EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 1st day of December, 1997, by and between ACCU-PATH MEDICAL LABORATORY,
INC., an Arkansas corporation ("ACCU-PATH"), and LABORATORY SPECIALISTS OF
AMERICA, INC., an Oklahoma corporation ("LSAI").
R E C I T A L S
1. ACCU-PATH and LSAI are each engaged in the providing of forensic drug
testing services to corporate and institutional customers.
2. LSAI desires to purchase from ACCU-PATH and ACCU-PATH desires to sell
to LSAI certain assets of ACCU-PATH, principally the forensic drug testing
customer base of ACCU-PATH and certain of the assets related thereto, and in
connection with such purchase the assumption of the operations by LSAI of the
Ruston, Louisiana, office of ACCU-PATH.
3. ACCU-PATH and LSAI 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 ACCU-PATH.
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 Section 2.1
hereof.
CLOSING DATE: The date on which the Closing shall occur which shall be
December 31, 1997, or such other date mutually agreed upon by the parties.
FORENSIC TESTING REVENUES: Determined in accordance with generally accepted
accounting principles, the sum of (i) the gross revenue directly attributable
to the ACCU-PATH Assets and (ii) the sales price of any of the ACCU-PATH Assets
sold by LSAI. Gross revenue is defined as total revenues billed by LSAI less
discounts and pass through xxxxxxxx. Pass through xxxxxxxx is
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 1
defined as any charges billed to LSAI by third parties, other than ACCU-PATH,
which are then billed by LSAI to customers for (1) the collection of
specimens and (2) the Medical Review Officer charges for review of specimens.
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.
ACCU-PATH: Accu-Path Medical Laboratory, Ins., an Arkansas corporation.
ACCU-PATH ASSETS: The assets of ACCU-PATH as defined in Section 2.1 hereof and
as more specifically identified on SCHEDULE 2.1.1, attached hereto.
OKLAHOMA LAW: The laws of the State of Oklahoma.
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 ACCU-PATH ASSETS. At the Closing, upon the
terms and subject to the conditions set forth in this Agreement, ACCU-PATH
shall sell, assign, convey, set over, transfer and deliver to LSAI, and LSAI
shall purchase, acquire and accept all right, title and interest of ACCU-PATH
in and to the forensic drug testing customer base (the "Customer Base"), all
contracts and contract rights for the providing of drug testing services
related thereto, and certain of the assets owned by ACCU-PATH used in
connection with the ACCU-PATH office in Ruston, Louisiana, as more specifically
described in SCHEDULE 2.1.1, hereto (the "ACCU-PATH 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. ACCU-PATH has not received
any written or
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 2
verbal indication that any client a part of the Customer Base intents to
cease doing business with or materially diminish the amount of business that
it is now doing with ACCU-PATH or after the Closing with LSAI.
Except as provided below, following the Closing, ACCU-PATH shall deliver
to LSAI all records, files, instruments, correspondence and other documents
possessed by ACCU-PATH relating to the clients included in the Customer Base,
including, without limitation, information concerning pricing, service
requirements, sales billing, accounts receivable aging, information pertinent
to the process of reporting test results to or invoicing any clients forming a
part of the Customer Base, utilization and composite reports and all other data
and information in the possessions of ACCU-PATH related to the Customer Base
and reasonably requested by LSAI. Notwithstanding the foregoing, ACCU-PATH
shall not be obligated to deliver to LSAI the following types of records and
files: Test Requisitions, patient test reports, or laboratory testing data.
Provided, however, that ACCU-PATH shall, upon request, have reasonable and
prompt access to any and all records, files, instruments, correspondence and
other documents concerning any of the assets that have not been delivered,
including, without limitation, records and files pertaining to any client or
clients on which are a part of the Customer Base or to any patients of such
clients. If requested, ACCU-PATH shall provide to LSAI true and complete
copies of such records, files correspondence, instruments and other documents.
ACCU-PATH shall retain for a period of time not less than the maximum
applicable document retention requirement, all test request forms, patient test
results, laboratory testing data, and other medical and patient data,
information, records and specimens. ACCU-PATH shall retain all other records,
files, correspondence, instruments and other documents relating to the ACCU-
PATH Assets for a period of at least one year following the Closing. ACCU-
PATH's obligations herein to provide access to and copies of documents and to
maintain records as required herein shall survive the Closing.
Following the Closing, LSAI shall assume all operations of the ACCU-PATH
office located at 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx, including assumption
of the lease associated with such office operations, as described in SCHEDULE
2.1.3, hereto.
Following the closing, employment shall be offered to the current
personnel of ACCU-PATH listed on SCHEDULE 2.1.2, hereto on terms and conditions
agreed to by LSAI and such personnel. Persons listed on SCHEDULE 2.1.2, hired
by LSAI within three months after the Closing shall be credited with their
seniority and levels of benefits under the benefit programs and employment
policies of LSAI as they may be modified by LSAI from time to time. LSAI shall
also reimburse the cost of COBRA health care coverage for the persons listed on
SCHEDULE 2.1.2, hired by LSAI for the first 90 day period of their employment
by LSAI to such persons. LSAI shall not be responsible for any accrued
payments or benefits pertaining to any such employee as a result of such
employee's employment with ACCU-PATH, including, without limitation, any
accrued wages, sick or vacation pay. In the event that any such person elects
not to become an employee of LSAI, then LSAI shall have no obligation to ACCU-
PATH with respect to such person and ACCU-PATH shall indemnify LSAI against any
liability on account of any termination of such person by ACCU-PATH.
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 3
2.2 PURCHASE PRICE OF ACCU-PATH ASSETS. In consideration for the ACCU-
PATH Assets to be sold, assigned, conveyed, transferred and delivered to LSAI
pursuant to Section 2.1 hereof, LSAI shall pay to ACCU-PATH an amount equal to
180% of the collected and collectible Forensic Testing Revenues, during the
seventh (7th) through twelfth (12th) months following consummation and closing
of the purchase of the ACCU-PATH Assets by LSAI (the "Purchase Price").
2.3 PAYMENT OF PURCHASE PRICE FOR ACCU-PATH ASSETS. LSAI shall pay the
Purchase Price to ACCU-PATH as follows: (I) upon consummation and at closing
of the Asset Purchase, One Hundred Thousand Dollars ($100,000) in immediately
available funds, (ii) thirty (30) days following the end of each of the first
three (3), three (3) calendar month periods ("Quarterly") following the date of
consummation and closing of the Assets Purchase an amount equal to 50% of the
Forensic Testing Revenues for each respective Quarterly period, and (iii) the
balance of the Purchase Price shall be paid in four (4) equal Quarterly
payments with the first of such payments due thirty (30) days following the end
of the first twelve (12) months anniversary date of the consummation and
closing of the purchase of the ACCU-PATH Assets by LSAI.
Forensic Testing Revenues shall be separately accounted for by LSAI on a
customer basis so as to identify each customer and the revenues attributable to
each customer in order to further determine the Forensic Testing Revenues that
are attributable to the customers comprising in part the Customer Base of ACCU-
PATH purchased as a portion of the ACCU-PATH Assets.
Forensic Testing Revenues shall be reduced by the amount of any billing
which is not collectible as a result of the failure to assign, or to obtain the
prior consent to any assignment by ACCU-PATH of any agreement for drug testing
services between ACCU-PATH and clients in the Customer Base.
For 12 months following the Closing, LSAI shall make no material change in
the provision of services or charges for services to the accounts constituting
the Customer Base without giving 5 days prior notice by facsimile to Accu-Path.
For purposes of this provision, material change is defined as any change
reasonable likely to cause a change in Net Revenue of more than $1,000 per
month in forensic drug testing revenues from the clients in the Customer Base.
2.4 CLOSING. Subject to the terms and conditions hereof, the Closing
shall take place at the offices of Dunn, Swan, & Xxxxxxxxxx 2800 Oklahoma
Tower, 210 Park Avenue, Oklahoma City, Oklahoma, or at such other place as the
parties hereto shall agree.
2.5 NO ASSUMPTION OF LIABILITIES. In connection with the purchase of the
ACCU-PATH Assets and consummation of the transactions contemplated under this
Agreement, except with respect to the lease agreements described on SCHEDULE
2.1.3 hereto, LSAI shall not nor shall any provision of this Agreement be
construed to cause LSAI to, assume or become liable for any
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 4
liability, obligation, performance, duty, debt, lien or any other claim of
any kind or nature of ACCU-PATH, and ACCU-PATH 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 which arise
prior to the Closing, including without limitation the obligation of
ACCU-PATH to maintain 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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LSAI
LSAI hereby represents and warrants to ACCU-PATH 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. LSAI has furnished to ACCU-PATH true,
correct and complete copies of its Certificate of Incorporation and Bylaws, as
amended and supplemented to the date hereof.
3.2 AUTHORIZATION OF AGREEMENT. LSAI 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 the
consummation by LSAI of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of LSAI. This
Agreement has been duly executed and delivered by LSAI, and constitutes the
legal, valid and binding obligation of LSAI, enforceable against LSAI in
accordance with its terms, 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. To the best of the knowledge of LSAI,
neither the execution and delivery of this Agreement by LSAI nor the
consummation of the transactions contemplated hereby, will (a) violate or
conflict with any provision of the Certificate of Incorporation or Bylaws of
LSAI, 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 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
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 5
credit agreement or any other agreement or instrument evidencing indebtedness
for money borrowed to which LSAI is a party or by which LSAI 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 is a party
or by which LSAI 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.
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 in
connection with the execution and delivery of this Agreement by LSAI or the
consummation by LSAI of the transactions contemplated hereby.
3.5 CONTRACTS. Other than this Agreement and the commitments
contemplated herein, LSAI is not a party to any material agreements, contracts,
guarantees and commitments pursuant to which LSAI or any of its properties or
assets are or will be bound and which involve in each case aggregate future
payments in an aggregate amount which is material.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACCU-PATH
ACCU-PATH hereby represents and warrants to LSAI as follows:
4.1 ORGANIZATION, GOOD STANDING, POWER, ETC. ACCU-PATH is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Arkansas 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. ACCU-PATH is duly qualified to do business and is in good
standing in the state of Lousiana.
4.2 AUTHORIZATION OF AGREEMENT. ACCU-PATH 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 ACCU-PATH and the
consummation by ACCU-PATH of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of ACCU-PATH.
This Agreement has been duly executed and delivered by ACCU-PATH, and
constitutes the legal, valid and binding obligation of ACCU-PATH, enforceable
against ACCU-PATH 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. To the best of the knowledge of ACCU-
PATH,
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 6
neither the execution and delivery of this Agreement by ACCU-PATH, nor the
consummation of the transactions contemplated hereby, will (a) violate or
conflict with any provision of the Certificate of Incorporation or By-laws of
ACCU-PATH, 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 ACCU-PATH 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 ACCU-PATH
is a party or by which ACCU-PATH or any of the ACCU-PATH Assets is bound or
affected, or (ii) any lease, license, tariff, contract or other agreement or
instrument to which ACCU-PATH is a party or by which ACCU-PATH or any of the
ACCU-PATH 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 ACCU-PATH Assets.
4.4 CONSENTS AND APPROVALS. Except as provided on SCHEDULE 4.4.1, 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 ACCU-PATH in connection with the execution and delivery of this
Agreement by ACCU-PATH, or the consummation by ACCU-PATH of the transactions
contemplated hereby.
4.5 FINANCIAL STATEMENTS. ACCU-PATH has delivered to LSAI certain
financial reports of its forensic drug testing operations and will deliver
audited balance sheets and income statements of such forensic drug testing
operations as of December 31, 1995, and December 31, 1996, in order to meet
LSAI's SEC reporting requirements (the "ACCU-PATH Financial Statements"). Each
ACCU-PATH Financial Statement (and the notes relating thereto) were or shall be
prepared in accordance with generally accepted accounting principles
consistently applied and fairly presents the financial condition of the
forensic drug testing operations of ACCU-PATH as of the date thereof and the
related results of operations and cash flows of the forensic drug testing
operations of ACCU-PATH for and during the periods covered thereby.
4.6 INDEBTEDNESS. ACCU-PATH is not in default in any material respect
under any note, mortgage, indenture, security agreement or other obligation or
instrument for or relating to any borrowing effected by ACCU-PATH, related to
the ACCU-PATH Assets and there has not occurred any event which, with or
without the giving of notice or the lapse of time or both, would constitute
such a default.
4.7 TITLE TO THE ACCU-PATH ASSETS; ABSENCE OF LIENS AND ENCUMBRANCES. At
the Closing ACCU-PATH shall hold good and defensible title to the ACCU-PATH
Assets, free and clear of all mortgages, liens, pledges, charges and
encumbrances of any nature whatsoever.
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 7
4.8 LITIGATION. (i) 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 ACCU-PATH and/or the ACCU-PATH Assets or business of ACCU-PATH 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) ACCU-PATH 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 ACCU-PATH or which would prevent or hinder the
sale, assignment, conveyance, setting over, transfer and delivery of the ACCU-
PATH Assets by ACCU-PATH to LSAI of all right, title and interest of ACCU-PATH
in and to the ACCU-PATH Assets free and clear of all mortgages, liens, pledges,
charges and encumbrances of any nature whatsoever, as contemplated hereunder.
(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 ACCU-PATH from taking, or requiring ACCU-PATH to take,
any action of any kind or to which ACCU-PATH or any of the ACCU-PATH Assets,
are subject or bound.
(iv) ACCU-PATH 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 ACCU-PATH Assets by ACCU-
PATH to LSAI of all right, title and interest of ACCU-PATH in and to the ACCU-
PATH Assets free and clear of all mortgages, liens, pledges, charges and
encumbrances of any nature whatsoever, as contemplated hereunder.
4.9 COMPLIANCE WITH LAWS. To the best of the knowledge of ACCU-PATH, it
is in compliance with all Legal Requirements applicable to any of its
properties or assets including the ACCU-PATH Assets and/or the ownership,
operation or use thereof, and ACCU-PATH 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 ACCU-PATH Assets or
to the operation of its business.
4.10 COLLECTIVE BARGAINING AGREEMENT. Neither ACCU-PATH nor the ACCU-PATH
employees described in SCHEDULE 2.1.2, are parties to or covered under any
collective bargaining agreement or any written employment contract other than
those set forth on SCHEDULE 4.10, HERETO. Further, ACCU-PATH has provided to
LSAI copies of all of its written employment policies and employee manuals.
4.11 FULL DISCLOSURE. No representation, covenant or warranty by ACCU-
PATH contained in this Agreement and no written information or agreements
furnished or to be furnished to LSAI by ACCU-PATH pursuant hereto or in
connection with the transactions
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 8
contemplated hereby, 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 ACCU-PATH
ACCU-PATH covenants and agrees with LSAI that, at all times between the
date hereof and the Closing, ACCU-PATH will comply with all covenants and
provisions of this Article V, except to the extent LSAI may otherwise consent
in writing or to the extent otherwise expressly required or permitted by this
Agreement.
5.1 APPROVALS. ACCU-PATH 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 hereby, (ii) provide such other
information and communications to such governmental authorities as LSAI or such
authorities may reasonably request, and (iii) cooperate with LSAI in obtaining,
as promptly as practicable, all approvals, authorizations and clearances of
governmental authorities required of LSAI to consummate the transactions
contemplated hereby.
5.2 INVESTIGATION BY LSAI. ACCU-PATH will provide LSAI, its counsel,
accountants, and other representatives with reasonable access (at the sole
cost, risk and expense of LSAI), upon prior notice and during normal business
hours, to all facilities, officers, directors, employees, agents, accountants,
assets, properties, books and records of ACCU-PATH as they pertain to forensic
drug testing operations. ACCU-PATH will furnish to LSAI and such other persons
during such period all such other information and data concerning the business,
operations and affairs of ACCU-PATH pertaining to forensic drug testing
operations or the transactions contemplated hereby as LSAI or any of such other
persons reasonably may request. LSAI hereby agrees to indemnify and hold ACCU-
PATH harmless from all claims, losses or damages arising out of exercise of
such information access rights pursuant to this Section 5.2.
5.3 NO NEGOTIATIONS. Except as contemplated in this Agreement, ACCU-PATH
will not take (or permit any other person acting for or on behalf of ACCU-PATH
to take), directly or indirectly, any action to (i) seek or encourage any offer
or proposal from any person to acquire any of the ACCU-PATH Assets or any
interest therein with respect to forensic drug testing, (ii) merge, consolidate
or combine, or permit any other person to merge, consolidate or combine, with
ACCU-PATH, (iii) liquidate, dissolve or reorganize ACCU-PATH, (iv) acquire or
transfer any of the ACCU-PATH Assets or any interests therein, other than in
the ordinary course of business; or (v) 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,
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 9
dissolution or reorganization.
5.4 CONDUCT OF BUSINESS. ACCU-PATH will conduct its business related to
the ACCU-PATH Assets only in the ordinary course and consistent with past
practices. Without limiting the generality of the foregoing:
(i) ACCU-PATH will maintain its books and records related to the
operation of the ACCU-PATH Assets 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 ACCU-PATH or in any
assumption underlying such a practice or policy.
(ii) ACCU-PATH 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) ACCU-PATH (A) will not convey, encumber, mortgage, pledge or
dispose of any portion of the ACCU-PATH 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
ACCU-PATH or of any termination or cancellation, or written threat of
termination or cancellation, of any contracts or agreements, including without
limitation any contracts or agreement with ACCU-PATH's customers comprising a
part of the Customer Base, (D) will promptly notify LSAI in writing of the loss
or suspension of any certification, which would have a material adverse effect
upon ACCU-PATH and its operations, including without limitation, loss or
suspension of certification by the National Institute on Drug Abuse.
5.5 NO DISTRIBUTIONS. ACCU-PATH will not make any distributions of the
ACCU-PATH Assets, to its shareholders.
5.6 NO DISPOSAL OF ACCU-PATH ASSETS. Except as contemplated in this
Agreement, ACCU-PATH will not (a) dispose of or assign any of the ACCU-PATH
Assets or permit any of the ACCU-PATH Assets to be subjected to any liens, or
(b) sell any portion of the ACCU-PATH Assets to any third party.
5.7 CONTRACTS. ACCU-PATH 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.
5.8 NOTICE AND CURE. ACCU-PATH will notify LSAI promptly in writing of,
and contemporaneously will provide LSAI 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
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 10
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
ACCU-PATH being breached under this Agreement, or that renders or will render
untrue any representation or warranty of ACCU-PATH contained in this
Agreement as if the same were made on or as of the date of such event,
transaction or circumstance. ACCU-PATH 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 ACCU-PATH in this Agreement.
5.9 AGREEMENTS AND COVENANTS. ACCU-PATH will not make any commitment,
either in writing or orally, which would violate any of the provisions set
forth in this Article V.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE PARTIES
Notwithstanding any other provision of this Agreement, the obligation of
ACCU-PATH, on the one hand, and LSAI, on the other hand, to consummate the
transactions contemplated hereby 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:
6.1 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.
6.2 CERTAIN ACTIONS. There shall not have been instituted and be
continuing or threatened against LSAI, ACCU-PATH 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.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF ACCU-PATH
Notwithstanding any other provision of this Agreement, the obligations of
ACCU-PATH to consummate the transactions contemplated hereby 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 ACCU-PATH:
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 11
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of LSAI set forth in Article III 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 had been made at and as of the Closing.
7.2 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS. LSAI 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.
7.2 AUTHORIZATION OF AGREEMENT. ACCU-PATH shall have received a
certificate from the corporate secretary of LSAI certifying a copy of all
corporate actions required for the execution and delivery of this Agreement and
the performance of all of their obligation hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF LSAI
Notwithstanding any other provision of this Agreement, the obligations of
LSAI to consummate the transactions contemplated hereunder 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:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties 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.
8.2 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS. ACCU-PATH
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 ACCU-PATH, at or prior to the Closing.
8.3 OFFICERS' CERTIFICATES, ETC. LSAI shall have received a certificate,
dated the date of the Closing and signed by the Chief Executive Officer or
President of ACCU-PATH to the effect set forth in Sections 8.1 and 8.2 above.
8.4 OPINION OF COUNSEL FOR ACCU-PATH. LSAI shall have received an
opinion, dated the date of the Closing, of counsel for ACCU-PATH, in form and
substance satisfactory to LSAI covering the subjects set forth in Sections 4.1,
4.2, 4.7, and 4.9 hereof. In rendering such opinion, counsel may rely to the
extent specified therein on certificates of representatives of
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 12
ACCU-PATH and public officials.
8.5 NO ADVERSE CHANGE. No material adverse change shall have occurred in
the business, prospects, operations, properties or financial condition of ACCU-
PATH operations of the Ruston, Louisiana office since December 31, 1996.
8.6 CERTAIN ACTIONS. There shall not have been instituted and be
continuing or threatened against LSAI, ACCU-PATH, or any of their respective
directors or officers, any action, suit or proceeding by or before any
governmental authority that would prohibit LSAI's ownership of all of the ACCU-
PATH Assets
8.7 DUE DILIGENCE. LSAI shall have performed and completed its due
diligence to verify, to its satisfaction, the existence of the Forensic Testing
Revenue Base of ACCU-PATH as represented. Such due diligence shall be
completed no later than December 15, 1997.
ARTICLE IX
ACCU-PATH'S NON-COMPETITION AGREEMENTS
9.1 ACCU-PATH'S AGREEMENT NOT TO COMPETE. For a period of five years
after the Closing Date, ACCU-PATH agrees that it will not directly or
indirectly: (i) engage or become interested in, whether as a partner, owner,
stockholder (other than a less than 2% interest in a corporation having
securities listed for trading on a national securities exchange), investor,
lender, provider of services, whether alone or in association with others, any
business that offers, forensic drug testing services ("Testing Services") to
any client included in the Customer Base, including without limitation Testing
Services referred by any physician associated with a client; (ii) induce or
attempt to induce any client included in the Customer Base to reduce its use of
the forensic services of LSAI.
9.2 CONFIDENTIAL INFORMATION. ACCU-PATH acknowledges that it has and may
continue to have access to and the use of confidential materials and
information and trade secrets concerning the ACCU-PATH Assets (including
without limitation the identity of and other information concerning clients
included in the Customer Base). ACCU-PATH shall not use, for itself or others,
or divulge or convey to any other, except as required to fulfill the
obligations of this Agreement, any secret or confidential information,
knowledge or data related to the ACCU-PATH Assets or LSAI or to the clients or
customers, or former clients or customers, of LSAI. Such information,
knowledge or data includes, but is not limited to, secret or confidential
matters not published or generally known in the industry, pricing information,
service requirements, sales, profits, costs or market.
9.3 REMEDIES. ACCU-PATH acknowledges and agrees that the provisions of
this Article IX are necessary to protect all of the ACCU-PATH Assets being
acquired by LSAI and in no way impose a significant hardship or prevents ACCU-
PATH from earning a livelihood. In the event that this Article IX or any other
portion thereof shall be determined by any court of
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 13
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a range of activities, it shall be
interpreted to extend only over the maximum time period and range of
activities as to which it may be enforceable. ACCU-PATH recognizes and
acknowledges that in the event of ACCU-PATH's failure to comply with any of
the covenants contained in this Article IX, it may be impossible to measure
in money the damages to LSAI or its successor and that in the event of such a
failure, LSAI or its successor may not have an adequate remedy at law. It is
therefore agreed that LSAI or its successor, in addition to any other rights
or remedies which it may have, shall be entitled to immediate injunctive
relief to enforce such covenants, and that if any action or proceeding is
brought in equity to enforce the same, ACCU-PATH will not urge as a defense,
that there is an adequate remedy at law.
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 and ACCU-PATH;
(ii) by either LSAI or ACCU-PATH in the event the Closing shall not have
been consummated on or before February 28, 1997; or
(iii) by either LSAI or ACCU-PATH if there shall have been entered or
rendered against LSAI, ACCU-PATH, or any of their respective directors or
officers in any action or proceeding referred to in Sections 6.2, or 8.6 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 or ACCU-PATH, 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, ACCU-PATH or their respective officers, directors or
shareholders, except as stated in Section 12.8 hereof; provided, however, that
such limitation shall not apply in the event of a willful breach by LSAI or
ACCU-PATH 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 herewith.
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.
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 14
ARTICLE XI
SURVIVAL OF PROVISIONS; REMEDIES; INDEMNIFICATION
11.1 SURVIVAL. The representations, warranties, covenants and agreements
respectively made by LSAI and ACCU-PATH in this Agreement, in the Schedules
hereto, or on any certificate delivered pursuant to the provisions hereof shall
not survive, other than those set forth in Sections 2.1, 4.9, 11.3, 12.2 , and
Article IX hereof, and shall terminate upon, the Closing, and neither LSAI nor
ACCU-PATH or any of their respective officers, directors or shareholders shall
be under any liability whatsoever, with respect to such representation,
warranty, covenant or agreement which does not survive the Closing. The
representations, warranties, covenants and agreements set forth in Sections
2.1, 4.9, 11.3, 12.2, and Article IX hereof shall survive the Closing and
consummation of the transactions contemplated hereby. The parties hereto
acknowledge that the representations and warranties contained in this
Agreement, other than those set forth in 2.1, 4.9, and Article IX hereof, are
included solely for purposes of Articles VII and VIII hereof and are not
intended to and shall not in any way give rise to any liability, claim, action
or cause of action on the part of any party hereof on account of breach of any
such representation or warranty. The parties hereto further acknowledge that
they may, after the Closing, discover facts in addition to or different from
those which they believed to be true at the Closing relating to the
representations, warranties, covenants and agreements made by the other party
to this Agreement. Notwithstanding the foregoing, except as otherwise
specifically agreed to in writing by the parties hereto, each of the parties
hereto hereby releases the other party at and effective as of the Closing from
any and all claims, liabilities, actions, and causes of action, of whatever
nature, kind or description known or unknown, direct or indirect, fixed or
contingent, in law or equity, arising under or relating to any representations,
warranties, covenants or agreements made by the other parties in this Agreement
(other than those set forth in Sections 2.1, 4.9, 11.3, 12.2, and Article IX
hereof).
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 hereby, 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.
11.3 INDEMNITY. (i) ACCU-PATH, in addition to the remedies accorded the
parties in Section 11.2 hereof, agrees to indemnify and hold LSAI harmless from
and against any and all claims, actions, causes of action, damages, costs and
expenses, including without limitation attorneys' fees, arising from or
relating to a breach by ACCU-PATH of the representations and warranties set
forth in Article IV, hereof.
(ii) LSAI, in addition to the remedies accorded the parties in Section
11.2 hereof, agrees to indemnify and hold ACCU-PATH harmless from and against
any and all claims, actions, causes of action, damages, costs and expenses,
including without limitation attorneys' fees arising from or relating to a
breach by LSAI of the representations and warranties set froth in
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 15
Article III, hereof.
ARTICLE XII
MISCELLANEOUS
12.1 EXPENSES. LSAI will pay its own costs and expenses, and ACCU-PATH
will pay own costs and expenses, incurred in connection with this Agreement and
the transactions contemplated hereby, including without limitation fees and
expenses of counsel, irrespective of when incurred and regardless of whether
this transaction is consummated.
12.2 FINDER'S FEE'S. Each of LSAI , on the one hand, and ACCU-PATH, on
the other, represent to the other that no finder's or fee or commission will be
owed to any party in connection with the transactions contemplated herein.
12.3 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.
Dunn, Swan, & Xxxxxxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to ACCU-PATH:
ACCU-PATH MEDICAL LABORATORY, INC.,
000 X. Xxx Xxxxxx
Xx Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
12.4 ENTIRE AGREEMENT. This Agreement (including the Exhibit and
Schedules hereto
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 16
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.
12.5 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.
12.6 WAIVER. Any term or provision of this Agreement may be waived in
writing at any time by LSAI, if it is entitled to the benefits thereof, or by
ACCU-PATH, 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.
12.7 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi applicable to contracts
made and to be performed within that State.
12.8 CONFIDENTIALITY. Prior to the consummation of the transactions
contemplated herein, ACCU-PATH 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 ACCU-PATH or LSAI, as the
case may be, prior to receipt from the other, (c) is lawfully received by ACCU-
PATH or LSAI, as the case may be, from an unrelated third party after receipt
of the same from the other, (d) ACCU-PATH or LSAI, as the case may be, is
required by law to disclose, or (e) ACCU-PATH or LSAI, 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 or financial institution. If the transactions contemplated
herein are not consummated, each of ACCU-PATH and LSAI shall return to the
other all data obtained hereunder.
12.9 PUBLICITY. All press releases and other publicity concerning the
transactions contemplated herein shall be jointly planned and coordinated by
and between ACCU-PATH 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.
12.10 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
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 17
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.
"LSAI" LABORATORY SPECIALISTS OF
AMERICA, INC.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Xxxx Xxxxxxxxx
Chief Executive Officer
"ACCU-PATH" ACCU-PATH MEDICAL
LABORATORY, INC.
By: /s/ Xx. Xxxxx X. Xxxxxxx
--------------------------------
Xx. Xxxxx X. Xxxxxxx
Chief Executive Officer
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 18
LIST OF SCHEDULES
Schedule 2.1.1 Description of ACCU-PATH Forensic Drug Testing Customer
List and assets owned and used by ACCU-PATH in connection
with the Ruston, Louisiana office of ACCU-PATH.
Schedule 2.1.2 List of Employees to be hired by LSAI.
Schedule 2.1.3 Description of Leases to be Assumed.
Schedule 4.4.1 List of required consents or releases needed by ACCU-PATH.
ASSET PURCHASE AGREEMENT BETWEEN ACCU-PATH MEDICAL LABATORY, INC.
AND LABORATORY SPECIALISTS OF AMERICA, INC. PAGE 19
