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ASSET ACQUISITION AGREEMENT
This is an Asset Acquisition Agreement (the "Agreement"), dated August 4,
1998, among Community Clinical Laboratories, Inc. (the "Seller"), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (collectively, the "Shareholders") and
Medical Technology Laboratories, Inc. (the "Buyer").
Background
The Seller is a provider of clinical laboratory services. The Buyer wishes
to purchase from the Seller and the Seller wishes to sell to the Buyer certain
assets of the Seller related to that business, subject to the terms and
conditions set forth below. Accordingly, in consideration of the mutual
covenants and agreements set forth below, the parties agree as follows:
Terms
1. Sale of Business and Assets. On the Closing Date (as defined below), the
Seller shall sell and the Buyer shall purchase, for the consideration set forth
in Section 2 below:
(a) The exclusive right to the customer lists and associated goodwill
of the Seller listed on Schedule 1(a);
(b) The leasehold interest in the Seller's laboratory testing
equipment, sometimes described as reagent rental agreements, listed on
Schedule 1(b);
(c) The leasehold interest in the Seller's assets listed on Schedule
1(c); and
(d) Those assets of the Seller listed on Schedule 1(d).
The assets described in this Section are collectively called the "Assets."
2. Assets Not Acquired. The Buyer shall not acquire or assume any of the
following Assets:
(a) Medicare provider number or agreement;
(b) Medicaid provider number or agreement;
(c) Clinical laboratory licenses;
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(d) Any third-party payor provider numbers or agreements;
(e) Any provider network agreements;
(f) Any contracts or agreements with any physicians; or
(g) Any equipment leased, purchased or owned by any physician.
The assets described in this Section collectively called the "Not Acquired
Assets."
3. Purchase Price of the Assets.
(a) The purchase price for the Assets (the "Purchase Price") shall be
an amount equal to 9% of all Collected Receivables for the Established List
(as defined below) for a period of 5 years after the Closing Date;
provided, however, that the maximum Purchase Price shall not exceed
$2,500,000. The first payment of the Purchase Price shall be paid 90 days
after the Closing. After the first payment, each successive payment shall
be paid 90 days after the date of the first payment during the term of the
Agreement.
(b) The Seller agrees that, if the Buyer is directed in writing by any
governmental agency or a court of competent jurisdiction, including but not
limited to the United States Postal Inspection Service, Office of Inspector
General, Health and Human Services, Defense Criminal Investigative Service,
Internal Revenue Service, Department of Justice, Office of the United
States Attorney or Health Care Finance Administration, to place all or any
part of the Purchase Price or any other payment owed to the Seller in
escrow, or to pay any creditor, receiver, government agency or any other
third person, the Buyer may comply with such a directive.
(c) In addition, the Seller agrees that if all or part of the Purchase
Price is paid into escrow, the amount of such payment into escrow shall be
credited toward the next quarterly payment of the Purchase Price and shall
reduce the Purchase Price maximum to be paid by the Buyer. In the event
that the Buyer makes any payment directly to any of the Seller's creditors,
except for payments made directly to the Seller's creditors relating to the
Assets listed on Schedule 1(c), the amount of such payment shall be
credited toward the next quarterly payment of the Purchase Price and shall
reduce the Purchase Price maximum to be paid by the Buyer. In the event
that the Buyer makes any payment directly to the owner of any of the Assets
under a lease agreement with the Seller, except for payments made directly
to the owner of the Assets listed on Schedule 1(c) and any rental payments
made to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. for the real property that is the subject of
the Lease between the Buyer and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Trustee of the ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇. Living Trust Under Agreement Dated 11/9/82, as amended (the
"Building"), the amount of such payment shall be credited toward the next
quarterly payment of the Purchase Price and shall reduce the Purchase Price
maximum to be paid by the Buyer.
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(d) The first payment of the Purchase Price will not be affected by
any credit for payments made by the Buyer as outlined in this Agreement. In
addition, the amount of any credit thereafter may not exceed 50% of the
quarterly Purchase Price payment that is due. If the amount of any credit
exceeds 50% of the Purchase Price payment in any quarter, the excess amount
of the credit will be credited toward the next quarterly payment up to the
50% maximum. Provided, however any payment made by the Buyer pursuant to
Section 3(b) above shall offset, dollar for dollar, any payment due under
this Agreement and this Section 3(d) shall have no force or effect over
such payments.
(e) Within 30 days after the Closing, the Seller will decide, in its
sole discretion, whether the Buyer will act as custodian for its accounts
receivables and liabilities. If the Buyer is chosen as custodian of the
Seller's accounts receivables and liabilities after 30 days, the Buyer, in
its sole discretion, may decide at that time whether it will act as
custodian of the Seller's accounts. If the Buyer is chosen as custodian,
the Buyer will use its reasonable efforts to collect the Sellers accounts
receivables and will use the proceeds of these collection efforts to pay
the Seller's liabilities. The Seller will appoint a third party, acceptable
to the Buyer, to receive funds and make disbursements on behalf of the
Seller as directed by the Buyer. Payments will be made first to secured
creditors, then to unsecured creditors and then to the Seller unless
formally directed otherwise by any government agency or court of competent
jurisdiction.
(f) In the event that the Buyer, in its sole discretion, determines
that certain liabilities should be paid, the Seller hereby authorizes the
Buyer to satisfy those liabilities first from the proceeds of the accounts
receivables and then from the Buyer's own funds. If the Buyer uses its
funds to satisfy the liabilities of the Seller, the amount of such payment
shall be credited toward the next quarterly payment of the Purchase Price
and shall reduce the Purchase Price maximum to be paid by the Buyer. The
amount of any credit may not exceed 50% of the quarterly Purchase Price
payment that is due. If the amount of any credit exceeds 50% of the
Purchase Price payment in any quarter, the excess amount of any credit will
be credited toward the next quarterly payment up to the 50% maximum. In the
event seller disputes purchase price offsets, the parties shall resolve it
in accordance with the provision for disputes in the Agreement A/R.
4. Definitions.
(a) Collected Receivables shall mean all cash collections actually
received and retained by the Buyer from the Established List. Any
regulatory or insurance company fees, fines, chargebacks, adjustments,
penalties or other payments (and related legal fees and costs related)
required to be paid by the Buyer, for the acts or omissions of the Seller
occurring prior to the Closing Date, will be deducted from the Purchase
Price maximum.
(b) Established List shall mean all of the Seller's accounts listed on
Schedule 1(a).
5. Representations and Warranties of the Seller. The Seller represents and
warrants to the Buyer the following, as of the execution date of this Agreement
and as of the Closing Date:
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(a) Organization and Authority. The Seller is a corporation duly
organized and in active status under the laws of Florida, and has full
corporate power and authority to execute and deliver this Agreement, to
carry out its obligations under this Agreement, and to effect the
transactions contemplated by this Agreement;
(b) Authorization, Consents, and Validity. The execution, delivery,
and performance of this Agreement by the Seller (i) has been duly
authorized by all requisite corporate action of the Seller, (ii) does not
require any consent, license, approval, waiver, or authorization from any
governmental authority or any other person, and (iii) will not conflict
with the articles of incorporation or bylaws of the Seller. This Agreement
has been duly and validly executed by the Seller and is a valid and legally
binding obligation of the Seller, enforceable against it in accordance with
its terms, except to the extent limited by bankruptcy, reorganization,
insolvency, moratorium, and similar laws of general application affecting
the rights and remedies of creditors and by general equity principles;
(c) Brokers. All negotiations relating to this Agreement and the
transaction contemplated hereunder have been carried on by the Seller
without the use of any broker, finder, underwriter, or other intermediary
whereby such party would have a valid claim against the Seller or the Buyer
for a brokerage commission, finder's fee, or other similar payment;
(d) Title to Assets. The Seller has, and at Closing the Buyer will
have, good and marketable title to, or a valid leasehold interest in, the
Assets, free and clear of any lien, encumbrance, security interest, claim
or equity interest, except for as set forth on Schedule 1(c);
(e) Absence of Certain Developments. Since July 27, 1998:
(i) The Seller is not in violation of any state or federal law;
(ii) There has not been any damage, destruction or loss, whether
or not covered by insurance, with respect to a material portion of the
Assets;
(iii) The Seller has not entered into any transaction or contract
(other than purchase and service orders entered into between the
Seller and its customers and suppliers in the ordinary course of
business) having, in the aggregate, a value or requiring payments in
excess of $10,000.00;
(iv) The Seller has not failed to pay and discharge current
liabilities within 90; days, except as set forth on Schedule 5(e)(iv);
(v) The Seller has not mortgaged, pledged or subjected to any
lien any of the Assets, or acquired or sold, assigned, transferred,
conveyed, leased or otherwise disposed of any property, right or asset
or any interest therein that otherwise would have been included as
part of the; Assets, except as set forth on Schedule 5(e)(v);
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(vi) The Seller has not amended, cancelled, terminated,
relinquished, waived or released any contract or right that otherwise
would have been included as part of the Assets, other than in the
ordinary course of business consistent with past practice;
(vii) The Seller has not made or committed to make any capital
expenditures or capital additions or betterments to any of the
business in excess of $10,000.00 in the aggregate that would affect
any of the Assets;
(viii) The Seller has not agreed to do any of the foregoing;
(f) Material Contracts.
(i) Except as set forth on Schedule 5(f)(i), all of the
Seller's material contracts are valid, binding and enforceable
against the Seller and, to the best knowledge of the Seller, any
other party thereto, in accordance with their respective terms,
and there does not exist under any material contract any default
on the part of the Seller or of any other party thereto or any
event which with notice or lapse of time or both would constitute
such a default.
(ii) Except as set forth on Schedule 5(f)(ii), the Seller
has not received any notice or communication from any party to a
material contract relating to such party's intent to modify,
terminate or fail to renew the arrangements and relationships set
forth therein that relate to the Assets.
(iii) The Seller is not a party to or subject to: (A) any
agreement, contract or commitment that substantially limits the
freedom of the Seller to compete in any line of business or with
any person or in any area, or to own, operate, sell, transfer,
pledge or otherwise dispose of or encumber any Asset or which
would so limit the freedom of the Buyer after the Closing Date;
or (B) any agreement, contract or commitment between the Seller
and any affiliate of the Seller.
(g) Taxes.
(i) Except as set forth on Schedule 5(g)(i), the Seller has
(A) timely paid (and until the Closing Date will timely pay) all
taxes that are due and payable with respect to the Seller, its
operations and assets, except for taxes, the nonpayment of which,
would not (1) result in a lien on any of the Assets after the
Closing Date, or (2) result in the Buyer becoming liable
therefor, and (B) established (and through and including the
Closing Date will establish) reserves that are adequate for the
payment of all taxes not yet due and payable with respect to the
result of operations through the Closing Date, the nonpayment of
which would (1) result in a lien on any of the Assets after the
Closing Date, or (2) result in the Buyer becoming liable
therefor.
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(ii) Except as set forth on Schedule 5(g)(ii), the Seller
has complied and will have complied through and including the
Closing Date with all applicable laws, rules and regulations
relating to the payment and withholding of taxes relating to
employee wages, salaries and other compensation and has timely
withheld and paid over (and through and including the Closing
Date will timely withhold and pay over) to the proper
governmental authorities all amounts required to be so withheld
and paid over for all periods under all applicable laws.
(h) Employees and Employee Benefits.
(i) (A) The Seller is not a party to any collective
bargaining agreement applicable to the employees, (B) none of the
employees are represented by any labor organization, and (C)
there is no labor strike, work stoppage or slowdown pending
against the Seller and no pending lockout by the Seller, in each
case, with respect to the business.
(ii) All of the Seller's employee benefit plans as defined
by Section 3(3) of ERISA are in compliance with the applicable
requirements of ERISA and the Code.
(i) Litigation. Except as set forth on Schedule 5(i), there
is no legal proceeding or investigation pending or, to the
knowledge of the Seller, threatened (A) against the Seller in
connection with the operation of the business or in respect of
any of the Assets; (B) that seeks to enjoin or obtain damages in
respect of the consummation of the transactions contemplated by
this Agreement; or (iii) that questions the validity of this
Agreement, or any action taken or to be taken by the Seller in
connection with the consummation of the transactions contemplated
hereby or thereby.
(j) Compliance with Law.
(i) Except as set forth on Schedule 5(i), the business is
currently operating in compliance with all applicable laws and
orders of governmental bodies. The Seller has neither received,
nor knows of the issuance of, any notice of any violation or
alleged violation of any applicable laws and orders of
governmental bodies.
(ii) Except as set forth on Schedule 5(i), the Seller is not
aware of any investigation with respect to any violation of any
law, order or judgment entered by any court, arbitrator or
governmental body, applicable to the Assets or the conduct of the
business.
(k) Assets Necessary to Conduct Business. The Assets comprise all of
the assets necessary to operate the business as presently being conducted.
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6. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller the following, as of the execution date of this Agreement
and as of the Closing Date:
(a) Organization and Authority. The Seller is a corporation duly
organized and in active status under the laws of the State of Florida, and
has full corporate power and authority to execute and deliver this
Agreement, to carry out its obligations under this Agreement, and to effect
the transactions contemplated by this Agreement;
(b) Authorization, Consents, and Validity. The execution, delivery,
and performance of this Agreement by the Buyer (i) has been duly authorized
by all requisite corporate action of the Buyer, (ii) does not require any
consent, license, approval, waiver, or authorization from any governmental
authority, and (iii) will not conflict with the articles of incorporation
or bylaws of the Buyer. This Agreement has been duly and validly executed
by the Buyer and is a valid and legally binding obligation of the Buyer,
enforceable against it in accordance with its terms, except to the extent
limited by bankruptcy, reorganization, insolvency, moratorium, and similar
laws of general application affecting the rights and remedies of creditors
and by general equity principles;
(c) Brokers. All negotiations relating to this Agreement and the
transaction contemplated hereunder have been carried on by the Buyer
without the use of any broker, finder, underwriter, or other intermediary
whereby such party would have a valid claim against the Buyer or the Seller
for a brokerage commission, finder's fee, or other similar payment.
7. Noncompetition and Nonsolicitation. Each of the Seller and the
Shareholders agree that, effective upon consummation of the Closing and
continuing for a period of 3 years thereafter, without the prior written consent
of the Buyer, he or it will not, directly or indirectly, as an agent, consultant
or independent contractor or in any other capacity: (a) invest (other than
investments in publicly owned companies which constitute not more than 1% of the
voting securities of any such company) or engage in any business or activity
that is competitive with the operation of the Assets; (b) accept employment with
or render services to a competitor of the Buyer; (c) contact, solicit or attempt
to solicit or accept business that is competitive with the operation of the
Assets from any of the Buyer's customers; (d) own or operate a medical
laboratory; or (e) own or operate a draw station. In addition, prior to the
Closing (as defined below), the Buyer will obtain agreements from the
Shareholders in substantially the form attached to this Agreement as Exhibit A
and from ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ in substantially the form attached to
this Agreement as Exhibit B.
8. Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Holland & Knight LLP, in
Tampa, Florida, commencing at 10:00 a.m. local time, on or before August 31,
1998, or such other date as may be agreed upon in writing by the parties (the
"Closing Date"). The Closing shall be contingent upon the Buyer obtaining
approval of this transaction by the Buyer's primary lenders.
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9. Deliveries at Closing. At the Closing, the Seller shall deliver to the
Buyer a ▇▇▇▇ of sale, a form of which is attached to this Agreement as Exhibit
C, and such other instruments of transfer and conveyance as in the reasonable
opinion of the Buyer's counsel shall be effective to vest in the Buyer title to
the Assets. At the Closing, the Buyer must have executed a lease, mutually
acceptable to the lessor and the Buyer, for the Building and must deliver an
appraisal of the Assets listed on Schedule 1(d). At the Closing, the Buyer and
the Seller must have executed separate leases for the Assets listed on Schedule
1(c).
10. Assumption of Liabilities. The parties acknowledge that the Buyer is
not assuming any of the Seller's liabilities, including, but not limited to,
accounts payable, notes payable to any financial institution, notes payable to
any individuals, or any liability relating to the current investigation of the
Seller or as set forth on Schedule 5(i) or any liability relating to or arising
from the Medicare or Medicaid provider number or agreements, or any liability
relating to or arising from any other third-party payor agreement.
11. Indemnification. The Seller will indemnify and hold the Buyer harmless
against any and all losses, costs, expenses, and liabilities (including
attorneys' fees and expenses at all levels of proceedings) arising out of or
resulting from any claim against the Seller, for any act or omissions by the
Seller that occurred prior to the Closing Date, including without limitation,
any losses, costs, expenses, or liabilities relating to the current
investigation or as set forth on Schedule 5(i). If the Seller is required to
indemnify the Buyer pursuant to this provision, the amount of any loss, cost,
expense or liability for which the Seller must indemnify the Buyer will be
set-off against the Buyer's future quarterly Purchase Price payments.
12. Pre-Closing Covenants. The parties agree as follows with respect to the
period between the execution of this Agreement and the Closing:
(a) General. Each of the parties will use its reasonable commercial
efforts to take all action and to do all things necessary, appropriate, or
convenient to consummate and make effective the transactions contemplated
by this Agreement;
(b) Notices and Consents. The Seller will give any notices to third
parties and will obtain any third-party consents the Buyer may reasonably
request in connection with the transactions contemplated by this Agreement
or that may otherwise be necessary to convey the Seller's full rights in
the Assets to the Buyer;
(c) Full Access. The Seller will permit representatives of the Buyer
to have full access to all premises, properties, books, records, contracts,
tax records, and documents of or pertaining to its financial statements,
during normal business hours or any other reasonable time for purposes of
due diligence investigation.
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13. Post-Closing Covenants. The parties agree as follows with respect to
the period following the Closing:
(a) General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each
of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as the other party may
reasonably request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification under
this Agreement);
(b) Transition. The Seller will not take any action (other than
actions required to be taken by the Seller under this Agreement) that is
designed or intended to have the effect of discouraging any client from
maintaining the same business relationships with the Buyer after the
Closing Date as it maintained with the Seller before the Closing Date. The
Seller will refer all client inquiries to the Buyer from and after the
Closing.
14. General Provisions.
(a) Benefit and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns. The rights of the Seller may not be assigned. The rights of the
Buyer may be assigned to a subsidiary or affiliate of the Buyer, provided
that any such assignment shall in no way relieve the Buyer of its
obligations and responsibilities under this Agreement.
(b) Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Florida.
(c) Notices. All notices, requests, demands and other communications
hereunder shall be in writing, and shall be deemed to have been duly given
if delivered by overnight delivery service or hand delivered, addressed as
follows:
If to the Buyer:
Medical Technology Laboratories, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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With a copy to:
Holland & Knight LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Seller:
Community Clinical Laboratories, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
If to the Shareholders:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
15. Expenses. Except as otherwise provided in this Agreement, any expenses
in connection with this Agreement or the transactions contemplated in this
Agreement shall be paid for by the party incurring such expenses.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Headings. All paragraph headings are inserted for convenience only and
shall not modify or affect the construction or interpretation of any provision
of this Agreement.
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18. Amendment, Modification and Waiver. This Agreement may be modified,
amended, and supplemented by mutual written agreement of the parties, at any
time prior to the Closing. Each party may waive any condition intended to be for
its benefit. Each amendment, modification, supplement, or waiver shall be in
writing executed by both parties.
19. Entire Agreement. This Agreement represents the entire agreement
between the parties and supersedes all prior negotiations and discussions by and
among the parties in connection with this Agreement or its subject matter.
20. Disputes Regarding Purchase Price. In the event the Seller disputes any
calculation of the Purchase Price made under this Agreement and the parties are
unable to resolve this dispute within thirty days, then each party shall appoint
(within thirty days) an independent certified public accountant to rule upon the
dispute. If the two accountants are unable to resolve the dispute, they shall
appoint a third accountant, who shall have the final, nonappealable authority
over the dispute. The accountants shall award the costs of the dispute
resolution as they deem appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date set forth above.
BUYER:
MEDICAL TECHNOLOGY
LABORATORIES, INC.
By: _____________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
SELLER:
COMMUNITY CLINICAL LABORATORIES, INC.
By:_____________________
Name:___________________
Its:____________________
SHAREHOLDERS:
________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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AMENDMENT TO ASSET ACQUISITION AGREEMENT
In accordance with Section 18 of the Asset Acquisition Agreement dated
August 4, 1998, the parties agree to amend Section 3A of the Agreement to
provide that the first payment of the purchase price shall be paid on November
15, 1998.
MEDICAL TECHNOLOGY LABORATORIES, INC.
By:__________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
SELLER:
COMMUNITY CLINICAL LABORATORIES, INC.
By:__________________
Name:________________
Its:_________________
SHAREHOLDERS:
______________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
______________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.