Document:

THIRD
      AMENDMENT TO
MEMBERSHIP
      INTEREST PURCHASE AGREEMENT
OF
HEALTH
      PLUS MANAGEMENT SERVICES, L.L.C.,
and
STUART
      BLUMBERG

    
 

    THIS
      THIRD AMENDMENT (“Amendment”)
      dated
      as of August 7, 2006, by and among BASIC CARE NETWORKS, INC., a Delaware
      corporation (the “Purchaser”),
      HEALTH PLUS MANAGEMENT SERVICES, LLC, a New York limited liability company
      (the
“Company”),
      and
      STUART BLUMBERG (“Blumberg”
or
      the
“Principal”),
      is an
      amendment to that certain Membership Interest Purchase Agreement dated November
      18, 2005 by and among the Buyer and Seller (the “Agreement”).
      

    

    WHEREAS,
      the parties desire to increase the Purchase Price in Section 2.1(a) of the
      Agreement by $100,000, to compensate the Principal for certain construction
      costs borne by the Principal during the extended period prior to
      Closing;

    

    WHEREAS,
      the parties deem it desirable to change the Annualized Earn-Out Period to
      January 1, 2006 through June 30, 2006; 

    

    WHEREAS,
      the parties wish to extend the deadline for effectiveness under Section 5.10
      of
      the Agreement; 

    

    WHEREAS,
      the parties also deem it desireable to make certain other adjustments to the
      purchase price provision in the Agreement. 

    

    THE
      PARTIES HEREBY AGREE AS FOLLOWS: 

    

    1.
       The
      parties mutually agree that Section 5.10 of the Agreement is hereby amended
      and
      restated to read in its entirety as follows: 

    

    “5.10
       Registration
      Statement Effective.
      The
      Registration Statement (as defined in Section 7.6, below) shall have become
      effective under the Securities Act and no stop order suspending the
      effectiveness of the Registration Statement shall have been issued and no
      proceedings for that purpose shall have been initiated or threatened by the
      SEC
      (as defined in Section 7.6, below); provided, however, that in the event the
      Registration Statement (i) has not been filed on or before March 15, 2006,
      or
      (ii) has not become effective on or before October 16, 2006, the Principal
      shall
      have the right, in its sole discretion, to terminate this Agreement without
      cost
      or penalty.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.
       Section
      2.1 of the Agreement is hereby amended and restated to read in its entirety
      as
      follows: 

     

    “Section
      2.1 Purchase
      Price.
      Subject
      to the terms of this Agreement, as full consideration for the sale, assignment,
      transfer and delivery of the Purchased Interests and the execution and delivery
      of the agreements referenced herein, the Purchaser shall deliver to Principal
      the following aggregate consideration of (the “Purchase
      Price”):

     

    (a)
      TWELVE MILLION, ONE HUNDRED THIRTY-TWO THOUSAND, THREE HUNDRED AND FIFTY-SIX
      DOLLARS ($12,132,356) (the “Unadjusted
      Closing Cash Amount”),
      less
      an
      amount equal to the accrued employee bonus compensation payable by the Company,
      in an amount to be determined by the Principal, on behalf of the Company, on
      or
      prior to the Closing Date (the “Employee
      Bonus Amount”),
      which
      Employee Bonus Amount shall be an assumed liability of the Purchaser hereunder
      (the Unadjusted Closing Cash Amount, less the Employee Bonus Amount, shall
      be
      referred to herein as the “Closing
      Cash Amount”).
      At
      the Closing, the Principal shall inform the Purchaser of the specific amount
      of
      the Employee Bonus Amount, which shall be paid by the Purchaser in accordance
      with instructions provided by the Principal at or prior to the
      Closing.

     

    (b)
      The
      Closing Cash Amount shall be paid by the Purchaser at the Closing as follows:
      (i) first,
      to
      Health Management Corporation of America (“HMCA”),
      an
      amount equal to all principal and accrued interest, if any, owed by the Company
      under that certain promissory note, dated July 28, 2005 between the Company,
      as
      Maker, and HMCA, as Payee (the “HMCA
      Note Amount”),
      by
      wire transfer of immediately available U.S. funds, to an account designated
      in
      writing by HCMA at or prior to the Closing; and (ii) second,
      to
      Principal, an amount equal to the Closing Cash Amount, less the HMCA Note
      Amount, by
      wire
      transfer of immediately available U.S. funds,
      to an
      account designated in writing by Principal at or prior to the
      Closing.

     

    (c)
      In
      addition to the foregoing, and subject to the remaining terms of this
      subparagraph, a promissory note (the “Promissory
      Note”)
      will
      be issued (if applicable) within three (3) business days following the Closing
      in the form attached as Exhibit
      I
      in the
      principal amount equal to: three (3) times the excess, if any, of (i) Adjusted
      EBITDA for the annualized period of January 1, 2006 through June 30, 2006
      (unaudited) (the “Annualized
      Earn-Out Period”),
      over
      (ii) Two Million, Nine Hundred and Eighty-Three Thousand, Eighty-Nine Dollars
      ($2,983,089) (the “Base
      Year Amount”),
      provided,
      however
      that notwithstanding the foregoing,

     

    
      	(A)  	
              the
                principal amount of the Promissory Note to be issued hereunder shall
                not
                exceed $2,000,000; 

            

    

     

    
      	(B)  	
              the
                Employee Bonus Amount shall not be considered as an expense to be
                taken
                into account in determining Adjusted EBITDA (and thus shall be added
                back
                to reach Adjusted EBITDA) in all determinations of Adjusted EBITDA
                under
                this Agreement and all other agreements entered into in connection
                with
                the transactions contemplated hereby;
                and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	(C)  	
              any
                amount in excess of $100,000 in any given year paid to Stuart Blumberg
                as
                compensation (including salary, bonuses or other forms of compensation)
                for acting as President and Chief Operating Officer (or any position
                with
                similar responsibilities) of the Purchaser shall not be treated as
                an
                expense to be taken into account in determining Adjusted EBITDA (and
                thus
                shall be added back to reach Adjusted EBITDA) in all determinations
                of
                Adjusted EBITDA under this Agreement and all other agreements entered
                into
                in connection with the transactions contemplated hereby.
                

            

    

     

    For
      clarity, the parties acknowledge that (i) if Adjusted EBITDA for the Annualized
      Earn-Out Period does not exceed the Base Year Amount, no Promissory Note shall
      be issued pursuant to this Section, and (ii) if, for example, Adjusted EBITDA
      for the Annualized Earn-Out Period exceeds the Base Year Amount by $500,000,
      the
      Promissory Note shall be issued in the principal face amount of $1,500,000
      (i.e.,
      $500,000 x 3 = $1,500,000).

     

    (d)
      The
      parties acknowledge and agree that, in the event the Promissory Note is issued
      but not paid, or in the event the Purchaser commits a material default under
      the
      Promissory Note which is not cured within the applicable cure period, and in
      addition to any of the remedies available to the Company and Principal,
      including, without limitation, any action for breach hereunder and under the
      Promissory Note, (i) the Non-Competition Agreement between Principal and the
      Company shall automatically terminate and be of no further force or effect,
      and
      (ii) at Principal’s option, the Consulting Agreement between Principal and the
      Company shall automatically terminate and be of no further force or effect,
      in
      which event Principal shall give the Company written notice of such
      termination.

     

    Upon
      issuance of the Promissory Note, interest on unpaid principal under the
      Promissory Note shall accrue at the simple rate of six percent (6%) per annum
      from and after the date of issuance. Any and all accrued interest under the
      Promissory Note shall be due and payable six (6) months after the date of
      issuance of the Promissory Note, with the remainder of all outstanding accrued
      interest and principal under the Promissory Note due and payable eleven (11)
      months after the date of issuance of said Promissory Note, but no later than
      June 30, 2007. For purposes of this Agreement, “Adjusted EBITDA” shall mean
      earnings of the Purchaser derived from the P.C.s before taxes, interest,
      depreciation and amortization, determined in accordance with GAAP on an accrual
      basis by the Company’s independent auditor, adjusted as follows:

     

    
      	 	
              (1)
                neither
                the proceeds from nor any dividends or refunds with respect to, nor
                any
                increases in the cash surrender value of, any life insurance policy
                under
                which the Purchaser or the P.C.s, is the named beneficiary or is
                otherwise
                entitled to recovery, shall be included as income, and the premium
                expense
                related to any such life insurance policy shall not be treated as
                an
                expense;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (2)
                the
                Employee Bonus Amount shall not be treated as an expense, and thus
                shall
                be added back to reach Adjusted EBITDA;
                and

            

    

     

    
      	 	
              (3)
                any
                extraordinary or unusual gains or losses and any gains or losses
                from the
                sale of any capital assets used by the Purchaser or the P.C.s or
                any
                subsidiary thereof in its operations during the applicable twelve-month
                periods under comparison (as opposed to assets acquired in the ordinary
                course of the business of the Purchaser, the P.C.s and its subsidiaries
                for resale or other disposition) shall be excluded from
                income.”

            

    

     

    

     

    [Remainder
      of Page Left Blank Intentionally]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment, on the day
      and
      year first above written.

     

    
      	 	 	 
	PURCHASER:	BASIC
              CARE
              NETWORKS, INC.
	 
 	 
 	 
 
	 	By:  	 /s/  Robert Goldsamt
	 	
              

              Name:
                Robert Goldsamt

              Title:
                Chief Executive Officer

            
	 	 

    

     

    
      	 	 	 
	PRINCIPAL:	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	 /s/ Stuart
              Blumberg
	 	
              

              Stuart
                Blumberg

            
	 	 

    

    
      	 	 	 
	 	 	 
	COMPANY:	HEALTH
              PLUS
              MANAGEMENT SERVICES, L.L.C.
	 
 	 
 	 
 
	 	By:  	 /s/ Stuart Blumberg
	 	
              
Name:
              Stuart Blumberg
	 	Title:THIRD
      AMENDMENT TO THE
MASTER
      TRANSACTION AGREEMENT

    

    

      THIS
      THIRD AMENDMENT (“Amendment”), is made by and among BASIC HEALTH CARE NETWORKS
      OF TEXAS, L.P., a Texas limited partnership (the “Company”)
      on the
      one hand and 303 MEDICAL CLINIC, P.A. , a Texas professional association, BRUCE
      E. WARDLE’, D.O., P.A., a Texas professional association, IBERIA MEDICAL CLINIC,
      P.A., a Texas professional association, KINGSLEY MEDICAL CLINIC, P.A., a Texas
      professional association, LAKE JUNE MEDICAL CENTER, P.A., a Texas professional
      association, NORTHSIDE MEDICAL CLINIC, P.A., a Texas professional association,
      O’CONNOR MEDICAL CENTER, P.A., a Texas professional association, RED BIRD URGENT
      CARE CLINIC, P.A., a Texas professional association (collectively, the
“Clinics”)
      and
      Bruce E. Wardlay, D.O. (“Physician”)
      is an
      amendment to that certain Master Transaction Agreement, dated December 12,
      2005,
      by and among the Company, the Clinics and the Physician (the “Agreement”). The
      Company, the Clinics and the Physician may hereinafter be referred to
      individually as a "Party" and collectively as the "Parties." This Amendment
      is
      effective as of August 7, 2006. 

    

    1. The
      Parties mutually agree that Section 2.2 of the Agreement is hereby amended
      and
      restated to read in its entirety as follows: 

    

    “2.2
      Closing.
      The
      Closing shall take place on or
      before
      (a) December 31, 2006, provided that the conditions in Article 7 are satisfied,
      or (b) on a date mutually agreed by the parties.
      The date
      on which the Closing occurs is hereinafter referred to as the “Closing
      Date.”
At
      the
      Closing, each of the Clinics and the Company shall execute and deliver an
      executed Asset Purchase Agreement in the form attached as Exhibit
      A
      hereto
      with respect to each such Clinic, including each of the closing deliverables
      set
      forth in such Asset Purchase Agreement.”

    

    2. The
      Parties also mutually agree that Section 9.4 of the Agreement is hereby amended
      and restated to read in its entirety as follows: 

    

    “9.4
      Termination
      Date.
      Unless
      terminated by mutual agreement of the parties prior to Closing, this Master
      Transaction Agreement shall terminate upon the first to occur of the following
      events: (a) at the discretion of the Physician if no registration statement
      shall have been filed by the Company with the SEC with respect to the initial
      public offering of the Company on or before March 15, 2006, (b) a date mutually
      agreed in writing by the Company and the Physician on which this Agreement
      shall
      terminate, (c) thirty (30) days after delivery of notice by a non-breaching
      party to the other party or parties of a material breach by such party or
      parties, provided that such material breach has not been cured (“Termination
      Date”).
      If
      Closing fails to occur as a result of the breach of this Master Transaction
      Agreement by the Company on the one hand, or any of the Physician Parties,
      on
      the other, this Master Transaction Agreement may be extended for a reasonable
      time to facilitate Closing at the election of the non-breaching party. In the
      event of termination of this Master Transaction Agreement pursuant to the
      provisions of this Section, a party that is not in material breach of this
      Master Transaction Agreement shall stand fully released and discharged with
      respect to any and all obligations under this agreement. In the event that
      the
      Conditions Precedent to Closing are not satisfied because of the breach of
      any
      representation, warranty or covenant of any party hereto, each party shall
      be
      entitled to pursue, exercise and enforce any and all remedies, rights, powers
      and privileges available hereunder or at law or in equity.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. BCNI
      agrees that in the event no closing takes place by December 31, 2006 it will
      provide Dr. Wardlay with all audit information on his clinics to use as he
      sees
      fit. 

     

    

     

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      of Page Left Blank Intentionally]

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed and delivered in the manner legally binding upon them as of the date
      first above written.

     

    

    COMPANY:

    BASIC
      HEALTH CARE NETWORKS

    OF
      TEXAS,
      L.P.

    a
      Texas
      limited partnership

    

    By:
      Basic
      Health Care Networks of Texas I, LLC, a Delaware limited liability company,
      General Partner

    

    

    By:
      /s/ Robert S. Goldsamt       
      

    Robert
      S.
      Goldsamt

    Chief
      Executive Officer

    

    

    PHYSICIAN:
      

    

    /s/
      Dr. Bruce
      Wardlay                  

    Dr.
      Bruce
      Wardlay, an individual

    

    

    

    CLINICS:
       

    303
      MEDICAL CLINIC, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    

    BRUCE
      WARDLE’, D.O., P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    

    IBERIA
      MEDICAL CLINIC, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    KINGSLEY
      MEDICAL CLINIC, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    

    LAKE
      JUNE
      MEDICAL CENTER, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    

    NORTHSIDE
      MEDICAL CLINIC, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    

    O’CONNOR
      MEDICAL CENTER, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

    

    

    RED
      BIRD
      URGENT CARE CLINIC, P.A.

    
      

      /s/
        Dr. Bruce
        Wardlay                  

                                                    
Dr.
      Bruce
      Wardlay

    President

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