FIRST AMENDMENT TO AGREEMENT FOR PURCHASE
AND SALE OF ASSETS/TRANSFER OF MEMBER RESPONSIBILITY
This First Amendment to Agreement for Purchase and Sale of Assets/Transfer
of Member Responsibility (this "Amendment") is dated, for reference purposes
only, June 5, 1998, by and between Sierra Primary Care Medical Group, A Medical
Corporation, a California professional corporation ("Sierra Group") and Prospect
Medical Holdings, Inc., a Delaware corporation ("Prospect Holdings"), on the one
hand, and PrimeCare Medical Group of Antelope Valley, Inc., a California
professional corporation, ("Antelope Valley Group"), and PrimeCare
International, Inc., a Delaware corporation, ("PrimeCare International").
RECITALS
A. The parties set forth above have previously entered into that certain
Agreement for the Purchase and Sale of Assets/Transfer of Member Responsibility
(the "Purchase Agreement") whereby certain assets of PrimeCare International and
member responsibility of Antelope Valley Group are to be sold and transferred to
Prospect Holdings and Sierra Group, respectively.
B. Xxxxx Xxxxxx, M.D. ("Xx. Xxxxxx") has entered into that certain
Affiliation Agreement dated April 1, 1997, that certain Provider Service
Agreement dated January 1, 1998, and that certain Consent to Assignment of
Provider Service Agreement and Affiliation Agreement dated February 25, 1998.
In accordance with the terms of the Affiliation Agreement, Xx. Xxxxxx is to
receive monthly payments of One Thousand Two Hundred Fifty Dollars ($1,250.00)
for fifty-nine (59) months from the Effective Date, as defined therein (the
"Fixed Consideration Fee"). PrimeCare International and Xx. Xxxxxx have
executed that certain First Amendment to Affiliation Agreement, whereby
PrimeCare International shall pay to Xx. Xxxxxx Forty-Five Thousand Dollars
($45,000.00) in accordance with the First Amendment to Affiliation Agreement (as
described below) as full and final satisfaction of the Fixed Consideration Fee.
C. The parties now desire to amend and modify the Purchase Agreement as set
forth below.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties agree as follows:
1. XXXXXX.
a. At or before the Closing, PrimeCare International and Xx. Xxxxxx
shall execute that certain First Amendment to Affiliation Agreement, and
PrimeCare International shall pay to Xx. Xxxxxx the sum of Forty-Five Thousand
Dollars ($45,000.00)
1
(in two (2) installments of $11,250.00 and one (1) installment of $22,500.00
on the dates set forth in said First Amendment to Affiliation Agreement) as
full and final satisfaction of the Fixed Consideration Fee.
b. The PrimeCare Down Payment, as defined in the Purchase Agreement,
is hereby increased by Eleven Thousand Two Hundred Fifty Dollars ($11,250.00) to
a total of Four Hundred Eighty-Six Thousand Two Hundred Fifty Dollars
($486,250.00).
c. On the date of the first payment of the Note (being ninety (90)
days from the Closing), Prospect Holdings shall pay to PrimeCare an additional
sum of Eleven Thousand Two Hundred Fifty Dollars ($11,250.00).
d. On the date of the second payment of the Note (being one hundred
eighty (180) days from the Closing), Prospect Holdings shall pay to PrimeCare an
additional sum of Twenty-Two Thousand Five Hundred Dollars ($22,500.00).
e. Schedule "A" of Exhibit 1.2 of the Purchase Agreement is hereby
modified to include the First Amendment to Affiliation Agreement.
2. VARMA.
a. Schedule "A" of Exhibit 1.2 of the Purchase Agreement is hereby
modified to include the following:
I. Provider Service Agreement by and between PrimeCare Medical Group
Network, Inc. and Xxxxxxxx Xxxxx, M.D., dated June 1, 1997
a. Amendment to Provider Service Agreement by and between
PrimeCare Medical Group of Antelope Valley, Inc., a
California professional corporation, and Xxxxxxxx Xxxxx
dated February 25, 1998
3. DATE OF PURCHASE AGREEMENT. The parties affirm and agree that the date
of the Purchase Agreement is May 13, 1998, and that the Effective Time is hereby
modified to be June 1, 1998, regardless of the Closing Date.
4. CONSIDERATION. Prospect Holdings acknowledges that after the Closing,
PrimeCare International intends to transfer all consideration received under the
Purchase Agreement (including, but not limited to the PrimeCare Down Payment,
the Note, and the Shares) to Discops LLC, a Delaware limited liability company
("Discops"). Prospect Holdings agrees to consent to the transfer of such
consideration to Discops, and to execute such other documents and to take such
other actions as may be reasonably requested by Discops or PrimeCare
International to confirm or effectuate the transfer of said consideration;
2
provided, however, that Prospect Holdings consent shall be subject to an
agreement by Discops to abide by all of the terms and obligations of
PrimeCare International under the Purchase Agreement, and all documents and
instruments delivered by PrimeCare International at the Closing, to the same
extent as PrimeCare International.
5. DEFINITIONS. All words and phrases that are defined in any of the
referenced agreements or instruments shall have the same meanings when used in
this Amendment, except as any such words and phrases are modified by this
Amendment.
6. EFFECT. The parties hereby confirm and agree that the Purchase
Agreement remains in full force and effect, and that except for the provisions
specifically amended or modified herein, all other provisions of the Purchase
Agreement remain unmodified.
IN WITNESS WHEREOF, this Amendment is executed by and among the
parties hereto on the dates set forth opposite their signatures below.
SIERRA PRIMARY CARE MEDICAL GROUP, A MEDICAL
CORPORATION
By: Xxxxx X. Xxxxxx, M.D.
-------------------------------------
Its: CEO
-------------------------------
PROSPECT MEDICAL HOLDINGS, INC.,
a Delaware corporation
By: Xxxxx X. Xxxxxx, M.D.
-------------------------------------
Its: CEO
-------------------------------
PRIMECARE MEDICAL GROUP OF ANTELOPE VALLEY, INC., a
California professional corporation
By: Xxxx Xxxxx, MD
-------------------------------------
Its:
-------------------------------
PRIMECARE INTERNATIONAL, INC.,
a Delaware corporation
By: Xxxxx Xxxxx
-------------------------------------
Its: Vice President
-------------------------------
3
