EXHIBIT 10.17
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 13th day of April, 1998, by and between XXXXXXXX LABORATORIES, INC., a
Texas corporation ("HLI"), XXX X. XXXXXXXX, an individual, officer, director and
shareholder of HLI ("Xxxxxxxx"), LABORATORY SPECIALISTS OF AMERICA, INC., an
Oklahoma corporation ("LSAI"), and LABORATORY SPECIALISTS, INC., a Louisiana
corporation and wholly-owned subsidiary of LSAI ("LSI").
R E C I T A L S
1. HLI and LSAI through LSI are each primarily engaged in the providing
of forensic drug testing services to corporate and institutional customers.
2. LSAI and LSI desire to purchase from HLI and HLI desires to sell to
LSAI and LSI certain assets of HLI, principally the customer base of HLI and the
assets related thereto.
3. HLI, LSAI and LSI desire to make certain representations, warranties,
covenants and agreements in connection with the transactions contemplated under
this Agreement and to prescribe various conditions precedent to such
transactions and payment and delivery of the consideration for purchase of the
assets of HLI.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties to this Agreement have agreed, and
hereby agree, subject to the terms and conditions hereinafter set forth, as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Certain terms which are used primarily in individual
sections of this Agreement are defined when used in such sections. Other terms
used frequently throughout this Agreement are set forth below and have the
following meanings:
CLOSING: The consummation of the transactions contemplated by this Agreement on
the Closing Date.
CLOSING DATE: The date on which the Closing shall occur on and be effective May
1, 1998, or on such other date as mutually agreed among the parties hereto, but
in any event not later than May 31, 1998.
XXXXXXXX: Xxx X. Xxxxxxxx, an individual, officer, director and shareholder of
HLI.
HLI: Xxxxxxxx Laboratories, Inc., a Texas corporation.
HLI ASSETS: The assets of HLI as defined in Section 2.1 hereof and as more
specifically identified on SCHEDULE 2.1 attached hereto.
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LEGAL REQUIREMENTS: Any law, statute, ordinance, decree, final order, final
judgment, rule or regulation of (including without limitation the terms of any
license, certificate, franchise or permit issued by) the United States, any
state, commonwealth, territory or possession thereof and any political or
judicial subdivision or instrumentality of the foregoing, including without
limitation courts, departments, commissions, boards, bureaus or agencies.
LSAI: Laboratory Specialists of America, Inc., an Oklahoma corporation.
LSI: Laboratory Specialists, Inc., a Louisiana corporation and the wholly-owned
subsidiary of LSAI.
ONE-YEAR ACCOUNTING PERIOD: The 12 months ended following Closing.
ONE-YEAR REVENUE BASE: Determined in accordance with generally accepted
accounting principles, the sum of all revenues directly attributable to the HLI
Assets during the One Year Accounting Period.
TAXES: All net income, gross income, gross receipts, sales and use, AD VALOREM,
franchise, profits, licenses, withholding, payroll, excise, severance, stamp,
occupation, property, customs duties or other taxes, fees or charges of any kind
whatsoever imposed by a foreign, federal, state, county or local taxing
authority together with any interest or penalty thereon.
1.2 INTERPRETATION. The words "hereof," "herein" and "hereunder" and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article, section, subsection and paragraph references in this Agreement are to
articles, sections, subsections and paragraphs of this Agreement, unless
otherwise specified. The article, section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement. The Exhibit and all Schedules referred to
herein are annexed hereto and incorporated herein by reference. The meanings
given to terms defined herein shall be equally applicable to both the singular
and plural forms of such terms.
ARTICLE II
ASSET PURCHASE
2.1 PURCHASE AND SALE OF HLI ASSETS. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, HLI shall sell, assign,
convey, set over, transfer and deliver to LSAI and LSI, and LSAI and LSI,
jointly and not severally, shall purchase, acquire and accept all right, title
and interest of HLI Assets, free and clear of any lien, charge, claim, pledge,
security interest or other encumbrance of any type or kind whatsoever, against
receipt of the consideration paid and delivered by LSAI pursuant to Section 2.2
hereof.
2.2 PURCHASE PRICE OF HLI ASSETS. In consideration for the HLI Assets to
be sold, assigned, conveyed, transferred and delivered to HLI pursuant to
Section 2.1 hereof and upon the terms and subject to the conditions contained
herein, the following payment and deliveries shall be made:
2.2.1 PAYMENT AT CLOSING. At Closing, LSAI and LSI, jointly and
not severally, shall deliver to HLI, in immediately available funds, the
sum of Five Hundred Thousand Dollars ($500,000); and
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2.2.2 PAYMENT SUBSEQUENT TO CLOSING. On or before 30th day
following the One-Year Accounting Period, LSAI and LSI, jointly and not
severally, shall pay HLI, in immediately available funds, an amount equal
to the One-Year Revenue Base, less (i) Five Hundred Dollars ($500,000) paid
to HLI pursuant to Section 2.2.1 and (ii) Thirty-Three Thousand Eight
Hundred Fifteen Dollars ($33,815) representing an account receivable owed
by HLI to LSI on the Closing Date.
2.3 CLOSING. Subject to the terms and conditions hereof, the Closing
shall take place by telecommunications at the offices of LSAI in Oklahoma City,
Oklahoma, and at the offices of HLI in Midland, Texas, or at such other places
as the parties hereto shall agree.
2.4 INSTRUMENTS OF TRANSFER AND CONVEYANCE. The conveyance, transfer,
assignment and delivery of the HLI Assets as herein provided shall be effected
by delivery by HLI at Closing (or any time thereafter) to LSAI and LSI of
instruments of transfer, conveyance, endorsements, bills of sale, all in form
satisfactory to LSAI and LSI, duly executed, as LSAI and LSI shall reasonably
deem necessary to vest in LSAI and LSI at Closing and at any time thereafter,
good and marketable title to the HLI Assets, free and clear of any lien, charge,
claim, pledge, security interest or other encumbrance of any type or kind
whatsoever.
2.5 NO ASSUMPTION OF LIABILITIES. Except as set forth on SCHEDULE 2.5, in
connection with the purchase of the HLI Assets and consummation of the
transactions contemplated under this Agreement, LSAI and LSI shall not nor shall
any provision of this Agreement be construed to cause LSAI and LSI to, assume or
become liable for any liability, obligation, performance, duty, debt, lien or
any other claim of any kind or nature of HLI, and HLI hereby acknowledges that
it shall remain liable for all of its liabilities, obligations, performances,
duties, debts, liens or any other claim of any kind or nature, other than as set
forth on SCHEDULE 2.5, after the Closing. Provided, however, LSI shall assume
all obligations of HLI to maintenance any and all records and information
required to be maintained and the continuing obligation to maintain all urine
samples in a frozen state in accordance with the regulations of the Substance
Abuse and Mental Health Services Administration, formerly National Institute on
Drug Abuse.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LSAI AND LSI
LSAI and LSI hereby represent and warrant to HLI as of the date hereof as
follows:
3.1 ORGANIZATION, GOOD STANDING, POWER, ETC. LSAI is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Oklahoma and has all requisite corporate power and authority to own, operate and
lease its properties and assets and to carry on its business as contemplated
following the Closing. LSI is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Louisiana and has all
requisite corporate power and authority to own, operate and lease its properties
and assets and to carry on its business as contemplated following the Closing.
3.2 AUTHORIZATION OF AGREEMENT. Each of LSAI and LSI has all requisite
corporate power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by LSAI and
LSI and the consummation by LSAI and LSI of the transactions
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contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of LSAI and LSI. This Agreement has been duly
executed and delivered by LSAI and LSI, and constitutes the legal, valid and
binding obligation of LSAI and LSI, enforceable against each of LSAI and LSI in
accordance with terms of this Agreement, except as enforceability may be limited
by (i) any applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.3 NO CONFLICTING AGREEMENTS. Neither the execution and delivery of this
Agreement by LSAI and LSI nor the consummation of the transactions contemplated
by this Agreement, will (a) violate or conflict with any provision of the
Certificate of Incorporation or Bylaws of LSAI and Articles of Incorporation and
Bylaws of LSI, as currently in effect; (b) violate or conflict with any
provision of any law, rule, regulation, order, permit, certificate, writ,
judgment, injunction, decree, determination, award or other decision of any
governmental authority, other regulatory or self-regulatory body or association
or arbitrator binding upon LSAI or LSI or any of its properties or assets; (c)
result in a breach of or constitute a default under (or with notice or lapse of
time or both result in a breach of or constitute a default under), or give rise
to a right of termination, cancellation, acceleration or repurchase of any
obligation or a right of first refusal with respect to any material property or
asset or a loss of a material benefit or the imposition of a material penalty
under, any of the terms, conditions or provisions of (i) any mortgage,
indenture, loan or credit agreement or any other agreement or instrument
evidencing indebtedness for money borrowed to which LSAI or LSI is a party or by
which LSAI or LSI or any of its properties or assets is bound or affected, or
(ii) any lease, license, tariff, contract or other agreement or instrument to
which LSAI or LSI is a party or by which LSAI or LSI or any of its properties
or assets is bound or affected; or (d) result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance of any nature upon or with respect to any of the
properties or assets now or hereafter owned by LSAI or LSI.
3.4 CONSENTS AND APPROVALS. No consent, approval, order, certificate or
authorization of, or registration, declaration or filing with, any governmental
authority or other third party is required by or with respect to LSAI or LSI in
connection with the execution and delivery of this Agreement by LSAI or the
consummation by LSAI of the transactions contemplated hereby, other than
following consummation of the transactions contemplated by this Agreement in
connection or compliance with any applicable provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). LSAI hereby agrees to
undertake all required actions in compliance with the Exchange Act; provided,
however, that any failure of LSAI to comply with the Exchange Act shall not
affect the obligations of LSAI and LSI under the terms of this Agreement.
3.5 FULL DISCLOSURE. No representation, covenant or warranty by LSAI or
LSI contained in this Agreement and no written information or agreements
furnished or to be furnished to HLI by LSAI and LSI or in connection with the
transactions contemplated by this Agreement, contains or will contain any untrue
statement of a material fact, or omits or will omit to contain a material fact
necessary in order to make the statements and information contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HLI
HLI hereby represents and warrants to LSAI and LSI as follows:
4.1 ORGANIZATION, GOOD STANDING, POWER, ETC. HLI is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power and authority to own, operate and
lease its properties and assets and to carry on its business as now being
conducted. HLI is duly qualified to do business and is in good standing in each
other jurisdiction in which the ownership, operation or leasing of its
properties or assets or the nature of its business requires such qualification.
4.2 AUTHORIZATION OF AGREEMENT. HLI has all requisite power and authority
to enter into and perform all of its obligations under this Agreement. The
execution and delivery of this Agreement by HLI and the consummation by HLI of
the transactions contemplated hereby have been duly authorized and all necessary
corporate action on the part of HLI has been taken or will have been taken on or
before Closing. This Agreement has been duly executed and delivered by HLI, and
constitutes the legal, valid and binding obligation of HLI, enforceable against
HLI in accordance with the terms of this Agreement, except as enforceability may
be limited by (a) any applicable bankruptcy, insolvency, reorganization or other
law relating to or affecting creditors' rights generally, and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.3 NO CONFLICTING AGREEMENTS. Neither the execution and delivery of this
Agreement by HLI, nor the consummation of the transactions contemplated by this
Agreement, will (a) violate or conflict with any provision of the Articles of
Incorporation or By-laws of HLI, as currently in effect; (b) violate or conflict
with any provision of any law, rule, regulation, order, permit, certificate,
writ, judgment, injunction, decree, determination, award or other decision of
any governmental authority, other regulatory or self-regulatory body or
association or arbitrator binding upon HLI or any of its properties or assets;
(c) at Closing or thereafter result in a breach of or constitute a default under
(or with notice or lapse of time or both result in a breach of or constitute a
default under), or give rise to a right of termination, cancellation,
acceleration or repurchase of any obligation or a right of first refusal with
respect to any material property or asset or a loss of a material benefit or the
imposition of a material penalty under, any of the terms, conditions or
provisions of (i) any mortgage, indenture, loan or credit agreement or any other
agreement or instrument evidencing indebtedness for money borrowed to which HLI
is a party or by which HLI or any of the HLI Assets is bound or affected, or
(ii) any lease, license, tariff, contract or other agreement or instrument to
which HLI is a party or by which HLI or any of the HLI Assets is bound or
affected; or (d) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the HLI Assets.
4.4 CONSENTS AND APPROVALS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental authority or
other third party is required by or with respect to HLI in connection with the
execution and delivery of this Agreement by HLI, or the consummation by HLI of
the transactions contemplated by this Agreement.
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4.5 HLI ASSETS. The HLI Assets are free and clear of any lien, charge,
claim, pledge, security interest or other encumbrance of any type or kind
whatsoever.
4.6 FINANCIAL STATEMENTS. HLI has delivered to LSAI (a) the unaudited
balance sheet of HLI as of December 31, 1997, and the related unaudited
statements of income, and cash flows of HLI for the fiscal year ended December
31, 1997, together with the notes related thereto (the "HLI Financial
Statements"). Each HLI Financial Statements (and the notes relating thereto)
were prepared in accordance with generally accepted accounting principles
consistently applied and fairly presents the financial condition of HLI as of
the date thereof and the related results of operations, and cash flows of HLI
for and during the periods covered thereby.
4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997, HLI
has not (i) borrowed or agreed to borrow funds secured or to be secured by the
HLI Assets; (ii) incurred or become subject to, or agreed to incur or become
subject to, any obligation or liability, contingent or otherwise, that resulted
in or may become a lien, charge, claim, pledge, security interest or encumbrance
of any type or kind whatsoever against or burden upon the HLI Assets;
(iii) declared, set aside or paid any distribution of the HLI Assets;
(iv) mortgaged, pledged or subjected to lien, charge or other encumbrance, or
agreed so to do, any of the HLI Assets; (v) sold, assigned, transferred,
conveyed, leased or otherwise disposed of or agreed to sell, assign, transfer,
convey, lease or otherwise dispose of any of the HLI Assets; (vi) entered into
any material transaction, contract or commitment, other than this Agreement,
affecting or related to the HLI Assets; and (vii) made or permitted, or agreed
to make or permit, any amendment or termination of any material contract,
franchise, license, agreement or other instrument (that constitutes in whole or
part or relates to the HLI Assets) to which HLI is a party or by which any of
the HLI Assets is bound. Furthermore, except as otherwise set forth on SCHEDULE
4.7, during the year ended December 31, 1997 and since December 31, 1997, HLI
has not lost and has no knowledge of the threatened of loss of any customer for
whom forensic drug testing services were provided during the year ended December
31, 1997, which such customer services accounted for $30,000 or more of HLI
revenues during the year ended December 31, 1997.
4.8 TITLE TO THE HLI ASSETS; ABSENCE OF LIENS AND ENCUMBRANCES. HLI holds
good and defensible title to the HLI Assets, free and clear of all mortgages,
liens, pledges, charges and encumbrances of any nature whatsoever.
4.9 LITIGATION. (i) Except as set forth on SCHEDULE 4.9, there is no
claim, action, suit, proceeding, arbitration, investigation or inquiry
("proceeding") before any governmental authority or arbitrator, now pending or
threatened against, relating to or affecting HLI and/or the HLI Assets or
business of HLI or that questions the validity of this Agreement or affects the
transactions contemplated herein, and there is no basis for any such claim,
action, suit, proceeding, arbitration, investigation or inquiry.
(ii) HLI has not been permanently or temporarily enjoined or
prohibited by order, judgment or decree of any governmental authority or
arbitrator from engaging in or continuing any conduct or practice in connection
with the business engaged in by HLI or which would prevent or hinder the sale,
assignment, conveyance, setting over, transfer and delivery of the HLI Assets by
HLI to LSAI of all right, title and interest of HLI in and to the HLI Assets
free and clear of all mortgages, liens, pledges, charges and encumbrances of any
nature whatsoever, as contemplated hereunder.
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(iii) There is not in existence any order, judgment or decree of any
governmental authority or arbitrator (other than general industry orders)
enjoining or prohibiting HLI from taking, or requiring HLI to take, any action
of any kind or to which HLI or any of the HLI Assets, are subject or bound.
(iv) HLI is not in default in any respect under any Legal Requirement
or any order, writ, injunction or decree of any governmental authority or
arbitrator which would prevent or hinder the sale, assignment, conveyance,
setting over, transfer and delivery of the HLI Assets by HLI to LSAI of all
right, title and interest of HLI in and to the HLI Assets free and clear of all
mortgages, liens, pledges, charges and encumbrances of any nature whatsoever, as
contemplated hereunder.
4.10 COMPLIANCE WITH LAWS. HLI is in compliance with all Legal
Requirements applicable to any of its properties or assets including the HLI
Assets and/or the ownership, operation or use thereof, and HLI has not received
notice of any noncompliance or alleged noncompliance with any Legal Requirement
relating or applicable to any of its properties or assets including the HLI
Assets or to the operation of its business.
4.11 FULL DISCLOSURE. No representation, covenant or warranty by HLI
contained in this Agreement and no written information or agreements furnished
or to be furnished to LSAI and LSI by HLI pursuant hereto or in connection with
the transactions contemplated by this Agreement, contains or will contain any
untrue statement of a material fact, or omits or will omit to contain a material
fact necessary in order to make the statements and information contained herein
or therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE V
COVENANTS OF LSAI AND LSI
Each of LSAI and LSI covenants and agrees with HLI that, at all times
between the date hereof and the Closing, each of LSAI and LSI will comply with
all covenants and provisions of this Article V, except to the extent HLI may
otherwise consent in writing or to the extent otherwise expressly required or
permitted by this Agreement.
5.1 APPROVALS. Each of LSAI and LSI will (i) take all reasonable steps
and use all reasonable efforts necessary or desirable to recommend the granting
of and to obtain, as promptly as practicable, all approvals, authorizations,
certificates, franchises, licenses, consents and clearances of governmental
authorities and of third parties, required of LSAI to consummate the
transactions contemplated by this Agreement, (ii) provide such other information
and communications to such governmental authorities as HLI or such authorities
may reasonably request, and (iii) cooperate with HLI in obtaining, as promptly
as practicable, all approvals, authorizations, certificates, franchises,
licenses, consents and clearances of governmental authorities required of HLI to
consummate the transactions contemplated by this Agreement.
5.2 BROKERS' FEES. Each of LSAI and LSI has not and will not incur any
brokerage, finder's or similar fee in connection with the transactions
contemplated by this Agreement.
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ARTICLE VI
COVENANTS OF HLI
HLI covenants and agrees with LSAI and LSI that, at all times between the
date hereof and the Closing, HLI will comply with all covenants and provisions
of this Article VI, except to the extent LSAI and LSI may otherwise consent in
writing or to the extent otherwise expressly required or permitted by this
Agreement.
6.1 APPROVALS. HLI will (i) take all reasonable steps and use all
reasonable efforts necessary or desirable to recommend the granting of and to
obtain, as promptly as practicable, all approvals, authorizations and clearances
of governmental authorities and of third parties, required of it to consummate
the transactions contemplated by this Agreement, (ii) provide such other
information and communications to such governmental authorities as LSAI or LSI
or such authorities may reasonably request, and (iii) cooperate with LSAI and
LSI in obtaining, as promptly as practicable, all approvals, authorizations and
clearances of governmental authorities required of LSAI and LSI to consummate
the transactions contemplated by this Agreement.
6.2 INVESTIGATION BY LSAI AND LSI. HLI will provide LSAI and LSI, their
counsel, accountants, and other representatives with reasonable access (at the
sole cost, risk and expense of LSAI and LSI), upon prior notice and during
normal business hours, to all facilities, officers, directors, employees,
agents, accountants, assets, properties, books and records of HLI. HLI will
furnish to LSAI and LSI and such other persons during such period all such other
information and data concerning the business, operations and affairs of HLI or
the transactions contemplated by this Agreement as LSAI and LSI or any of such
other persons reasonably may request. LSAI and LSI hereby agrees to indemnify
and hold HLI harmless from all claims, losses or damages arising out of exercise
of such information access rights pursuant to this Section 6.2. HLI will also
provide to LSAI and LSI timely notice of and access to minutes of all meetings
(and all actions by written consent in lieu thereof) of the board of directors
and stockholders of HLI.
6.3 NO NEGOTIATIONS. Except as contemplated in this Agreement, HLI will
not take (or permit any other person acting for or on behalf of HLI to take),
directly or indirectly, any action to (i) seek or encourage any offer or
proposal from any person to acquire any of the HLI Assets or any interest
therein, (ii) merge, consolidate or combine, or permit any other person to
merge, consolidate or combine, with HLI, (iii) liquidate, dissolve or reorganize
HLI, (iii) acquire or transfer any of the HLI Assets or any interests therein,
other than in the ordinary course of business, or (iv) reach any agreement or
understanding (regardless of whether such agreement or understanding is
absolute, revocable, contingent or conditional) for, or otherwise to attempt to
consummate, any such acquisition, transfer, merger, consolidation, combination,
liquidation, dissolution or reorganization. LSAI and LSI hereby acknowledge
that, following the Closing Date, HLI anticipates selling all or a portion of
its remaining assets and adopting a plan of liquidation and dissolution and the
filing articles of dissolution in accordance with the Texas Business Corporation
Act and distributing the assets of HLI to the shareholders of HLI, after payment
or provision for payment of its debts.
6.4 CONDUCT OF BUSINESS. HLI will conduct its business only in the
ordinary course and consistent with past practices. Without limiting the
generality of the foregoing:
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(i) HLI will cause the books and records of HLI, and HLI maintain its
books and records in the usual manner and consistent with past practices and
customs, and will not permit a material change in any operational or financial
reporting or accounting practice or policy of HLI or in any assumption
underlying such a practice or policy.
(ii) HLI will (A) prepare properly and file duly and timely all reports
and all tax returns required to be filed with governmental authorities with
respect to its business, operations or affairs, and (B) pay duly and fully all
Taxes indicated by such tax returns or otherwise levied or assessed upon it or
any of its assets and properties, and withhold or collect and pay to the proper
taxing authorities or reserve for such payment all Taxes that it is required to
so withhold or collect and pay, unless such Taxes are being contested in good
faith.
(iii) HLI (A) will not convey, encumber, mortgage, pledge or dispose of any
portion of the HLI Assets, (B) will use its best efforts to conduct its business
in the ordinary course in a prudent and diligent manner in accordance with
industry standards,(C) will promptly notify LSAI in writing of the receipt of
any written notice or written claim of default or breach by HLI or of any
termination or cancellation, or written threat of termination or cancellation,
of any contracts, agreements or other arrangements with HLI's customers, (D)
will promptly notify LSAI in writing of the loss or suspension of any
certification, which would have a material adverse effect upon HLI and its
operations, including without limitation, loss or suspension of certification by
the Substance Abuse and Mental Health Services Administration or any applicable
state agency.
6.5 NO DISTRIBUTIONS. HLI will not make any distributions of the HLI
Assets to its shareholders.
6.6 NO DISPOSAL OF HLI ASSETS. Except as contemplated in this Agreement,
HLI will not (a) dispose of or assign any of the HLI Assets or permit any of the
HLI Assets to be subjected to any liens, or (b) sell any portion of the HLI
Assets to any third party.
6.7 CONTRACTS. HLI will not enter into any contract for the providing of
drug testing services, except contracts entered into in the ordinary course of
business consistent with past practices.
6.8 NOTICE AND CURE. HLI will notify LSAI and LSI promptly in writing
of, and contemporaneously will provide LSAI and LSI with true, complete and
correct copies of, any and all information or documents relating to, and will
use all reasonable efforts to cure prior to the Closing, any event, transaction
or circumstance occurring after the date of this Agreement that results in or
will result in any covenant or agreement of HLI being breached under this
Agreement, or that renders or will render untrue any representation or warranty
of HLI contained in this Agreement as if the same were made on or as of the date
of such event, transaction or circumstance. HLI also will use all reasonable
efforts to cure, at the earliest practicable date and before the Closing, any
violation or breach of any representation, warranty, covenant or agreement made
by HLI in this Agreement.
6.9 AGREEMENTS AND COVENANTS. HLI will not make any commitment, either
in writing or orally, which would violate any of the provisions set forth in
this Article VI.
6.10 BROKERS' FEES. HLI not and will not incur any brokerage, finder's or
similar fee in connection with the transactions contemplated by this Agreement.
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ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE PARTIES
Notwithstanding any other provision of this Agreement, the obligation of
HLI, on the one hand, and LSAI and LSI, on the other hand, to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment,
prior to or at the Closing, of each of the following conditions precedent, any
one of which may be waived by such entity:
7.1 CONSENTS AND APPROVALS. All approvals of and consents by all
governmental authorities and other persons, and all permits by and all filings
with and submissions to all such governmental authorities and other persons as
may be required for the consummation of the transactions contemplated by this
Agreement, shall have been obtained or made and reasonably satisfactory evidence
thereof shall have been received and any waiting period, if applicable, shall
have expired.
7.2 CERTAIN ACTIONS. There shall not have been instituted and be
continuing or threatened against LSAI, LSI, HLI or any of their respective
directors or officers, any action, suit or proceeding by or before any
governmental authority that would restrain, prohibit or invalidate, or result in
the payment of substantial damages in respect of, any transaction contemplated
by this Agreement.
7.3 APPROVAL OF STOCKHOLDERS OF HLI. The stockholders of HLI shall have
approved this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF HLI
Not withstanding any other provision of this Agreement, the obligations of
HLI to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment prior to or at the Closing, of each of the following
conditions precedent, any of which may be waived by HLI:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of LSAI and LSI set forth in Article III above shall be true and
correct in all material respects as of the date of this Agreement, with the same
effect as though such representations and warranties had been made at and as of
Closing.
8.2 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS. LSAI and LSI
shall have duly performed, complied with and satisfied in all material respects
all covenants, agreements and conditions required by this Agreement to be
performed, complied with or satisfied by it at or prior to the Closing.
8.3 CERTAIN ACTIONS. There shall not have been instituted and be
continuing or threatened against LSAI, LSI, HLI, or any of their respective
directors or officers, any action, suit or proceeding by or before any
governmental authority that would impose or confirm material limitations on the
ability of HLI to receive the consideration for purchase of the HLI Assets
pursuant to Section 2.2 hereof.
10
8.4 NO ADVERSE CHANGE. No material adverse change shall have occurred in
the business, operations, properties, assets or financial condition of LSAI and
LSI since the date of this Agreement.
8.5 OFFICERS' CERTIFICATE, ETC. HLI shall have received (a)
certificates, dated the date of the Closing and signed by the Chief Executive
Officer or President of LSAI or LSI, as the case may be, to the effect set forth
in Sections 8.1, 8.2, 8.3 and 8.4 above, and (b) such other certificates,
instruments and documents as shall be reasonably requested by HLI for the
purpose of verifying the accuracy of such representations and warranties and the
performance and satisfaction of such covenants and conditions.
8.6 EMPLOYMENT OFFER TO KEY LABORATORY PERSON. LSI shall offer Xxxxx
Xxxxxxxx, an employee of HLI, an employment position in the laboratory
facilities of LSI in Gretna, Louisiana as a "responsible person" under the
regulations of the Substance Abuse and Mental Health Services Administration for
annual compensation of Fifty Thousand Dollars ($50,000).
8.7 THREE-YEAR EMPLOYMENT AGREEMENT. LSAI shall have caused LSI to have
executed and delivered to Xxxxxxxx the Employment Agreement attached hereto as
EXHIBIT A.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF LSAI AND LSI
Notwithstanding any other provision of this Agreement, the obligations of
LSAI and LSI to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, prior to or at the Closing, of each of the
following conditions precedent, any of which may be waived by LSAI and LSI:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of HLI set forth in Article IV above shall be true and correct as of
the date of this Agreement and as of the Closing, with the same effect as though
such representations and warranties had been made at and as of the Closing.
9.2 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS. HLI shall have
duly performed, complied with and satisfied all covenants, agreements and
conditions required by this Agreement to be performed, complied with or
satisfied by HLI, at or prior to the Closing.
9.3 NO ADVERSE CHANGE. No material adverse change shall have occurred in
the business, prospects, operations, properties or financial condition of HLI as
such related to the HLI Assets since December 31, 1997.
9.4 CERTAIN ACTIONS. There shall not have been instituted and be
continuing or threatened against LSAI, LSI, HLI, or any of their respective
directors or officers, any action, suit or proceeding by or before any
governmental authority that would prohibit the ownership of all of the HLI
Assets by LSAI and LSI.
9.5 OFFICERS' CERTIFICATES, ETC. LSAI shall have received (a) a
certificate, dated the date of the Closing and signed by the Chief Executive
Officer or President of HLI to the effect set forth in Sections 9.1, 9.2, 9.3
and 9.4 above, and (b) such other certificates, instruments and documents as
shall
11
be reasonably requested by LSAI for the purpose of verifying the accuracy of
such representations and warranties and the performance and satisfaction of such
covenants and conditions.
ARTICLE X
TERMINATION AND AMENDMENTS
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing, as follows:
(i) by mutual consent of LSAI, LSI and HLI;
(ii) by either LSAI or HLI in the event the Closing shall not have been
consummated on or before May 30, 1998; provided, however, that if LSAI and LSI
(on the one hand) are or HLI (on the other hand) is in compliance with their or
its respective representations, warranties and covenants made in this Agreement
and prepared to close the transactions contemplated in this Agreement on May 30,
1998, the in such event, LSAI and LSI may require HLI or HLI may require LSAI
and LSI to perform as quickly after May 30, 1998, as possible and may
specifically use the remedies provide in Section 11.2 to enforce the provisions
this Section 10.1 and the other provisions of this Agreement to cause
consummation of the transactions contemplated in this Agreement; or
(iii) by LSAI and LSI on the one hand or HLI on the other hand if there
shall have been entered or rendered against LSAI, LSI, HLI, or any of their
respective directors or officers in any action or proceeding referred to in
Sections 7.2, 8.3 or 9.4 hereof an injunction or a final judgment having one of
the effects specified in such Sections.
10.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
by either LSAI and LSI on the one hand or HLI on the other hand, as provided in
Section 10.1 hereof, this Agreement shall forthwith become void and there shall
be no obligation or liability on the part of LSAI, LSI, HLI or their respective
officers, directors or shareholders, except as stated in Section 12.7 hereof;
provided, however, that such limitation shall not apply in the event of a
willful breach by LSAI, LSI or HLI of any of their respective material covenants
contained herein in which case the non-breaching party shall be entitled to
recover from the breaching party all out-of-pocket costs (including without
limitation reasonable attorney fees' and expenses) which the non-breaching party
has incurred in connection this Agreement.
10.3 AMENDMENT. This Agreement may be amended by the parties hereto, at
any time prior to the Closing. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
ARTICLE XI
SURVIVAL OF PROVISIONS; REMEDIES; FEES AND COSTS
11.1 SURVIVAL. The representations, warranties, covenants and agreements
respectively made by LSAI and HLI in this Agreement, in the Schedules or Exhibit
hereto, or on any certificate delivered pursuant to the provisions hereof shall
survive shall not terminate upon the Closing and consummation of the
transactions contemplated by this Agreement. The parties hereto acknowledge
that the representations
12
and warranties contained in this Agreement are intended to and shall give rise
to liability, claim, action or cause of action on the part of any party hereof
on account of breach of any such representation or warranty.
11.2 AVAILABLE REMEDIES. Each party expressly agrees that, consistent
with its intention and agreement to be bound by the terms of this Agreement and
to consummate the transactions contemplated by this Agreement, subject only to
the satisfaction of conditions precedent, the remedy of specific performance
shall be available to a non-breaching and non-defaulting party to enforce
performance of this Agreement by a breaching or defaulting party, including,
without limitation, to require the consummation of the Closing pursuant to
Section 2.1 hereof.
11.3 ATTORNEYS' FEES AND COSTS. In the event any party hereto shall be
required to employ an attorney or attorneys to institute a legal proceeding
against the other party or parties for the purpose of enforcing any of the
provisions of this Agreement or protecting its interest in any matter arising
under this Agreement, the non-prevailing party in any such action pursued in
courts of competent jurisdiction (the finality of which is not legally
contestable) shall pay to the prevailing party all reasonable costs, damages and
expenses, including attorneys' fees, expended or incurred in connection with
such proceeding. The standard to be applied in determining who is a prevailing
party for purposes of this Section 11.2 shall be the same standard as applied by
the courts in determining who is a prevailing party for purposes of Rule 54(d)
of the Federal Rules of Civil Procedure.
ARTICLE XII
CONTINUING OBLIGATIONS OF HLI, XXXXXXXX, LSAI AND LSI AFTER CLOSING
Following Closing and consummation of the transactions contemplated in this
Agreement, the HLI covenants and agrees (except to the extent LSAI and LSI may
otherwise consent in writing or to the extent otherwise expressly required or
permitted by this Agreement), and each of LSAI and LSI covenants and agrees
(except to the extent HLI otherwise consent in writing or to the extent
otherwise expressly required or permitted by this Agreement), as follows:
12.1 INDEMNIFICATIONS BY HLI. Subject to the provisions of this Article
XII, HLI agrees to indemnify fully in respect of, hold harmless and defend LSAI,
LSI and any Affiliate (as defined below) of LSAI or LSI against any and all
damages, liabilities, costs, claims, proceedings, investigations, penalties,
judgments, deficiencies, losses, including Taxes, expenses (including interest,
penalties, and fees and disbursements of attorneys, accountants and experts)
("Loss" or "Losses") incurred or suffered by any of them arising out of or
relating to (i) any misrepresentation or breach of warranty or covenant on the
part of HLI under this Agreement and (ii) any nonfulfillment or failure to
perform any covenant or agreement on the part of any of HLI under this
Agreement. For purposes of this Article XII, "Affiliate" shall refer to an
officer, director or employee of LSAI, LSI or HLI, as the case may be.
12.2 INDEMNIFICATIONS BY LSAI. Subject to the provisions of this Article
XII, LSAI agrees to indemnify fully in respect of, hold harmless and defend HLI
and any Affiliate of HLI against, any and all Losses arising out of or relating
to (i) any misrepresentation, or breach of warranty or covenant on the part of
LSAI under this Agreement, or (ii) nonfulfillment or failure to perform any
covenant or agreement on the part of LSAI or LSI under this Agreement.
13
12.3 SET OFF. Subject to Section 12.5, in the event that HLI, LSI or LSAI
(the "Debtor Party") shall be indebted to HLI, LSI or LSAI or any other person
or entity (the "Creditor Party") for any amounts pursuant to the terms of this
Agreement, including, but not limited to, the provisions of this Article XII or
under any other agreement, then the Creditor Party (or Affiliate, if applicable)
may give notice to the Debtor Party of such obligation. If such notice has been
given and the Debtor Party does not fully pay such obligation within 90 days of
such notice, then the Creditor Party may retain and apply to the payment of that
amount otherwise owed by the Creditor Party (or Affiliate, if applicable) to the
Debtor Party (or Affiliate, if applicable) under this Agreement or under any
other agreement and in doing so such Creditor Party (or Affiliate, if
applicable) shall have no liability to such Debtor Party for such retention and
application, under this Agreement or any such other agreement and such retention
and application shall not be a violation or breach thereof; provided, however,
the amount which may be retained pursuant to this Section 12.3 of any payment
otherwise due under this Agreement or any such other agreement shall be an
amount equal to that percentage of such payment obtained by dividing such
payment by all amounts then due and which can then be determined to become due
to the Debtor Party (or Affiliate, if applicable) by the Creditor Party (or
Affiliate, if applicable) under this Agreement or any such other agreement.
12.4 LIMITATION OF LIABILITY FOR CERTAIN MISREPRESENTATIONS OR BREACHES.
(i) HLI shall not be liable under this Agreement for any misrepresentation or
breach of warranty, or breach of any covenant to be performed at or prior to
Closing, except to the extent that the aggregate amount of Losses for which it
would otherwise (but for this provision) be liable exceeds in the aggregate the
sum of $10,000 and then in such case to the full extent of such Losses;
provided, however, that in no event shall HLI be liable for any such
misrepresentation or such breach in excess of the sum of One Million Dollars
($1,000,000). LSAI and LSI hereby acknowledge that, following the Closing Date,
HLI anticipates selling all or a portion of its remaining assets and adopting a
plan of liquidation and dissolution and the filing articles of dissolution in
accordance with the Texas Business Corporation Act and distributing the assets
of HLI to the shareholders of HLI, after payment or provision for payment of its
debts. HLI hereby acknowledges that the obligations of HLI under the provisions
of this Article XII and the other provisions of this Agreement shall survive the
Closing and that adequate provision must be made for payment of said obligations
prior to the filing of said articles of dissolution in accordance with the Texas
Business Corporation Act.
(ii) LSAI and LSI, jointly and not severally, shall not be liable under
this Agreement for any misrepresentation or breach of warranty, or breach of any
covenant to be performed at or prior to Closing, except to the extent that the
aggregate amount of Losses for which it would otherwise (but for this provision)
be liable exceeds in the aggregate the sum of $10,000 and then in such case to
the full extent of such Losses; provided, however, that in no event shall LSAI
and LSI be liable for any such misrepresentation or breach for an aggregate
amount in excess of One Million Dollars ($1,000,000).
12.5 METHOD OF ASSERTING CLAIMS, ETC. The party claiming indemnification
under Section 12.1 or 12.2 of this Agreement hereinafter referred to as the
"Indemnified Party" and the party against whom such claims are asserted
hereunder is hereinafter referred to as the "Indemnifying Party." All claims
for indemnification by any Indemnified Party under this Article XII shall be
asserted and conducted as follows:
12.5.1 NOTIFICATION; DEFENSE. In the event that any claim or
demand for which an Indemnifying Party would be liable to an Indemnified
Party hereunder is asserted against or sought to be collected from such
Indemnified Party by a third party, said Indemnified Party shall with
reasonable promptness notify the Indemnifying Party of such claim or
demand, specifying the
14
nature of and specific basis for such claim or demand and the amount or the
estimated amount thereof to the extent then feasible (which estimate shall
not be conclusive of the final amount of such claim and demand (the "Claim
Notice"). The Indemnified Party's failure to so notify the Indemnifying
Party in accordance with the provisions of this Agreement shall not relieve
the Indemnifying Party of liability hereunder unless such failure
materially prejudices the Indemnifying Party's ability to defend against
the claim or demand. The Indemnifying Party shall have 30 days from the
giving of the Claim Notice (the "Notice Period") to notify the Indemnified
Party (i) whether or not the Indemnifying Party disputes the liability of
the Indemnifying Party to the Indemnified Party hereunder with respect to
such claim or demand and (ii) whether or not the Indemnifying Party
desires, at the sole cost and expense of the Indemnifying Party, to defend
the Indemnified Party against such claim or demand; provided, however, that
any Indemnified Party is hereby authorized prior to and during the Notice
Period to file any motion, answer or other pleading which it shall deem
necessary or appropriate to protect its interests or those of the
Indemnifying Party and not prejudicial to the Indemnifying Party. In the
event that the Indemnifying Party notifies the Indemnified Party within the
Notice Period that he desires to defend the Indemnified Party against such
claim or demand and except as hereinafter provided, the Indemnifying Party
shall have the right to defend by all appropriate proceedings, which
proceedings shall be promptly settled or prosecuted by him to a final
conclusion. If the Indemnified Party desires to participate in, but not
control, any such defense or settlement by the Indemnifying Party it may do
so at its sole cost and expense. If requested by the Indemnifying Party,
the Indemnified Party agrees to cooperate with the Indemnifying Party and
his counsel in contesting any claim or demand which the Indemnifying Party
elects to contest, or, if appropriate and related to the claim in question,
in making any counterclaim against the person asserting the third party
claim or demand, or any cross-complaint against any person. No claim for
which indemnity is sought hereunder may be settled without the consent of
the Indemnifying Party, which consent may not be unreasonably withheld.
12.5.2 COUNTERCLAIM NOTIFICATION. In the event any Indemnified
Party should have a claim against any Indemnifying Party hereunder which
does not involve a claim or demand being asserted against or sought to be
collected from it by a third party, the Indemnified Party shall give a
Claim Notice with respect to such claim to the Indemnifying Party.
12.5.3 ACCESS TO BOOKS AND RECORDS. To the extent that LSAI or LSI
or its Affiliate may claim indemnity against HLI hereunder, HLI agrees to
give LSAI or LSI or its Affiliate access to the books, records and
employees of HLI in connection with the matters for which indemnification
is sought hereunder, to the extent LSAI or LSI or its Affiliate reasonably
deems necessary in connection with the rights and obligations under this
Agreement. To the extent that HLI may claim indemnity against LSAI or LSI
under this Agreement, LSAI or LSI agrees to give HLI access to the books,
records and employees of LSAI or LSI, as the case may be, in connection
with the matters for which indemnification is sought hereunder, to the
extent HLI reasonably deems necessary in connection with its rights and
obligations under this Agreement.
12.6 TRANSITION ASSISTANCE. Xxxxxxxx agrees to provide LSAI and LSI with
such transition assistance and services for a period of ninety (90) days
following Closing as LSAI or LSI may reasonably request in order to provide for
an orderly and business-like transition of the ownership of the HLI Assets from
HLI. For such assistance and services, Xxxxxxxx shall not be entitled to
receive any compensation other than as provided in the Employment Agreement
attached hereto as EXHIBIT A.
15
12.8 NON-COMPETITION. (i) In order to induce LSAI and LSI to enter into
this Agreement and the Employment Agreement attached hereto as EXHIBIT A, HLI
and Xxxxxxxx covenants and agrees that, for a period of three (3) years from
Closing, each of HLI and Xxxxxxxx shall not, and HLI shall not permit any of its
officers and directors, (A) to engage in any business similar to, or in any way
competitive with, that carried on by LSAI or LSI as constituted on the date of
this Agreement within any county in any state in which HLI is engaged in any
such similar or competitive business ("Competitive Business") (except pursuant
to agreements with LSAI and LSI), (B) to acquire any legal or beneficial
interest in, or otherwise participate in the ownership of any person, firm,
corporation, partnership or other entity or association which is or becomes
engaged in a Competitive Business, except ownership of less than one percent of
a publicly traded company shall be permissible, (C) to directly or indirectly
solicit, canvass or otherwise contact or accept any business or transaction from
any present or former customer of HLI, or take any action which shall cause the
termination or curtailment of the business relationship between HLI or LSAI or
LSI and/or its successor or successors and any of their present, future or
former customers, including without limitation those customers constituting in
whole or in part the HLI Assets relating to a Competitive Business, and (D) to
directly or indirectly, without the prior written consent of LSAI and LSI,
solicit, entice, raid, persuade or induce any individual who at of the date of
this Agreement is, or at any time during such period shall be, an employee of
LSAI, LSI or its subsidiary, or any of its respective successors, to terminate
or refrain from renewing or extending his or her employment with LSAI or LSI or
its subsidiary, or any of its respective successors, except this clause shall
not apply to any such employee whose employment shall have been terminated by
LSAI, LSI or its subsidiary. This covenant and agreement is included herein in
order to protect the value of the HLI Assets being acquired by LSAI and LSI
pursuant to this Agreement and to assure that LSAI and LSI shall have the full
benefit of the value of the HLI Assets.
(ii) If any part of the restrictions set forth in subsection (i) of this
Section 12.8 shall, for any reason whatsoever, be declared invalid by a court of
competent jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected and shall be enforced to
the fullest extent permitted by law. If any of such restrictions are deemed to
be unreasonable by a court of competent jurisdiction, then HLI shall submit to
the reduction or modification of this Section 12.8 as said court deems
reasonable.
(iii) If HLI shall be in violation of the aforementioned restrictive
covenant and agreements in this Section 12.8, then in addition to other remedies
available to LSAI or LSI, the time limitation thereof shall be extended for a
period of time equal to the period of time during which such violation occurred.
(iv) The terms and provisions of this Section 12.8 are for the benefit of
LSAI and LSI and may be waived in whole or in part only in writing by LSAI and
LSI.
(v) HLI, LSAI and LSI agree that no portion of the purchase price of the
HLI Assets shall be allocable to the restrictive covenant and agreement as set
forth in this Section 12.8.
12.9 INJUNCTIVE RELIEF. HLI acknowledge that LSAI and LSI would be
irreparable damaged and that money damages and any other remedy available at law
would be inadequate to redress or remedy any loss in the event that the
provisions of Section 12.8 were not fully performed in accordance with their
specific terms or are otherwise breached, and HLI, therefore, agrees that LSAI
and its assigns, in addition to recovering any claim for damages or obtaining
any other remedy available at law, also may enforce the terms of Section 12.8 by
injunction or specific performance and may obtain may other appropriate
16
remedy available in equity, and that HLI hereby waives its or his right to
assert and will not assert in defense against such equitable claims that an
adequate legal remedy is available.
12.9 SPECIMEN COLLECTION SITE AND PERSONNEL EMPLOYMENT. LSAI and LSI
hereby agree to (i) establish a specimen collection site in Midland, Texas, and
(ii) employ Xxxxxx Xxxxxxxx at such collection site as an employee of LSI,
commencing on the date following the Closing Date, with annual compensation of
Thirty Thousand Dollars ($30,000) payable in equal semi-month installments on
the fifteenth and last day of each month. Provided, however, LSAI and LSI shall
not be obligated to maintain the collection site or such employment for any
definite period of time and shall have the right to terminate such collection
site and employment in their sole and absolute discretion at any time.
ARTICLE XIII
MISCELLANEOUS
13.1 EXPENSES. Except as otherwise provided herein, LSAI will pay its own
costs and expenses, and HLI will pay own costs and expenses, incurred in
connection with this Agreement and the transactions contemplated by this
Agreement, including without limitation fees and expenses of counsel,
irrespective of when incurred and regardless of whether this transaction is
consummated.
13.2 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given when
delivered personally, or on the next day after being sent by facsimile
transmission or a nationally recognized overnight delivery service, or on the
third (3rd) day after being sent by registered or certified mail (return receipt
requested), postage prepaid to the parties to this Agreement at the following
addresses or at such other address for a party as shall be specified by like
notice:
If to LSAI:
Laboratory Specialists of America, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxx, Esq.
Xxxx Swan & Xxxxxxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
17
If to HLI:
Xxxxxxxx Laboratories, Inc.
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With copies to:
Xxxx Xxxxxx, Esq.
XxXxxxx, Tidwell, Hansen, Xxxxxx & Peacock, P.C.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
13.3 ENTIRE AGREEMENT. This Agreement (including the Exhibit and
Schedules hereto and the documents and instruments referred to herein)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, written and
oral.
13.4 BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns. Neither this Agreement nor any right, remedy,
obligation or liability hereunder or by reason hereof shall be assignable by any
of the parties to this Agreement without the prior written consent of the
others. Nothing expressed or implied in this Agreement is intended to or shall
be construed to give any person other than the parties to this Agreement or
their respective successors or permitted assigns any legal or equitable right,
remedy or claim under or in respect of this Agreement, it being the intention of
the parties to this Agreement that this Agreement shall be for the sole and
exclusive benefit of the parties hereto or such successors or assigns and for
the benefit of no other person.
13.5 WAIVER. Any term or provision of this Agreement may be waived in
writing at any time by LSAI and LSI, if it is entitled to the benefits thereof,
or by HLI, if it is entitled to the benefits thereof. No such waiver shall,
unless explicitly stated, be a continuing waiver. No failure to exercise or
delay in exercising any right hereunder shall constitute a waiver thereof.
13.6 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to contracts made and
to be performed within that State.
13.7 CONFIDENTIALITY. Prior to the consummation of the transactions
contemplated herein, HLI, LSI and LSAI shall each keep confidential, and not
disclose to any third party, information it may obtain hereunder about the
other; provided, however, that this restriction shall not apply to information
which (a) is now in or may hereafter enter the public domain without breach of
this covenant, (b) was already in the possession of HLI, LSI or LSAI, as the
case may be, prior to receipt from the other, (c) is lawfully received by HLI or
LSAI and LSI, as the case may be, from an unrelated third party after receipt of
the same from the other, (d) HLI or LSAI and LSI, as the case may be, is
required by law to disclose, or (e) HLI or LSAI and LSI, as the case may be,
discloses to independent consultants or financial institutions, provided there
are restrictions prohibiting further dissemination of such information by any
such consultant
18
or financial institution. If the transactions contemplated herein are not
consummated, each of HLI, LSI and LSAI shall return to the other all data
obtained pursuant to this Agreement.
13.8 PUBLICITY. All press releases and other publicity concerning the
transactions contemplated herein shall be jointly planned and coordinated by and
between HLI and LSAI. Neither party shall act unilaterally in this regard
without the prior written approval of the other, except to the extent required
by law.
13.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be a single agreement.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed by their duly authorized representatives as of the
date first written above.
"HLI" XXXXXXXX LABORATORIES, INC.
By:/S/XXX X. XXXXXXXX
------------------------------------------
Xxx X. Xxxxxxxx, Chief Executive Officer
"Xxxxxxxx" /S/XXX X. XXXXXXXX
---------------------------------------------
Xxx X. Xxxxxxxx
"LSAI" LABORATORY SPECIALISTS OF
AMERICA, INC.
By:/S/XXXX XXXXXXXXX
------------------------------------------
Xxxx Xxxxxxxxx, Chief Executive Officer
"LSI" LABORATORY SPECIALISTS, INC.
By:/S/XXXXXX X. XXXXXXXX, XX.
------------------------------------------
Xxxxxx X. Xxxxxxxx, Xx., President
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE 2.1 Description of HLI Assets
Appendix A -- HLI Customer List
SCHEDULE 2.5 Liabilities Assumed by LSAI and LSI
SCHEDULE 4.7 HLI Customer Losses and Threatened Losses
SCHEDULE 4.9 Pending or Threatened Litigation
EXHIBIT A Employment Agreement
19
