Exhibit 10.5
BUY-BACK AGREEMENT
THIS BUY-BACK AGREEMENT (this "Agreement") is made and entered into as of
July 1, 1998 by and between ADVANCED PHYSICIAN BILLING INC., a Florida
corporation ("Repurchaser"); and NATIONAL MEDICAL FINANCIAL SERVICES
CORPORATION, a Nevada corporation ("NMFS").
W I T N E S S E T H:
WHEREAS, NMFS proposes to acquire substantially all of the assets of
Repurchaser, pursuant to that certain Asset Purchase Agreement dated as of the
even date hereof (the "Asset Purchase Agreement");
WHEREAS, in consideration for the delivery of assets pursuant to the Asset
Purchase Agreement, NMFS delivered to Repurchaser that certain Promissory Note
of NMFS dated as of the even date hereof in favor of Repurchaser for the
principal indebtedness amount of $1,649,000 (the "NMFS Note");
WHEREAS, Xxxxx Xxxxx, Sr. and Xxxxx Xxxxx, Jr. are shareholders of
Repurchaser (the "Shareholders");
WHEREAS, in conjunction with said asset purchase pursuant to the Asset
Purchase Agreement, NMFS has made and entered into certain Employment Agreements
with the Shareholders and with Xxxxxxx Xxxxx (the "Employment Agreements"),
certain Noncompetition Agreements with the Shareholders (the "Noncompetition
Agreements"), and that certain Lease (the "Lease"), each dated as of the even
date hereof;
WHEREAS, in conjunction with said asset purchase pursuant to the Asset
Purchase Agreement, NMFS has made a loan to Repurchaser in the amount of
$400,000, the repayment obligation of which loan is evidenced by that certain
Promissory Note of Repurchaser dated as of the even date hereof in favor of NMFS
for the principal indebtedness of $400,000 (the "Repurchaser Note");
WHEREAS, to induce Repurchaser to enter into said Asset Purchase Agreement,
NMFS and Repurchaser hereby agree that Repurchaser should have the right under
certain circumstances as set forth herein to reacquire the assets conveyed to
NMFS pursuant to the Asset Purchase Agreement;
NOW, THEREFORE, IN CONSIDERATION OF the premises and the covenants and
agreements contained herein, the parties hereto do hereby agree as follows:
Section 1. Buy-Back Right. In the event of any failure of
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NMFS to make any payment due pursuant to the NMFS Note (the "Event of Default")
and the failure by NMFS to cure such Event of Default within ten (10) days after
receipt of written notice thereof, then Repurchaser shall have the right (which
right may be exercised at any time within thirty (30) thereafter): (i) to
repurchase from NMFS all of the assets of Repurchaser acquired by NMFS pursuant
to the Asset Purchase Agreement, and (ii) to purchase from NMFS all of the
assets acquired by NMFS subsequent to the date hereof to replace any assets
described in preceding clause (i) for use at 0000 X.X. 00xx Xxxxxx, Xxxxx 000,
Xxxxx, XX 00000 (the assets described in the preceding clauses (i) and (ii)
being hereinafter referred to collectively as the "Assets").
Section 2. Repurchase Price. In the event that Repurchaser exercises the
buy-back right under Section 1 hereof, the purchase price (the "Purchase Price")
shall be One U.S. Dollar ($1.00) payable to NMFS for the Assets.
Section 3. Repurchase.
3.1 Closing. The "Closing" of the transfer of the Assets shall be held at
the offices of Repurchaser on the date (the "Closing Date") specified in the
notice exercising the buy-back right, said Closing Date to be no later than 60
days after the exercise of the buy-back right. At the Closing, NMFS will deliver
the Assets described in Section 1 hereof against payment of the Purchase Price
in cash. Effective upon consummation of the Closing, the NMFS Note, the
Repurchaser Note, the Employment Agreements, the Lease, and the Noncompetition
Agreement shall be terminated.
3.2 Xxxx of sale and Assignment. In conjunction with the execution of this
Agreement, NMFS hereby delivers to Xxxxxxxxxxx X. Xxxxx, Esq., as escrowee, an
executed Xxxx of Sale and Assignment in substantially the form attached hereto
as Exhibit "A", intended for the purposes of effecting the transfer of Assets
hereunder in the event of and subject to exercise of the buy-back right under
Section 1 hereof.
3.3 Standstill Obligation. From the date of receipt of any notice hereunder
of an Event of Default pursuant to Section 1 hereof until the Closing hereunder,
NMFS shall not mortgage, pledge or subject (whether or not voluntarily) to any
encumbrance, any of the Assets.
3.4 Further Acts and Assurances. From time to time and at any time, at
Repurchaser's request, whether on or after the Closing Date, and without further
consideration, NMFS' shall, at its expense, execute and deliver such further
documents and instruments of conveyance and transfer and shall take such further
actions (i) as may be reasonably necessary to transfer and convey to Repurchaser
all of the right, title and interest in and to the Assets, free and clear of any
encumbrance whatsoever, or (ii) as may be reasonably necessary to carry out the
intent of this Agreement and the transactions contemplated hereby.
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Section 4. Miscellaneous.
4.1 Expenses. All expenses of the preparation of this Agreement and of the
other agreements and transactions contemplated hereby, including, without
limitation, counsel fees, accounting fees, investment advisor's fees and
disbursements, shall be borne by the respective parties incurring such expense.
4.2 Notices. All notices, demands and other communications hereunder shall
be written and shall be deemed to have been duly given if delivered in person or
mailed by Federal Express (or other national air courier service), charges
prepaid, to the address set forth below:
To Repurchaser: Advanced Physician Billing Inc.
0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
with a copy to: Xxxxxxxxxxx X. Xxxxx, Esq.
000 X. Xxxxxxx Xxx., Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
To NMFS: National Medical Financial
Services Corporation
0000 Xxxx Xx., Xxxxx 000
Xxxxxx, XX 00000
with a copy to: Xxxxx X. Xxxxxxx & Associates, P.C.
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
or to such other address as NMFS or Repurchaser may designate by notice to the
other. Notices delivered in person shall be deemed delivered on the date of
delivery and notices sent via air courier service, as aforesaid, shall be deemed
delivered on the date of delivery as indicated by the records of the courier
service. Rejection or other refusal to accept or inability to deliver because of
a changed address of which no notice was given shall be deemed to be a receipt
of the notice, request or other communication. Any notice, request or other
communication required or permitted to be given by any party may be given by
such party's legal counsel.
4.3 Entire Agreement. This Agreement and the Exhibits, and the other
agreements and schedules and documents delivered pursuant hereto constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
letters of intent negotiations and discussions, whether written or oral, of the
parties, and there are no representations, warranties or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the parties to be bound
thereby.
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4.4 Governing Law; Arbitration. The validity and construction of this
Agreement shall be governed by the laws of the State of Florida. The parties
(meaning Repurchaser on one hand and NMFS on the other hand) agree that all
disputes concerning this Agreement or any of the other agreements executed and
delivered in connection with the Closing shall be submitted to binding
arbitration in accordance with the commercial arbitration rules of the American
Arbitration Association and the provisions contained herein. The arbitration
shall be conducted in Tampa, Florida, by one arbitrator. The party initiating
arbitration shall give the other party notice of the matter in dispute. If the
parties fail to agree upon an arbitrator within ten days after notice of
initiation of the arbitration is given, then the American Arbitration
Association shall select the arbitrator. All determinations and the final
decision of the arbitrator shall be made in writing. The fees and expenses of
the arbitrator shall be awarded by the arbitrator in his discretion as part of
the award. The arbitrator's award shall be binding on the parties hereto and may
be entered in any court of competent jurisdiction. The parties reserve the right
to seek a judicial temporary restraining order, preliminary injunction, or other
similar short term equitable relief prior to the appointment of the arbitrator.
The arbitrator will have the right to make a final determination of the parties'
rights including, without limitation, whether to make permanent, modify or
dissolve the judicial order.
4.5 Section and Exhibit Headings. The Section and Exhibit headings are for
reference only and shall not limit or control the meaning of any provisions of
this Agreement.
4.6 Waiver. No delay or omission on the part of any party hereto in
exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
4.7 Nature and Survival of Representations. All statements contained in any
certificate delivered by or on behalf of a party to this Agreement in connection
with the transactions contemplated hereby shall be deemed to be representations
and warranties made by such party hereunder. The covenants, representations and
warranties made by the parties each to the other in this Agreement or pursuant
hereto shall survive the Closing for the applicable period of the statute of
limitations.
4.8 Exhibits. All exhibits, schedules and documents referred to in or
attached to this Agreement are integral parts of this Agreement as if fully set
forth herein and all statements appearing therein shall be deemed to be
representations. All items disclosed hereunder shall be deemed disclosed only in
connection with the specific representation to which they are explicitly
referenced.
4.9 Amendments. This Agreement may be amended, but only in writing, signed
by the parties hereto.
4.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall comprise one and the same instrument.
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4.11 Nonarbitral Attorneys' Fees. In the event that a suit, action, or other
proceeding of any nature whatsoever (other than arbitration), including, without
limitation, any proceeding under the U.S. Bankruptcy Code and involving issues
peculiar to federal bankruptcy law, any action seeking a declaration of rights
or any action for rescission, is instituted to interpret or enforce this
Agreement or any provision of this Agreement, the prevailing party shall be
entitled to recover from the losing party the prevailing party's reasonable
attorneys', paralegals', accountants', and other experts' professional fees and
all other fees, costs, and expenses actually incurred and reasonably necessary
in connection therewith, as determined by the judge at trial or other
proceeding, or on any appeal or review, in addition to all other amounts
provided by law.
4.12 No Other Parties. Repurchaser acknowledges and agrees that the only
other party to this Agreement is NMFS and that Xxxxxxx X. Xxxxxxx, M.D.
individually is not a party, in any capacity to this Agreement.
4.13 Rules of Construction. All references herein to the singular shall
include the plural, and vice versa, and all references herein to the neuter
shall include the masculine or feminine, as the case may be, and vice versa.
When general words or terms are used herein followed by the word "including" (or
another form of the word "include") and words of particular and specific
meaning, the general words shall be construed in their widest extent, and shall
not be limited to persons or things of the same general kind or class as those
specifically mentioned in the words of particular and specific meaning. All
parties have participated in the drafting of this Agreement. No provision of
this Agreement shall be construed against or interpreted to the disadvantage of
a party by reason of such party having or being deemed to have drafted,
structured or dictated such provisions. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written,
ADVANCED PHYSICIAN BILLING INC.,
a Florida corporation ("Repurchaser")
By: /s/ Xxxxx Xxxxx, Sr.
-----------------------------------
Title: President
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NATIONAL MEDICAL FINANCIAL
SERVICES CORPORATION, a Delaware
corporation ("NMFS")
By: /s/ Xxxxxxx X. Xxxxxxx, M.D.
-----------------------------------
Title: CEO
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