall defend and indemnify Quintiles and its Affiliates, and the directors,
employees and agents of Quintiles and its Affiliates against and hold them
harmless from any and all losses, liabilities, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees, investigation
expenses,
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court costs, interest and penalties) (hereinafter referred to collectively as
"Damages") sustained or incurred by Quintiles as a result of (i) any material
breach or failure of any HMR General Warranty (as defined herein) made by HMR
in this Agreement regardless of any independent investigation made by
Quintiles; or (ii) HMR's ownership of or beneficial interest in the Assets and
operation of the Facility including, but not limited to, liabilities arising
from the Assumed Contracts, and any other events, matters or conditions
occurring or existing on or in any way related to the Facility on or before the
date of Closing. "HMR General Warranty(ies)" shall mean the warranties by HMR
set forth in Article 6 below and Schedule 4.2. The indemnity referred to in
this Section 4.2 shall not include "Environmental Claims" as described in
Section 4.8 below.
4.3 QUINTILES GENERAL INDEMNITY
Subject to the provisions of Section 4.7 below, Quintiles shall defend
and indemnify HMR and its Affiliates, and the directors, employees and agents
of HMR and its Affiliates against and hold them harmless from any and all
Damages sustained or incurred by HMR as a result of: (i) any breach or failure
of any Quintiles General Warranty (as defined herein) made by Quintiles in this
Agreement regardless of any independent investigation made by HMR; (ii) the
termination of any Assumed Contract at the request of Quintiles or any breach
or failure by Quintiles relating to Quintiles' performance under any of the
Assumed Contracts; or (iii) Quintiles' use or lease of or ownership of the
Assets and operation of the Facility including, but not limited to, Quintiles'
use or disclosure of the HMR Licensed Technology in a manner inconsistent with
that permitted in the Intellectual Property License, and any other events,
matters or conditions occurring after the date of Closing, except to
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the extent that any claim arises out of matters covered by Section 4.2 above or
Section 4.5 below. "Quintiles General Warranty" shall mean the warranties by
Quintiles set forth in Article 6 below and Schedule 4.3. The indemnity referred
to in this Section 4.3 shall not include "Environmental Claims" as described in
Section 4.9 below.
4.4 LIMITATIONS ON INDEMNITY
(a) The indemnities provided in prior provisions of
Article 4 above shall be the parties' sole and
exclusive remedy for failure or breach by either
party of any warranty made under this Agreement or a
Schedule attached hereto or any other claim for
Damages under prior provisions of Article 4 above,
and neither party shall have any liability or other
obligation in respect of a breach of any of the
warranties except as provided in prior provisions of
Article 4 above.
(b) Except for those indemnification obligations set
forth in Sections 4.5, 4.6, 4.8, 4.9 and 9.2(b) and
Article 14 below, the indemnifying party shall not
be under any liability in respect of its
indemnification obligations unless such party shall
have been given written notice of any bona fide
claim or bona fide potential claim for Damages by
the other (together with details of the facts and
circumstances giving rise to such claim or potential
claim) within three (3) years of the date of Closing
except that with respect to the warranties set forth
in section 7(n) of the Real Estate Sale Agreement
and Section 6.1(b) below, such notice shall be given
within 5 years of the date of Closing.
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(c) HMR shall not be liable under the HMR General
Warranties, under any other claim for Damages under
Section 4.2 above or under corresponding provisions
of the Transaction Documents unless its aggregate
liability for claims (including those arising
previously whether giving rise to payment or not
pursuant to this Article 4.4) hereunder or
thereunder exceeds, and only in the amount by which
it exceeds, Five Hundred Thousand Dollars
($500,000.00).
(d) Neither party shall be liable under the warranties
or any other claim for Damages under prior
provisions of Article 4 above:
(i) to the extent that such liability would not
have arisen but for any change of law
occurring after the date of Closing;
(ii) in respect of any matter in relation to
which either party, being fully informed,
shall, after the date of Closing, expressly
have waived in writing its rights; or
(iii) to the extent that such liability would not
have arisen but for the negligence or other
willful act or omission of the other party
occurring after the date of Closing.
(e) Neither party shall be liable under the warranties
or in respect of any other claim for Damages under
prior provisions of this Article 4 above for
special, indirect or consequential damages
including, but not limited to, loss of profits or
revenue.
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(f) Each party shall take all reasonable steps to
mitigate its loss on any claim against the other in
respect of the warranties or any other claim for
Damages under prior provisions of Article 4 above.
(g) In the event that either party has made a
payment pursuant to a claim under the warranties or
any other claim for Damages under prior provisions
of Article 4 above and the other party shall receive
a reimbursement in respect of the matter in respect
of which such claim was made, that party shall
forthwith repay to the other party an equal sum to
the amount of such refund or, if lower, a sum equal
to the amount paid by that party pursuant to the
claim. Each party shall take all reasonable steps to
obtain payment of any such refunds.
4.5 HMR'S RESPONSIBILITY AND INDEMNITY RE: TRANSFERRING EMPLOYEES
HMR shall discharge all wages and salaries and other remuneration of
or obligations to the Transferring Employees and all other costs and expenses
relating to the Transferring Employees which arise up to and including the date
of Closing and shall indemnify Quintiles and its Affiliates, and the directors,
officers, agents and employees of Quintiles and its Affiliates against:
(a) all Damages incurred by Quintiles arising from HMR's
failure so to discharge;
(b) all Damages incurred by Quintiles as a result of
any claim made (whether before or after the date of
Closing) by or on behalf of any applicant for
employment, employee or former employee of HMR,
related to or arising out of the recruitment,
application, interview, hiring, employment or
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termination of employment of any such person by HMR
on or prior to the date of Closing;
(c) all Damages incurred by Quintiles as a result of any
claim made by an HMR employee who does not become a
Quintiles employee; and
(d) all Damages incurred by Quintiles resulting from any
claim based on any HMR severance or separation plan,
vacation policy, pension, retirement, profit
sharing, deferred compensation, medical, health
insurance or other employee benefit plan or any
other liability or obligation of HMR.
4.6 QUINTILES' RESPONSIBILITY AND INDEMNITY RE: TRANSFERRING
EMPLOYEES
Except for the payments contemplated by Section 9.2(c), and subject to
Section 4.5, Quintiles shall, discharge all wages and salaries and other
remuneration of or obligations to the Transferring Employees which arise after
the date of Closing and all other costs and expenses which relate to the
Transferring Employees and which arise after the date of Closing and shall
indemnify HMR and its affiliates, and the directors, officers, agents and
employees of HMR and its Affiliates against:
(a) all Damages arising from Quintiles' failure
so to discharge;
(b) all Damages incurred by HMR as a result of
any claim made (whether before or after the date of
Closing) by or on behalf of any applicant for
employment, employee or former employee of
Quintiles, related to or arising out of the
recruitment, application, interview, hiring,
employment or termination of employment of any such
person by Quintiles; and
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(c) all Damages resulting from any claim made
based on the stock option plan referred to in
Section 5.4, vacation policy, pension, retirement,
profit sharing, deferred compensation, medical,
health insurance or other employee benefit plan, or
any other liability or obligation of Quintiles.
4.7 PROCEDURES RE: GENERAL AND EMPLOYEE INDEMNITIES
(a) The party seeking indemnification under this Article
4 shall notify the indemnifying party within thirty
days of its receipt of knowledge of the existence of
any claim, demand or other matters including, but
not limited to, any claim under the warranties set
forth in Article 6 below or Schedule 4.2 that may
affect the indemnifying party's obligation of
indemnity hereunder. Although the indemnifying party
shall have the right to assume the defense in such
case, the indemnified party shall have the right to
employ its own legal agents in any such case, but in
such event, the fees and expenses of such legal
agents shall be at the indemnified party's expense.
The indemnified party shall be kept fully informed
of such action, claim or proceeding at all stages
thereof whether or not it is represented.
(b) The indemnified party shall make available to the
indemnifying party and its legal advisers
free-of-charge all relevant books, records,
documents and other information and personnel of the
indemnified party relating to such proceedings or
litigation and the parties hereto agree to render to
each other such assistance as they may reasonably
require of each other in order
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to ensure the proper and adequate defense of any
such action, claim or proceedings.
(c) The indemnified party shall not make any formal
admission of liability nor make any settlement of
any claim without the written consent of the
indemnifying party and if such admission of
liability is made by the indemnified party without
the prior written consent of the indemnifying party,
the indemnified party shall be deemed to have
compromised and waived any claim for indemnification
hereunder.
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4.8 HMR INDEMNITY RE: ENVIRONMENTAL CLAIMS
HMR hereby covenants and agrees to release, indemnify, protect, defend
and hold harmless Quintiles and its Affiliates, officers, directors,
shareholders, agents, employees, representatives, successors, and assigns from
and against any and all Damages suffered, incurred by or asserted against
Quintiles relating to, arising out of, or connected with, any event or
condition which was created or caused prior to or including the Environmental
Report Date (except as otherwise indicated in Section 4.9), or which was
created or caused by HMR after the Environmental Report Date, and which relates
to:
(i) any Release, threatened Release or disposal
of Hazardous Materials at, upon, under, or
from the Facility;
(ii) the operation or violation of Environmental
Laws or Environmental Permits at the
Facility;
(iii) any Environmental Claim in connection with
the Facility or HMR's operations at the
Facility;
(iv) any Environmental Claim in connection with
any disposal by HMR of Hazardous Materials
from the Facility at any off-site facility;
or
(v) any breach by HMR of any covenant,
representation or warranty of HMR contained
in this Agreement and giving rise to an
Environmental Claim.
The foregoing indemnity in subsections (i) through (iv) is not subject
to or in any way limited or reduced by the representations, warranties, or
agreements of HMR set forth in this Agreement, or any limitations thereof.
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HMR acknowledges that the environmental due diligence of the Facility
may not be satisfactorily completed by the date of Closing, though it is
expected to be completed by January 31, 1999. HMR agrees that: (i) the date
both the due diligence is completed and a final report thereof is satisfactory
to both parties (the "Environmental Report Date") and (ii) the substance of
such final report, shall serve as information available for the allocation of
environmental responsibility.
4.9 QUINTILES' INDEMNITY RE: ENVIRONMENTAL CLAIMS
Quintiles hereby covenants and agrees to release, indemnify, protect,
defend and hold harmless HMR and its Affiliates, officers, directors,
shareholders, agents, employees, representatives, successors, and assigns from
and against any and all Damages suffered, incurred by or asserted against HMR
relating to, arising out of, or connected with, directly or indirectly, any
event or condition which is created or caused by Quintiles after the
Environmental Report Date, or after the date of Closing and prior to the
Environmental Report Date and which clearly results from the activities of
Quintiles prior to the Environmental Report Date that are inconsistent with the
practices of HMR prior to the date of Closing, with, in any event, the
exception of those events or conditions giving rise to HMR's indemnity
obligations in Section 4.8 above, and which relates to:
(i) any Release, threatened Release or disposal
of Hazardous Materials at, upon, under, or
from the Facility;
(ii) the operation or violation of Environmental
Laws or Environmental Permits at the
Facility;
(iii) any Environmental Claim in connection with
the Facility or Quintiles' operations at
the Facility;
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(iv) any Environmental Claim in connection with
any disposal by Quintiles of Hazardous
Materials at any off-site facility; or
(v) any breach by Quintiles of any
covenant, representation or warranty of
Quintiles contained in this Agreement and
giving rise to an Environmental Claim.
The foregoing indemnity in subsections (i) through (iv) is not subject
to or in any way limited or reduced by the representations, warranties, or
agreements of Quintiles set forth in this Agreement.
Quintiles acknowledges that the environmental due diligence of the
Facility may not be satisfactorily completed by the date of Closing, though it
is expected to be completed by January 31, 1999. Quintiles agrees that: (i) the
Environmental Report Date and (ii) the substance of such final report shall
serve as information available for the allocation of environmental
responsibility.
4.10 NUCLEAR MATERIALS LICENSE AND "RAD-BUILDING"
Prior to the completion of the transfer of HMR's Nuclear Materials
License to Quintiles, HMR shall, at its sole expense (i) perform a radiation
contamination survey of HMR's existing radioactive waste storage facility (the
"Rad-Building") and any other area on the Facility where radioactive materials
have been stored, handled, or otherwise used or transported by HMR and (ii)
conduct any required decontamination of any area affected by radiation
contamination. At such time as Quintiles ceases permanently its use of the
Rad-Building, whether or not as a result of termination of its lease of the
Rad-Building (the "Rad-Building Lease"), Quintiles shall, at its sole expense
(i) perform a radiation contamination survey of the Rad-Building, (ii) conduct
any required decontamination of any area of the Rad-Building affected by
radiation contamination and (iii) decommission the Rad-Building; provided,
however, that, with respect to the foregoing
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clause (iii), if, and only if, decommissioning of the Rad-Building is required
because HMR has exercised its right to terminate the Rad-Building Lease for the
purpose of relocating such storage facility to a replacement building, the cost
of decommissioning the Rad-Building shall be apportioned between HMR and
Quintiles based on the relative number of years each party used the
Rad-Building. At such time as (a) Quintiles' Nuclear Materials License expires,
or otherwise ceases to be in effect, or (b) Quintiles ceases permanently its
use of any area, other than the Rad-Building (whether in connection with a
permanent cessation of use of the Rad-Building or otherwise), where radioactive
materials have been stored, handled, or otherwise used or transported by
Quintiles, then Quintiles shall, at its sole expense, complete steps (i)
through (iii) above (without reference to the proviso set forth above in such
clause (iii)) for (x) in the case of clause (a) above, the Rad-Building and any
other area where radioactive materials have been stored, handled, or otherwise
used or transported by Quintiles or (y) in the case of clause (b) above, such
area where radioactive materials have been stored, handled, or otherwise used
or transported by Quintiles.
Further, within 10 business days of the date of this Agreement, HMR
and Quintiles shall enter into a lease whereby HMR shall lease the Rad-Building
to Quintiles on the terms and conditions set forth in Schedule 4.10 to this
Section 4.10, and on such other terms and provisions as the parties shall
mutually agree.
5. EMPLOYMENT AND BENEFITS OF TRANSFERRING EMPLOYEES
5.1 QUINTILES' EMPLOYMENT OF TRANSFERRING EMPLOYEES
(a) Attached hereto as Schedule 5.1(a) are
forms of offer letters for the Transferring
Employees. Quintiles has provided to HMR a list of
the base salaries and positions to be offered to
each such Transferring
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Employee. HMR has reviewed such forms of offer
letters and such list and found them to be
satisfactory. Quintiles shall make offers to the
Transferring Employees pursuant to the forms of
offer letters and consistent with the information on
such list. Notwithstanding anything to the contrary,
Quintiles shall have no responsibility for any
severance or other compensation obligation owed to
any of the Transferring Employees as a result of any
severance or other agreements or benefits offered
previously by HMR. Initially, Quintiles shall not
require Transferring Employees to transfer from
Kansas City to another Quintiles facility. For a
period of three years after the date of Closing and
so long as Quintiles is receiving the Guaranteed
Revenue, Quintiles will not terminate any Option
Recipient without a reasonable basis in conduct or
performance or without first obtaining the consent
of HMR, which consent shall not be unreasonably
withheld or delayed.
(b) Attached as Schedule 5.1(b) is a list of
those Transferring Employees who are nonimmigrant
aliens working, or scheduled to begin working, for
HMR at the Facility prior to Closing. After the date
of Closing, each of these Transferring Employees
shall remain employees of HMR until Quintiles has
obtained the approval of a petition for nonimmigrant
workers for such Transferring Employee from the
Immigration and Naturalization Service ("INS") to
employ such Transferring Employee. As to those
Transferring Employees listed on Schedule 5.1(b) who
have indicated a desire to become employees of
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Quintiles, Quintiles shall use its best efforts to
obtain such approval as promptly as practicable.
Quintiles shall have the benefit, from and after the
date of Closing, of the services of such employees
indicating a desire to work for Quintiles.
Thereafter, each such Transferring Employee shall
become an employee of Quintiles. For purposes of
Sections 4.5, 4.6, 5.3(b) and 9.1(b)(ii) of this
Agreement, the term "date of Closing" with respect
to each of these employees shall mean the date that
Quintiles has obtained the INS approval described
above.
(c) Each Transferring Employee who is on
short-term disability leave or Family and Medical
Leave Act leave as of the Closing pursuant to the
otherwise applicable plans and policies of HMR shall
remain an employee of HMR until the date he or she
returns to work from leave. As of that date, each
such Transferring Employee who has accepted an offer
of employment from Quintiles shall then become an
employee of Quintiles. For purposes of Sections 4.5,
4.6, 5.3(b) and 9.1(b)(ii) of this Agreement, the
term "date of Closing" with respect to each such
Transferring Employee shall mean the date that such
Transferring Employee becomes an employee of
Quintiles. HMR shall provide to Quintiles a list of
all such Transferring Employees within ten days of
the Closing.
5.2 BENEFITS FOR TRANSFERRING EMPLOYEES
Quintiles shall cause the Transferring Employees to be eligible to
participate in the "employee benefit plans" (within the meaning of Section 3(1)
of ERISA) and other employee
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benefits of Quintiles in which similarly situated employees of Quintiles'
United States operations are generally eligible to participate, provided that
nothing herein shall prevent Quintiles from amending or terminating any such
plan in accordance with its terms and applicable law. For purposes of
Quintiles' employee stock ownership plan, employee stock purchase plan and
vacation policy, Quintiles shall grant the Transferring Employees credit for
the number of years of service with which they are credited by HMR.
5.3 APPORTIONMENTS
(a) The Transferring Employees who have
properly accrued unused vacation that they would
otherwise be entitled to carry over to 1999 had they
continued as employees of HMR, may each carry over
up to five days of such accrued unused vacation. On
the Closing, HMR shall pay to Quintiles the value of
such accrued unused vacation, and Quintiles shall
permit each Transferring Employee to use such
accrued unused vacation day(s) during 1999;
provided, however, that as promptly as practicable
after the date of Closing, Quintiles shall reimburse
HMR for the amount of such accrued payment that
relates to Transferring Employees who do not become
employees of Quintiles.
(b) Except as provided in Section 5.3(a) above,
all payments due in respect of any wages, salaries
or other remuneration with respect to the
Transferring Employees up to and including the date
of Closing shall be borne by HMR and, except as set
forth in Section 9.2(c), all payments due in respect
of any wages, salaries or other remuneration with
respect to
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the Transferring Employees who joined Quintiles
after the date of Closing shall be borne by
Quintiles.
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5.4 KEY TRANSFERRING EMPLOYEE RETENTION
Quintiles shall offer a key employee retention plan, available to the
key Transferring Employees identified by HMR on Schedule 5.4(a) (the "Option
Recipients"), pursuant to the terms of an option agreement attached hereto as
Schedule 5.4(b). This option agreement is intended by the parties to be an
inducement to such key Transferring Employees to become Quintiles employees.
The aggregate value of the options to be granted under this Section 5.4, based
on a Black Scholes valuation, shall be $* million.
5.5 RAIDING OF OTHER PARTY'S EMPLOYEES
Both HMR and Quintiles agree that during the Initial Period neither
will recruit nor hire, directly or indirectly, any of the Kansas City-based
employees of the other, regardless of the position of the employee, except upon
mutual agreement by Quintiles and HMR or if employment of the former employee
terminated more than one year prior to the date of such recruitment or initial
hiring contact. HMR and Quintiles agree that, notwithstanding the foregoing,
Quintiles may make offers of employment to the employees listed on Schedule
5.5(a) at any time more than six (6) months after Closing. Except as to those
Transferring Employees listed on Schedule 5.5(b), neither HMR nor any Affiliate
has made an offer to employ any Transferring Employee outside of its Kansas
City Drug Innovation & Approval unit.
6. WARRANTIES
6.1 HMR WARRANTIES HMR warrants that:
(a) HMR is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware, and has the corporate power and
authority to carry on its business as now conducted
and to own,
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lease, and operate its assets. HMR has the full
power and authority to enter into and perform this
Agreement and the Transaction Documents to which it
is a party and to grant all of the rights, powers
and authorities herein granted.
(b) HMR has a sufficient beneficial interest in the
Assets to enable HMR to lease the Leased Property,
to sell the Purchased Property, to lease and
eventually sell the Facility, to license the HMR
Licensed Technology and to perform the services
contemplated under the Services Agreement to
Quintiles on the terms contemplated herein, all of
which Assets are unencumbered by any liens, security
interests or other rights or claims of any third
party other than, in the case of leased assets, the
applicable lessor.
(c) This Agreement has been, and upon execution as
contemplated herein the Transaction Documents to
which it is a party will be, duly executed and
delivered by HMR and are legal, valid and binding
obligations enforceable against HMR in accordance
with their terms.
(d) Other than the HSR filing and the filings
contemplated in the Real Estate Sale Agreement, and
other than those that have been obtained and that
are in full force and affect, the execution,
delivery and performance by HMR of this Agreement
and the Transaction Documents to which it is a party
do not require the consent, waiver, approval,
license or authorization of or any notice to or
filing with any person or any governmental
authority.
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(e) HMR knows of no fact that materially adversely
affects or could materially adversely affect: (i)
the rights granted to Quintiles under this Agreement
to receive the Guaranteed Revenue or the right to be
offered the opportunity to perform Research Services
in accordance with Article 3, or (ii) as of the date
of Closing, Quintiles' possession of the Assets or
operation of the Facility.
(f) In respect of the representations and warranties set
forth in this Article 6 and in Schedule 4.2 hereto,
the rights and remedies of Quintiles shall not be
affected by completion of this Agreement, by any
investigation made by or on behalf of Quintiles into
the affairs of HMR or by Quintiles failing to
exercise or delaying the exercise of any of its
rights or remedies or by any other matter except a
specific and duly authorized written waiver or
release.
6.2 EXCLUSION OF OTHER EXPRESS OR IMPLIED WARRANTIES
Except as expressly warranted in Section 6.1 above, Schedule 4.2
hereto, or the Transaction Documents, no warranties, express or implied, have
been made or are made by HMR with respect to the Assets.
6.3 QUINTILES WARRANTIES
Quintiles warrants that:
(a) Quintiles is a corporation duly organized, validly
existing and in good standing under the laws of the
State of North Carolina, and has the corporate power
and authority to carry on its business as now
conducted and to own, lease and operate its assets.
Quintiles has the full power and
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authority to enter into and perform this Agreement
and the Transaction Documents to which it is a
party.
(b) This Agreement has been, and upon execution as
contemplated herein the Transaction Documents to
which it is a party will be, duly executed and
delivered by Quintiles, and are legal, valid and
binding obligations enforceable against Quintiles in
accordance with their terms.
(c) Other than the HSR filing and except as contemplated
in the Real Estate Sale Agreement, and other than
those that have been obtained and that are in full
force and effect, the execution, delivery and
performance by Quintiles of this Agreement and the
Transaction Documents to which it is a party do not
require the consent, waiver, approval, license or
authorization of or any notice to or filing with any
person or any governmental authority.
(d) Quintiles knows of no fact that materially adversely
affects or could materially adversely affect the
rights granted to HMR under this Agreement to
receive the Research Services and to have the
Reserved Capacity made available to it.
7. CLOSING AND CONDITIONS TO CLOSING
7.1 CLOSING
The Closing shall occur at the offices of Blackwell Sanders Peper
Martin LLP at 2300 Main Street in Kansas City, Missouri, or such other place as
may be agreed upon by the parties.
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7.2 QUINTILES' CONDITIONS TO CLOSING
Quintiles' obligation to close is subject to the following conditions
precedent, any or all of which may be waived in writing by Quintiles at its
sole discretion:
(a) HMR shall have delivered to Quintiles a
certificate, dated as of the Closing, and signed on
its behalf by its chief executive officer and its
chief financial officer, to the effect that the
warranties set forth in Section 6.1 above and
Schedule 4.2 hereto are true and correct in all
material respects with the same effect as though the
warranties were made at and as of the Closing;
(b) Each and all of the agreements and
covenants of HMR to be performed and complied with
pursuant to this Agreement and the other agreements
of HMR contemplated hereby prior to the Closing
shall have been duly performed and complied with in
all material respects;
(c) No action, claim or proceeding against HMR,
Quintiles or any Affiliate of either relating to the
consummation of any of the transactions contemplated
in this Agreement, or in any document referred to
herein, or any governmental action seeking to delay
or enjoin any such transactions, shall be pending or
threatened;
(d) Quintiles shall have received either copies
of the resolutions adopted by the Board of Directors
of HMR, certified by the Secretary or an Assistant
Secretary of HMR, or an opinion from HMR's counsel,
with respect to the authorization by such Board of
Directors of the execution and delivery of this
Agreement by HMR, the performance
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by HMR of its covenants and agreements hereunder and
the consummation of the transactions contemplated
hereby, which resolutions shall not have been
amended or modified, shall be in full force and
effect and shall be in form and substance reasonably
satisfactory to Quintiles and its counsel;
(e) Quintiles shall have received either copies of
the resolutions adopted by the Board of Directors of
HMR Pharma, Inc. and the Board of Management of
Hoechst Marion Roussel AG, certified by the
respective Secretary or an Assistant Secretary
thereof, with respect to the authorization by each
such Board of the execution and delivery of the
Parent Guaranty by each such company, the
performance by each such company of its respective
covenants and agreements thereunder and the
consummation of the transactions contemplated
thereby, which resolutions shall not have been
amended or modified, shall be in full force and
effect and shall be in form and substance reasonably
satisfactory to Quintiles and its counsel;
(f) All consents of, filings and registrations with, and
notifications to, all federal and state regulatory
authorities required for consummation of the
transactions contemplated hereby shall have been
obtained or made and shall be in full force and
effect and all required waiting periods shall have
expired;
(g) Quintiles shall have received, or application shall
have been made to transfer, such certificates,
instruments and other documents, in form and
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substance reasonably satisfactory to Quintiles and
its counsel, as Quintiles shall have reasonably
requested in writing in connection with the
consummation of the transactions contemplated
hereby, including, but not limited to, the transfer
of all vehicle titles acquired by Quintiles pursuant
to the transactions contemplated hereby;
(h) HMR has executed the Transaction Documents to which
it is a party and HMR Pharma, Inc. and Hoechst
Marion Roussel AG shall each have executed a Parent
Guaranty; and
(i) HMR has wired to Quintiles and Quintiles has
received from HMR in immediately available funds the
sum representing HMR's payment of the facility
commitment fee described in Section 3.10 and the
accrued unused vacation payment described in Section
5.3(a).
7.3 HMR'S CONDITIONS TO CLOSING
The obligation of HMR to close is subject to the following conditions
precedent, any or all of which may be waived in writing by HMR at its sole
discretion:
(a) Quintiles shall have delivered to HMR a certificate,
dated as of the Closing, and signed on its behalf by
its chief executive officer and its chief financial
officer, to the effect that the warranties set forth
in Section 6.3 above and Schedule 4.3 are true and
correct in all material respects with the same
effect as though the warranties were made at and as
of the Closing;
(b) Each and all of the agreements and covenants of
Quintiles to be performed and complied with pursuant
to this Agreement and the other agreements of
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Quintiles contemplated hereby prior to the Closing
shall have been duly performed and complied with in
all material respects;
(c) No action, claim or proceeding against Quintiles,
HMR or any Affiliate of either relating to the
consummation of any of the transactions contemplated
in this Agreement, or in any document referred to
herein, or any governmental action seeking to delay
or enjoin any such transactions, shall be pending or
threatened;
(d) HMR shall have received such certificates,
instruments and other documents, in form and
substance reasonably satisfactory to HMR and its
counsel, as HMR shall have reasonably requested in
connection with the consummation of the transactions
contemplated hereby;
(e) HMR shall have received either copies of resolutions
adopted by the Board of Directors of Quintiles,
certified by the Secretary or an Assistant Secretary
of Quintiles, or an opinion from Quintiles' counsel,
with respect to the authorization by such Board of
Directors of the execution and delivery of this
Agreement by Quintiles, performance by Quintiles of
its covenants and agreements hereunder and the
consummation of the transactions contemplated
hereby, which resolutions shall not have been
amended or modified, shall be in full force and
effect and shall be in form and substance reasonably
satisfactory to HMR and its counsel; and
(f) HMR shall have received either copies of the
resolutions adopted by the Board of Directors of
Quintiles Transnational, certified by the Secretary
or an Assistant Secretary, with respect to the
authorization by such Board of
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Directors of the execution and delivery of the
Parent Guaranty by Quintiles Transnational, the
performance by Quintiles Transnational of its
covenants and agreements thereunder and the
consummation of the transactions contemplated
thereby, which resolutions shall not have been
amended or modified, shall be in full force and
effect and shall be in form and substance reasonably
satisfactory to HMR and its counsel;
(g) Quintiles has executed the Transaction Documents to
which it is a party and Quintiles Transnational
shall have executed the Parent Guaranty;
(h) Quintiles has wired to HMR and HMR has received from
Quintiles in immediately available funds the amount
of $*;
(i) All consents of, filings and registrations with, and
notifications to, all federal and state regulatory
authorities required for the consummation of the
transactions contemplated hereby shall have been
obtained or made and shall be in full force and
effect and all required waiting periods shall have
expired; and
(j) Quintiles has delivered to HMR a list of
Transferring Employees who have agreed to become
Quintiles employees.
8. TERMINATION
8.1 QUINTILES' RIGHT TO TERMINATE DURING THE INITIAL PERIOD
Quintiles shall have the right to terminate this Agreement and the
Transaction Documents prior to the completion of the Initial Period and upon
written notice at any time in the event that (i) HMR is in breach of a monthly
payment obligation of Guaranteed Revenue under Article 3 above, provided: (A)
such breach has continued for a period of ten (10) business days after
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written notice thereof, (B) such termination shall be effective only upon
further written notice to HMR, and (c) such payment obligation is not then the
subject of a dispute that HMR is actively pursuing in good faith through the
dispute resolution process described in this Agreement; or (ii) HMR terminates
the Lease (except as permitted pursuant to the terms of the Lease upon the
occurrence of a default by Quintiles thereunder); or (iii) HMR takes or omits
to take any action that prevents Quintiles' ability to provide to HMR Research
Services in accordance with this Agreement having associated revenue of $25
million. If Quintiles exercises such right to terminate this Agreement,
Quintiles shall have the right to (x) require HMR to purchase the Purchased
Property and the Facility (if it has been purchased by Quintiles) at the
purchase price therefor of $93,000,000 in the aggregate less any depreciation
taken by Quintiles with respect thereto, and to reacquire the Leased Property,
and (y) require HMR to assume any contracts related to the Assets, which shall
not include any contracts entered into by Quintiles with third parties to
provide or receive Research Services. Subject to Section 8.4, if Quintiles
exercises its right to terminate this Agreement, it must terminate all
Transaction Documents. The assignment and assumption to be used in the event of
transferring Leased Property back to HMR shall be in the same form as the
Assignment and Assumption Agreement.
8.2 HMR'S RIGHT TO TERMINATE DURING THE INITIAL PERIOD
HMR shall have the right to terminate this Agreement and the
Transaction Documents immediately upon written notice if: (i) there is a
failure to close under the Real Estate Sale Agreement due to a material breach
thereunder by Quintiles, which material breach persists after any notice and
cure period provided for therein, and Quintiles has not exercised its option to
convert the Lease to the Long Term Lease as defined in the Real Estate Sale
Agreement; or (ii) there is a Persistent Material Failure on the part of
Quintiles to fulfill its obligations to provide
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Research Services to HMR as referred to in Section 3.1 above. For the purpose
of this Section, Persistent Material Failure shall mean material breach of the
performance obligations imposed on Quintiles in terms of the Letter Agreements
where Quintiles, having been given a reasonable opportunity to remedy such
breach, has failed to do so such that in any one year during the Initial Period
HMR, without breach of contract and for cause, terminates four or more Letter
Agreements having an aggregate value of not less than $25 million. If HMR
exercises its right to terminate this Agreement, it must terminate all
Transaction Documents.
8.3 TERMINATION FOR INSOLVENCY
Either party shall have the right to terminate this Agreement and the
Transaction Documents immediately upon written notice at any time during the
Initial Period in the event that the other is declared insolvent by a court of
competent jurisdiction or shall be the subject of any reorganization (other
than a corporate reorganization and not arising out of any insolvency) or
winding up, receivership or dissolution or any proceeding similar to one or
more of the above. If either party exercises its right to terminate this
Agreement, it must terminate all Transaction Documents.
8.4 QUINTILES' OPTION TO CONTINUE TO LEASE
Notwithstanding other provisions of this Article 8, in the event of
termination of this Agreement by Quintiles under Section 8.1 above, or by HMR
under Section 8.2 above, during the Initial Period but prior to the time
Quintiles has either purchased the Facility from HMR or exercised its option to
convert the Lease to the Long Term Lease as defined in the Real Estate Sale
Agreement, Quintiles shall be entitled, at its option: (i) to continue to lease
the Facility on the terms set out in the Lease and the other Leased Property on
the terms and conditions contained in the Assignment and Assumption Agreement,
in each case until December 31, 2003;
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and (ii) to continue to license such HMR Licensed Technology pursuant to the
Intellectual Property License as is necessary or appropriate to use, occupy or
perform, respectively, the Purchased Property, the Facility, and continuing
Letter Agreements; provided, however, that if Quintiles so elects to continue
the Lease, it shall remain obligated under the Real Estate Sale Agreement to
purchase the Facility pursuant to the terms and conditions of the Real Estate
Sale Agreement. In the event of termination by Quintiles under Section 8.1
above, or by HMR under Section 8.2 above, during the Initial Period and after
Quintiles has either purchased the Facility from HMR or entered into a Long
Term Lease as defined in the Real Estate Sale Agreement, Quintiles shall be
entitled, at its option: (i) to continue to lease the Leased Property on the
terms and conditions contained in the Assignment and Assumption Agreement until
December 31, 2003, and (ii) to continue to license such HMR Licensed Technology
pursuant to the Intellectual Property License as is necessary or appropriate to
use, occupy or perform, respectively, the Purchased Property, the Facility, and
continuing Letter Agreements.
8.5 CONSEQUENCES OF TERMINATION
Upon termination under this Article 8 for whatever reason, both HMR
and Quintiles shall, subject, to Section 8.4 above, be relieved of their
obligations then outstanding under this Agreement save for:
(a) Quintiles' obligations to the Transferring Employees
under Section 4.6 above;
(b) Quintiles' indemnity with respect to Assumed
Contracts under Section 4.2 above;
(c) both parties' indemnity obligations pursuant to
Article 4 above;
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(d) both parties' obligations of confidentiality,
non-use and non-disclosure under Article 11 below;
(e) the indemnity obligations under Section
12.1 below; and
(f) the right of the parties to be paid all
sums due to them as of the date of termination and
to enforce any other rights or remedies arising out
of obligations which existed under this Agreement
prior to the termination, including, but not limited
to, any damages arising after termination out of a
breach occurring prior to termination.
Notwithstanding anything to the contrary in this Article 8, in the
event that Quintiles terminates this Agreement but remains in possession of the
Facility, the Operation, Maintenance and Utility Service Agreement and the
separate Services Agreement shall remain in full force and effect.
8.6 RIGHTS OF HMR AND QUINTILES, AND EXCLUSION OF CONSEQUENTIAL
LOSS
The provisions of this Article 8 are without prejudice to the rights
of either party to seek any other remedy at law or at equity to which it may be
entitled other than termination. Notwithstanding anything to the contrary,
neither party shall be liable for consequential damages, including, but not
limited to loss of profits, or loss of revenue arising from a breach of this
Agreement provided that amounts payable under the express terms of this
Agreement or any Letter Agreement shall not be considered consequential damages
and the payment of such revenues shall be enforceable at law or in equity.
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9. COVENANTS
9.1 PRE-CLOSING COVENANTS
(a) Prior to the date of Closing, HMR will permit
Quintiles and its representatives and agents to have
access for purposes reasonably related to the Assets
and to its documents, books and records related
thereto and to make copies during normal business
hours of such financial and operating data and other
information with respect to the Assets, as Quintiles
or any of its representatives or agents shall
reasonably request. In addition, HMR shall cause
appropriate representatives to be available to
Quintiles, its representatives and agents at such
times, and from time to time, as Quintiles may
reasonably request in connection with the
consummation of this Agreement and the transactions
contemplated thereby. HMR will cause to be delivered
such additional information and copies of documents,
books and records relating to the Assets as may be
reasonably requested by Quintiles or any of its
representatives or agents.
(b) On and prior to the date of Closing, except as
otherwise required by this Agreement, HMR will
conduct its operations carried on at the Facility
only in the ordinary course and will use its
commercially reasonable efforts to maintain the
relationships of HMR with distributors, suppliers,
vendors, employees, agents, governmental authorities
and others. Without limiting the generality of the
foregoing, on and prior to the date of Closing, HMR
will not, except as contemplated by this Agreement,
without the prior written consent of Quintiles:
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(i) enter into any transactions
affecting the Facility or the drug
innovation and approval activities conducted
at the Facility, other than in the
ordinary course of business or on an arms'
length basis;
(ii) pay any compensation other than in
the ordinary course of business to, or
increase any compensation of, any
Transferring Employee;
(iii) default on or terminate any
Assumed Contract;
(iv) remove any of the Purchased
Property from the Facility; or
(v) take any action or omit to take
any action that will cause any of the
representations or warranties in this
Agreement, including Schedule 4.2 hereto,
to become untrue.
(c) On and prior to the date of Closing the parties
shall specify the manner in which chemical storage,
use and disposal areas shall be separated, permitted
or otherwise managed. The parties shall also specify
whether Environmental Permits will be transferred to
Quintiles or retained by HMR, whether separate
Environmental Permits will be obtained by Quintiles
or HMR, or whether Environmental Permits will be
shared. Quintiles will initiate the Transfer of
HMR's existing Environmental Permits that will be
transferred to Quintiles that relate to transferred
Assets or the obtaining of separate Environmental
Permits for Quintiles. HMR agrees to assist
Quintiles in the Transfer of Environmental Permits
that
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will be transferred to Quintiles that relate to
transferred Assets or the obtaining of separate
Environmental Permits for Quintiles. HMR will
initiate obtaining separate Environmental Permits
for HMR. Quintiles agrees to cooperate with HMR for
the obtaining of separate Environmental Permits for
HMR. HMR and Quintiles agree to cooperate with each
other to segregate between HMR and Quintiles any
Environmental Permits that relate both to HMR's
operations or property and to transferred Assets.
HMR and Quintiles agree to proceed with a joint
permit where Environmental Permits can not be
reasonably transferred, aggregated or otherwise
obtained. HMR shall make available for Quintiles'
review and copying all environmental reports
prepared by or for HMR relating to the Facility and
operations at the Facility and all Environmental
Permits, relating to the Facility and operations at
the Facility.
(d) Prior to the date of Closing, the parties shall
negotiate in good faith to finalize the Transaction
Documents not finalized as of the date of this
Agreement.
(e) Prior to the date of Closing, Quintiles will not,
except as contemplated by this Agreement, without
the prior written consent of HMR, take any action or
omit to take any action that will cause any of the
representations or warranties in this Agreement,
including Schedule 4.3 hereto, to become untrue.
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(f) On and before the date of Closing, Quintiles will
use commercially reasonable efforts to obtain and
deliver the environmental due diligence report to
HMR on a timely basis.
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9.2 POST-CLOSING COVENANTS
(a) At any time and from time to time after the Closing,
the parties agree to cooperate with each other to
prepare, execute and deliver such other documents,
instruments of transfer, assignment, files, books
and records and do all such further acts and things
as may be reasonably required to carry out the
transactions contemplated hereunder.
(b) Except as would not be allowed by applicable
Environmental Laws, Quintiles and HMR agree to
Transfer Environmental Permits or to obtain separate
Environmental Permits and provide equivalent
environmental services as follows:
(i) Prior to the time in which Transfer or
obtaining of separate Environmental Permits
is completed, HMR's Environmental Permits
shall remain in full force and effect with
respect to those Assets covered by the
terms of any Environmental Permit. During
the Interim Period, Quintiles will operate
those Assets covered by any Environmental
Permit as agent of HMR;
(ii) During the Interim Period, Quintiles hereby
covenants and agrees to release, indemnify,
protect, defend and hold harmless HMR and
its Affiliates, officers, directors,
shareholders, agents, employees,
representatives, successors and assigns
from and against any and all Damages
suffered, incurred by or asserted against
them relating to, arising out of, or
connected with, directly or indirectly, any
event or condition created or caused by
Quintiles' operation of
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permitted equipment after the Closing under
any Environmental Permit of HMR, including,
without limitation, under any agency
relationship;
(iii) In the event that any of HMR's
Environmental Permits cannot be Transferred
to Quintiles, or Quintiles cannot
otherwise, without incurring significant
unnecessary expense, obtain a necessary
separate Environmental Permit, HMR and
Quintiles shall enter into a joint
operating agreement to continue operations
at the Facility and provide uninterrupted
use of the Assets subject to the
Environmental Permit. Under the terms of
such joint operating agreement, the parties
shall allocate direct costs of operation
and liabilities based on total flow rate
and chemical and physical properties or
constituencies of treated waste streams
contributed by each party. Further, with
respect to any joint operating agreement
each party shall be solely responsible for
any and all fines, penalties, and other
costs arising out of or due to such party's
activities; provided, however, that to the
extent the origin, as among the parties, of
the activity giving rise to such fines,
penalties, or costs cannot be determined,
the parties shall equitably allocate among
them such fines, penalties, and costs,
based on all available information
regarding the volume, composition, and
nature of activities of each party that
contributed to the assessment of such
fines, penalties, and other costs.
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(c) Cash bonuses for Transferring Employees who have
earned the right to receive payment of a bonus under
HMR's 1998 Bonus Plan shall be paid to such
Transferring Employees by HMR no later than March
31, 1999.
(d) Quintiles shall continue all projects on which the
Transferring Employees are currently working in
accordance with the terms of the Master Services
Agreement and related Letter Agreements; provided,
however, that until completion of a Letter Agreement
for any particular project, Quintiles shall, to the
extent commercially reasonable, continue to perform
such project on current timelines and budgets
subject to review by the Steering Committee. Work
performed by Quintiles on all such projects shall
count toward the Guaranteed Revenue.
(e) The parties shall take commercially reasonable steps
to separate the facilities. Specifically, the
parties shall as expeditiously as possible relocate
Quintiles' employees from "Building H" into
"Building F" and HMR employees from "Building F"
into "Building H". The parties shall share equally
the costs associated with separating the Facility
and its use from the remaining portion of the
business park owned by, and the operation of, HMR
including, but not limited to, the costs of
re-engineering the security system, separating the
physical space, separating the computer facilities
and the computer equipment, transferring permits,
creating the requisite ownership interests in the
real property, personnel and personal property
relocations and all similar costs. The parties shall
consult with each other prior to taking steps to
effectuate such separation.
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Notwithstanding the foregoing, the costs of moving
certain lab equipment from "Building D" into the
Facility shall be borne by Quintiles.
(f) Immediately after the Closing, the parties
shall meet to determine whether an adequate number
and level of Transferring Employees have agreed to
become employees of Quintiles such that Quintiles
can provide the Research Services at substantially
the same level provided by the Transferring
Employees in 1998. If the parties conclude that an
inadequate number or level of Transferring Employees
have become employees of Quintiles, the parties
shall, within 30 days after Closing, agree to a
mutually acceptable amendment to the terms hereof,
which shall include, for a reasonable period of time
until Quintiles hires necessary replacements, a
reduction in the obligation of Quintiles to provide
the Research Services in proportion to the shortfall
in necessary capacity, a reduction of the Guaranteed
Revenue payable by HMR equal to the direct cost
savings attributable in compensation expense
attributable to the shortfall in necessary capacity
and, to the extent reasonably necessary, a delay in
the offering of Research Services significantly
impaired by the inadequate number or level of
Transferring Employees who have joined Quintiles;
provided that Quintiles shall exercise commercially
reasonable efforts to hire the necessary staff as
soon as reasonably possible. If the parties cannot
agree on all issues pertinent to this Section
9.2(f), and neither the Steering Committee nor the
Supervisory Committee can resolve the matter, then
the adjustments necessary to make each of
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Quintiles and HMR whole in light of the shortfall of
necessary capacity shall be determined by
arbitration pursuant to Article 13, it being
understood and agreed that Quintiles shall not be
required to suffer economic harm, and HMR shall not
be required to suffer an unreasonable delay in
performance as a result of closing with an
inadequate number and level of Transferring
Employees.
(g) After the Closing: (i) HMR shall pay as
and when due all amounts due to third parties under
Assumed Contracts for all periods on or prior to the
date of Closing; and (ii) Quintiles shall pay as and
when due all amounts due to third parties under
Assumed Contracts for all periods subsequent to the
date of Closing.
(h) Quintiles shall not, and shall cause its
Affiliates not to, seek an amendment to the TIF
Agreement or Plan as described in Section 2.5(d).
(i) Until the removal and disposal of HMR's
radioactive waste, the completion by HMR of a
radiation contamination survey of the Rad-Building
and any other area where radioactive materials have
been stored, handled or otherwise used by HMR, the
conclusion of any decontamination by HMR as
indicated by such survey, and the transfer of the
Nuclear Materials License by HMR to Quintiles,
Quintiles shall make reasonably available to HMR the
services of all Transferring Employees who currently
hold at HMR the status of radiation safety officer
or are a subordinate of such officer. Such persons
shall assist HMR to fulfill
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regulatory obligations of HMR, assist with HMR's
management and removal of radioactive waste and
oversee any survey and decontamination efforts of
HMR, if any. Quintiles shall not incur any liability
as a result of such persons' actions in assisting
HMR.
10. PUBLICITY
The parties agree that no publicity, release or announcement
concerning any of the provisions of this Agreement or the transactions
contemplated hereby shall be issued except (i) with the advance written
approval of the form and content of the same by both HMR and Quintiles; or (ii)
to the extent required by law, but in such event only after review and
consultation by both Quintiles and HMR.
11. CONFIDENTIALITY
Each of the parties hereto agrees to keep confidential any and all
information and data with respect to the other party or its Affiliates that it
has received or may receive as a result of this Agreement or any investigation
made in connection herewith and in particular each of the parties agrees to
continue to be bound by the obligations of confidentiality, non-use and
non-disclosure contained in the Confidential Disclosure Agreement entered into
between HMR and Quintiles dated December 11, 1998.
12. BROKERAGE FEES, EXPENSES OF THE PARTIES
12.1 NO BROKERS FEES
Each of the parties hereto represents and warrants to the other that
no broker or finder has acted on its behalf in connection with the transactions
contemplated by this Agreement. Each of the parties agrees to indemnify the
other party, and to hold the other party harmless, from any
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claim or demand for any commission, compensation or other payment by any
broker, finder or similar agent claiming to have been or that was in fact
employed by or on behalf of it.
12.2 EACH PARTY TO BEAR ITS OWN COSTS
Regardless of whether or not the transactions contemplated hereby are
consummated, each party shall pay its own respective expenses (including,
without limitation, the fees, disbursements and expenses of its legal advisers,
accountants and investment advisers) in connection with the negotiation,
preparation and execution of this Agreement and the transactions contemplated
hereby, except as otherwise provided in this Agreement.
13. LAW AND ARBITRATION
13.1 LAW
This Agreement shall be governed by and construed in all respects in
accordance with the laws of Missouri.
13.2 ARBITRATION
(a) Any dispute or difference between Quintiles and HMR
in connection with this Agreement shall be referred,
in the first instance, to the Steering Committee
and, failing resolution at the next available
meeting of the Steering Committee or in the event
that the matter is of such urgency that either
Quintiles or HMR requires it to be dealt with before
the next available meeting of the Steering
Committee, a special meeting of the Steering
Committee shall be called. If the Steering
Committee, is not able to resolve any such matters,
either party may bring the matter before the
Supervisory Committee, and a special meeting of that
committee shall be called to resolve the matter.
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(b) In the event that the matter in dispute is not
resolved by the unanimous resolution of the Steering
Committee or the Supervisory Committee, either party
may, upon notice to the other party, refer such
matter for arbitration in Kansas City, Missouri, in
accordance with the rules of commercial arbitration
of the American Arbitration Association; provided,
however such referral must be made after fifteen
(15) and before sixty (60) days following the date
of the decision rendered by the Supervisory
Committee.
(c) In connection with any arbitration, Quintiles shall
appoint one arbitrator and HMR shall appoint one
arbitrator. The arbitrators appointed by Quintiles
and HMR respectively shall be independent and shall
have expertise in the matter in dispute between the
parties. A third arbitrator shall be appointed by
the arbitrators appointed by Quintiles and HMR
respectively.
(d) Each of Quintiles and HMR undertakes to present its
case to the arbitrators in the shortest practicable
time and to use its best efforts to ensure that the
arbitrators make an award in respect of the matter
in dispute within thirty (30) days of the final day
upon which their respective submissions are made.
14. TAX ALLOCATION
14.1 SALES TAX. Quintiles shall provide to HMR at Closing a
Sales/Use Tax Exemption Certificate certifying to HMR the good faith belief of
Quintiles that no sales or use tax is due as a result of the sale, lease or
other transfer of personal property by HMR to Quintiles pursuant to this
Agreement. To confirm the validity of the position taken in such certificate
and
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at Quintiles' sole cost and expense, Quintiles and HMR agree to use their
respective best efforts and work together to file expeditiously after the
Closing a joint private letter ruling request with the Missouri Department of
Revenue pursuant to Regulation Section 12 CSR 10-1.202. Quintiles and HMR agree
to be bound by the private letter ruling that the Missouri Department of
Revenue issues pursuant to such request.
14.2 INDEMNIFICATION OF HMR BY QUINTILES. Quintiles agrees to hold
harmless, indemnify and defend HMR, and its Affiliates, directors, officers,
employees and agents, from and against any and all demands, causes of action,
proceedings, losses, damages, debts, expenses, liabilities, fines, penalties,
deficiencies, judgments or costs (including reasonable attorneys' fees)
("Claims") at any time and from time to time asserted against or incurred by
HMR to the extent based on, or resulting or arising from, the alleged failure
by HMR to pay any amount of state or local sales or use tax (or any interest or
penalty with respect to state or local sales tax) on the personal property
sold, leased or otherwise transferred pursuant to this Agreement.
14.3 INDEMNIFICATION PROCEDURE. In the event HMR seeks
indemnification under this Section 14:
(a) HMR shall give Quintiles prompt written notice of
the Claim asserted against or imposed upon or incurred by HMR
(which notice shall in any event be given within thirty days
of the receipt by HMR of knowledge of the existence of any
Claim and shall set forth the basis of the Claim and provide
evidence to Quintiles that the Claim is covered by the
indemnification provided in Section 14.2), and Quintiles
shall have the right to undertake the defense thereof by
representatives of its own choosing, provided that Quintiles
diligently conducts the defense of such
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Claim; provided, however, that HMR shall have the right, at
its expense, to retain its own counsel as to such Claim.
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(b) In the event that Quintiles, within twenty (20)
calendar days after receipt of notice of the Claim, fails or
refuses to undertake the defense of such Claim, HMR will
(upon further written notice to Quintiles) have the right to
undertake the defense, compromise or settlement of such Claim
on behalf of and for the account and risk of Quintiles,
subject to the right of Quintiles to assume the defense of
such Claim at any time prior to the settlement, compromise or
final determination thereof. If HMR undertakes the defense,
compromise or settlement of any such Claim pursuant to this
Section 14.3(b), Quintiles shall promptly reimburse HMR for
any reasonable legal fees and expenses incurred in connection
therewith within five (5) business days of receipt of notice
seeking such reimbursement.
(c) In the event the Missouri Department of Revenue
conducts an audit of HMR's sales and/or use tax returns for
the HMR tax period during which this Agreement becomes
effective, HMR shall give Quintiles prompt written notice of
any written inquiry arising from that audit that could
reasonably be expected to result in a Claim under this
Agreement, shall keep Quintiles informed of any changes in
the status of such inquiry, and shall not compromise or
settle such potential Claim without Quintiles' written
consent.
(d) Notwithstanding anything to the contrary contained
herein, if there is a reasonable probability that any Claim
may materially and adversely affect HMR other than as a
result of money damages or other
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money payments, HMR shall have the right to defend,
compromise or settle such Claim; provided, however, in such
event, if HMR shall compromise or settle such Claim without
the approval of Quintiles, Quintiles shall not be bound by
such compromise or settlement and shall have no
indemnification obligation as to such Claim. Quintiles shall
not, without HMR's written consent, settle or compromise any
Claim or consent to entry of any judgment as to a Claim that
does not include, as an unconditional term thereof, the
release of HMR by the claimant or the plaintiff from all
liability in respect of such Claim.
15. MISCELLANEOUS
15.1 ENTIRE AGREEMENT
This Agreement, together with the Transaction Documents and the
Confidential Disclosure Agreement set forth the entire agreement and
understanding between the parties and supersede all previous agreements,
including the non-binding letter of intent entered into between the parties
dated October 5, 1998, the non-binding term sheet executed December 3, 1998,
and all promises, representations, understandings and negotiations, either
written or oral, between the parties with respect to the subject matter hereof.
None of the terms of this Agreement shall be amended or modified except in
writing signed by the parties hereto.
15.2 ASSIGNMENT
Either party shall be entitled, at its sole discretion, to assign any
of its rights or obligations under this Agreement to any Affiliate or
Affiliates. No such assignment shall release the assigning party from any such
assigned obligations hereunder as a result of such assignment unless or until
such obligations are performed by its Affiliates. Save to the extent provided
in the
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foregoing sentence, neither party may assign any right or obligation hereunder
without the written consent of the other party, except if such assignment
arises under a transaction in which the assigning party is selling its entire
business or a line of business or operations to which this Agreement relates,
or that party is being acquired or merging, in each case to, by or with a third
party that is not a direct competitor of the nonassigning party. This Agreement
shall be binding upon and inure to the benefit of the parties' respective
predecessors and permitted assigns. Any attempted assignment in violation of
this provision shall be void and of no effect.
15.3 INVALIDITY
If and solely to the extent that any provision of this Agreement shall
be invalid or unenforceable, or shall render this entire Agreement to be
unenforceable or invalid, such offending provision shall be of no effect and
shall not affect the validity of the remainder of this Agreement or any of its
provisions; provided, however, the parties shall use their respective
reasonable efforts to renegotiate the offending provisions to best accomplish
the original intentions of the parties.
15.4 WAIVER
A waiver by either party of any term or condition of this Agreement in
any one instance shall not be deemed or construed to be a waiver of such term
or condition for any similar instance in the future or of any subsequent breach
hereof. All rights, remedies, undertakings, obligations and agreements
contained in this Agreement shall be cumulative and none of them shall be a
limitation of any other remedy, right, undertaking, obligation or agreement.
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15.5 SCHEDULES
All Schedules attached hereto and the documents and agreements to be
delivered or performed at or subsequent to the Closing ("Items") are
incorporated herein and expressly made a part of this Agreement as fully as
though completely set forth herein, and all references to this Agreement herein
or in any of such Items shall be deemed to refer to and include all of said
Items.
15.6 COUNTERPARTS
This Agreement may be executed in counterparts each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
15.7 CONFLICTS
In the event of any conflict between the terms of this Agreement and
the Transaction Documents, then the provisions of this Agreement shall prevail.
15.8 FORCE MAJEURE
Neither party shall be liable for failure to perform or delay in
performing obligations set forth in this Agreement, and no party shall be
deemed in breach or default of its obligations, if, to the extent and for so
long as, such failure, delay, breach or default is due to natural disasters or
any similar causes reasonably beyond the control of such party. Any party
desiring to invoke the protection of force majeure shall promptly notify the
other party of such desire and shall use reasonable efforts to resume
performance of its obligations.
15.9 NO THIRD PARTY BENEFICIARIES
Nothing contained in this Agreement or any of the Transaction
Documents is intended to create any rights or benefits to any third party,
including any of the Transferring Employees.
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15.10 NOTICES
Any notice, consent or approval permitted or required under this
Agreement shall be in writing sent by registered or certified airmail, postage
pre-paid, or by a nationally-recognized overnight courier or facsimile and
addressed as follows:
If to Quintiles:
Quintiles, Inc.
4709 Creekstone Drive
Riverbirch Building, Suite 300
Durham, North Carolina 27703
Attn: President, CRO Americas
Fax: (919) 941-9113
With a copy to:
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 300
Durham, North Carolina 27703
Attn: Gregory D. Porter
Fax: (919) 941-7263
and
Blackwell Sanders Peper Martin
Two Pershing Square, Suite 1000
2300 Main Street
P.O. Box 419777
Kansas City, Missouri 64108
Fax: (816) 983-8080
Attention: Steven Carman
If to HMR to:
Hoechst Marion Roussel, Inc.
10236 Marion Park Drive
Kansas City, Missouri 64137
Attn: General Counsel, North America
Facsimile: (816) 966-3805
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with copies to:
Hoechst Marion Roussel, Inc.
10236 Marion Park Drive
Kansas City, Missouri 64137
Attn: Vice President and Chief Financial Officer
Facsimile: (816) 966-4889
and
Hoechst Marion Roussel, Inc.
Route 202-206
Bridgewater, New Jersey 08807-0800
Attn: General Counsel, Global Development Center
Facsimile: (908) 231-4480
The parties may, however, designate in writing such new or other
addresses or telecopy numbers to which notice shall thereafter be mailed or
telecopied. Any notice given in accordance with this Section 15.10: (i) by
registered or certified airmail, postage pre-paid, shall be deemed delivered
three days after proper deposit in the United States mail; (ii) by overnight
courier shall be deemed delivered the next business day after proper delivery
to a nationally recognized overnight courier; or (iii) by facsimile
transmission shall be deemed delivered upon receipt of confirmation of such
transmission.
15.11 HEADINGS
Headings in this Agreement are included for ease of reference only and
shall have no legal effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their duly authorized
officers.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
HOECHST MARION ROUSSEL, INC.
By /s/ Hoechst Marion Roussel, Inc.
-----------------------------------------
Title:
-------------------------------------
QUINTILES, INC.
By /s/ Quintiles, Inc.
-----------------------------------------
Title:
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