EXHIBIT 10X
-----------
ASSET PURCHASE AGREEMENT
------------------------
This ASSET PURCHASE AGREEMENT (the "Agreement") dated as of April 1, 1996
by and between Xxxxxx X. Xxxxxx, M.D., Ltd., (the "Seller"), a Illinois
corporation with an office at 0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx and CSI Illinois Inc., a Florida corporation with an office at 000 Xxxx
Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, XX 00000, (the "Purchaser").
R E C I T A L S:
WHEREAS, Seller owns the assets of a medical practice with
offices in Chicago, Illinois; and
WHEREAS, Purchaser desires to purchase and the Seller desires to sell to
Purchaser all of the assets of Seller's medical practice; and
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
a.. PURCHASE OF ASSETS.
1. SALE AND PURCHASE. Subject to the terms and conditions set forth
in this Agreement, Seller agrees to sell and deliver to the Purchaser and the
Purchaser agrees to purchase from the Seller at the Closing, hereinafter defined
the assets of Sellers medical practice set forth on Schedule "A" annexed hereto
(hereinafter the "Assets").
2. PURCHASE PRICE. In consideration for the sale of the Assets, the
Purchaser agrees to pay to the Seller 100% of the amount of actual cash
collections of the medical practice for the twelve (12) month period between
April 1, 1996 and March 31, 1997 which cash collections and price shall be
calculated on or before June 30, 1997.
3. PAYMENT OF PURCHASE PRICE. The purchase price will be paid as
follows:
a) 20% of the price shall be paid in cash in eight (8) equal
quarterly installments with the first quarterly payment being due on July 31,
1997 and second payment being due on October 31, 1997. The unpaid principal
shall bear interest at 5% percent per annum from July 31, 1997 until paid in
full. The balance due from time to time may be paid in full at any time without
any prepayment penalty.
b) The balance of the purchase price shall be paid in
unregistered shares of the common stock of Health Professionals, Inc., a
Delaware corporation as follows:
i) An initial $400,000 worth of stock (the "INITIAL
SHARES") shall be credited to the account of the Xxxxxx X. Xxxxxx Irrevocable
Trust, said stock valued at $1.75 per share (the "INITIAL SHARE VALUATION
PRICE"). Seller acknowledges that as of April 1, 1996, that it is indebted to
Buyer and/or CSI Delaware for advances made or debts justly due in the amount of
$336,910.00 and that this sum may be set off against the INITIAL SHARES.
Accordingly, Purchaser shall deliver to the Xxxxxx X. Xxxxxx Irrevocable Trust
the equivalent of $66,052 at $1.75 per share (36,052 shares). Purchaser
46
acknowledges Seller is neither a control person or purchaser nor an affiliate as
those terms are defined by SEC rules, but that Purchaser shall prepare, at its
expense, any forms required to be filed by the SEC or any State agency.
ii) The balance of the stock ("BALANCE OF SHARES")
shall be issued on July 31, 1997 and shall be valued at 70% percent of the
average closing price of the stock for the 5 trading days preceding June 30,
1997 (the "BALANCE OF SHARES VALUATION PRICE").
c) Purchaser and its parent, Health Professionals, Inc. shall
guarantee the INITIAL SHARE VALUATION PRICE and the BALANCE OF SHARES VALUATION
PRICE of the HPI shares delivered to the Xxxxxx X. Xxxxxx Irrevocable Trust for
a period of five trading days from the date said shares are first eligible for
sale under Rule 144 or otherwise (the "GUARANTEE PERIOD"), to the extent that,
if during the GUARANTEE PERIOD the market price of either the INITIAL SHARES or
BALANCE OF SHARES delivered to the Xxxxxx X. Xxxxxx Irrevocable Trust is lower
than 70% of its market value on the date of issuance (the GUARANTEED PRICE),
then Purchaser shall pay the Xxxxxx X. Xxxxxx Irrevocable Trust the difference
between the average market price at the close of business of the five days
constituting the GUARANTEE PERIOD and the GUARANTEED PRICE in either cash or HPI
stock so that the market value of the HPI shares received by Seller for the
stock portion of the purchase price is no less than 70% percent of the market
value of said stock on the respective dates of issuance.
d) The initial shares and balance of shares shall be due
and payable even if Xxxxxx X. Xxxxxx, M.D. is not associated with Health
Professionals, Inc., for any reason, when said shares become due to be issued.
b. CLOSING AND CONDITION TO CLOSING.
i. CLOSING AND CLOSING DATE . The closing (the "Closing") shall
take place at the offices of the Purchaser, effective on the 1st day of April,
1996.
ii. CONDITION TO CLOSING. The Closing shall be subject to
satisfaction of the condition that (a) the representations and warranties of (i)
the Seller contained in Section 3 hereof, and (ii) the Purchaser contained in
Section 4 hereof are true and correct and shall be true and correct as of the
Closing Date; (b) the Seller shall have delivered to the Purchaser the items
required by Section 2.3 hereof; and (c) the Purchaser and the Seller shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed and complied with by such party prior to or as of the
Closing Date.
iii. DELIVERIES BY THE SELLER. At the Closing the Seller shall
deliver or cause to be delivered to the Purchaser a xxxx of sale for the assets
in form annexed hereto as Exhibit "C".
iv. DELIVERIES BY THE PURCHASER. At the Closing, the Purchaser
shall deliver or cause to be delivered to the Seller a copy of instructions to
the transfer agent directing the issuance of the INITIAL SHARES to the Xxxxxx X.
Xxxxxx Irrevocable Trust.
c. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
i. ORGANIZATION AND STANDING OF THE SELLER. The Seller is a pro-
fessional association duly organized, validly existing and in good standing
under the laws of the State of Illinois, and has clear title to the assets and
is entitled to sell said assets.
47
ii. AUTHORITY OF THE SELLER; CONSENTS; EXECUTION OF AGREEMENTS. The
Seller has all requisite power, authority, and capacity to enter into this
Agreement and to perform the transactions and obligations to be performed by it
hereunder. No consent, authorization, approval, license, permit or order of, or
filing with, any person or governmental authority is required in connection with
the execution of the transactions and obligations to be performed by it
hereunder. The execution and delivery of this Agreement, and the performance of
the transactions and obligations contemplated hereby by the Seller, have been
duly authorized by all requisite action of the Seller. This Agreement has been
duly executed and delivered by the Seller and constitutes a valid and legally
binding obligation of the Seller, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws.
D. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
1. AUTHORITY OF THE PURCHASER; CONSENTS; EXECUTION OF AGREEMENTS.
The Purchaser is a duly and properly formed corporation under the laws of the
State of Florida and has all requisite power, authority, and capacity to enter
into this Agreement and to perform the transactions and obligations to be
performed by it hereunder.
2. No consent, authorization, approval, license, permit or order of,
or filing with, any person or governmental authority is required in connection
with the execution of the transactions and obligations to be performed by it
hereunder. The execution and delivery of this Agreement, and the performance of
the transactions and obligations contemplated hereby by the Purchaser, have been
duly authorized by all requisite action of the Purchaser.
3. This Agreement has been duly executed and delivered by the
Purchaser and constitutes a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws.
4. Purchaser and HPI certifies that it has sufficient stock author-
ized to issue the INITIAL SHARES and balance of shares.
5. Purchaser and HPI certifies that all issuances of stock, as set
forth herein do not violate any rules or regulations of the SEC or shareholder
agreements.
E. EMPLOYMENT OF XXXXXX X. XXXXXX, M.D. Contemporaneously with the
closing, the Purchaser and Xxxxxx X. Xxxxxx, M.D. shall enter into the written
Employment Agreement annexed hereto, which cannot be rescinded or cancelled for
any reason, except cause as set forth therein.
F. COVENANT NOT TO COMPETE.
1. During the term of the Employment Agreement and for a period of
two (2) years thereafter, Xx. Xxxxxx shall not, directly or indirectly, (a)
divert or attempt to divert any business or patients of CSI to any other medical
practice or research facility in competition with CSI within the geographic area
48
of Xxxx County, Illinois or (b) solicit or induce employees of CSI to terminate
their employment with CSI and/or engage in any business in competition with the
business carried on by CSI.
2. Xxxxxx X. Xxxxxx, M.D. shall not, during the term of this
Agreement or any time thereafter, communicate or divulge to, or use for the
benefit of any other person, partnership, association, corporation or entity,
any confidential or proprietary information regarding CSI's research, protocols,
procedures, systems, techniques, formulas, inventions or other knowledge
concerning CSI, the Facilities or the research being conducted at the Facilities
or any of the services provided by CSI. Nothing contained in these restrictive
covenants shall prohibit Xxxxxx X. Xxxxxx, M.D. from conducting clinical
research at his discretion nor prohibit him from publishing the results of his
research.
3. During the term of the Employment Agreement and for a period of 2
years thereafter, Xxxxxx X. Xxxxxx, M.D. will not compete with, or, directly or
indirectly, own, manage, operate, control, loan money to, or participate in the
ownership, operation or control of, or be connected with as a director, partner,
consultant, agent, independent contractor or otherwise, or acquiesce in the use
of his name in any other business or organization which is in direct competition
with CSI as a for-profit provider of specialized services for the treatment of
HIV infection, Chronic Fatigue Syndrome and related diseases in the geographical
area of Xxxx County, Illinois provided, however, that Employee shall be
permitted after the cessation of his employment but during the Covenant Period
to own less than a 5% interest as a shareholder in any company which is listed
on any national securities exchange even though it may be in competition with
CSI.
G. MISCELLANEOUS.
1. COSTS AND EXPENSES. Each party agrees to pay its own costs and
expenses in connection with the preparation, execution and delivery of this
Agreement and any other instruments and documents to be delivered hereunder.
2. WAIVERS AND AMENDMENTS. This Agreement may be amended or modified
in whole or in part only by a writing which makes reference to this Agreement
and is executed by the parties to this Agreement. The obligations of any party
hereunder may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the party
claimed to have given the waiver; provided, however, that any waiver by any
party of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be constructed
as, or constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any provision of this Agreement or any
other agreement provided for herein.
3. INVALIDITY. the sale described in this Agreement shall be
determined to be invalid, illegal, or unenforceable, then the transaction shall
be null and void and the assets conveyed hereunder shall be returned to the
Seller and the Seller shall return all consideration paid by the Buyer whether
in stock, its cash equivalent or in cash upon terms mutually agreeable. In
addition, Buyer shall assign to Seller all accounts receivable which had not
49
been collected and all other monies received less office expenses for the
Chicago office, including rent, salaries for Chicago employees and office
supplies. If any other provision in this Agreement shall be determined to be
invalid, illegal or unenforceable, such provision shall not effect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
4. DEFAULT BY PURCHASER. In the event the Purchaser fails to pay
either the cash portion or stock portion of the purchase price when due and
fails to correct the failure within five days from the receipt of written notice
of default, than Seller shall be entitled to the return of all the patient files
and other assets sold hereunder and be relieved from the restrictive covenant
set forth in paragraph addition, Buyer shall assign to Seller all accounts
receivable of Seller's medical practice which had not been collected. In the
event of such default, Seller shall also retain all consideration paid and all
stock issued to the Xxxxxx X. Xxxxxx Irrevocable Trust as liquidated damages.
5. GOVERNING LAW. This Agreement shall in all respects be governed
by and constructed in accordance with the laws of the State of Florida without
giving effect to the principles of conflicts of law thereof.
6. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and be deemed to have been duly given if
personally delivered or five business days after being sent by recognized
overnight courier or confirmed facsimile to the parties at their respective
addresses set forth herein.
7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
8. SUCCESSORS AND ASSIGNS. Neither this Agreement, nor any of the
rights or obligations hereunder, shall be assigned by either party hereto
without the prior written consent of the other party hereto. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9. THIRD PARTIES. Nothing expressed or implied in this Agreement is
intended, or shall be constructed, to confer upon or give any person or entity
other than the parties hereto and their permitted assigns any rights or remedies
under or by reason of this Agreement.
10. EXHIBITS. The exhibits attached to this Agreement are
incorporated herein and shall be part of this Agreement for all purposes.
11. HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
50
IN WITNESS WHEREOF, the parties have duly executed, or have caused their
duly authorized officer or representative to execute, this Asset Purchase
Agreement as of the date first above written.
SELLER:
XXXXXX X. XXXXXX, M.D., LTD.
By:________/S/_______________
Xxxxxx X. Xxxxxx, M.D.
PURCHASER:
CSI ILLINOIS, INC., a Florida
corporation
By:________/S/________________
Xxxxxxx X. Xxxxxx, President
GUARANTOR:
HEALTH PROFESSIONALS, INC., a
Florida corporation
By:________/S/_________________
Xxxxxxx X. Xxxxxx, President
51
