Exhibit 2(b)
THIRD AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO ASSET PURCHASE AGREEMENT (this
"Amendment") is made and entered into as of this __ day of December, 1998, by
and among Allied Specialty Care Services, Inc., a Florida corporation formerly
known as CMSF, Inc. (the "Buyer"), Allied Health Group, Inc., a Florida
corporation ("AHG"), Gut Management, Inc., a Florida corporation ("Gut"), Sky
Management Co., a Florida corporation ("Sky"), Florida Specialty Network, Ltd.,
a Florida limited partnership ("FSN"), Surgical Associates of South Florida,
Inc., a Florida corporation ("SASF"), Surginet, Inc., a Florida corporation
("Surginet" and, together with AHG, Gut, Sky, FSN and SASF, the "Sellers" and
individually, a "Seller"), Jacob Nudel, M.D. ("Nudel"), David Russin, M.D.
("Russin"), Lawrence Schimmel, M.D. ("Schimmel" and, together with Nudel and
Russin, the "Executive Shareholders") and Magellan Health Services, Inc., a
Delaware corporation and the ultimate corporate Parent of the Buyer (the
"Parent").
RECITALS
A. The parties entered into that certain Asset Purchase
Agreement dated as of October 16, 1997 (the "Original Agreement"), as amended by
that certain First Amendment to Asset Purchase Agreement dated as of December 5,
1997 (the "First Amendment"), as further amended by that certain Second
Amendment to Asset Purchase Agreement dated as of November 18, 1998 (the "Second
Amendment", the Original Agreement, as amended by the First Amendment and as
further amended by the Second Agreement referred to herein as the "Asset
Purchase Agreement"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Asset Purchase Agreement.
B. The parties desire to further amend the Asset Purchase
Agreement, on the terms and subject to the conditions set forth hereinbelow.
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises of the parties, and in consideration of the representations,
warranties and covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. AMENDMENTS.
1.1 BUY-OUT OF REMAINING EARNOUT. In exchange for the
payment by the Buyer to AHG of the aggregate sum of $500,000 (the "Remaining
Buyout Price"), payable in cash upon the execution of this Amendment by wire
transfer of immediately available funds, (a) the Buyer shall be entitled to
receive, and AHG shall release all claims to, the Remaining Clawback (as said
term is defined in the Second Amendment) and any interest or earnings thereon,
and (b) the
Buyer shall purchase, and AHG shall sell, the Remaining Earnout (as said term is
defined in the Second Amendment). The parties to this Amendment acknowledge and
agree that the Remaining Buyout Price is payable in consideration for the
purchase of the Remaining Earn-Out, and that there is no perceived value of
future claims to the purchase of the Remaining Clawback. The parties to this
Amendment further acknowledge and agree that the Remaining Buyout Price, after
deduction of attorneys fees and expenses of Sellers and of the Executive
Shareholders incurred in connection with the transactions contemplated by this
Amendment, will be paid to GHS, Inc. pursuant to the terms and conditions of the
Letter Agreement (as said term is defined in the Second Amendment).
1.2 AMENDMENT TO AND TERMINATION OF REMAINING EARNOUT
PROVISIONS. The Asset Purchase Agreement is hereby amended by deleting Sections
3.3A and 3.4A (which are set forth in Section 1.2(b) of the Second Amendment) in
their entirety.
2. DISBURSEMENTS OF ESCROW FUND. Buyer and AHG hereby agree to
issue joint instructions to the Escrow Agent (i) to deliver from the Escrow
Funds $500,000.00 by federal funds wire transfer to the Broad and Cassel Trust
Account, in accordance with wire transfer instructions furnished in writing by
AHG, for further credit to AHG (said payment constituting payment of the
Remaining Buyout Price), and (ii) to deliver the balance of the Escrow Funds by
federal funds wire transfer to Buyer, in accordance with wire transfer
instructions furnished in writing by Buyer. Buyer and AHG shall then cause the
Escrow Agreement to be terminated.
3. REPRESENTATIONS AND WARRANTIES.
3.1 REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT. In
order to induce the Seller and the Executive Shareholders to enter into this
Amendment, and to consummate the transactions contemplated hereby, the Buyer
and the Parent, on a joint and several basis, represent and warrant as
follows:
(a) POWER AND AUTHORITY; BINDING AGREEMENT. The Buyer
and the Parent have the full right, power and authority to enter into, and to
perform their respective obligations under, this Amendment. The execution and
delivery by the Buyer and the Parent of this Amendment and the performance of
their respective obligations hereunder have been duly authorized by all
necessary corporate action and no other proceedings on the part of the Buyer
or the Parent are necessary to authorize the execution of this Amendment and
the performance of transactions contemplated hereby. This Amendment has been
duly and validly executed and delivered by the Buyer and the Parent and
constitutes the legal, valid and binding obligation of the Buyer and of the
Parent enforceable against the Buyer and the Parent in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other laws affecting creditors= rights generally, or equitable
principles, whether applied in a proceeding in equity or law.
3.2 REPRESENTATIONS AND WARRANTIES OF SELLERS AND EXECUTIVE
SHAREHOLDERS. In order to induce the Buyer and the Parent to enter into this
Amendment, and to consummate the transactions contemplated hereby, the Seller
and the Executive Shareholders, on
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a joint and several basis, represent and warrant as follows; provided, however,
that the representations and the warranties of each Executive Shareholder are
made only as to himself and to each Seller in which such Executive Shareholder
owns any shares or partnership interests, as the case may be:
(a)POWER AND AUTHORITY; BINDING AGREEMENT. Each
Seller has the full right, power and authority to enter into, and to perform its
obligations under, this Amendment and the consent of no other party is necessary
or required in order to permit or allow each such Seller to enter into and
perform its obligations hereunder. The execution and delivery by each Seller of
this Amendment and the performance of its obligations hereunder have been duly
authorized by all necessary corporate or partnership action, as applicable, and
no other proceedings on the part of such Seller is necessary to authorize the
execution of this Amendment and the performance of transactions contemplated
hereby. This Amendment has been duly and validly executed and delivered by each
Seller and constitutes the legal, valid and binding obligation of such Seller
enforceable against such Seller in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting creditors= rights generally, or equitable principles, whether applied
in a proceeding in equity or law. This Amendment has been duly and validly
executed and delivered by each Executive Shareholder and constitutes the legal,
valid and binding obligation of such Executive Shareholder enforceable against
such Executive Shareholder in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other laws affecting
creditors= rights generally, or equitable principles, whether applied in a
proceeding in equity or law.
4. RATIFICATION. Except as modified by this Amendment, the
Asset Purchase Amendment is and shall continue to be in full force and effect
and is hereby in all respects confirmed, approved and ratified.
5. MISCELLANEOUS.
5.1 FURTHER ASSURANCES. At any time, and from time to
time, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Amendment.
5.2 COSTS AND EXPENSES. Each party hereto agrees to pay
its own costs and expenses incurred in negotiating this Amendment and
consummating the transactions described herein.
5.3 TIME. Time is of the essence.
5.4 ENTIRE AMENDMENT. This Amendment and the transactions
contemplated hereby constitute the entire Amendment among the parties hereto
with respect to the
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subject matter hereof, and supersede all prior negotiations, letters and
understandings relating to the subject matter hereof.
5.5 AMENDMENT. This Amendment may not be amended,
supplemented or modified in whole or in part except by an instrument in
writing signed by the party or parties against whom enforcement of any such
amendment, supplement or modification is sought.
5.6 ASSIGNMENT. Except as otherwise provided in Section
12.1 of the Asset Purchase Agreement, this Amendment may not be assigned by
any party hereto without the prior written consent of the other parties.
5.7 CHOICE OF LAW. This Amendment will be interpreted,
construed and enforced in accordance with the laws of the State of Florida.
5.8 HEADINGS. The section and subsection headings in this
Amendment are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Amendment.
5.9 PRONOUNS. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as
the context may require.
5.10 NUMBER AND GENDER. Words used in this Amendment,
regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context indicates is
appropriate.
5.11 CONSTRUCTION. The parties hereto and their respective
legal counsel participated in the preparation of this Amendment; therefore,
this Amendment shall be construed neither against nor in favor of any of the
parties hereto, but rather in accordance with the fair meaning thereof.
5.12 EFFECT OF WAIVER. The failure of any party at any
time or times to require performance of any provision of this Amendment will
in no manner affect the right to enforce the same. The waiver by any party of
any breach of any provision of this Amendment will not be construed to be a
waiver by any such party of any succeeding breach of that provision or a
waiver by such party of any breach of any other provision.
5.13 SEVERABILITY. The invalidity, illegality or
unenforceability of any provision or provisions of this Amendment will not
affect any other provision of this Amendment, which will remain in full force
and effect, nor will the invalidity, illegality or unenforceability of a
portion of any provision of this Amendment affect the balance of such
provision. In the event that any one or more of the provisions contained in
this Amendment or any portion thereof shall for any reason be held to be
invalid, illegal or unenforceable in any respect, this Amendment shall be
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reformed, construed and enforced as if such invalid, illegal or unenforceable
provision had never been contained herein.
5.14 BINDING NATURE. This Amendment will be binding upon
and will inure to the benefit of any successor or successors of the parties
hereto.
5.15 NO THIRD-PARTY BENEFICIARIES. Notwithstanding
anything in this Amendment to the contrary, no person (including, without
limitation, GHS, Inc.) shall be deemed to possess any third-party beneficiary
right pursuant to this Amendment. It is the intent of the parties hereto that no
direct benefit to any third party is intended or implied by the execution of
this Amendment.
5.16 COUNTERPARTS. This Amendment may be executed in one
or more counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the day and year first above written.
ALLIED SPECIALTY CARE SERVICES, INC.
By:
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Title:
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ALLIED HEALTH GROUP, INC.
By:
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Title:
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GUT MANAGEMENT, INC.
By:
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Title:
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SKY MANAGEMENT CO.
By:
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Title:
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FLORIDA SPECIALTY NETWORK, LTD., BY
ITS GENERAL PARTNER, FLORIDA
SPECIALTY NETWORK, INC.
By:
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Title:
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SURGICAL ASSOCIATES OF SOUTH
FLORIDA, INC.
By:
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Title:
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SURGINET, INC.
By:
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Title:
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Lawrence Schimmel, M.D.,
Individually
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Jacob Nudel, M.D., Individually
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David Russin, M.D., Individually
MAGELLAN HEALTH SERVICES, INC.
By:
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Title:
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