ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of April 2,
1998 (the "Execution Date"), is by and among PRIMEDICA HEALTHCARE, INC., a
Florida corporation ("Primedica"), and METCARE VII, INC. ("Metcare"), a Florida
corporation, and METROPOLITAN HEALTH NETWORKS, INC., a Florida corporation, and
the owner of all of the issued and outstanding shares of Metcare ("Parent").
PRELIMINARY STATEMENTS
1. Primedica is desirous of conveying a substantial portion of its
business assets related to the physician practices located at 00000 X. X. 00xx
Xxxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx and 0000 X.X. 000xx Xxxxxx, Xxxxx Xxxxx
Xxxxx, Xxxxxxx to Metcare in exchange for Primedica's receipt from Metcare of
the Purchase Price (as defined below).
2. Without the covenants and agreements of Primedica contained in this
Agreement, Metcare would not enter into this Agreement or consummate the
contemplated transaction.
AGREEMENT
In consideration of the respective representations,
warranties, agreements and covenants in this Agreement and subject to the
conditions contained in this Agreement, the parties, intending to be legally
bound, agree as follows:
ARTICLE I
Transfer and Assignment of Assets
Section I.1 Transfer and Assignment of Assets.
(a) Upon the terms and subject to the conditions of this
Agreement, and effective as of the Closing Date, Primedica transfers to Metcare
and Metcare acquires from Primedica, all of Primedica's right, title and
interest in and to the assets listed on Schedule 1.1 to this Agreement (the
"Assets"):
(b) In order to effectuate the assignment, transfer and
conveyance contemplated by Section 1.1(a), simultaneously with the execution of
this Agreement, and effective as of the Closing Date, Primedica is executing and
delivering all instruments of assignment, transfer or conveyance (collectively,
the "Conveyance Instruments") as Metcare reasonably deems necessary or
appropriate to vest in or confirm to Metcare good, valid and marketable title to
all of the Assets, free and clear of all liens, encumbrances, defects and claims
of any kind ("Liens"). Notwithstanding anything contained in this Agreement, to
the extent that any of the Assets would otherwise include any license, contract,
agreement or other item (a "Restricted Asset") which requires the consent,
approval or waiver of another party to the transfer of any Restricted Asset
under this Agreement and all of these consents, approvals or waivers have not
been obtained prior to the Closing with respect to that Restricted Asset, then:
(i) only the claims, rights, benefits and obligations arising under that
Restricted Asset and otherwise to be assigned and assumed under this Agreement
shall be assigned and assumed as of the Closing Date; (ii) upon Metcare's
request, Primedica shall cooperate with Metcare in Metcare's efforts to obtain
those consents, approvals and waivers; and, (iii) upon the receipt of all
necessary consents, approvals and waivers with respect to the Restricted Asset,
that Restricted Asset shall automatically be deemed assigned and assumed to the
extent it would have
been assigned and assumed as of the Closing Date but for the lack of those
consents, approvals and waivers.
Section I.2 Excluded Assets. All assets of Primedica, which are not
included in Schedule 1.1 are not being conveyed to Metcare (the "Excluded
Assets") including, but not limited to: (a) Primedica's original books, records
and other data relating to the Assets, business, employees and operations of
Primedica; (b) Primedica's pension funds, Employee Programs (as defined below)
and other plans and arrangements regarding employee benefits; (c) Primedica's
cash in bank; and (d) Primedica's rights to payment for services rendered on or
before the Closing Date.
ARTICLE II
Purchase Price; Assumed Obligations; Allocation of Purchase Price; Put Option
Section II.1 Purchase Price. The aggregate purchase price (the
"Purchase Price") for the Assets shall be: (i) Three Million Five Hundred
Thousand Dollars ($3,500,000.00); and, (ii) Metcare's and Parent's assumption of
certain of Primedica's obligations as described in Section 2.2. Subject to the
terms and conditions of this Agreement, and in reliance on the representations,
warranties and covenants of Primedica contained in this Agreement and made at
the Closing, Metcare shall deliver to Primedica, at the Closing, the Purchase
Price by execution and delivery to Primedica of a promissory note substantially
in the form of Exhibit A (the "Note").
Section II.2 Assumed Obligations. Effective as of the Closing Date,
Metcare and Parent assume and collectively agree to pay, discharge and perform,
when lawfully due, those liabilities and obligations of Primedica to the extent
expressly set forth on Schedule 2.2 to this Agreement (all of which are
collectively referred to as the "Assumed Obligations").
Section II.3 Allocation of the Purchase Price. The parties mutually
agree that the allocation of the Purchase Price is as follows: (a) $135,000.00
for accounts receivable; (b) $465,000.00 for furniture and equipment; and
$2,900,000.00 for goodwill.
Section 2.4 Put Option. Simultaneously with the execution and delivery
of this Agreement, Metcare, Parent and Primedica shall enter into a Repurchase
Election Agreement in substantially the form of Exhibit B to this Agreement.
ARTICLE III
Closing
Section III.1 Time and Place of the Closing. The closing (the
"Closing") of the transactions contemplated by this Agreement is being held at
the offices of Primedica, simultaneously with the execution of this Agreement,
and shall be deemed effective as of 12:01 a.m., Miami time, on the date of this
Agreement (the "Closing Date").
Section III.2 Procedure at the Closing. At the Closing, the parties are
taking the following steps in the order listed below (provided, however, that
upon their completion all of these steps shall be deemed to have occurred
simultaneously):
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(a) Primedica shall duly execute and deliver the Conveyance
Instruments to Metcare;
(b) Primedica shall execute and deliver resolutions adopted by
the board of directors and shareholders of Primedica approving the transactions
contemplated by this Agreement, certified by the corporate secretary of
Primedica;
(c) Metcare shall deliver resolutions adopted by the board of
directors of Metcare approving the transactions contemplated by this Agreement,
certified by the corporate secretary of Metcare;
(d) Parent shall deliver resolutions adopted by the board of
directors of Parent approving the transactions contemplated by this Agreement,
certified by the corporate secretary of Parent;
(e) Metcare and Parent shall deliver the Note to Primedica;
(f) Primedica shall execute and deliver to Metcare an
Assignment and Assumption of Lease Agreement for each of the Personal Property
Leases in substantially the form of Exhibit C attached to this Agreement, duly
executed by Primedica, and a Lessor's consent to the assignment, duly executed
by each Lessor;
(g) Metcare shall deliver to Primedica a Certificate of Good
Standing issued by the Secretary of State of Florida, dated not more than thirty
(30) days prior to the Closing Date;
(h) Parent shall deliver to Primedica a Certificate of Good
Standing issued by the Secretary of State of Florida, dated not more than thirty
(30) days prior to the Closing Date;
(i) Primedica shall deliver to Metcare a Certificate of Good
Standing issued by the Secretary of State of Florida dated not more than thirty
(30) days prior to the Closing Date;
(j) Primedica, as the tenant or subtenant under the Real
Property Leases, shall execute and deliver to Metcare or its nominee assignments
of the Real Property Leases, in the form of Exhibit D attached to this
Agreement;
(k) Primedica shall have executed and delivered to Metcare the
following instrument, in the form of Exhibit E attached to this Agreement, duly
executed by the landlord or sublessor under the Real Property Leases: an
instrument evidencing each landlord's and sublessor's consent to the assignment
to Metcare or its nominee of the Real Property Leases; and
(l) Primedica shall have executed and delivered to Metcare the
assignment of the employment agreements of the following physicians: Xxxxx
Xxxxxxxxx, M.D., Xxxxxxx Xxxxxxxx, M.D., Xxxx Xxxxxxx, D.O. and Xxxxxxx Xxxxxxx,
D.O. (collectively, the "Doctors").
ARTICLE IV
Representations and Warranties of Primedica
In order to induce Metcare to enter into this Agreement and to
consummate the transactions contemplated under this Agreement, Primedica makes
the following representations and warranties to Metcare:
Section IV.1 Organization, Power and Authority of Primedica. Primedica
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida and has the requisite corporate power and authority
to own or lease its properties and to carry on its business as it is now being
conducted.
Section IV.2 Due Authorization; Binding Obligation. Primedica has the
requisite corporate power and authority to enter into this Agreement and all
documents described within this Agreement to be executed in connection with this
Agreement (collectively, the "Related Documents") to which it is or is to be a
party, and to consummate the contemplated transactions. This Agreement and the
Related Documents to which Primedica is a party have been duly and validly
executed and delivered by Primedica and are the legal, valid and binding
obligations of Primedica, enforceable in accordance with their respective terms.
The board of directors and shareholders of Primedica have duly authorized the
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement as required under applicable law. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will: (i) conflict with or violate
any provision of Primedica's Articles of Incorporation or By-laws, or any law,
ordinance or regulation or any decree or order of any court or administrative or
other governmental body which is either applicable to, binding upon or
enforceable against Primedica; or (ii) result in the creation of any Lien,
charge or encumbrance upon any of its assets. Attached to this Agreement and
marked as Exhibit F is a true, correct and complete copy of the Articles of
Incorporation, as amended, and attached to this Agreement and marked as Exhibit
G is a true, correct and complete copy of the By-laws, as amended, of Primedica.
Section IV.3 Ownership of Primedica. Sheridan Healthcorp, Inc. is the
sole record and beneficial owner of all outstanding shares of Primedica's stock.
Section IV.4 The Real Property Lease(s) attached to the Disclosure
Document as Exhibit H are true and complete copies of the Real Property
Lease(s), including all amendments and modifications, which Primedica is a party
to.
Section IV.5 Personal Property Leased and Purchase Options. The
Personal Property Leases attached to this Agreement as Exhibits I-1 through I-
are (i) true and complete copies of all the Personal Property Leases.
Section IV.6 Title to Assets. Primedica has good and marketable title
to all of the Assets, subject to Liens for current taxes and assessments not yet
due and payable. All of the Assets shall be conveyed to Metcare free and clear
of restrictions on or conditions to transfer or assignment, and free and clear
of any mortgage, Lien, charge, encumbrance, security interest or other
restrictions. Primedica is the tenant or subtenant under the Real Property
Lease(s).
Section IV.7 Condition of Assets. Primedica makes no representation or
warranty regarding the condition of the Assets, and Metcare is acquiring on an
As-Is basis.
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ARTICLE V
Representations and Warranties of Metcare
In order to induce Primedica to enter into this Agreement and to
consummate the transactions contemplated under this Agreement, Metcare and
Parent make the following representations and warranties to Primedica:
Section V.1 Organization, Power and Authority. Metcare is a corporation
duly organized and validly existing under the laws of the State of Florida, with
full corporate power and authority to enter into this Agreement and perform its
obligations under this Agreement. Parent is a corporation duly organized and
validly existing under the laws of the State of Florida, with full corporate
power and authority to enter into this Agreement and perform its obligations
under this Agreement.
Section V.2 Due Authorization; Binding Obligation. The execution,
delivery and performance of this Agreement, the Related Documents and all other
agreements contemplated by this Agreement and the consummation of the
contemplated transactions have been duly authorized by all necessary corporate
action of Metcare and Parent. This Agreement has been duly executed and
delivered by Metcare and Parent and is a valid and binding obligation of Metcare
and Parent, enforceable in accordance with its terms. Except for any corporate
action required by Metcare or Parent and conditions precedent provided for in
this Agreement which must be satisfied or waived, no other action on the part of
any individual or other person or entity is necessary to authorize this
Agreement or for the consummation of the transactions contemplated by this
Agreement and the Related Documents. Metcare and Parent has duly executed this
Agreement and authorized the execution of this Agreement and the consummation of
the transactions contemplated by this Agreement as required under the Florida
Business Corporation Act.
Section V.3 Consents and Approvals. No approval, consent or
authorization of or filing or registration with any governmental or other
regulatory authority or other third party is required by Metcare or Parent for
the execution, delivery or performance of this Agreement or for the consummation
of the transactions contemplated by this Agreement, except for those which shall
have been obtained prior to the Closing.
ARTICLE VI
Covenants of Primedica
Section VI.1 Further Assurances. From time to time after the date of
this Agreement, Primedica agrees that it shall execute and deliver all other
instruments and shall take all other actions as Metcare may reasonably request
to effectuate the contemplated transactions. Primedica agrees that it shall take
whatever action may be necessary as soon as practicable after execution of this
Agreement to ensure that any governmental licenses or certificates held by
Primedica prior to the Closing and necessary for Metcare's operation of the
assets acquired pursuant to this Agreement are transferred from Primedica to
Metcare as soon as practicable after the Closing Date.
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ARTICLE VII
Covenants of Metcare
Section VII.1 Further Assurances. From time to time after the date of
this Agreement, Metcare shall execute and deliver all other instruments and
shall take all other actions as Primedica may reasonably request to effectuate
the transactions contemplated by this Agreement.
ARTICLE VIII
Indemnification
Section VIII.1 Indemnification. Each party agrees to fully, completely,
and unconditionally indemnify, defend, and hold the other party and their
directors, officers, employees, agents, and affiliates harmless from and against
any and all claims, actions, liability, loss, cost, and expenses, proceedings,
investigations, causes of action, whether suit is instituted or not and, if
instituted, at any trial or appellate level, and whether raised by the parties
to this Agreement or any third party (including, without limitation, costs of
judgments, settlements, court costs, and attorneys' fees, costs and expenses)
arising out of or relating to, or alleged to arise out of or relate to,
negligent or intentional acts or omissions of the indemnifying party, or any
failure by the indemnifying party to perform any obligation or covenant of the
indemnifying party under this Agreement. Metcare shall be jointly and severally
liable for all of Parent's obligations under this Agreement, including, without
limitation, any indemnification obligations. Parent shall be jointly and
severally liable for all of Metcare's obligations under this Agreement
including, without limitation, any indemnification obligations.
ARTICLE IX
Miscellaneous
Section IX.1 Brokers' Commission. Metcare and Parent will jointly and
severally indemnify and hold harmless Primedica from any commission, fee or
claim of any person, firm or corporation employed or retained or claiming to be
employed or retained by Metcare or Parent to bring about, or to represent it in,
the transactions contemplated by this Agreement. Primedica will indemnify and
hold harmless Metcare and Parent from any commission, fee or claim of any
person, firm or corporation employed or retained or claiming to be employed or
retained by Primedica to bring about, or to represent them in, the transactions
contemplated by this Agreement.
Section IX.2 Amendment and Modification. This Agreement and the Related
Documents may not be modified or terminated orally, and no modification or
termination shall be binding unless in writing and signed by the parties to this
Agreement.
Section IX.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries, executors and legal and personal representatives.
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Section IX.4 No Waiver; Remedies Cumulative. This Agreement and the
Exhibits and Schedules attached to this Agreement, the Disclosure Document and
the Related Documents contain the entire agreement of the parties with respect
to the acquisition and the other transactions contemplated in this Agreement,
and merges and supersedes all prior understandings and agreements among the
parties with respect to the subject matter of this Agreement. Failure of any
party to enforce one or more of the provisions of this Agreement or to require
at any time performance of any of the obligations under this Agreement shall not
be construed to be a waiver of any provisions by any party nor to in any way
affect the validity of this Agreement or any party's right to enforce any
provision of this Agreement nor to preclude any party from taking all other
action at any time which it would legally be entitled to take. All waivers to be
effective shall be in writing signed by the waiving party.
Section IX.5 Headings. The descriptive headings in this Agreement are
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions of this Agreement.
Any references in this Agreement to Sections, Exhibits and Schedules are the
Sections, Exhibits and Schedules of this Agreement, the Related Documents or the
Disclosure Document.
Section IX.6 Execution in Counterparts. This Agreement may be executed
in any number of multiple counterparts, each of which shall be deemed an
original and all of which together shall be deemed to be one and the same
instrument. Each party agrees to be bound by any telecopied signature to this
Agreement or any agreement executed in connection herewith as if a manually
executed signature page had been executed and delivered.
Section IX.7 Notices. Whenever any notice, request, information or
other document is required or permitted to be given under this Agreement, that
notice, demand or request shall be in writing and shall be either hand
delivered, sent by United States certified mail, postage prepaid, delivered via
overnight courier to the addresses below or to any other address that any party
may specify by notice to the other parties. No party shall be obligated to send
more than one notice to each of the other parties and no notice of a change of
address shall be effective until received by the other parties. A notice shall
be deemed received upon hand delivery or telecopy transmission, two days after
posting in the United States mail or one day after dispatch by overnight
courier.
If to Metcare: METCARE VII, INC.
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, President
If to Parent: METROPOLITAN HEALTH NETWORKS, INC.
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: ________________________
with a copy to: METCARE VII, INC.
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxxx, General Counsel
If to Primedica: PRIMEDICA HEALTHCARE, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
ATTN: Xxx X. Xxxxxx, Esq.,
Vice President and General Counsel
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Section IX.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
its conflicts of law principles.
Section IX.9 Expenses and Taxes. All accounting, legal and other costs
and expenses incurred in connection with the negotiation of this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring those fees, costs and expenses. Except as provided in the next
sentence, in no event shall Metcare be liable for taxes imposed upon Primedica
including, without limitation, any and all taxes upon their incomes, taxes
incurred prior to the Closing Date and sales taxes. Metcare and Parent shall be
solely responsible for all (i) taxes imposed upon the conveyance of the Assets
and (ii) sales, use or excise taxes payable in connection with the contemplated
transactions.
Section IX.10 Waiver. Any party to this Agreement may extend the time
for or waive the performance of any of the obligations of the other, waive any
inaccuracies in the representations or warranties by the other, or waive
compliance by the other with any of the covenants or conditions contained in
this Agreement. Any extension or waiver shall be in writing and signed by the
parties. No waiver shall operate or be construed as a waiver of any subsequent
act or omission of the parties.
Section IX.11 Severability. The invalidity or unenforceability of any
one or more of the words, phrases, sentences, clauses, or sections contained in
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if such invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability.
Section IX.12 Litigation; Prevailing Party. Except as otherwise
required by applicable law or as expressly provided in this Agreement, in the
event of any litigation, including appeals, with regard to this Agreement, the
prevailing party shall be entitled to recover from the non-prevailing party all
reasonable fees, costs, and expenses of counsel (at pre-trial, trial and
appellate levels).
Section IX.13 Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted, including any presumption of superior
knowledge or responsibility based upon a party's business or profession or any
professional training, experience, education or degrees of any member, agent,
officer of employee of any party. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the party against whom the
words are construed, then this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
Section IX.14 Mergers and Consolidation; Successors and Assigns.
Metcare and Parent shall not have the right to assign their rights or delegate
their duties and obligations under this Agreement. The parties acknowledge and
agree that the provisions of this Agreement, are assignable by Primedica to any
assignee, successor or Affiliate and, upon that assignment, the assignee,
successor or affiliate shall be entitled to enforce the provisions of this
Agreement.
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Section IX.15 Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT
ENTERED BY ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date first written above.
METCARE:
METCARE VII, INC.
a Florida corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx, President
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.
a Florida corporation
By:/s/ Xxxx X. Xxxxxxxx
----------------------------
Print Name: Xxxx X. Xxxxxxxx
Print Title: President
PRIMEDICA:
PRIMEDICA HEALTHCARE, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------
Xxx X. Xxxxxx, Vice President
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