EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BETWEEN
BONE, MUSCLE AND JOINT, INC.
AND
XXXXXXX AND XXXXXXX, M.D.'S, P.A.
Effective as of June 1, 1997
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EXHIBITS
Exhibit A - Xxxx of Sale
Exhibit B - Assignment and Assumption Agreement
SCHEDULES
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) - Accounts Receivable
1.1(f) - Deposits
1.1(g) - Additional Items
2.2 - Allocation of Purchase Price
3.1(c) - Claims
3.1(d) - Litigation
Definitions
The following terms which may appear in more than one Section of this Agreement
are defined at the following pages:
TERM PAGE
---- ----
A/R Amount................................................................. 7
A/R Balance................................................................ 7
A/R Collections............................................................ 7
A/R Shortfall.............................................................. 8
Accounts Receivable........................................................ 2
Affiliate.................................................................. 20
Assignment and Assumption Agreement........................................ 4
Assumed Obligations........................................................ 3
Xxxx of Sale............................................................... 4
bulk sales laws............................................................ 21
Business Day............................................................... 27
Buyer...................................................................... 1
Buyer Indemnification Event................................................ 20
Buyer Indemnified Persons.................................................. 21
Bylaws..................................................................... 9
Certificate of Incorporation............................................... 9
Claims..................................................................... 10
Closing.................................................................... 18
Closing Date............................................................... 18
Collections................................................................ 35
Determination Date......................................................... 7
Excluded Assets............................................................ 3
Excluded Obligations....................................................... 3
Final Statement............................................................ 8
Indemnified Persons........................................................ 21
Indemnifying Person........................................................ 21
Losses..................................................................... 21
Management Services Agreement.............................................. 1
Permitted Liens............................................................ 11
Purchase Price............................................................. 6
Purchased Assets........................................................... 2
Related Agreements......................................................... 15
Seller..................................................................... 1
Seller Indemnification Event............................................... 21
Seller Indemnified Persons................................................. 22
Signature Date............................................................. 1
Statement of Allocation.................................................... 7
Subject Business........................................................... 1
Threshold Month............................................................ 7
THIS ASSET PURCHASE AGREEMENT
is entered into as of July 3, 1997 (the
"Signature Date"), effective as of June 1,
1997 , between BONE, MUSCLE AND JOINT, INC.,
a Delaware corporation (the "Buyer"), and
XXXXXXX AND XXXXXXX, M.D.'S, 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:
ARTICLE 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 accounts receivable described on Schedule
1.1(e) (the "Accounts Receivable") (subject to applicable law and in accordance
with Section 1.6 hereof);
(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 under the equipment leases identified in Schedule 1.1(c) (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.
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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, 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. Right of Endorsement, Etc.
Effective upon the Closing, the Seller hereby constitutes
and appoints the Buyer, its successors and assigns, the true and lawful
attorney-in-fact of the Seller with full power of substitution, in the name of
the Buyer, or the name of the Seller, on behalf of and for the benefit of the
Buyer, to collect all Accounts Receivable assigned to the Buyer as provided
herein, to endorse, without recourse, checks, notes and other instruments
received in payment of such Accounts Receivable in the name of the Seller, and
to institute and prosecute, in the name of the Seller or otherwise, all
proceedings which the Buyer may deem proper in order to assert or enforce any
claim, right or title of any kind in or to the Purchased Assets (provided that
the Buyer shall not, without the consent of the Seller, initiate any such
proceeding to collect on Accounts Receivable acquired hereunder), to defend and
compromise any and all actions, suits or proceedings in respect of any of the
Purchased Assets and to
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do all such acts and things in relation thereto as the Buyer may deem advisable.
The foregoing powers are coupled with an interest and shall be irrevocable by
the Seller, directly or indirectly, whether by the dissolution of the Seller or
in any manner or for any reason; provided, however that notwithstanding anything
to the contrary contained herein, collections of Medicare and Medicaid Accounts
Receivable shall first be deposited into the Medical Group Collections Account
(as defined in the Management Services Agreement) and shall thereafter be
transferred to an account designated by the Management Company in accordance
with the procedures outlined in Section 5.1 of the Management Services
Agreement. Notwithstanding anything contained herein to the contrary, the power
of attorney granted to the Management Company in this Section 1.6 shall be
terminated upon the termination of the Management Services Agreement.
1.7. 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, including all amounts paid to the Seller on
account of the Accounts Receivable. 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 done, executed, acknowledged,
delivered or filed, 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.
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1.8. 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.
1.9. 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 the sum of the following amounts:
(a) $1,952,257; and
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(b) $950,000 (the "A/R Amount"), subject to adjustment
in accordance with Section 2.3, which amount is a good faith estimate of the
aggregate face value of all Accounts Receivable outstanding as of the Closing
Date and set forth on Schedule 1.1(e).
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 Payment.
The portion of the Purchase Price specified in Section
2.1(b) is subject to adjustment and shall be paid or repaid as follows:
(a) In the event that the aggregate amount of
collections received by the Buyer in payment of the Accounts Receivable (the
"A/R Collections"), at any point prior to June 30, 1998 (the "Determination
Date"), exceeds the A/R Amount (such excess amount being referred to herein as
an "A/R Balance"), the Buyer shall pay to the Seller on the last day of the
month occurring after the month in which the Buyer first determines such A/R
Balance exists (such month in which the Buyer determines that an A/R Balance
occurred being referred to as the "Threshold Month") an amount equal to the A/R
Balance that had accrued through the last day of the Threshold Month and, on the
last day of each month occurring thereafter through and including the
Determination Date, the Buyer shall pay to the Seller an amount, if any, equal
to the A/R Balance as of the last day of the previous month, less, in each case,
the aggregate amount previously paid pursuant to this sentence. The Buyer shall
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deliver to the Seller, within 30 days after delivery of the Final Statement (as
hereinafter defined), a check in an amount, if any, equal to the A/R Balance as
of the Determination Date less the total amount of all payments made to the
Seller prior to such date pursuant to this Section 2.3(a). Within thirty (30)
days after the Determination Date, the Buyer shall furnish to the Seller a
statement (the "Final Statement") setting forth the A/R Collections, including
detail of write-offs of any of the Accounts Receivable, the remaining
outstanding balances of the Accounts Receivable, and any other detail relating
thereto as the Seller may reasonably request. If, as of the Determination Date,
the A/R Collections are less than the A/R Amount (such deficit being referred to
herein as the "A/R Shortfall"), the Seller shall pay the A/R Shortfall to the
Buyer by check in six equal monthly installments (the first payment due 10 days
after delivery of the Final Statement). The parties hereto acknowledge and agree
that after delivery of the Final Statement and payment in full of the A/R
Balance or A/R Shortfall, as the case may be, neither party shall have any other
obligation to the other party with respect to the Accounts Receivable, except
that all remaining uncollected Accounts Receivable shall be turned over to the
Seller for disposition in such manner as the Seller, in its sole discretion,
shall determine. Notwithstanding anything to the contrary contained herein, in
the event that the Management Services Agreement is terminated prior to the
Determination Date, such date of termination shall be deemed the Determination
Date for purposes of this Section 2.3(a).
(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.
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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 hereof, 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 on the part
of the Seller. This Agreement, the Xxxx of Sale and the 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
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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 provision 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 respective 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, Interests 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 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 (i) those Claims set forth on
Schedule 3.1(c) and (ii) Permitted Liens.
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(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 appeal
bonds) 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 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
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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.
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
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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 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
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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(d), 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(d), if any.
(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.
(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:
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(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 respects as of the date of this
Agreement and as of the Closing Date as though made at and as of the Closing
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 listed on Schedule 1.1(c) 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.
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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 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 date of this
Agreement and as of the Closing Date as though made at and as of the Closing
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:
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(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;
(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 Xxxx of Sale executed by the Seller; and
(e) 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 June 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 consummated, unless all of the closing
transactions identified in this Section 5.2 have been completed or waived in
writing by the parties.
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(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) The Buyer shall deliver to the Seller the Purchase
Price payable by cashier's check or wire transfer of funds to an account
designated in writing by the Seller;
(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.
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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 the Buyer or 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 the Buyer or any Buyer
Indemnified Person of any liability or obligation arising from, relating to, or
in any way connected with any Excluded Obligation; and
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(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.
(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.
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(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 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
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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 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
- 23 -
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 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 Closing 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).
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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, except for the Accounts Receivable,
are subject to repurchase by the Seller from the Buyer upon termination or
rescission of the 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.
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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 and the Amendatory Agreement dated as of the
Signature Date among Buyer, Seller, Xxxx Xxxxxxx, M.D., and Xxxxxx Xxxxxxx,
M.D., contain the entire agreement between the parties hereto with respect to
the transactions contemplated hereby and supersede all prior agreements,
representations, warranties and understandings, either oral or written, between
the parties with respect thereto.
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:
- 26 -
(a) if to the Buyer, to:
Bone, Muscle and Joint, 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:
Fishman and Xxxxxxx, M.D.'s, P.A.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, M.D.
Telecopier: (000) 000-0000;
with a copy to:
Xxxxx & Xxxxxxxx, P.A.
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000;
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.
- 27 -
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 Palm Beach County, State of Florida. By execution and
delivery of this Agreement, the 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.
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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.
BONE, MUSCLE AND JOINT, INC.
By:____________________________
Name:
Title:
XXXXXXX AND XXXXXXX, M.D.'S, P.A.
By:______________________________
Xxxx X. Xxxxxxx, M.D.
President
By:______________________________
Xxxxxx X. Xxxxxxx, M.D.
Secretary
SCHEDULE 1.1(a)
Medical Equipment
SCHEDULE 1.1(b)
Furniture, Furnishings,
Trade Fixtures, and Office Equipment
SCHEDULE 1.1(c)
Equipment Leases
SCHEDULE 1.1(d)
Supplies
All of the medical supplies, office supplies, postage, and
printed materials owned by the Medical Group and located on the premises of any
of the Medical Group's offices at 12:01 a.m. on the Closing Date hereunder.
SCHEDULE 1.1(e)
Accounts Receivable
All of the Accounts Receivable of the Medical Group the
payment of which would constitute "Collections" as defined in Section 5.3(c)(ii)
of the Management Services Agreement, determined as of 12:01 a.m. of the
Closing Date hereunder.
SCHEDULE 1.1(f)
Deposits
1. Security deposits under leases of offices located
in _____________ (Schedule 1.1(f), items #1 and #2) $ _______
2. Security deposit under lease of office located in
________ Schedule 1.1(f), item #3 $ _______
$ _______
SCHEDULE 1.1(g)
Additional Items
SCHEDULE 2.2
Allocation of Purchase Price
Medical Equipment, Furniture, Furnishings, Trade Fixtures,
and Office Equipment (including supplies) $ 140,000.00
_______ Percent (__%) of the estimated collectible amount of
Accounts Receivable, subject to adjustment in accordance with
Section 2.3 $ 950,000.00
Purchase of intangible assets for access and rights to same
(going concern, work force in place, access to patient records
and logs, and booked business) $1,812,250.50
TOTAL: $2,902,250.50
SCHEDULE 3.1(c)
Claims
SCHEDULE 3.1(d)
Litigation
EXHIBIT A
XXXX OF SALE
Xxxxxxx and Xxxxxxx, M.D.'s, P.A., a Florida professional
association (the "Seller"), hereby sells, conveys, transfers, assigns and
delivers to BONE, MUSCLE AND JOINT, INC., a Delaware corporation (the "Buyer"),
the following assets, properties, interests in properties and rights of the
Seller (collectively, the "Purchased Assets"):
1. the medical equipment owned by the Seller and listed on
Schedule 1.1(a) of that certain Asset Purchase Agreement between the Seller and
the Buyer entered into as of the date hereof (the "Asset Purchase Agreement");
2. the furniture, furnishings, trade fixtures, and office
equipment owned by the Seller and listed on Schedule 1.1(b) of the Asset
Purchase Agreement;
3. the Seller's rights and interests under the equipment
leases identified on Schedule 1.1(c) of the Asset Purchase Agreement, subject to
the Buyer's assumption of the obligations accruing thereunder from and after the
date hereof;
4. the supplies described on Schedule 1.1(d) of the Asset
Purchase Agreement;
5. the accounts receivable described on Schedule 1.1(e) of
the Asset Purchase Agreement;
6. the deposits identified on Schedule 1.1(f) of the Asset
Purchase Agreement; and
7. any additional items identified on Schedule 1.1(g) of
the Asset Purchase Agreement.
All assets, properties, interests in properties, and rights of the Seller not
expressly identified above or in the schedules referenced in the Asset Purchase
Agreement (the "Excluded
Assets") are expressly excluded from the assets of the Seller being sold,
assigned, or otherwise transferred to the Buyer.
To the extent that there is a conflict between the terms and
provisions of this Xxxx of Sale and the Asset Purchase Agreement, the terms and
provisions of the Asset Purchase Agreement shall prevail.
IN WITNESS WHEREOF, the Seller has executed this
instrument as of the 3rd day of July, 1997, effective as of June 1, 1997.
XXXXXXX AND XXXXXXX, M.D.'S, P.A.
By:______________________________
Name:
Title:
EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of
July 3, 1997, effective as of June 1, 1997, between XXXXXXX AND XXXXXXX, M.D.'S,
P.A. ("Assignor") and BONE, MUSCLE AND JOINT, INC. ("Assignee").
A. Pursuant to the terms of the Asset Purchase Agreement
dated as of the date hereof (the "Asset Purchase Agreement"), between Assignor,
as Seller, and Assignee, as Buyer, Assignor has concurrently with the delivery
hereof, sold, conveyed, transferred, assigned and delivered to Assignee certain
assets of Assignor (the "Purchased Assets"), which are specifically identified
in the Asset Purchase Agreement.
B. In partial consideration of the Purchased Assets, the
Asset Purchase Agreement provides that Assignee shall assume certain liabilities
of Assignor, identified in Section 1.3 of the Asset Purchase Agreement.
NOW, THEREFORE, Assignor and Assignee hereby agree as
follows:
1. Assignment; Assumption.
Assignor hereby assigns, transfers and delivers to Assignee,
and Assignee does hereby accept, all of Assignor's rights, titles, and
interests, legal and equitable, in, to and under the equipment leases identified
in Schedule 1.1(c) of the Asset Purchase Agreement (the "Assigned Contracts"),
and Assignee agrees to assume and to pay when due, those liabilities accruing
from and after the date hereof under the Assigned Contracts and to observe,
perform, and comply with the covenants, restrictions, limitations, and
conditions imposed upon Assignor under the Assigned Contracts; 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.
2. Limitation of Assumption.
2.1 Right to Contest Obligations.
Nothing contained in this Agreement shall require that
Assignee perform, pay or discharge any obligation expressly assumed hereby so
long as Assignee shall in good faith contest or cause to be contested the amount
or validity thereof.
2.2 Obligations Not Assumed.
Other than as specifically stated above, Assignee is not
assuming any liabilities or obligations of the Assignor (whether fixed or
contingent, known or unknown, matured or unmatured).
To the extent there is a conflict between the terms and
provisions of this Assignment and Assumption Agreement and the Asset Purchase
Agreement, the terms and provisions of the Asset Purchase Agreement shall
prevail.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement as of the date first above written.
XXXXXXX AND XXXXXXX, M.D.'S, P.A.
By:______________________________
Name:
Title:
BONE, MUSCLE AND JOINT, INC.
By:______________________________
Name:
Title:
