THIS
LLC MEMBERSHIP INTEREST PURCHASE AGREEMENT, (this “Agreement”) is entered
into effective as of the 6th day of September, 2007 (the “Effective Date”) by
and among Medical Resources, LLC, a Florida limited liability company, (“MR”),
Xxxxxx Xxxxx and Xxxxxx Xxxxx, (together, the “Jankes”) and PrimaCare
Corporation, a Florida corporation (“Buyer”). MR, the Jankes and Buyer are
hereinafter referred to jointly as the “Parties” and singularly as
“Party”.
WHEREAS,
Buyer desires to purchase from the Jankes and the Jankes desire to sell to Buyer
membership interests representing 100% of the membership interests in MR.
NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants, agreements and conditions set forth in this Agreement, and intending to be
legally bound, the parties agree as follows:
| 1. |
Purchase
and Sale of Membership Interests. |
| |
(a) |
Agreement.
At the Closing, the Jankes shall sell to Buyer, and Buyer shall
purchase from the Jankes in accordance with the terms and conditions
contained in this Agreement: |
| |
(i) |
The
Jankes’ membership interests in MR (the “MR Membership
Interests”), which consists of 100% of all of MR’s issued
and outstanding membership interests; |
| 2. |
Purchase
Price; Payment |
| |
(a) |
Purchase
Price. The aggregate purchase price (the “Purchase Price”)
for the Membership Interests shall be an amount equal to 5 times MR’s
earnings before interest, taxes, depreciation and amortization (“EBITDA”),
which shall be calculated based upon an audited review of MR’s
financial statements for the 24 month period from January 1, 2008
through December 31, 2009. Notwithstanding the foregoing, the
Purchase Price shall be no less than Fifteen Million Dollars
($15,000,000) and no more than Thirty Million Dollars ($30,000,000). |
| |
(b) |
Payment.
The Purchase Price shall be paid as follows: |
| |
(i) |
At
the Closing, Buyer shall deliver 28 million IWWI shares (as defined below) as
an estimate of the Purchase Price to Escrow Agent pursuant to an
Escrow Agreement by and among the Jankes, Buyer, MR, and Escrow Agent
(the “Escrow Agreement”). The form of the Escrow Agreement
shall be agreed upon by all Parties within 30 days from the date of
this Agreement. |
1
| |
(ii) |
All
payments under this Section 2 shall be made in the form of shares of
common stock of Inform Worldwide Holdings, Inc. (the “IWWI Shares”).
The number of the IWWI Shares to be placed into Escrow shall be
determined as follows: |
| |
(1) |
The
Purchase Price divided by the 90days Weighted Average Price of the
IWWI Shares on the Trading Day immediately preceding the Closing
Date. |
The “Weighted Average
Price” shall be established by the dollar volume-90 days weighted average
price for IWWI Shares in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York Time (or such other
time as such market publicly announces is the official open of trading), and ending at
4:00:00 p.m., New York Time (or such other time as such market publicly announces is the
official close of trading) as reported by Bloomberg. All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or other
similar transaction during the applicable calculation period.
The “Trading Day” means any
day on which the IWWI Shares are traded on the over-the-counter market on the electronic
bulletin board.
| |
(c) |
When
the Purchase Price can be computed finally under the provisions of Section
2(a), an appropriate adjustment shall be made to the number of IWWI Shares
delivered to the Escrow Agent. If Escrow Agent has received more shares than as
is required to satisfy the Purchase Price, the Escrow agent shall deliver to
Buyer such excess shares. If the Purchase Price requires the Buyer to pay
additional shares, Buyer shall promptly deliver the proper number of shares
needed so that the Purchase Price can be satisfied to the Jankes. |
| |
(d) |
Excluded
Assets. At the Closing, title to the 2004 Kia Sedona Automobile License Tag
No. 4531DX. Additionally, if MR receives from America’s Health Choice
Medical Plans, Inc. any additional compensation due to CMS retroactive
adjustments for the period prior to the Closing Date, fifty percent (50%) of
the amounts received shall be payable to the Jankes when received by MR, as an
addition to the Purchase Price. Further, at the time of Closing, MR shall
assign to the Jankes all of its causes of action which it may hold against Xx.
Xxxxxx Xxxxxx and/or Xxxxxx Healthcare, Inc. |
| 3. |
Representations
and Warranties of MR and Jankes. |
The Jankes, jointly and severally,
and MR, jointly and severally with the Jankes, make the following representations and
warranties to Buyer, each of which is true and correct on the date hereof and shall
survive the consummation of the transactions contemplated hereby.
2
| |
(a) |
Organization
and Qualification. MR is a limited liability company duly organized
and in active status under the laws of the State of Florida. MR has all
requisite power and authority to carry on its business as currently
conducted and is duly qualified to transact business in each jurisdiction
in which the failure to be so qualified would reasonably be expected to
have a material adverse effect on MR’s business, properties or
financial condition (a “Material Adverse Effect”). |
| |
(b) |
Capitalization.
As of the Closing, the outstanding equity of MR will consist of 100%
membership interest held by Jankes. There are no outstanding rights,
options, warrants, preemptive rights, rights of first refusal or similar
rights for the purchase or acquisition from MR of any equity interest in
MR. All outstanding equity interests of MR have been issued in compliance
with state and federal securities laws. |
| |
(c) |
Subsidiaries.
Except as provided on Schedule 3(c), and except as to Clinicare of
Broward, LLC (formerly known as Family Futures, LLC), MR does not
presently own or control, directly or indirectly, any interest in any other
corporation, association, or other business entity. MR is not a
participant in any joint venture, partnership, or similar arrangement. |
| |
(d) |
Valid
Issuance of Membership Interests. The Membership Interests shall be
duly authorized, validly issued, fully paid and non-assessable and will be
free of restrictions on transfer directly or indirectly created by MR
other than restrictions on transfer under this Agreement and under
applicable state and federal securities laws. |
| |
(e) |
Jankes.
Each of the Jankes is a competent adult and has full power, legal right
and authority to execute and deliver this Agreement and the other
documents and instruments to be executed and delivered by each of the
Jankes pursuant hereto and to carry out the transactions contemplated
hereby and thereby. Each of the Jankes has, and at the Closing Buyer will
receive, good and marketable fee title to the MR Membership Interests,
free and clear of all liens. |
| |
(f) |
Authority.
The execution and delivery of this Agreement and the other documents and
instruments to be executed and delivered by MR or the Jankes pursuant
hereto and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by MR and the Jankes. No other or
further act or proceeding on the part of MR or its members (including the
Jankes in their personal capacities) is necessary to authorize this
Agreement or the other documents and instruments to be executed and
delivered by MR or the Jankes pursuant hereto or the consummation of the
transactions contemplated hereby and thereby. MR and the Jankes have
delivered to Buyer true, correct and complete copies of all consents,
resolutions and other documents necessary to duly authorize the execution
and delivery of this Agreement and the other documents and instruments to
be executed and delivered by MR or the Jankes pursuant hereto and the
consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes, and when executed and delivered, the other
documents and instruments to be executed and delivered by MR or the Jankes
pursuant hereto will constitute, valid and binding agreements of MR and/or
the Jankes, as the case may be, enforceable in accordance with their
respective terms. |
3
| |
(g) |
Governmental
Consents. Except as provided on Schedule 3(g), no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of MR is required in connection with
the offer, sale or issuance of the Membership Interests. |
| |
(h) |
Litigation.
Except as provided on Schedule 3(h), there are no actions, suits,
proceedings or investigations pending or, to the best of MR’s
knowledge, threatened before any court, administrative agency or other
governmental body against MR. MR is not a party or subject to, and none of
its assets is bound by, the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality. |
| |
(i) |
Employees.
Except as provided on Schedule 3(i), MR is not a party to or bound
by any currently effective employment contract, deferred compensation
agreement, bonus plan, incentive plan, profit sharing plan, retirement
agreement or other employee compensation agreement or arrangement with any
collective bargaining agent. Except as provided on Schedule 3(i), upon the
closing of this transaction, Buyer shall have the right to renegotiate all
employment contracts to which MR is a party. |
| |
(j) |
Intellectual
Property. To their knowledge MR has sufficient title to and ownership
of, or other rights to use, all trade secrets, and, to its knowledge,
copyrights, information, proprietary rights, trademarks, service marks and
trade names in each case necessary for its business as now conducted
without any material conflict with or infringement of the rights of
others. Except as set forth on Schedule 3(k), there are no material
outstanding options, licenses, or agreements of any kind relating to the
foregoing, nor is MR bound by or a party to any material options, licenses
or agreements of any kind with respect to the trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information, proprietary
rights and processes of any other person or entity. MR has not received
any written, or to its knowledge, oral communications alleging that MR has
violated or, by conducting its business as proposed, would violate any of
the trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity. |
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| |
(k) |
Absence
of Certain Events. Except as and to the extent set forth in Schedule 3(k),
since July 31, 2007, there has not been: |
| |
(i) |
No
Adverse Change. Any material adverse change in the conduct, financial
condition, assets, liabilities, business, prospects or operations of MR. |
| |
(ii) |
No
Damage. Any material loss, damage or destruction, whether covered by
insurance or not, relating to or affecting the business, assets or
liabilities of MR. |
| |
(iii) |
No
Increase in Compensation. Any increase in the compensation, salaries,
commissions or wages payable or to become payable to any employees or
agents of MR, including any bonus or other employee benefit granted, made
or accrued in respect of such employees or agents, or any increase in the
number of such employees or agents. |
| |
(iv) |
No
Labor Disputes. Any labor dispute or disturbance relating to or
affecting MR, other than routine individual grievances that are not
material to the conduct, financial condition, assets, Liabilities,
business, prospects or operations of MR. |
| |
(v) |
No
Distributions. Any declaration, setting aside or payment of any
dividend or other distribution in respect of MR’s capital stock; any
redemption, purchase or other acquisition by MR of any capital stock of
MR, or any security relating to such capital stock; or any other payment
of any kind to any of MR’s members, except for regular payments of
base salary, benefits under employee agreements applicable to MR employees
generally and reimbursement of expenses in accordance with MR’s
expense reimbursement policy. |
| |
(vi) |
No
Increase in Affiliate Obligations. Any increase in MR’s
investment in or receivable from any Affiliate of MR. |
| |
(vii) |
No
Disposition of Property. Any sale, lease, grant or other transfer or
disposition of any assets of MR, except for the sale of Inventory items in
the ordinary course of business. |
| |
(viii) |
No
Indebtedness. Any indebtedness for borrowed money incurred, assumed or
guaranteed by MR. |
| |
(ix) |
Loans
and Advances. Any loan or advance made by MR to any person or entity,
other than advances made to MR’s employees in the ordinary course of
business for travel and entertainment in accordance with past practice. |
5
| |
(x) |
Credit.
Any grant of credit by MR to any customer (including any distributor) of
MR on terms or in amounts more favorable than those that have been
extended to such customer in the past, any other change in the terms of any
credit heretofore extended by MR or any other change of MR’s policies
or practices with respect to the granting of credit. |
| |
(xi) |
Discharge
of Obligations. Any discharge, satisfaction or agreement to satisfy or
discharge any liability of MR, other than the discharge or satisfaction in
the ordinary course of business of current liabilities and current
liabilities incurred since July 31, 2007 in the ordinary course of
business. |
| |
(xii) |
Deferral
of Liabilities. Any deferral, extension or failure to pay any of the
liabilities of MR as when the same become due or any allowance of the level
of the liabilities of MR to increase in any material respect or any
prepayment of any of the liabilities of MR. |
| |
(xiii) |
Accounting
Principles. Any material change in MR’s financial or tax
accounting principles or methods, except to the extent required by GAAP. |
| |
(xiv) |
No
Unusual Events. Any other event or condition not in the ordinary
course of business that relates to or affects the business or assets of
MR. |
| |
(l) |
Compliance
with Other Instruments. Except as set forth on Schedule 3(l): (i) MR
is not in violation or default of any provision of its Certificate of
Formation or its Operating Agreement, each as in effect immediately prior
to the Closing; (ii) MR is not in violation or default of any provision of
any material instrument, mortgage, deed of trust, loan, contract,
commitment, judgment, decree, order or obligation to which it is a party
or by which it or any of its properties or assets are bound; and (iii) MR
is not in violation or default of any provision of any federal, state or
local statute, rule or governmental regulation. The execution, delivery
and performance of and compliance with this Agreement and the sale of the
Membership Interests will not result in any such violation, be in conflict
with or constitute, with or without the passage of time or giving of
notice, a default under any such provision, require any consent or waiver
under any such provision (other than any consents or waivers that have
been obtained), or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of MR pursuant
to any such provision. |
6
| |
(m) |
Permits.
MR has all material franchises, permits, licenses, and any similar
authority necessary for the conduct of its business as now being conducted
by it. MR is not in default in any material respect under any of such
franchises, permits, licenses, or other similar authority. |
| |
(n) |
No
Default. Except as set forth on Schedule 3(n), MR is not in default in
any material respect under any contract to which it is a party, nor has
any event or omission occurred that, through the passage of time or the
giving of notice, or both, would constitute a default in any material
respect thereunder or cause the acceleration of any of MR’s
obligations thereunder or result in the creation of any lien on any of MR’s
assets. Except as set forth on Schedule 3(n), no third party is in default
in any material respect under any contract to which MR is a party, nor has
any event or omission occurred that, through the passage of time or the
giving of notice, or both, would constitute a default in any material
respect thereunder, or give rise to an automatic termination, or the right
of discretionary termination thereof. Except as set forth on Schedule
3(n), each contract to which MR is a party is in full force and effect and
is a valid and binding agreement enforceable against MR and, to MR’s
knowledge, the other party or parties thereto in accordance with its
terms. |
| |
(o) |
Environmental
and Safety Laws. MR is not in violation of any applicable statute, law
or regulation relating to the environment or occupational health and
safety. |
| |
(p) |
Registration
Rights. MR has not granted or agreed to grant any registration rights,
including piggyback rights, to any person or entity. |
| |
(q) |
Title
to Property and Assets. Except as set forth on Schedule 3(q), MR has
good and marketable title to all of properties and assets owned by it, free
and clear of all mortgages, liens and encumbrances, except liens for
current taxes and assessments not yet due. Except as set forth on Schedule
3(q), with respect to the material property and assets it leases, MR is in
material compliance with such leases and, to the best of its knowledge,
holds a valid leasehold interest free of all liens, claims or
encumbrances. MR’s material properties and assets are in good
condition and repair, in all material respects, for the purposes for which
they are currently used, ordinary wear and tear excepted. |
| |
(r) |
Agreements;
Actions. Except as provided on Schedule 3(r), there are no
agreements, understandings or proposed transactions between MR and any of
its officers, directors, affiliates, or any affiliate thereof. |
| |
(s) |
Brokers
or Finders. MR has not agreed to incur, directly or indirectly, any
liability for brokerage or finders’ fees, agents’ commissions or
other similar charges in connection with this Agreement or any of the
transactions contemplated hereby. |
7
| 4. |
Representations
and Warranties of Buyer. |
Buyer makes the following
representations and warranties to MR and the Jankes, and unless otherwise provided herein,
each of which is true and correct on the date hereof and shall survive the consummation of
the transactions contemplated hereby.
| |
(a) |
Organization
and Qualification. Buyer is a corporation duly organized and in active
status under the laws of the State of Florida. Buyer has all requisite
power and authority to carry on its business as currently conducted, and
is duly qualified to transact business. |
| |
(b) |
Corporate
Power. Buyer has all requisite corporate power and authority to
execute and deliver this Agreement and the other documents and instruments
to be executed and delivered by Buyer pursuant hereto and to carry out the
transactions contemplated hereby and thereby. |
| |
(c) |
Authority.
The execution and delivery of this Agreement and the other documents and
instruments to be executed and delivered by Buyer pursuant hereto and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by Buyer. No other or further corporate act or proceeding
on the part of Buyer or its shareholders is necessary to authorize this
Agreement or the other documents and instruments to be executed and
delivered by Buyer pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when
executed and delivered, the other documents and instruments to be executed
and delivered by Buyer pursuant hereto will constitute, valid and binding
agreements of Buyer, as the case may be, enforceable in accordance with
their respective terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights
generally, and by general equitable principles. |
| |
(d) |
Valid
Issuance of IWWI Shares. On the date of the Closing, the IWWI Shares
shall be duly authorized, validly issued, fully paid and non-assessable
and will be free of restrictions on transfer directly or indirectly
created by Buyer other than restrictions on transfer under this Agreement
and under applicable state and federal securities laws. |
| 5. |
Covenants
Prior to the Closing. |
| |
(a) |
Management
and Operation of Business Pending the Closing. As of the Effective
Date, Buyer shall have full control and authority over the management and
operations of MR and shall be elected the sole manager of MR. Until the
Closing, Buyer shall not make any distributions to itself from MR without
the consent of the Jankes, and shall not incur any new contractual
obligations or indebtedness in each instance greater than Three Thousand
Dollars ($3,000.00) without the written consent of the Jankes. |
8
| |
(b) |
Pre-Closing
Access to MR Information. From the date hereof until the Closing,
except as prohibited by applicable Law, MR and the Jankes shall, and shall
cause all of MR’s officers, employees, agents, independent
accountants and advisors to, furnish to Buyer and its representatives, at
reasonable times and places, (a) such access to the MR’s facilities
as Buyer may from time to time reasonably request, (b) such access to
the assets, books and records of MR as Buyer may from time to time
reasonably request and (c) such access to financial and operating data and
other information relating to MR as Buyer may from time to time reasonably
request, including access to the work papers of MR’s independent
auditors. Buyer shall be entitled to inspect, examine, audit and photocopy
all of such documents. In addition, during such period, Buyer and its
representatives shall have access to suppliers, customers, officers,
employees and agents of MR and others having business dealings with MR for
the purpose of performing Buyer’s due diligence investigation. In
connection with access to information, Buyer agrees to execute such
confidentiality agreements as shall be required by the Health Insurance
Portability and Accountability Act and any other laws that are applicable. |
| |
(c) |
Further
Actions. Subject to the terms and conditions hereof, all Parties shall
use their best efforts to take, or cause to be taken, all action and to
do, or cause to be done, and to cooperate fully with each other with
respect to, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated hereby, including using their
best efforts (a) to obtain prior to the Closing all licenses, permits,
consents, approvals, authorizations, qualifications and orders of
governmental entities and parties to contracts with MR that are necessary
for the consummation of the transactions contemplated hereby and (b) to
effect all necessary registrations and filings. With regard to any consent
that may be required from third parties, MR, and/or the Jankes shall
initiate contact to obtain such consents only in conjunction and
cooperation with Buyer. Notwithstanding any language to the contrary
contained herein, the Jankes shall not be required to incur any expenses
in connection with the provisions of this subsection. |
| |
(d) |
Notification.
Prior to the Closing, MR or any member of MR shall promptly notify Buyer
(after MR or such member has notice thereof), and Buyer shall promptly
notify MR (after Buyer has notice thereof), and keep such other Parties
advised, as to any litigation pending and known to such Party or, to its
actual knowledge, threatened against such Party that challenges the
transactions contemplated hereby. In addition, prior to the Closing, MR,
or any member of MR shall promptly notify Buyer (after MR, or such member
has notice thereof), and keep Buyer advised, as to any material adverse
change in the conduct, financial condition, assets, liabilities, business,
prospects or operations of MR becoming known to them. |
9
| |
(e) |
Disclosure.
MR and the Jankes shall promptly notify Buyer in writing with respect to
any matter hereafter arising or discovered that, if existing or known on
the date hereof, would have been required to be set forth or described in the
Disclosure Schedule on the date hereof or would cause the representations
and warranties of any Party made pursuant to this Agreement not to be
true, correct and complete as of the date hereof or the date on which such
matter arose or was discovered, but no such disclosure shall cure any
breach of any representation or warranty. For purposes of determining the
accuracy of the representations and warranties of MR and the Jankes made
pursuant to this Agreement, the Disclosure Schedule shall be deemed to
include only that information contained therein on the date hereof, and
shall be deemed to exclude any information contained in any notification
to Buyer pursuant to this Section 5(e) or otherwise. |
| |
The
Disclosure Schedules for this Agreement shall be prepared by MR and the Sellers for
presentation to the Buyers within 14 days from the Effective Date. Such Disclosure
Schedules shall be dated as of the Effective Date. |
| |
(a) |
Non-Solicitation.
The Jankes agree that for a period of two years from the date of execution
of this Agreement, that the Jankes will not, directly or indirectly
solicit, induce or otherwise offer employment or engagement as an
independent contractor with, any person who is or was an employee,
physician or consultant of, or who performed similar services for MR, or
assist any third party with respect to any of the foregoing, unless
either: (i) such person has been separated from his or employment or other
relationship with Buyer and each of its affiliates (including MR), or (ii)
written consent from Buyer is obtained. |
| |
(b) |
Confidentiality.
The Parties, and their respective officers, directors, partners and
affiliates, agree to keep the terms and conditions of this Agreement
confidential, and agree not to disclose to any party not a party to this
Agreement any of the terms hereof, except as may be required by applicable
law or except to their professional advisors. The Parties hereto expressly
acknowledges that they have received, and will receive in the future,
Confidential Materials (as hereinafter defined), and that disclosure of
such Confidential Materials to parties not a party to this Agreement would
cause irreparable harm to the Parties hereto. Except with the prior
written consent of the other Parties or as required by law, no Party, nor
their respective officers, directors, partners or affiliates, shall (i)
disclose any Confidential Materials to any party not a party to this
Agreement other than their professional advisors, or (ii) use any
Confidential Materials for any purpose except in connection with their
efforts on behalf of a party hereto and their respective officers,
directors, partners or affiliates shall use their reasonable best efforts
to preserve the confidentiality of all Confidential Materials. In the
event that a Party concludes that it is legally obligated to disclose any
provision of this Agreement or any Confidential Materials, such Party
shall provide the other Parties with prompt written notice, and shall seek
to limit the dissemination of such Confidential Materials. In the case of
legal proceedings in which such disclosure is required, the Parties shall
cooperate to obtain an appropriate protective order limiting the
disclosure of such material. |
10
| |
“Confidential
Materials” means any information or materials, whether written or oral, tangible or
intangible, concerning a party, its subsidiaries, businesses, markets, products,
prospects, finances, principal shareholders and/or members. Notwithstanding the foregoing,
the Confidential Material shall not include (A) information that was known to, and
material that was in the possession of a party prior to the commencement of any
negotiations, (B) information that is or becomes generally known to, and materials
possessed by, the public at large, (C) information or material acquired by Buyer
independently from a third party (other than a third party which Buyer knows, or has
reason to know, is under an obligation of confidentiality to MR), and (D) information or
material independently developed by Buyer and not as a result of the disclosure of
information or provision of materials by MR. The Confidential Materials may include, but
are not necessarily limited to, the following: concepts; techniques; data; documentation;
research and development; customer lists; advertising plans; distribution networks; new
product concepts; designs; patterns; sketches; planned introduction dates; processes;
marketing procedures; “know-how”; marketing techniques and materials;
development plans; names and other information related to strategic partners, suppliers,
or vendors; pricing policies and strategic, business or financial information, including
business plans and financial pro formas. |
| 7. |
Conditions
Precedent to Buyer’s Obligations |
Each and every obligation of Buyer to
be performed on or after the Closing Date under this Agreement is subject to the
satisfaction (or written waiver by Buyer) prior to or at the Closing of each of the
following conditions:
11
| |
(a) |
Representations
and Warranties True on the Closing Date. Except for any changes
permitted by the terms of this Agreement or consented to in writing by
Buyer, each of the representations and warranties made by MR, and the
Jankes in this Agreement, and each of the statements contained in the
Disclosure Schedule or in any instrument, list, certificate or writing
delivered by or on behalf of MR or any member of MR pursuant hereto, that
is qualified as to materiality shall be true and correct in all respects
when made and shall be true and correct in all respects at and as of the
Closing Date as though such representations, warranties and statements
were made or given on and as of the Closing Date, and each of such
representations, warranties and statements that is not qualified as to
materiality shall be true and correct in all respects when made and shall
be true and correct in all material respects at and as of the Closing Date
as though such representations, warranties and statements were made or
given on and as of the Closing Date. For purposes of whether the
representations and warranties made by MR and the Jankes pursuant to this
Agreement (including each of the statements contained in the Disclosure
Schedule or in any instrument, list, certificate or writing delivered by
or on behalf of MR or any member of MR pursuant hereto) is true and
correct at and as of the Closing Date, the Disclosure Schedule shall be
deemed to include only that information contained therein on the Effective
Date hereof, and shall be deemed to exclude any information disclosed to
Buyer pursuant to Section 5(f). However, information disclosed to
Buyer pursuant to Section 5(f) or otherwise shall be taken into
account for purposes of determining whether the condition described in
this Section 7(a) has been satisfied. |
| |
(b) |
Compliance
With Agreement. MR and the Jankes shall have in all material respects
performed and complied with all of their respective agreements and
obligations under this Agreement that are to be performed or complied with
by MR or the members of MR prior to or on the Closing Date, including the
delivery of the documents described in Section 10(b). |
| |
(c) |
Absence
of Litigation. No litigation shall have been commenced or threatened,
and no investigation by any governmental entity shall have been commenced,
against any Party or any of their respective affiliates with respect to
the transactions contemplated hereby. |
| |
(d) |
Consents
and Approvals. All approvals, consents and waivers that are required
to effect the transactions contemplated hereby shall have been received,
and executed counterparts thereof shall have been delivered to Buyer, not
less than two (2) business days prior to the Closing. |
| 8. |
Conditions
Precedent to MR’s, and the Jankes’ Obligations |
Each and every obligation of MR and
the Jankes to be performed on or after the Closing Date under this Agreement is subject to
the satisfaction (or written waiver by the Jankes) prior to or at the Closing of each of
the following conditions:
12
| |
(a) |
Representations
and Warranties True on the Closing Date. Except for any changes
permitted by the terms of this Agreement or consented to in writing by the
Jankes, each of the representations and warranties made by Buyer in this
Agreement, and each of the statements contained in any instrument, list,
certificate or writing delivered by or on behalf of Buyer pursuant hereto,
that is qualified as to materiality shall be true and correct in all
respects when made and shall be true and correct in all respects at and as
of the Closing Date as though such representations, warranties and
statements were made or given on and as of the Closing Date, and each of
such representations, warranties and statements that is not qualified as
to materiality shall be true and correct in all respects when made and
shall be true and correct in all material respects at and as of the
Closing Date as though such representations, warranties and statements
were made or given on and as of the Closing Date. |
| |
(b) |
Compliance
With Agreement. Buyer shall have in all material respects performed
and complied with all of its agreements and obligations under this
Agreement that are to be performed or complied with by Buyer prior to or
on the Closing Date, including the delivery of the documents described in
Section 10(c). |
| |
(a) |
Indemnification
by Jankes. Subject to the provisions of Section 9(f), the Jankes
shall, joint and severally, defend, indemnify and hold harmless Buyer and
its members, managers, employees, agents, consultants, representatives,
affiliates, successors and assigns from and against any and all claims,
liabilities, obligations, losses, costs, expenses (including, without
limitation, legal, accounting and similar expenses), litigation,
proceedings, fines, taxes, levies, imposts, duties, deficiencies,
assessments, charges, penalties, demands, damages (including, but not
limited to, actual, foreseen or unforeseen, known or unknown, fixed or
contingent, and matured or unmatured), civil and criminal violations of
law, settlements and judgments of any kind or nature whatsoever
(individually a “Loss” and collectively, “Losses”),
that any of them may incur arising out of any one or more of the
following: (a) any breach or violation of any of the covenants made by
Jankes or MR in this Agreement; (b) any breach of, or any inaccuracy or
misrepresentation in, any of the representations or warranties made by
Jankes and MR in this Agreement or in any agreement, instrument,
certificate or similar document required to be delivered pursuant to the
terms hereof; (c) any investigation, civil regulatory proceeding or other
action instituted by the Centers for Medicare and Medicaid Services (“CMS”)
as a result of MR’s operations. |
13
| |
(b) |
Indemnification
by Buyer. Buyer shall indemnify and hold harmless Jankes and MR and
their respective members, directors, trustees, officers, employees,
agents, consultants, representatives, affiliates, successors and assigns
from and against any and all Losses that any of them may incur arising out
of any one or more of the following: (a) any breach or violation of any of
the covenants made by Buyer in this Agreement; (b) any breach of, or any
inaccuracy or misrepresentation in, any of the representations or
warranties made by Buyer in this Agreement or in any agreement,
instrument, certificate or similar document required to be delivered
pursuant to the terms hereof; or (c) any guarantees made by the Jankes on
any obligations of MR. |
| |
(c) |
Survival.
The representations, warranties, covenants and agreements made in this
Agreement or in any agreement, instrument or similar document delivered
pursuant hereto shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. |
| |
(d) |
Indemnification
Procedure. |
| |
(i) |
Any
Party seeking indemnification hereunder (the “Indemnitee”) shall
notify the parties liable for such indemnification (each an
“Indemnitor”) in writing of any event, omission or occurrence
that the Indemnitee has determined has given or could give rise to Losses
that are indemnifiable hereunder (such written notice being hereinafter
referred to as a “Notice of Claims”). Such notice shall be given
promptly after the Indemnitee becomes aware of its own claim or that of a
third party; provided that the failure of any Indemnitee to give notice as
provided in this Section 9(d) shall not relieve the Indemnitor of
its obligations under this Section 9. A Notice of Claims shall specify in
reasonable detail the nature and any particulars of the event, omission or
occurrence giving rise to a right of indemnification. The Indemnitor shall
satisfy its obligations hereunder, as the case may be, within thirty (30)
days of its receipt of a Notice of Claims; provided, however,
that so long as the Indemnitor is in good faith defending a claim pursuant
to clause (b) below, its obligation to indemnify the Indemnitee with
respect thereto shall be suspended. |
14
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(ii) |
Except
as provided in Section 9(d)(i), with respect to any third party
claim, demand, suit, action or proceeding that is the subject of a Notice
of Claim, the Indemnitor shall, in good faith and at its own expense,
defend, contest or otherwise protect against any such claim, demand, suit,
action or proceeding with legal counsel of its own selection (and
reasonably acceptable to the Indemnitee). The Indemnitee shall have the
right, but not the obligation, to participate, at its own expense, in the
defense thereof through counsel of its own choice and shall have the
right, but not the obligation, to assert any and all cross claims or
counterclaims it may have. So long as the Indemnitor is defending in good
faith any such third party claim, demand, suit, action or proceeding, the
Indemnitee shall at all times cooperate, at its own expense, in all
reasonable ways with, make its relevant files and records available for
inspection and copying by, and make its employees available or otherwise
render reasonable assistance to, the Indemnitor. In the event that the
Indemnitor fails to timely defend, contest or otherwise protect against
any such third party claim, demand, suit, action or proceeding, the
Indemnitee shall have the right, but not the obligation, to defend,
contest, assert cross claims or counterclaims, or otherwise protect
against, the same and may make any compromise or settlement thereof and be
entitled to all amounts paid as a result of such third party claim,
demand, suit or action or any compromise or settlement thereof. The
Indemnitor will not consent to the entry of any judgment or enter into any
settlement with respect to any such third party claim, demand, suit,
action or proceeding without the prior written consent of the Indemnitee,
which will not be unreasonably withheld. |
| |
(e) |
Time
Limits on Indemnification. Except for claims or actions based on
fraud, no claim or action shall be brought under this Article 9 for
breach of a representation or warranty after the lapse of twenty four (24)
months following the Closing. Regardless of the foregoing, however, or any
other provision of this Agreement, any representation or warranty made by
MR or the Jankes in or pursuant to Sections 3(a), 3(b), 3(d), 3(f), 3(h),
3(m), and 3(r) shall survive for the applicable statute of limitations
plus sixty (60) days, including any extension or tolling thereof. |
| |
(f) |
Any
amounts payable by the Jankes pursuant to this Article 9 shall be
first deducted from the Purchase Price held under the Escrow Agreement,
and any property taken from the Escrow Agreement to satisfy any
obligations of the Jankes under this Article 9 shall be deemed a
reduction to the Purchase Price. |
| |
(a) |
Closing
Date; Location. Unless this Agreement shall have been terminated and
the transactions contemplated hereby shall have been abandoned in accordance
with Section 11, and provided that the conditions to the Closing
set forth in Section 7 and Section 8 are satisfied or
waived, the consummation of the transactions contemplated hereby (the
“Closing”) shall take place at the offices of Xxxxx & Xxxxxxx
LLP, at 10:00 a.m., local time on the first business day following the
completion of the audit of MR by the accounting firm of Stark, Winter,
Xxxxxxxxx and Co., LLP (the “Closing Date”). Notwithstanding the
foregoing, the Closing Date shall occur on or prior to January 5, 2008. |
15
| |
(b) |
Documents
to be delivered by MR and the Jankes. At the Closing, MR, and the
Jankes shall deliver to Buyer the following documents, in each case duly
executed or otherwise in proper form: |
| |
(i) |
Certificates.
Certificates representing the MR Membership Interests, duly endorsed for
transfer |
| |
(ii) |
Escrow
Agreement. The Escrow Agreement, dated as of the Closing Date. |
| |
(iii) |
Certified
Charter. A copy of the charter of MR, certified by the Secretary of
State of Florida. |
| |
(iv) |
Certified
Bylaws or Similar Organizational Documents. A copy of the bylaws and
similar organizational documents of MR, certified by the secretary
thereof. |
| |
(v) |
Certified
Resolutions. A copy of the resolutions of the Board of Managers and
members of MR, in form and substance reasonably satisfactory to Buyer,
authorizing and approving this Agreement and the other documents and
instruments to be executed and delivered by MR and its respective members,
as the case may be, pursuant hereto and the consummation of the
transactions contemplated hereby and thereby, certified by the secretary
thereof. |
| |
(vi) |
Good
Standing Certificate. A Certificate of Good Standing for MR, issued by
the Secretary of State of Florida. |
| |
(c) |
Documents
to be delivered by Buyer. At the Closing, Buyer shall deliver to MR
and the Jankes the following documents, in each case duly executed or
otherwise in proper form: |
| |
(i) |
Certificates.
Certificates representing the IWWI Shares, duly endorsed for transfer,
delivered to Escrow Agent. |
| |
(ii) |
Escrow
Agreement. The Escrow Agreement, dated as of the Closing Date. |
| |
(iii) |
Certified
Resolutions. A copy of the resolutions of the Board of Directors of
Buyer authorizing and approving this Agreement and the other documents and
instruments to be executed and delivered by Buyer pursuant hereto and the
consummation of the transactions contemplated hereby and thereby. |
16
| |
(a) |
Termination
without Breach. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, without any further Liability of any
Party at any time prior to the Closing: |
| |
(i) |
By
mutual written agreement of Buyer and the Jankes; |
| |
(ii) |
By
Buyer in the event that a Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any law or order, or granted any required
consent or approval, that has the effect of conditioning the consummation
of the transactions contemplated hereby upon the divesture, sale or
holding separate of any of Buyer’s or its affiliates’ (including,
for this purpose, MR’s) assets, businesses or properties, the
execution of a consent decree or the assumption of any other obligations
with respect to the ongoing operations of Buyer and/or its affiliates
(including, for this purpose, MR). |
| |
(iii) |
By
Buyer within 7 days after it receives the Disclosure Schedules from the
Jankes and MR dated as of the Effective Date. |
| |
(b) |
Termination
for Breach. |
| |
(i) |
Termination
by Buyer. If (i) there has been a material violation or breach by MR
or any member of MR of any of the representations, warranties, covenants,
agreements or other provisions of this Agreement that has not been waived
in writing by Buyer, (ii) an event has occurred (other than a breach of
this Agreement by Buyer) such that a condition to the obligations of Buyer
cannot be satisfied or (iii) MR or the Jankes shall have attempted to
terminate this Agreement under this Section 11 or otherwise without
grounds to do so, then Buyer may, upon written notice to the Jankes at any
time prior to the Closing during the period that such violation, breach,
failure or wrongful termination attempt is continuing, terminate this
Agreement with the effect set forth in Section 11(b)(iii). |
| |
(ii) |
Termination
by the Jankes. If (i) there has been a material violation or breach by
Buyer of any of the representations, warranties, covenants, agreements or
other provisions of this Agreement that has not been waived in writing by the
Jankes, (ii) an event has occurred (other than a breach of this Agreement
by MR or the Jankes) such that a condition to the obligations of MR, and
the Jankes cannot be satisfied or (iii) Buyer shall have attempted to
terminate this Agreement under this Section 11 or otherwise without
grounds to do so, then the Jankes may, upon written notice to Buyer at any
time prior to the Closing during the period that such violation, breach,
failure or wrongful termination attempt is continuing, terminate this
Agreement with the effect set forth in Section 11(b)(iii). |
17
| |
(iii) |
Effect
of Termination. Termination of this Agreement pursuant to this Section 11(b) shall
not in any way terminate, limit or restrict the rights and remedies of any
Party against any other Party that has violated, breached or failed to
satisfy any of the representations, warranties, covenants, agreements,
conditions or other provisions of this Agreement prior to termination
hereof. In addition to the right of any Party under common law to redress
for any such breach or violation, each Party whose breach or violation has
occurred prior to termination shall jointly and severally indemnify each
other Party for whose benefit such representation, warranty, covenant,
agreement or other provision was made from and against all claims asserted
against, resulting to, imposed upon or incurred by the non-breaching
party, directly or indirectly, by reason of, arising out of or resulting
from such breach or violation. |
| |
(a) |
Disclosure
Schedules. MR and the Jankes will prepare the schedules to be attached
to this Agreement (individually, a “Schedule” and
collectively, the “Disclosure Schedule”) and delivered to
Buyer within 14 days from the date hereof. Any fact or item disclosed on
any Schedule shall be deemed disclosed on all other Schedules to which
such fact or item may reasonably apply so long as such disclosure is in
sufficient detail to enable a reasonable person to identify the other
article or section of this Agreement to which such information is
responsive. |
| |
(b) |
Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Florida, without regard to any provisions thereof relating
to conflicts of laws among different jurisdictions. |
| |
(c) |
Survival. Except as provided in Sections 9(c) and 9(e), the
representations and warranties made herein shall survive the Closing for a
period of twenty four months, whereupon they shall cease and be of no further
force and effect. |
| |
(d) |
Successors
and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the Parties hereto;
provided, however, that the rights of Buyer to purchase the MR Membership
Interests shall not be assignable without the consent of the other
Parties. Notwithstanding the foregoing, the Jankes shall have the right to
transfer the MR Membership Interests to trusts established for their
benefit or the benefit of themselves and their children and heirs at any
time. This Agreement shall not be construed so as to confer any right or
benefit on any party not a party hereto, other than their respective
successors, assigns, heirs, executors and administrators. |
18
| |
(e) |
Entire
Agreement; Amendment. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
among the Parties with regard to the subjects hereof and thereof and
supersede all prior agreements and understandings relating thereto.
Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the
Party against whom enforcement of any such amendment, waiver, discharge or
termination is sought. |
| |
(f) |
Notice.
All notices under this Agreement shall be sufficiently given for all
purposes if made in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed,
facsimile or other electronic transmission, to following addresses and
numbers. |
Notices to MR shall be addressed to:
Medical Resources, LLC
0000 Xx. XX
Xxxxxxx 0
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxx, Chief Executive Officer
or at such other address and to the
attention to such other person as MR may designate by written notice to Buyer.
Notices to Buyer shall be addressed to:
| |
PrimaCare
Corporation
0000 X Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxx 00000
Attn: Xxxxxx
Xxxxxxxxxxx, President |
or at such other address and to the
attention of such other person as Buyer may designate by written notice to MR.
| |
(g) |
Delays
or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any Party upon any breach or default of the other
Parties under this Agreement shall impair any such right, power or remedy
of such first party, nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any holder of any breach
or default under this Agreement, or any waiver on the part of any holder
of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such
writing or as provided in this Agreement. |
19
| |
(h) |
Expenses.
The Parties hereto shall each bear the expenses and legal fees incurred on
their own behalf with respect to this Agreement and the transactions
contemplated hereby. |
| |
(i) |
Counterparts.
This Agreement may be executed in any number of counterparts, each of
which may be executed by only one Party, which shall be enforceable
against the Parties actually executing such counterparts, and all of which
together shall constitute one instrument. |
| |
(j) |
Severability;
Enforcement. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without such provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement
to any Party. The Parties hereto agree that irreparable damage for which
money damages would not be an adequate remedy would occur in the event
that any of the provision of this Agreement were not performed in
accordance with its specific terms or was otherwise breached. It is
accordingly agreed that, in addition to any other remedies a Party may
have at law or equity, the Parties shall be entitled to seek an injunction
of injunctions to prevent such breached of this Agreement and to enforce
specifically the terms hereof. |
[THE REMAINDER OF THIS
PAGE IS INTENTIONALLY LEFT BLANK. SIGNATURE PAGE TO FOLLOW.]
20
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above
written.
|
MEDICAL RESOURCES, LLC |
|
/s/ Xxxxxx Xxxxx |
|
By: Xxxxxx Xxxxx |
|
Its: Chief Executive Officer |
|
JANKES: |
|
/s/ Xxxxxx Xxxxx |
|
Xxxxxx Xxxxx |
|
/s/ Xxxxxx Xxxxx |
|
Xxxxxx Xxxxx |
|
BUYER: |
|
PRIMACARE CORPORATION |
|
/s/ Xxxxxx Xxxxxxxxxxx |
|
By: Xxxxxx Xxxxxxxxxxx |
|
Its: Chief Executive Officer |
21
