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ASSET PURCHASE AGREEMENT
BETWEEN
BMJ MEDICAL MANAGEMENT, INC.
AND
BROWARD INSTITUTE OF ORTHOPAEDIC SPECIALTIES, P.A.
Effective as of September 1, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I TRANSFER OF PURCHASED ASSETS, ASSUMPTION OF
LIABILITIES AND RELATED MATTERS .............................. 2
1.1. Transfer of Assets ........................................... 2
1.2. Assets Not Being Transferred ................................. 3
1.3. Liabilities Being Assumed .................................... 3
1.4. Liabilities Not Being Assumed ................................ 3
1.5. Instruments of Conveyance and Transfer, Etc .................. 3
1.6. Further Assurances ........................................... 4
1.7. Assignment of Leases ......................................... 5
1.8. Condition of Purchased Assets ................................ 5
ARTICLE II PURCHASE PRICE; ALLOCATION ................................... 5
2.1. Purchase Price; Payment ...................................... 5
2.2. Allocation of Purchase Price ................................. 6
2.3. Accounts Receivable .......................................... 6
ARTICLE III REPRESENTATIONS AND WARRANTIES ............................... 7
3.1. Representations and Warranties of the Seller ................. 7
3.2. Representations and Warranties of the Buyer .................. 11
ARTICLE IV CONDITIONS TO CLOSING ........................................ 13
4.1. Conditions to Each Party's Obligations ....................... 13
4.2. Conditions to Obligations of the Buyer ....................... 13
4.3. Conditions to Obligations of the Seller ...................... 14
4.4. Related Agreements ........................................... 15
ARTICLE V CLOSING ...................................................... 16
5.1. Date ......................................................... 16
5.2. Closing Transactions ......................................... 16
ARTICLE VI INDEMNIFICATION .............................................. 18
6.1. Definitions .................................................. 18
6.2. Indemnification Generally .................................... 19
6.3. Assertion of Claims .......................................... 20
6.4. Notice and Defense of Third Party Claims ..................... 20
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6.5. Survival of Representations, Warranties and Covenants ........ 22
ARTICLE VII NON-COMPETITION .............................................. 22
ARTICLE VIII REPURCHASE OF ASSETS ......................................... 22
ARTICLE IX AMENDMENT, MODIFICATION AND WAIVER ........................... 23
ARTICLE X MISCELLANEOUS ................................................ 23
10.1. Transfer Taxes, Etc .......................................... 23
10.2. Entire Agreement ............................................. 23
10.3. Descriptive Headings ......................................... 24
10.4. Notices ...................................................... 24
10.5. Counterparts ................................................. 25
10.6. Bulk Sales Compliance ........................................ 25
10.7. Governing Law; Jurisdiction .................................. 25
10.8. Attorneys' Fees .............................................. 26
10.9. Benefits of Agreement ........................................ 26
10.10 Pronouns ..................................................... 26
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EXHIBITS
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Exhibit A - Xxxx of Sale
Exhibit B - Assignment and Assumption Agreement
Exhibits C-1 and C-1 - Promissory Notes
SCHEDULES
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1.1(a) - Medical Equipment
1.1(b) - Furniture, Furnishings, Trade
Fixtures, and Office Equipment
1.1(c) - Equipment Leases
1.1(d) - Supplies
1.1(e) - Office Leases
1.1(f) - Deposits
1.1(g) - Additional Items
2.2 - Allocation of Purchase Price
3.1(b) - Seller Consents
3.1(c) - Claims
3.1(d) - Litigation
3.2(b) - Buyer Consents
Definitions
The following terms which may appear in more than one Section of this Agreement
are defined at the following pages:
TERM PAGE
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Accounts Receivable .................................................... 6
Affiliate .............................................................. 18
Appraisal Period ....................................................... 6
Assignment and Assumption Agreement .................................... 4
Assumed Obligations .................................................... 3
Xxxx of Sale ........................................................... 4
bulk sales laws ........................................................ 18
Business Day ........................................................... 25
Buyer .................................................................. 1
Buyer Indemnification Event ............................................ 18
Buyer Indemnified Persons .............................................. 19
Bylaws ................................................................. 7
Certificate of Incorporation ........................................... 7
Claims ................................................................. 9
Closing ................................................................ 16
Closing Date ........................................................... 16
Excluded Assets ........................................................ 3
Excluded Obligations ................................................... 3
Fixed Assets ........................................................... 5
Indemnified Persons .................................................... 19
Indemnifying Person .................................................... 19
Losses ................................................................. 19
Management Services Agreement .......................................... 1
New Appraisal .......................................................... 6
Permitted Liens ........................................................ 9
Purchase Price ......................................................... 5
Purchased Assets ....................................................... 2
Related Agreements ..................................................... 13
Seller ................................................................. 1
Seller Indemnification Event ........................................... 19
Seller Indemnified Persons ............................................. 19
Signature Date ......................................................... 1
Statement of Allocation ................................................ 6
Subject Business ....................................................... 1
THIS ASSET PURCHASE
AGREEMENT is entered into on
October 31, 1997 (the "Signature
Date"), effective as of September
1, 1997, between BMJ MEDICAL
MANAGEMENT, INC., a Delaware
corporation (the "Buyer"), and
BROWARD INSTITUTE OF ORTHOPAEDIC
SPECIALTIES, P.A., a Florida
professional association (the
"Seller").
A. The Seller is engaged in the business (the "Subject Business") of
providing orthopedic medical and surgical services and related medical and
ancillary services to patients.
B. The Buyer is engaged in the business of providing management,
administrative, financial, marketing, information technology, and related
services to professional medical organizations.
C. Concurrently herewith, the Seller and the Buyer are entering into a
Management Services Agreement (the "Management Services Agreement"), pursuant to
which the Buyer will furnish to the Seller management, administrative, and
related services.
D. The Seller desires to sell, transfer, convey and assign to the Buyer and
the Buyer desires to purchase from the Seller, certain of the assets,
properties, interests in properties and rights of the Seller used in the Subject
Business upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereby agree as follows:
ARTCILE I
TRANSFER OF PURCHASED ASSETS, ASSUMPTION OF
LIABILITIES AND RELATED MATTERS
1.1. Transfer of Assets.
On the terms and subject to the conditions of this Agreement, at the
Closing (as hereinafter defined), the Seller shall sell, transfer, convey and
assign to the Buyer, and the Buyer shall purchase, assume, and accept from the
Seller, the following assets, properties, interests in properties and rights of
the Seller (the "Purchased Assets"), as the same shall exist immediately prior
to the Closing, free and clear of all Claims (as defined below) (except
Permitted Liens (as defined below)):
(a) the medical equipment owned by the Seller and listed on Schedule
1.1(a);
(b) the furniture, furnishings, trade fixtures, and office equipment
owned by the Seller and listed on Schedule 1.1(b);
(c) the Seller's rights and interests under the equipment leases
identified on Schedule 1.1(c), subject to the Buyer's assumption of the
obligations accruing thereunder as provided in Section 1.3;
(d) the supplies described on Schedule 1.1(d);
(e) the Seller's rights and interests under the office leases
identified in Schedule 1.1(e), subject to the Buyer's assumption of the
obligations accruing thereunder as provided in Section 1.3;
(f) the deposits identified on Schedule 1.1(f); and
(g) any additional items identified on Schedule 1.1(g).
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1.2. Assets Not Being Transferred.
All assets, properties, interests in properties, and rights of the Seller
not expressly identified in Section 1.1 or the Schedules referenced therein (the
"Excluded Assets") are expressly excluded from the assets of the Seller being
sold, assigned, or otherwise transferred to the Buyer.
1.3. Liabilities Being Assumed.
Except as otherwise provided herein and subject to the terms and conditions
of this Agreement, simultaneously with the sale, transfer, conveyance and
assignment to the Buyer of the Purchased Assets, the Buyer shall assume, and
hereby agrees to pay when due, those liabilities accruing after the Closing Date
(as hereinafter defined) under the equipment leases identified in Schedule
1.1(c) and the office leases identified in Schedule 1.1(e) (the "Assumed
Obligations"); provided, however, that any and all obligations and liabilities
arising under any such lease as of or prior to the Closing Date and any and all
obligations and liabilities arising out of or in connection with the Seller's
breach of any such lease shall, in each case, remain the obligations and
liabilities of the Seller.
1.4. Liabilities Not Being Assumed.
The Buyer is not assuming any liabilities or obligations of the Seller
(fixed or contingent, known or unknown, matured or unmatured) whatsoever other
than the Assumed Obligations. For convenience of reference, all liabilities and
obligations of the Seller not being assumed by the Buyer are collectively
referred to as the "Excluded Obligations." The Seller hereby agrees to pay all
Excluded Obligations as and when such Excluded Obligations become due.
1.5. Instruments of Conveyance and Transfer, Etc.
At the Closing, the Seller shall deliver (or cause to be delivered) to the
Buyer such deeds, bills of sale,
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endorsements, assignments and other good and sufficient instruments of sale,
transfer, conveyance and assignment as shall be necessary to sell, transfer,
convey and assign to the Buyer, in accordance with the terms hereof, title to
the Purchased Assets, free and clear of all Claims (except Permitted Liens),
including, without limitation, the delivery of a Xxxx of Sale (the "Xxxx of
Sale") substantially in the form of Exhibit A attached hereto and the delivery
of an Assignment and Assumption Agreement (the "Assignment and Assumption
Agreement") substantially in the form of Exhibit B attached hereto.
Simultaneously therewith, the Seller shall take all steps as may be reasonably
required to put the Buyer in possession and operating control of the Purchased
Assets.
1.6. Further Assurances.
The Seller shall pay or cause to be paid to the Buyer promptly any amounts
which shall be received by the Seller after the Closing which constitute
Purchased Assets. The Seller shall, at any time and from time to time after the
Closing, upon the reasonable request of the Buyer, execute, acknowledge, deliver
and file, or cause to be executed, acknowledged, delivered or filed, and perform
or cause to be performed all such further acts, transfers, conveyances,
assignments or assurances as may reasonably be required for better selling,
transferring, conveying, assigning and assuring to the Buyer, or for aiding and
assisting in the collection of or reducing to possession by the Buyer, any of
the assets, properties, interests in properties or rights being purchased by the
Buyer hereunder. Any reasonable expenses incurred in connection with the
foregoing shall be borne by the Seller; provided that such expenses shall not
exceed $10,000 nor shall the provisions of this Section be interpreted to
require that the Seller litigate, arbitrate or mediate any matters pursuant
hereto.
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1.7. Assignment of Leases.
Anything contained in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement or attempted agreement to assign any
office lease or equipment lease if an attempted assignment thereof, without the
consent of any other party thereto, would constitute a breach thereof or in any
way affect the rights of the Buyer or the Seller thereunder. The Seller shall
use its best efforts, and the Buyer shall cooperate with the Seller, to obtain
the consent of any such third party to the assignment thereof to the Buyer. If
such consent is not obtained, the Seller shall cooperate with the Buyer in any
arrangements reasonably necessary or desirable to provide for the Buyer the
benefits (together with the obligations to perform) thereunder.
1.8. Condition of Purchased Assets.
The Buyer acknowledges that the Seller makes no representations or
warranties, express or implied, as to any matter whatsoever relating to the
Purchased Assets, except for the representations and warranties expressly set
forth in this Agreement, and except as set forth expressly herein, the condition
of the Purchased Assets shall be "as is" and "where is".
ARTICLE II
PURCHASE PRICE; ALLOCATION
2.1. Purchase Price; Payment.
The purchase price (the "Purchase Price") to be paid for the Purchased
Assets shall equal $2,691,562.70. A portion of the Purchase Price for the assets
described as "Medical Equipment, Furniture, Furnishings, Trade Fixtures, and
Other Equipment" on Schedule 2.2 hereof (collectively, the "Fixed Assets") was
computed based upon the value of the Purchased Assets determined by an appraisal
of the Fixed Assets performed
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prior to the date hereof at the request of the Seller. Notwithstanding the
foregoing, the Seller shall have the right, exercisable on or before November
14, 1997 (the "Appraisal Period"), to have a second appraisal (the "New
Appraisal") done on the Fixed Assets. The parties hereto agree that in the event
the Seller elects to have such New Appraisal done within the Appraisal Period,
and such New Appraisal reflects a different value for the Fixed Assets, the
parties will adjust the Purchase Price (either upward or downward as
appropriate) based upon such New Appraisal; provided that in no event shall the
Purchase Price be adjusted by more than $46,500. In the event of such a change
in the Purchase Price, the principal amount of Note No. 2 (as hereinafter
defined) and the amount of the Purchase Price allocated to the Fixed Assets on
Schedule 2.2 hereof shall each be deemed changed accordingly, effective as of
the Signature Date.
2.2. Allocation of Purchase Price.
The Purchase Price shall be allocated among the Purchased Assets in a
statement (the "Statement of Allocation") reflecting the allocation set forth in
Schedule 2.2 attached hereto. The parties shall complete their respective tax
returns for the period which includes the Closing Date in a manner that is
consistent with the Statement of Allocation.
2.3. Accounts Receivable.
(a) All of the Seller's accounts receivable and other rights to
payment existing as of the close of business on August 31, 1997 and any
amounts owing to the Seller for services provided through such date
(collectively, the "Accounts Receivable") shall remain the property of the
Seller. The Buyer agrees to use its reasonable best efforts (which shall
not require the institution or participation in any litigation) to collect
the Seller's Accounts Receivable in the normal and ordinary course of
business and shall cooperate in all reasonable
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respects with the Seller's efforts to collect the Accounts Receivable. The
Buyer agrees to promptly, but at least monthly, account for and pay to the
Seller all monies paid to or received by the Buyer in respect of the
Accounts Receivable.
(b) All payments by patients and third-party payors shall be accounted
for on a first in-first out basis unless any such payment is identified as
a payment in respect of a particular invoice or otherwise is designated as
payment of a particular invoice or for a particular service.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Buyer, as of the Signature
Date, as follows:
(a) Organization; Good Standing; Qualification and Power. The Seller
is a professional association duly formed, validly existing and in good
standing under the laws of the State of Florida and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted and as proposed to be conducted, to execute
and deliver this Agreement, the Xxxx of Sale and the Assignment and
Assumption Agreement, to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
Seller has delivered to the Buyer a true and correct copy of its articles
of incorporation (the "Articles of Incorporation") and its bylaws (the
"Bylaws"), each as in effect on the date hereof.
(b) Authority. The execution, delivery and performance of this
Agreement, the Xxxx of Sale and the Assignment and Assumption Agreement and
the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action the
part of the Seller. This Agreement, the Xxxx of Sale and the
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Assignment and Assumption Agreement have been duly and validly executed and
delivered by the Seller and constitute legal, valid and binding obligations
of the Seller enforceable in accordance with their respective terms, except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally. Neither the execution, delivery or performance by the
Seller of this Agreement, the Xxxx of Sale or the Assignment and Assumption
Agreement nor the consummation by the Seller of the transactions
contemplated hereby or thereby, nor compliance by the Seller with any
provision hereof or thereof will (i) conflict with or result in a breach of
any provisions of the Articles of Incorporation or Bylaws of the Seller,
(ii) cause a default (with due notice, lapse of time or both), or give rise
to any right of termination, cancellation or acceleration, under any of the
terms, conditions or provisions of any note, bond, lease, mortgage,
indenture, license or other instrument, obligation or agreement to which
the Seller is a party or by which it or any of its respective properties or
assets may be bound or (iii) violate any law, statute, rule or regulation
or order, writ, judgment, injunction or decree of any court, administrative
agency or governmental body applicable to the Seller or any of its
properties or assets. Except as set forth on Schedule 3.1(b), no permit,
authorization, consent or approval of or by, or any notification of or
filing with, any person (governmental or private) is required in connection
with the execution, delivery or performance by the Seller of this
Agreement, the Xxxx of Sale or the Assignment and Assumption Agreement or
the consummation of the transactions contemplated hereby or thereby.
(c) Title to Assets, Properties, Interest in Properties and Rights and
Related Matters.
(i) The Seller has good and valid title to all of the Purchased
Assets, free and clear of all security interests, judgments, liens,
pledges, claims, charges, escrows, encumbrances, easements, options,
rights of first refusal, rights of first offer, mortgages, indentures,
security agreements or
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other agreements, arrangements, contracts, commitments, understandings
or obligations, whether written or oral and whether or not relating in
any way to credit or the borrowing of money (collectively, "Claims"),
of any kind or character, except for (A) those Claims set forth on
Schedule 3.1(c) and (B) Permitted Liens.
(ii) There does not exist any condition which materially
interferes with the economic value or use (consistent with the
Seller's past practice) of any tangible personal property included in
the Purchased Assets and such property is in good operating condition
and repair, reasonable wear and tear excepted.
(iii) The Seller has the complete and unrestricted power and the
unqualified right to sell, transfer, convey and assign, and the Seller
is hereby selling, transferring, conveying and assigning to the Buyer,
the Purchased Assets free and clear of all Claims except the Permitted
Liens.
(iv) As used in this Agreement, "Permitted Liens" shall mean (A)
any lien for current taxes not yet due and payable, (B) liens of
carriers, warehousemen, mechanics and materialmen created in the
ordinary course of the Subject Business for amounts not yet due and
payable which do not materially detract from the value or impair the
use of any property or assets, (C) in the case of Purchased Assets,
liens incurred in the ordinary course of the Subject Business
(including, without limitation, surety bonds and and appeal bond) in
connection with workers' compensation, unemployment insurance and
other types of social security benefits and (D) statutory landlord
liens securing rents not yet due and payable.
(d) Litigation. Except as set forth on Schedule 3.1(d), there are no
(i) actions, suits, claims, investigations or legal or administrative or
arbitration proceedings pending or, to the best knowledge of the Seller,
threatened against the Seller, the Purchased Assets or the Subject
Business, whether at
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law or in equity, or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality or (ii) judgments, decrees, injunctions or orders of any
court, governmental department, commission, agency, instrumentality or
arbitrator against the Seller or affecting the Purchased Assets or the
Subject Business. The Seller has delivered to the Buyer all documents and
correspondence relating to matters referred to in said Schedule 3.1(d).
(e) Compliance; Governmental Authorizations. To the best of its
knowledge, the Seller has complied in all material respects with all
applicable Federal, state, local or foreign laws, ordinances, regulations
and orders. The Seller has all Federal, state, local and foreign
governmental licenses and permits necessary in the conduct of the Subject
Business the lack of which would have a material adverse effect on the
Seller's ability to operate the Subject Business after the Closing Date on
substantially the same basis as presently operated, such licenses and
permits are in full force and effect, no violations are or have been
recorded in respect of any thereof and no proceeding is pending or, to the
Seller's best knowledge, threatened to revoke or limit any thereof. None of
such licenses and permits shall be affected in any material respect by the
transactions contemplated hereby.
(f) Disclosure. Neither this Agreement (including the Exhibits and
Schedules attached hereto), the Xxxx of Sale, the Assignment and Assumption
Agreement nor any other document, certificate or written statement
furnished to the Buyer by or on behalf of the Seller in connection with the
transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading.
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3.2. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller, as of the Signature Date
hereof, as follows:
(a) Organization, Good Standing and Power. The Buyer (i) is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) has all requisite corporate power and
authority to own, lease and operate its properties, to carry on its
business as now being conducted, to execute and deliver this Agreement and
the Assignment and Assumption Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby.
(b) Authority. The execution, delivery and performance of this
Agreement and the Assignment and Assumption Agreement, and the consummation
of the transactions contemplated hereby and thereby, have been duly and
validly authorized by all necessary corporate action on the part of the
Buyer. This Agreement and the Assignment and Assumption Agreement have been
duly and validly executed and delivered by the Buyer, and constitute legal,
valid and binding obligations of the Buyer, enforceable in accordance with
their respective terms except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally. Neither the execution,
delivery or performance by the Buyer of this Agreement or the Assignment
and Assumption Agreement nor the consummation by the Buyer of the
transactions contemplated hereby or thereby, nor compliance by the Buyer
with any provision hereof or thereof, will (i) conflict with or result in a
breach of any provisions of the Certificate of Incorporation or By-laws of
the Buyer, (ii) cause a default (with due notice, lapse of time or both),
or give rise to any right of termination, cancellation or acceleration,
under any of the terms, conditions or provisions of any material note,
bond, lease, mortgage, indenture, license or other instrument, obligation
or agreement to which the Buyer is a party or by which
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it or any of its properties or assets is or may be bound or (iii) violate
any law, statute, rule or regulation or order, writ, judgment, injunction
or decree of any court, administrative agency or governmental body
applicable to the Buyer or any of its properties or assets. Except as set
forth on Schedule 3.2(b), no permit, authorization, consent or approval of
or by, or any notification of or filing with, any person (governmental or
private) is required in connection with the execution, delivery or
performance by the Buyer of this Agreement or the Assignment and Assumption
Agreement or the consummation by the Buyer of the transactions contemplated
hereby or thereby.
(c) Litigation. Except as set forth on Schedule 3.2(c), there are no
(i) actions, suits, claims, investigations or legal or administrative or
arbitration proceedings pending or, to the best knowledge of the Buyer,
threatened against the Buyer, whether at law or in equity, or before or by
any Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality or (ii) judgments, decrees,
injunctions or orders of any court, governmental department, commission,
agency, instrumentality or arbitrator against the Buyer. The Buyer has
delivered to the Seller all documents and correspondence relating to
matters referred to in said Schedule 3.2(c).
(d) Compliance; Governmental Authorizations. To the best of its
knowledge, the Buyer has complied in all material respects with all
applicable Federal, state, local or foreign laws, ordinances, regulations
and orders.
(e) Disclosure. Neither this Agreement (including the Exhibits and
Schedules attached hereto), the Assignment and Assumption Agreement nor any
other document, certificate or written statement furnished to the Seller by
or on behalf of the Buyer in connection with the transactions contemplated
hereby contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein
and therein not misleading.
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ARTICLE IV
CONDITIONS TO CLOSING
4.1. Conditions to Each Party's Obligations.
The obligations of the Seller to sell the Purchased Assets, and of the
Buyer to purchase the Purchased Assets, are subject to the satisfaction of the
following conditions unless waived in writing (to the extent such conditions can
be waived by the Seller or the Buyer, as applicable):
(a) Legal Action. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the
consummation of the transactions contemplated hereby shall have been issued
by any Federal or state court and remain in effect. Each party agrees to
use its reasonable best efforts to have any such injunction or order
lifted.
(b) Legislation. No Federal, state, local or foreign statute, rule or
regulation shall have been enacted which prohibits, restricts or delays the
consummation of the transactions contemplated by this Agreement or any of
the conditions to the consummation of such transactions.
(c) Related Agreements. Each of the related agreements identified in
Section 4.4 hereof (collectively, the "Related Agreements") shall have been
fully executed and delivered prior to or at the Closing by all of the
parties required to execute and deliver such agreements.
4.2. Conditions to Obligations of the Buyer.
The obligation of the Buyer to purchase the Purchased Assets is subject to
the satisfaction of the following conditions unless waived in writing (to the
extent such conditions can be waived) by the Buyer:
(a) Representations and Warranties. The representations and warranties
of the Seller set forth in Section 3.1 shall in each case be true and
correct in all material
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respects as of the Closing Date and as of the Signature Date as though made
at and as of the Signature Date.
(b) Performance of Obligations. The Seller shall have performed all
obligations required to be performed by it under this Agreement prior to
and at the Closing.
(c) Authorization. All action necessary to authorize the execution,
delivery and performance of this Agreement, the Xxxx of Sale and the
Assignment and Assumption Agreement by the Seller and the consummation of
the transactions contemplated hereby and thereby shall have been duly and
validly taken by the Seller and the Seller shall have full power and right
to consummate the transactions contemplated hereby and thereby.
(d) Consents and Approvals. The Seller shall have delivered to the
Buyer duly executed copies of (i) consents to the assignment of the
equipment leases and office leases listed on Schedule 1.1(c) and Schedule
1.1(e), and (ii) all other approvals, if any, required by this Agreement or
the Schedules, in each case in form and substance satisfactory to the Buyer
and counsel to the Buyer.
(e) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with,
any Federal, state, local or foreign governmental commission, board or
other regulatory body which are required for or in connection with the
execution and delivery by the Seller of this Agreement, the Xxxx of Sale
and the Assignment and Assumption Agreement and the consummation by the
Seller of the transactions contemplated hereby and thereby shall have been
obtained or made.
4.3. Conditions to Obligations of the Seller.
The obligation of the Seller to sell the Purchased Assets to the Buyer is
subject to the satisfaction of the
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following conditions unless waived in writing (to the extent such conditions can
be waived) by the Seller:
(a) Representations and Warranties. The representations and warranties
of the Buyer set forth in Section 3.2 shall in each case be true and
correct in all material respects as of the Closing Date and as of the
Signature Date as though made at and as of the Signature Date.
(b) Performance of Obligations. The Buyer shall have performed all
obligations required to be performed by it under this Agreement prior to
and at the Closing.
(c) Authorization. All action necessary to authorize the execution,
delivery and performance of this Agreement and the Assignment and
Assumption Agreement by the Buyer and the consummation of the transactions
contemplated hereby and thereby shall have been duly and validly taken by
the Buyer.
(d) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with,
any Federal, state, local or foreign governmental commission, board or
other regulatory body which are required for or in connection with the
execution and delivery by the Buyer of this Agreement and the Assignment
and Assumption Agreement and the consummation by the Buyer of the
transactions contemplated hereby and thereby shall have been obtained or
made.
4.4 Related Agreements.
The Related Agreements referred to in this Agreement consist of the
following:
(a) the Management Services Agreement between the parties hereto;
(b) the Restricted Stock Agreements between the Buyer and each of the
physicians receiving capital stock of the Buyer as of the date hereof,
respectively;
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(c) the Stockholder Non-Competition Agreements among the Seller, the
Buyer, and each of the physicians receiving capital stock of the Buyer as
of the date hereof, respectively;
(d) the Assignment of Office Leases, relating to each of the medical
office premises identified on Schedule 1.1(e), between the parties hereto;
(e) the Xxxx of Sale executed by the Seller; and
(f) the Assignment and Assumption Agreement between the Seller and the
Buyer.
ARTICLE V
CLOSING
5.1. Date.
The closing (the "Closing") for the consummation of the transactions
contemplated by this Agreement shall be deemed to have taken place at 12:01 a.m.
on September 1, 1997 (the "Closing Date"), irrespective of the actual date(s)
and time(s) that all of the documents required hereunder are executed and
delivered.
5.2. Closing Transactions.
At the Closing, the parties shall take the actions and deliver the
documents identified in this Section 5.2. The Closing shall not be deemed to
have taken place, and the transactions contemplated by this Agreement shall not
be deemed to have been consumated, unless all of the closing transactions
identified in this Section 5.2 have been completed or waived in writing by the
parties.
(a) The Seller shall deliver to the Buyer an executed copy of the Xxxx
of Sale;
(b) Each of the parties shall execute and deliver to the other a copy
of the Assignment and Assumption Agreement;
(c) Buyer shall deliver to the Seller the Purchase Price by (i) wire
transfer to the Seller's account of
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immediately available funds of $95,311.00; (ii) delivery of a promissory
note in the principal amount of $1,334,041.76, substantially in the form of
Exhibit C-1 attached hereto and (iii) delivery of a promissory note in the
principal amount of $1,262,209.94 (subject to adjustment as provided in
Section 2.1 hereof), substantially in the form of Exhibit C-2 attached
hereto. In addition, the Buyer shall wire transfer to the Seller's account
$24,000 to reimburse a portion of the Seller's legal fees.
(d) Each of the parties shall execute and deliver to the other a fully
executed copy of the Management Services Agreement;
(e) The Seller shall deliver Restricted Stock Agreements to the Buyer
executed by each of the physicians receiving capital stock of the Buyer as
of the date hereof, respectively, and the Buyer shall execute and deliver
to the Seller Restricted Stock Agreements for each of the physicians
receiving capital stock of the Buyer as of the date hereof, respectively.
(f) The Buyer shall deliver to the physicians receiving capital stock
of the Buyer as of the date hereof stock certificates issued in their
respective names as required under the terms of the Restricted Stock
Agreements; and
(g) The Seller shall deliver to the Buyer Stockholder Non-Competition
Agreements executed by each of the physicians receiving capital stock of
the Buyer as of the date hereof; and
(h) The Seller shall deliver to the Buyer a copy of the resolutions of
the Seller authorizing the transactions contemplated hereby, accompanied by
a certificate of the Seller stating that such resolution has been duly
adopted in accordance with the Seller's Articles of Incorporation and
Bylaws.
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ARTICLE VI
INDEMNIFICATION
6.1 Definitions
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Affiliate", as to any person, means any other person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such person.
(b) "Buyer Indemnification Event" shall mean the following:
(i) (A) the untruth, inaccuracy or breach of any representation
or warranty of the Seller contained in this Agreement, any Schedule or
Exhibit attached hereto, the Xxxx of Sale, the Assignment and
Assumption Agreement or any certificate delivered by the Seller in
connection herewith (or any facts or circumstances constituting any
such untruth, inaccuracy or breach) or (B) the breach of any agreement
or covenant of the Seller contained in this Agreement, the Xxxx of
Sale, or the Assumption or Assignment Agreement;
(ii) the assertion against any Buyer Indemnified Person of any
liability or obligation arising from, relating to, or in any way
connected with the operation of the Subject Business at any time prior
to the Closing;
(iii) the assertion against any Buyer Indemnified Person of any
liability or obligation arising from, relating to, or in any way
connected with any Excluded Obligation; and
(iv) any non-compliance by the Seller with the "bulk sales laws"
of Florida to the extent that such laws are in effect and may be
applicable to the transactions contemplated hereby.
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(c) "Buyer Indemnified Persons" shall mean and include the Buyer, its
Affiliates and their respective officers, directors, and employees.
(d) "Indemnified Persons" shall mean the Buyer Indemnified Persons or
the Seller Indemnified Persons, as the case may be.
(e) "Indemnifying Person" shall mean the Buyer or the Seller, as the
case may be.
(f) "Losses" shall mean any and all losses, claims, damages,
liabilities, expenses (including reasonable attorneys' and accountants'
fees), assessments, tax deficiencies and taxes (including interest or
penalties thereon) sustained, suffered or incurred by any Indemnified
Person arising from any matter which is the subject of indemnification
under Section 6.2.
(g) "Seller Indemnification Event" shall mean (i) the untruth,
inaccuracy or breach of any representation or warranty of the Buyer
contained in this Agreement, any Schedule or Exhibit attached hereto, the
Assignment and Assumption Agreement or any certificate delivered by the
Buyer in connection herewith (or any facts or circumstances constituting
any such untruth, inaccuracy or breach) or (ii) the breach of any agreement
or covenant of the Buyer contained in this Agreement or the Assignment and
Assumption Agreement, including, without limitation, the assertion against
the Seller or any Seller Indemnified Person of any liability or obligation
arising from, relating to, or in any way connected with any Assumed
Obligation.
(h) "Seller Indemnified Persons" shall mean and include the Seller and
its equity owners, directors, officers and employees.
6.2. Indemnification Generally.
(a) The Seller shall indemnify, defend and hold harmless the Buyer
Indemnified Persons, and each of them, from
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and against any and all Losses resulting from Buyer Indemnification Events.
(b) The Buyer shall indemnify, defend and hold harmless the Seller
Indemnified Persons, and each of them, from and against any and all Losses
resulting from Seller Indemnification Events.
(c) The parties hereto agree that in the event of a conflict between
the terms of this Article VI and the terms of the Management Services
Agreement, the terms and provisions of the Management Services Agreement
shall prevail.
6.3. Assertion of Claims.
No claim, demand, suit or cause of action shall be brought under Section
6.2 unless the Indemnified Persons, or any of them, give the Indemnifying Person
written notice of the existence of any such claim, demand, suit or cause of
action, stating with particularity the nature and basis of said claim, and the
amount thereof, to the extent known, and providing to the extent reasonably
available all written documentation relating thereto. Such written notice shall
be delivered to the Indemnifying Person as soon as practicable upon receipt of
actual knowledge of such claim, demand, suit or cause of action; provided,
however, that the failure to provide such written notice shall not affect the
Indemnified Persons' right to indemnification hereunder if failure to provide
such written notice does not materially adversely affect the Indemnifying
Person. Upon the giving of such written notice as aforesaid, the Indemnified
Persons, or any of them, shall have the right to commence legal proceedings
subsequent to the applicable survival date, if any, for the enforcement of their
rights under Section 6.2.
6.4. Notice and Defense of Third Party Claims.
(a) In the event any action, suit or proceeding is brought by a third
party against an Indemnified Person, with
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respect to which an Indemnifying Person may have liability under Section
6.2, the action, suit or proceeding shall, upon the written agreement of
the Indemnifying Person that it is obligated with respect to such action,
suit or proceeding, be defended (including all proceedings on appeal or for
review which counsel for the defendant shall deem appropriate) and, unless
otherwise provided below, controlled by such Indemnifying Person. The
Indemnified Persons shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Persons, unless (i) the employment of such
counsel shall have been authorized in writing by the Indemnifying Person in
connection with the defense of such action, suit or proceeding, (ii) the
Indemnifying Person shall fail actively and diligently to defend such
action, suit or proceeding, or (iii) the Indemnified Persons shall have
reasonably concluded that there may be one or more legal or equitable
defenses available to the Indemnified Persons which are different from or
additional to those available to the Indemnifying Person, in any of which
events the Indemnifying Person shall not have the right to direct the
defense of such action, suit or proceeding on behalf of the Indemnified
Persons and that portion of any fees and expenses of counsel related to
matters covered by the indemnity agreement and contained in Section 6.2
shall be borne by the Indemnifying Person. The Indemnified Persons shall be
kept fully informed of such action, suit or proceeding at all stages
thereof whether or not they are so represented. The Indemnifying Person
shall make available to the Indemnified Persons and their attorneys and
accountants all books and records of the Indemnifying Person relating to
such action, suit or proceeding and the parties hereto agree to render to
each other such assistance as they may reasonably require of each other in
order to ensure the proper and adequate defense of any such action, suit or
proceeding.
(b) The Indemnifying Person shall not make any settlement of any
action, suit or proceeding without the written
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consent of the Indemnified Persons, which consent shall not be unreasonably
withheld; provided, however, that in the event the Indemnified Persons
refuse to consent to a settlement acceptable to the Indemnifying Person
which is capable of settlement by the payment of money only and the
Indemnifying Persons shall demonstrate to the reasonable satisfaction of
the Indemnified Persons their ability to pay such amount, the Indemnifying
Person may pay the amount of the proposed settlement to the Indemnified
Persons and shall thereupon be released from any further liability with
respect to such action, suit or proceeding.
6.5. Survival of Representations, Warranties and Covenants.
The representations and warranties of the Seller contained in Section 3.1
and the representations and warranties of the Buyer contained in Section 3.2
shall survive the Closing and shall terminate forty-five (45) days following the
second anniversary of the Signature Date; provided, however, that the
representations and warranties of the Seller set forth in Sections 3.1(a),
3.1(b), 3.1(c) and 3.1(e), and the representations and warranties of the Buyer
set forth in Sections 3.2(a) and 3.2(b), shall survive the Closing and remain in
full force and effect until the expiration of the statute of limitations, if
any, applicable to the matters set forth therein (and indefinitely, if none).
ARTICLE VII
NON-COMPETITION
The parties hereby acknowledge that they have entered into an agreement
regarding non-competition, as set forth in Section 16 of the Management Services
Agreement.
ARTICLE VIII
REPURCHASE OF ASSETS
The Purchased Assets are subject to repurchase by the Seller from the Buyer
upon termination or rescission of the
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Management Services Agreement in accordance with Section 13.5 or Section 14.1,
respectively, of the Management Services Agreement.
ARTICLE IX
AMENDMENT, MODIFICATION AND WAIVER
This Agreement shall not be altered or otherwise amended except pursuant to
an instrument in writing signed by each of the parties. The waiver by one party
of the performance of any covenant, condition or promise shall not invalidate
this Agreement, nor shall it be considered as a waiver by such party of any
other covenant, condition or promise. The delay in pursuing any remedy or in
insisting upon full performance for any breach or failure of any covenant,
condition or promise shall not prevent a party from later pursuing any remedies
or insisting upon full performance for the same or any similar breach or
failure.
ARTICLE X
MISCELLANEOUS
10.1. Transfer Taxes, Etc.
The Seller shall pay all sales, use and excise taxes and all registration,
recording or transfer taxes which may be payable in connection with the
transactions contemplated by this Agreement.
10.2. Entire Agreement.
This Agreement (including the recitals hereof and the Schedules and the
Exhibits attached hereto), together with the Related Agreements referenced
herein, contains the entire agreement between the parties hereto with respect to
the transactions contemplated hereby and supersedes all prior agreements,
representations, warranties and understandings, either oral or written, between
the parties with respect thereto.
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10.3. Descriptive Headings.
Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provisions of this Agreement.
10.4. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
telecopier, nationally-recognized overnight courier, or certified mail, postage
prepaid, return receipt requested, addressed as follows:
(a) if to the Buyer, to:
BMJ Medical Management, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000;
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Held, Esq.
Telecopier: (000) 000-0000; and
(b) if to the Seller, to:
Broward Institute of Orthopaedic
Specialties, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Administrator
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Broad and Xxxxxx
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000;
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or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered if
personally delivered or sent by telecopier, (ii) on the Business Day after
dispatch if sent by nationally-recognized, overnight courier and (iii) on the
fifth Business Day after dispatch, if sent by mail. As used herein, "Business
Day" means a day that is not a Saturday, Sunday or a day on which banking
institutions in the state of Florida are not required to be open.
10.5. Counterparts.
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
10.6. Bulk Sales Compliance.
The Buyer hereby waives compliance by the Seller with the provisions of the
"bulk sales laws" of any state which may be in effect and applicable to the
transactions contemplated hereby; provided, however, that the Seller shall
indemnify the Buyer in connection with such noncompliance to the extent provided
in Article 6 hereof.
10.7. Governing Law; Jurisdiction.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida without giving effect to the
laws and principles thereof, or of any other jurisdiction, which would direct
the application of the laws of another jurisdiction. The parties to this
Agreement agree that jurisdiction and venue in any action brought pursuant to
this Agreement by any party hereto shall lie exclusively in any Federal or state
court located in Broward County, State of Florida. By execution and delivery of
this Agreement, the
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parties hereto irrevocably submit to the jurisdiction of such courts for
themselves and in respect of their property with respect to such action. The
parties hereto irrevocably agree that venue would be proper in such court, and
hereby waive any objection that such court is an improper or inconvenient forum
for the resolution of such action. The parties hereto shall act in good faith
and shall refrain from taking any actions to circumvent or frustrate the
provisions of this Agreement.
10.8. Attorneys' Fees.
In the event of any dispute or controversy arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover from the other
party all costs and expenses, including attorneys' fees and accountants' fees,
incurred in connection with such dispute or controversy.
10.9. Benefits of Agreement.
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. Anything contained herein to the contrary notwithstanding, this
Agreement shall not be assignable by any party without the consent of the other
party hereto, and any purported assignment without such consent shall be null
and void.
10.10. Pronouns.
As used herein, all pronouns shall include the masculine, feminine, neuter,
singular and plural thereof whenever the context and facts require such
construction.
* * * *
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IN WITNESS WHEREOF, each of the parties hereto has caused this Asset
Purchase Agreement to be executed on its behalf effective as of the day and year
first above written.
BMJ MEDICAL MANAGEMENT, INC.
By:____________________________
Name:
Title:
BROWARD INSTITUTE oF ORTHOPAEDIC
SPECIALTIES, P.A.
By:____________________________
Name:
Title:
