THIRD AMENDMENT TO ASSET PURCHASE AGREEMENT OF PARK SLOPE MANAGEMENT ASSOCIATES, LLC
THIS
THIRD AMENDMENT (“Amendment”)
dated
as of August 7, 2006, by and among PARK SLOPE MANAGEMENT ASSOCIATES, LLC, a
New
York limited liability company having its principal place of business at 0
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx (“Seller”),
BASIC
CARE NETWORKS (Park Slope), LLC, a New York limited liability company having
its
principal place of business at 0000 Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxx Xxx Xxx,
Xxxxxxxxxx 00000 (“Buyer”),
and
BASIC CARE NETWORKS, INC., a Delaware corporation having its principal place
of
business at 0000 Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
(“Parent”),
of
which Buyer is a wholly-owned subsidiary, is an amendment to that certain Asset
Purchase Agreement dated November 18, 2005 by and among the Parent, Buyer and
Seller (the “Agreement”).
1.
The
parties mutually agree that Section 9(k) of the Agreement is hereby amended
and
restated to read in its entirety as follows:
“(k)
Registration
Statement Effective.
The
Registration Statement shall have become effective under the Securities Act
and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been initiated
or threatened by the SEC; provided, however, that in the event (i) the
Registration Statement shall not have been filed with the SEC on or before
March
15, 2006, or (ii) the Registration Statement shall not have been declared
effective on or before October 16, 2006, the Seller shall have the right, in
its
sole discretion, to terminate this Agreement without cost or
penalty.”
2. Section
2
of the Agreement is hereby amended and restated to read in its entirety as
follows:
“2.
Purchase
Price.
The
purchase price for the Assets to be conveyed hereunder (the “Purchase Price”)
shall consist of a total amount equal to the lesser of (i) $5,000,000 or (ii)
an
amount equal to four (4) times the Adjusted EBITDA of Seller (and the Buyer
for
the period after Closing, which will operate its business in good faith and
shall not transfer the Assets during the Measuring Period, as such term is
defined below) derived from the P.C. for the twelve (12) month period beginning
October 1, 2005 and ending September 30, 2006 (the “Measuring Period”). For
purposes of this Agreement, “Adjusted EBITDA” shall mean earnings before taxes,
interest, depreciation and amortization, determined in accordance with GAAP
on
an accrual basis by the Buyer’s independent auditor, adjusted as
follows:
a.
neither the proceeds from nor any dividends or refunds with respect to, nor
any
increases in the cash surrender value of, any life insurance policy under which
the Buyer or the P.C., is the named beneficiary or is otherwise entitled to
recovery, shall be included as income, and the premium expense related to any
such life insurance policy shall not be treated as an expense;
b.
any
extraordinary or unusual gains or losses and any gains or losses from the sale
of any capital assets used by the Buyer or the P.C. or any subsidiary thereof
in
its operations during the applicable Measuring Period (as opposed to assets
acquired in the ordinary course of the business of the Buyer, the P.C. and
its
subsidiaries for resale or other disposition) shall be excluded from
income.
c. The
Purchase Price shall be paid by the Buyer to Seller as follows:
| (i) |
Seven
hundred fifty thousand dollars ($750,000), payable in immediately
available funds shall be paid at the Closing, and delivered, at Seller’s
election, either by certified check(s) or wire
transfer;
|
| (ii) |
an
additional amount equal to the product of (y) two times the Adjusted
EBITDA of the Seller for the period between January 1, 2006 and June
30,
2006, multiplied by (z) four, but not to exceed One million
dollars ($1,000,000) in any event, shall be paid at the Closing and
delivered, at Seller’s election, either by certified check(s) or wire
transfer; and
|
| (iii) |
a
secured promissory note substantially in the form attached as Exhibit
A
(“Promissory Note”) in the principal amount, in U.S. dollars, equal to the
unpaid balance of the Purchase Price, which shall be issued by the
Buyer
to the Seller on or prior to November 30,
2006;
|
provided,
however, that the Buyer may, at its election, at any time on or after July
31,
2006 and prior to November 30, 2007, pay (in cash or immediately available
funds) any portion of the Purchase Price in an amount up to $1,000,000 (or
a
greater amount at Buyer’s election), without penalty, to Seller (each such
payment, a “Prepayment”).
Upon
issuance of the Promissory Note, (i) interest shall be deemed accrued at the
simple rate of six percent (6%) per annum on any unpaid balance of the Purchase
Price, appropriately adjusted for any Prepayment, from the date of the Closing
to the date of issuance, and (ii) interest on unpaid principal under the
Promissory Note shall accrue at the simple rate of six percent (6%) per annum
from and after the date of issuance. Any and all accrued interest under the
Promissory Note shall be due and payable six (6) months after the date of
issuance of the Promissory Note, with the remainder of all outstanding accrued
interest and principal under the Promissory Note due and payable thirteen (13)
months after the date of issuance of said Promissory Note, but no later than
December 31, 2007.
The
Purchase Price for the Assets shall be allocated for federal, state, local
and
foreign tax purposes by each of Seller and Buyer among the Assets sold,
transferred and assigned hereunder and the agreements contained herein below
as
set forth on Schedule 2 attached hereto.”
[Remainder
of Page Left Blank Intentionally]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered in the manner legally binding upon them as of the date
first above written.
|
BASIC
CARE NETWORKS (Park Slope), LLC |
PARK
SLOPE MANAGEMENT
ASSOCIATES,
LLC, by SJB Ventures,
Inc.,
a
Member
|
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| By: /s/ Xxxxxx Xxxxxxxx | By: /s/ Xxxxxx Xxxxxxxx | ||
|
Name:
Xxxxxx Xxxxxxxx
Title:
Chief Executive Officer
|
Name:
Xxxxxx Xxxxxxxx
Title:
Authorized Signatory
|
||
|
BASIC
CARE NETWORKS, INC |
|||
| By: /s/ Xxxxxx Xxxxxxxx | |||
|
Name:
Xxxxxx Xxxxxxxx
Title:
Chief Executive Officer
|
|
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