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Exhibit 2.1
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ASSET PURCHASE AND SALE AGREEMENT
Between
PATIENT PORTAL TECHNOLOGIES, , INC.
and
WORLDNET COMMUNICATIONS, INC. , d/b/a TMS
This Asset Purchase and Sale Agreement ("Agreement") between
Worldnet
Communications, Inc., dba TMS, a New York corporation with an
address for
purposes hereof at 8276 Willett Parkway, Suite 200,
Baldwinsville, New York
13027 ("TMS"), and Patient Portal Technologies, Inc., a Delaware
corporation
with an address for purposes hereof at 7108 Fairway Drive, Palm
Beach Gardens,
FL, 33418 ("PPTI "), is dated the 25th day of September 2007.
TMS and PPTI are
each referred to herein at times as a "Party" and collectively
as the "Parties".
WITNESSETH:
WHEREAS, TMS was engaged in the business of providing various
patient telephone
and television services to Hospitals and their patients ("Retail
Customers"),
and desires to refocus its business activities on providing
infrastructure
support and billing services to other services providers that
require certain
TMS Services in connection with the service providers customers
("Wholesale
Customers"); and
WHEREAS, PPTI, through its wholly-owned subsidiary Patient
Portal Connect
("Patient Portal:"), is engaged in the business of providing
various services to
Hospitals, colleges and universities, students and patients;
WHEREAS, TMS and PPTI are affiliated companies and desire to
enter into this
Agreement upon terms and conditions that are no more or less
favorable than the
terms and conditions that would apply to unaffiliated
companies.
WHEREAS, TMS desires to sell and PPTI desires to purchase
certain Hospital
Contracts (defined below) upon the terms and conditions set
forth herein; and
NOW, FOR AND IN CONSIDERTION OF, the mutual promises and
covenants contained
herein, and other good and valuable consideration, the receipt
and sufficiency
of which is hereby acknowledged, it is agreed by and between TMS
and PPTI as
follows:
1. Definitions. Capitalized terms used in this Agreement, and
not otherwise
defined herein, shall have the meanings as set forth below.
"Billing and Collection Services" means services provided by TMS
for billing and
collecting patient charges for TMS Services and, on behalf of
PPTI, for PPTI
Services, pursuant to agreements with local exchange carriers,
credit card
companies, direct invoicing and third party billing and
collection entities.
"Call-Center Services" means TMS' primary services including
Billing Collection
Services, and activation and deactivation of patient televisions
and/or
telephones, and other equipment. Call Center Services are
provided on a 24x7
basis 365 days per year through live operators that activate and
deactivate
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patient telephones and/or televisions, collect billing
information and verify
patients home telephone numbers or validate credit card
information, dispatch
repair personnel for hospital telephones and/or televisions, and
provide a
help-desk and customer services for inquiries by the hospital or
patients
following discharge.
"Colleges" means colleges, universities and other educational
institutions or
entities that become customers of PPTI, including individual
students, faculty
and other personnel.
"Direct Dial Services" are services provided by TMS that allow
patients in
Hospitals to make long distance calls directly from their
hospital room without
prepayment, dial-around or other inconvenience and/or additional
charges through
the TMS Call Center operators.
"HIPAA" means the Administrative Simplification requirements of
the Health
Insurance Portability and Accountability Act of 1996, and
regulations
promulgated thereunder, including the Standards for Privacy of
Individually
Identifiable Health Information at 45 Code of Federal
Regulations Parts 160 and
164 commonly referred to as the "Privacy Regulations".
"Hospitals" are public or private health and medical care
facilities and
institutions that provide health care and related services to
patients,
including but not limited to, hospitals, rehabilitation centers
and
institutions, and nursing homes, including Systems (defined
below) that are
comprised of one or more such entities.
"Hospital Contracts" means the contracts, agreements,
understandings or
arrangements between TMS and its Retail Customers comprised of
Hospitals
pursuant to which TMS provides TMS Services and Direct Dial
Services.
"Initial Term" has the meaning set forth in paragraph 4.1
below.
"PPTI Customers" means Colleges and Hospitals and any other
person or entity
that PPTI provides PPTI Services during the Term of this
Agreement.
"PPTI Representative" means Kevin Kelly, or such other person
that PPTI notifies
TMS in writing.
"PPTI Services" means any and all services provided by PPTI to
PPTI Customers,
including those Hospitals and patients that become PPTI
Customers upon closing
of the purchase and sale of the Hospital Contracts under this
Agreement.
"Purchase Price" means the total two million five hundred
thousand dollars
($2,500,000) to be paid as set forth in Section 2 below.
"Proprietary Information" has the meaning set forth in paragraph
5.1 below.
"Renewal Term" has the meaning set forth in paragraph 4.1
below.
"Systems" means independent hospital networks or IHNs, groups,
health systems,
health associations or other organizations comprised of one or
more institutions
organized to provide management services to Hospitals, and any
person,
organization, entity or Hospital that is affiliated with an
entity that owns
and/or controls, Hospitals located in more than one state.
"Term" means the Initial Term and all Renewal Terms as further
set forth in
Section 4 below.
"TMS Designated Representative" means William M. Kelly, Jr. or
such other person
as TMS notifies PPTI in writing.
"TMS Services" means collectively Call Center Services and
Billing and
Collection Services Services.
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"Transaction" means all TMS Services provided to, or on behalf
of PPTI provided
per Customer.
"Transaction Fee" means $6.00 to be paid by PPTI to TMS per
Transaction
processed for each PPTI Customer for whom TMS provides TMS
Services during the
Term..
2. Transfer of Certain Assets
2.1 TMS hereby transfers and forever conveys and assigns any and
all of its
rights, title and interest in, and any related intellectual
property or other
associated rights, to twenty (18) Hospital Contracts set forth
in Exhibit A,
which is attached hereto and incorporated herein by this
reference. The Hospital
Contracts constitute substantially all of the Retail Base of
TMS.
2.2 In consideration for the acquisition of the assets listed in
paragraph 2.1
above, simultaneous with the execution of this Agreement, PPTI
shall pay TMS a
total of two million five hundred thousand dollars ($2,500,000)
payable as
follows:
A. $1,500,000 in cash at the Closing; and
B. $1,000,000 in shares of PPTI's Series B Preferred Stock.
2.3 Notwithstanding the closing of the purchase and sale of the
Hospital
Contracts, TMS or an affiliate agrees to provide Billing and
Collection and Call
Center Services for the PPTI if PPTI desires for TMS to do so
for a Transaction
Fee per PPTI Customer per service Billed and Collected of $6.00.
During the term
of each Hospital Contract for which TMS provides Direct Dial
Services at the
time of the sale, TMS agrees to continue to provide such
services unless PPTI
notifies TMS to discontinue the Direct Dial Service on a
Hospital-by-Hospital
basis, and further provided that PPTI shall indemnify TMS from
any claims or
damages by a Hospital or patient for the termination of Direct
Dial Services.
2.4 This Agreement and the purchase and sale of the Hospital
Contracts is
contingent on: (i) each Party obtaining all necessary corporate
and shareholder
approval, (ii) PPTI closing on the financing in connection with
its acquisition
of the Hospital Contracts; and (iii) TMS notifying all Hospital
customers of the
assignment of their respective Hospital Contracts. Each Party
shall notify the
other Party's Designated Representative in writing by email or
other electronic
means, when the necessary approvals are obtained, and PPTI shall
notify TMS'
Designated Representative when the financing is closed. When the
above
contingencies all are satisfied, the Parties will mutually agree
on a date for
the closing, which shall be completed by email.
2.5 For the Closing, TMS will confirm in writing that it has
assigned the
Hospital Contracts to PPTI and shall state the effective date of
the transfer,
which date shall be the same date as PPTI performs the following
Closing
obligations: (i) PPTI shall sign a letter to each Hospital
agreeing to be bound
by the terms and conditions of the Hospital Contract for the
term, and shall
copy TMS on each letter; and (ii) PPTI shall pay the Purchase
Price and issue
the Shares.
3. Indemnification; Liability.
3.1 Nothing in this Agreement is to be construed to constitute
the Parties as
employer/employee, franchisor/franchisee, partners, joint
venturers, co-owners,
or otherwise as participants in a joint or common undertaking.
Employees of one
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Party are not entitled to benefits of any nature whatsoever
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