EXHIBIT 1
STOCK PURCHASE AGREEMENT
BY AND AMONG
RESPONSE ONCOLOGY, INC.,
STOCKHOLDERS OF ONCOLOGY HEMATOLOGY GROUP OF SOUTH FLORIDA, P.A.
AND
SOUTH FLORIDA ONCOLOGY HEMATOLOGY ASSOCIATES, P.A.
December 20, 1995
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of December 20, 1995, by and among
RESPONSE ONCOLOGY, INC, a Tennessee corporation (the "Purchaser"), the
STOCKHOLDERS OF ONCOLOGY HEMATOLOGY GROUP OF SOUTH FLORIDA, P.A., each of whom,
together with his or her state of residence and address, is listed on Exhibit A
hereto (collectively, the "Sellers" and, individually, a "Seller") and SOUTH
FLORIDA ONCOLOGY HEMATOLOGY ASSOCIATES, P.A., a Florida professional
association (the "Group").
W I T N E S S E T H:
WHEREAS, the Sellers own in the aggregate eighty (80) shares (the
"Shares") of the common stock, par value $1.00 per share, of Oncology
Hematology Group of South Florida, P.A., a Florida professional association
engaged in the practice of medicine (the "Association"), with each Seller
owning ten (10) Shares; and
WHEREAS, the Sellers desire to sell and Purchaser desires to purchase the
Shares on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and promises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and attorneys' fees and expenses which, in the
aggregate, would have a material adverse effect on the financial condition or
results of operations of the Purchaser.
"Affiliate" has the meaning set forth in Rule 12-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504 or any similar group defined under a similar provision of state,
local or foreign law.
"Agreement among Sellers" means an agreement, effective as of a time prior
to the execution and delivery of this Agreement, pursuant to which the Sellers
appoint an attorney-in-fact to execute and deliver this Agreement, collect the
cash portion of the Purchase Price, take delivery of the Long-term Note and the
Warrants, receive payments under the Long-Term Note, exercise Warrants and
otherwise act on behalf of the Sellers for all purposes connected with the
performance of this Agreement.
"Applicable Rate" means the corporate base rate of interest announced from
time to time by First Tennessee Bank National Association, Memphis, Tennessee
plus two percent (2%).
"Association" has the meaning set forth in the first recital above.
"Base Purchase Price" has the meaning set forth in Section 2(a) below.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction of which any Seller has Knowledge that forms or
could form the basis for any specified consequence.
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Controlled Group of Corporations" has the meaning set forth in Code
Section 1563.
"Deferred Intercompany Transaction" has the meaning set forth in Treasury
Regulation 1.1502-13.
"Deferred Purchase Price" has the meaning set forth in Section 2(b) below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan,
(b) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, the Occupational Safety and Health Act
of 1970, the Medical Waste Tracking Act of 1988, the U. S. Public Vessel
Medical Waste Anti-Dumping Act of 1988, the Marine Protection, Research and
Sanctuaries Act and Human Services, National Institute for Occupational Safety
and Health, Infections Waste Disposal Guidelines, Publication No. 88-119, each
as amended, together with all other laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public health
and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of medical wastes,
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes into ambient air, surface water, ground water, or lands or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excess Loss Account" has the meaning set forth in Treasury Regulation
1.1502-19.
"Extremely Hazardous Substance" has the meaning set forth in Section 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statement" has the meaning set forth in Section 4(g) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Group" has the meaning set forth in the initial paragraph of this Stock
Purchase Agreement.
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, and whether due or to become due), including any liability for
Taxes.
"Long-Term Note" means the promissory note of the Purchaser payable to the
order of the Sellers in the form set forth as Exhibit 2(b)(i).
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in Section
4(f) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section 4(f)
below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 4(f)
below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.
"Party" means the Purchaser or any Seller.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406 and
Code Sec. 4975.
"Pro Rata" means, with respect to the Sellers, their proportionate
ownership interests in the Association.
"Purchaser" has the meaning set forth in the initial paragraph of this
Stock Purchase Agreement and, after Closing (and as relates to Section 9(b)
regarding indemnification), shall mean Response Oncology, Inc. and any
subsidiary or affiliate thereof.
"Purchaser's Disclosure Letter" has the meaning set forth in Section 3(b)
below.
"Receivables" means the face amount, in dollars, of the Association's
accounts receivable as of the close of business on the day prior to the Closing
Date.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Response Stock" means the common stock of the Purchaser, $.01 par value
per share.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money
liens and liens securing rental payments under capital lease arrangements, and
(d) other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Sellers' Disclosure Letter" has the meaning set forth in Section 3(a)
below.
"Service Agreement" means the Service Agreement between the Purchaser and
the Group to be executed and delivered by the Purchaser and the Group, and
which will become effective, at the time of Closing.
"Shares" means all of the issued and outstanding shares of the Common
Stock, par value $1.00 per share, of the Association.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 9(d) below.
"Warrants" means warrants to purchase 160,000 shares of Response Stock at
$12.50 per share, issuable to the Sellers at Closing in the form set forth as
Exhibit 2(b)(ii).
2. PURCHASE AND SALE OF SHARES.
(a) BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, the Purchaser agrees to purchase from the Sellers, and the
Sellers agree to sell to the Purchaser, all of the Shares for the sum of (i)
the aggregate base price (the "Base Purchase Price") equal to the sum of Ten
Million Three Hundred Three Thousand Seven Hundred Twenty-Two Dollars
($10,303,722.00), plus the Net Realizable Value of Receivables, and (ii) the
deferred price (the "Deferred Purchase Price") equal to Fifty Thousand Dollars
($50,000.00) per calendar quarter for each quarter, or portion thereof, that
the Service Agreement remains if effect, up to a maximum of Eight Hundred
Thousand Dollars ($800,000). In the event of termination of the Service
Agreement on any day which is not the last day of a calendar quarter, then the
Deferred Purchase Price shall be pro rated through the last day of the calendar
month of termination as if such termination occurred on that day. In addition
to the foregoing, the Purchaser shall issue to each Seller, at such Seller's
election, either (i) a Warrant to purchase 20,000 shares Response Stock, (ii)
options to purchase 20,000 shares of Response Stock at a price of $12.50 per
share, which options shall be issued pursuant to the Purchaser's Non-Qualified
Stock Option Plan, or (iii) any combination of Warrants and options. At the
time of such issuance, any options issued to any Seller pursuant to said plan
shall be immediately vested and exercisable.
(b) PAYMENT OF PURCHASE PRICE. The Purchaser shall pay or satisfy the
Base Purchase Price in the following manner: (i) Five Million Two Hundred
Thousand ($5,343,750) Dollars in cash to the Sellers, pro rata according to
their ownership of Shares, at Closing (hereinafter defined), (ii) Five Million
Nine Hundred Fifty-Nine Thousand Nine Hundred Seventy-Two ($5,959,972) Dollars
by issuance and delivery of the Long-Term Note to the Sellers; and (iii)
issuance and delivery of the Warrants and/or option to the Sellers in
accordance with Section 2(a) above. The Deferred Purchase Price shall be paid
to the Sellers, pro rata according to their ownership of Shares, by the
Purchaser Fifty Thousand Dollars (or such portion thereof as may be computed in
accordance with Section 2(a) in the event of termination of the Service
Agreement) in arrears on the last day of each calendar quarter, commencing
March 31, 1996 (which date is subject to change in the event the Closing occurs
later than January 2, 1996), with the last such payment being due and payable
on the earlier of the last day of the quarter during which the Service
Agreement is terminated or December 31, 1999. In addition to the foregoing,
the Purchaser shall pay to the Sellers, pro rata according to their ownership
of Shares, as additional Purchase Price, on a monthly basis during the period
after Closing, the amount of Receivables collected by Response in excess of
$1,200,000.00. Such obligation shall terminate on the first anniversary of the
Closing. In that regard, during such one year period, the Purchaser shall make
monthly accountings to the Sellers with respect to the collection of
Receivables, and the Sellers may, at their option and sole expense, assist in
the collection of any Receivable.
(c) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Baker, Donelson,
Bearman & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
commencing at 9:00 a.m. local time on January 2, 1996, or such other date as
the Purchaser and the Sellers may mutually determine (the "Closing Date").
(d) DELIVERIES AT THE CLOSING. At the Closing, (i) the Purchaser will
deliver to the Sellers the various certificates, instruments, and documents
referred to in Section 8(a) below, (ii) the Sellers will deliver to the
Purchaser the various certificates, instruments, and documents referred to in
Section 8(b) below.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
(a) REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers jointly
and severally represent and warrant to the Purchaser that the statements
contained in this Section 3(a) are correct and complete as of the date of this
Agreement with respect to the Sellers, except as set forth in the disclosure
letter executed and delivered by the Sellers and the Group contemporaneous with
this Agreement (the "Sellers' Disclosure Letter""). The Sellers' Disclosure
Letter shall be satisfactory to the Purchaser and its counsel and will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3(a) and Section 4.
(i) AUTHORIZATION OF TRANSACTION. Each Seller has the requisite
legal capacity and has full power and authority to execute and deliver this
Agreement and to perform his obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of each Seller, enforceable in
accordance with its terms and conditions. Each Seller need not give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the transactions
contemplated by this Agreement. This Agreement constitutes the valid and
legally binding obligation of each Seller, enforceable in accordance with its
terms, subject to applicable bankruptcy, moratorium, insolvency and other laws
affecting the rights of creditors and general equity principles.
(ii) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any Seller is subject or (B)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which any Seller is a party or by
which he is bound or to which any of his assets is subject.
(iii) BROKERS' FEES. The Sellers have no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Purchaser could
become liable or obligated.
(iv) SHARES. Each Seller holds of record and owns beneficially all
of the Shares free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws), Taxes,
Security Interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. No Seller is a party to any option, warrant,
purchase right, or other contract or commitment that could require the Seller
to sell, transfer, or otherwise dispose of any capital stock of the Association
(other than this Agreement). No Seller is a party to any voting trust, proxy,
or other agreement or understanding with respect to the voting of any Shares.
(v) AGREEMENT AMONG SELLERS. The Agreement among Sellers has been
duly executed by each Seller and constitutes the valid and legally binding
obligation of each Seller, enforceable according to its terms.
(b) REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to each Seller that the statements contained in this
Section 3(b) are correct and complete as of the date of this Agreement except
as set forth in the disclosure letter executed and delivered by the Purchaser
contemporaneous with this Agreement (the "Purchaser's Disclosure Letter").
(i) ORGANIZATION OF THE PURCHASER. The Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Tennessee.
(ii) AUTHORIZATION OF TRANSACTION. The Purchaser has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Purchaser,
enforceable in accordance with its terms, subject to applicable bankruptcy,
moratorium, insolvency and other laws affecting the rights of creditors and
general equity principles. The Purchaser need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
(iii) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Purchaser is subject or
any provision of its charter or bylaws or (B) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Purchaser is a party or by which it is bound or to
which any of its assets is subject.
(iv) BROKERS' FEES. The Purchaser has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
(v) INVESTMENT. The Purchaser is not acquiring the Shares with a
view to or for sale in connection with any distribution thereof within the
meaning of the Securities Act.
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE ASSOCIATION. The
Sellers and the Group, jointly and severally, represent and warrant to the
Purchaser that the statements contained in this Section 4 are true, correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4), except
as set forth in the Sellers' Disclosure Letter. Nothing in the Sellers'
Disclosure Letter shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Sellers' Disclosure Letter
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. The Sellers' Disclosure Letter will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Association is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida. The Association is duly authorized to conduct
business and are in good standing under the laws of each jurisdiction where
such qualification is required. The Association has full corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the business in which it is engaged and to own and use its properties.
Paragraph 4(a) of the Sellers' Disclosure Letter lists the directors and
officers of the Association. The Sellers have delivered to the Purchaser
correct and complete copies of the charter and bylaws of the Association (as
amended to date). The minute book (containing the records of meetings of the
stockholders, the board of directors, and any committees of the board of
directors), the stock certificate book, and the stock record book of the
Association are correct and complete. The Association is not in default under
or in violation of any provision of its charter or bylaws.
(b) CAPITALIZATION. The entire authorized capital stock of the
Association consists of 5,000 Shares, of which 80 Shares are issued and
outstanding. All of the issued and outstanding Shares have been duly
authorized, are validly issued, fully paid, and nonassessable, and are held of
record by the Sellers. There are no outstanding or authorized options,
warrants, purchase rights, preemptive rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
the Association to issue, sell, or otherwise cause to become outstanding any of
its capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to the
Association. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of the
Association.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Association is subject or any
provision of the charter or bylaws of the Association or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Association is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets). The Association
is not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.
(d) BROKERS' FEES. The Association has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) TITLE TO ASSETS. The Association has good and marketable title to,
or a valid leasehold interest in, all of its properties and assets, free and
clear of all Security Interests, and has not sold, transferred, exchanged or
conveyed any of its properties and assets since the date of the Most Recent
Balance Sheet except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet.
(f) FINANCIAL STATEMENTS. Attached as collective Paragraph 4(f) to the
Sellers' Disclosure Letter are the following financial statements (collectively
the "Financial Statements"): (i) unaudited balance sheet and statement of
income, changes in stockholders' equity, and cash flow as of and for the fiscal
years ended December 31, 1994 (the "Most Recent Fiscal Year End") for the
Association; and (ii) unaudited balance sheet and statement of income, changes
in stockholders' equity, and cash flow (the "Most Recent Financial Statements")
as of and for the six (6) months ended June 30, 1995 (the "Most Recent Fiscal
Month End") for the Association. The Financial Statements (including the notes
thereto) have been prepared on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of the Association as
of such dates and the results of operations of the Association and its
subsidiaries for such periods on a cash basis method of accounting, are correct
and complete, and are consistent with the books and records of the Association.
(g) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the Most
Recent Fiscal Year End, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of the Association. Without limiting the generality of the foregoing,
since that date:
(i) the Association has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, other than for a fair consideration
in the Ordinary Course of Business;
(ii) the Association has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts, leases, and
licenses) either involving more than $25,000.00 or outside the Ordinary Course
of Business;
(iii) no party (including the Association) has accelerated,
terminated, modified, or cancelled any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses) involving
more than $25,000.00 to which the Association is a party or by which the
Association or its properties are bound;
(iv) the Association has not created, suffered or permitted to attach
or be imposed any Security Interest upon any of its assets, tangible or
intangible;
(v) the Association has not made any capital expenditure (or series
of related capital expenditures) either involving more than $25,000.00 or
outside the Ordinary Course of Business;
(vi) the Association has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other Person (or
series of related capital investments, loans, and acquisitions) either
involving more than $25,000.00 or outside the Ordinary Course of Business;
(vii) the Association has not issued any note, bond, or other debt
instrument or security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation;
(viii) the Association has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary Course of Business;
(ix) the Association has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and claims) either
involving more than $25,000.00 or outside the Ordinary Course of Business;
(x) the Association has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the charter or
bylaws of the Association;
(xii) the Association has not issued, sold, or otherwise disposed of
any of its capital stock, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any of
its capital stock;
(xiii) the Association has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock;
(xiv) the Association has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property;
(xv) the Association has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and employees outside
the Ordinary Course of Business;
(xvi) the Association has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(xvii) the Association has not granted any increase in the base
compensation of any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xviii) the Association has not adopted, amended, modified, or
terminated any bonus, profit sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee Benefit
Plan);
(xix) the Association has not made any other change in employment
terms for any of its directors, officers, and employees outside the Ordinary
Course of Business;
(xx) the Association has not made or pledged to make any charitable
or other capital contribution outside the Ordinary Course of Business;
(xxi) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of Business
involving the Association; and
(xxii) the Association has not committed to any of the foregoing.
(h) UNDISCLOSED LIABILITIES. The Association has no Liability (and there
is no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against the Association that
may result in any Liability), except for (i) Liabilities set forth on the face
of the Most Recent Balance Sheet (rather than in any notes thereto); (ii)
Liabilities which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business and (iii) Liabilities described with particularity
in Paragraph 4(h) of the Sellers' Disclosure Letter (and, with respect to each
Liability described in items (i) through (iii) immediately above, none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, malpractice, infringement, or
violation of law).
(i) LEGAL COMPLIANCE. The Association and its respective predecessors
and Affiliates have complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments (and
all agencies thereof), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure so to comply.
(j) TAX MATTERS.
(i) The Association has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects. All
Taxes owed by the Association (whether or not shown on any Tax Return) have
been paid or accrued in the Financial Statements. The Association is not the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by an authority in a jurisdiction where the
Association does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction. There are no Security Interests on any of the assets of
either the Association that arose in connection with any failure (or alleged
failure) to pay any Tax.
(ii) The Association has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.
(iii) Neither the Sellers nor any director or officer (or employee
responsible for Tax matters) of the Association expects any authority to assess
any additional Taxes for any period for which Tax Returns have been filed.
There is no dispute or claim concerning any Tax Liability of the Association
either (A) claimed or raised by any authority in writing or (B) as to which the
Sellers or the directors and officers (and employees responsible for Tax
matters) of the Association have Knowledge. Paragraph 4(j) of the Sellers'
Disclosure Letter lists all federal, state, local, and foreign income Tax
Returns filed with respect to the Association for taxable periods ended on or
after December 31, 1992, indicates those Tax Returns that have been audited,
and indicates those Tax Returns that currently are the subject of audit. The
Sellers have delivered to the Purchaser correct and complete copies of all
examination reports and statements of deficiencies assessed against or agreed
to by the Association since December 31, 1991.
(iv) The Association has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(v) The Association has not filed a consent under Code Section 341(f)
concerning collapsible corporations. The Association has not made any payment,
is not obligated to make any payment, or is not a party to any agreement that
under certain circumstances could obligate it to make any payments that will
not be deductible under Code Section 280G. The Association has not been a
United States real property holding corporation within the meaning of Code Sec.
897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii). The Association has not disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code Section 6662.
The Association is not a party to any Tax allocation or sharing agreement. The
Association (A) has not been a member of an Affiliated Group filing a
consolidated federal income Tax Return or (B) has no Liability for the Taxes of
any Person (other than of the Association under Treasury Regulation 1.1502 6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(vi) Paragraph 4(j) of the Sellers' Disclosure Letter sets forth the
following information with respect to the Association as of the most recent
practicable date: (A) the basis of the Association in its assets; and (B) the
amount of any net operating loss, net capital loss, unused investment or other
credit, unused foreign tax, or excess charitable contribution.
(k) REAL PROPERTY. The Association does not own any real property and
has not executed and delivered or otherwise entered into any contract to
purchase any real property. Paragraph 4(k) of the Sellers' Disclosure Letter
lists and describes briefly all real property leased or subleased to the
Association. The Sellers have delivered to the Purchaser correct and complete
copies of the leases and subleases listed in Paragraph 4(k) of the Sellers'
Disclosure Letter (as amended to date). With respect to each lease and
sublease listed in Paragraph 4(k) of the Sellers' Disclosure Letter, except as
otherwise set forth in such Paragraph 4(k) of the Sellers' Disclosure Letter:
(i) the lease or sublease is legal, valid, binding, enforceable, and
in full force and effect;
(ii) the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby;
(iii) the Association, and, to the best of Sellers' Knowledge, no
other party to the lease or sublease is in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a breach or
default or permit termination, modification, or acceleration thereunder;
(iv) the Association, and, to the best of Sellers' Knowledge, no
party to the lease or sublease has repudiated any provision thereof;
(v) to the best of Sellers' Knowledge, there are no disputes, oral
agreements, or forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are true and correct
with respect to the underlying lease;
(vii) the Association has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold;
(viii) all facilities leased or subleased thereunder have received
all approvals of governmental authorities (including licenses and permits)
required in connection with the operation thereof and have been operated and
maintained in accordance with applicable laws, rules, and regulations;
(ix) all facilities leased or subleased thereunder are supplied with
utilities and other services necessary for the operation of said facilities;
and
(x) to the best of Sellers' Knowledge, the owner of the facility
leased or subleased has good and marketable title to the parcel of real
property, free and clear of any Security Interest, easement, covenant, or other
restriction, except for installments of special easements not yet delinquent
and recorded easements, covenants, and other restrictions which do not impair
the current use, occupancy, or value, or the marketability of title, of the
property subject thereto.
(l) TANGIBLE ASSETS. The Association owns or leases all buildings,
machinery, equipment, and other tangible assets necessary for the conduct of
its business as presently conducted.
(m) INVENTORY. The inventory of the Association consists of medical
supplies, all of which is merchantable and fit for the purpose for which it was
procured or manufactured, and none of which is slow moving, obsolete, damaged,
or defective, subject only to the reserve for inventory writedown set forth on
the face of the Most Recent Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with
the past custom and practice of the Association.
(n) CONTRACTS. Paragraph 4(n) of the Sellers' Disclosure Letter lists
the following contracts and other agreements to which the Association is a
party:
(i) any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease payments in excess
of $25,000.00 per annum;
(ii) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, the performance of
which will extend over a period of more than one year, result in a loss to the
Association, or involve consideration in excess of $25,000.00;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which the
Association has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $25,000.00 or
under which it has imposed a Security Interest on any of its assets, tangible
or intangible;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any agreement with either the Sellers or their Affiliates (other
than the Association);
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement
for the benefit of its current or former directors, officers, and employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a full-
time, part-time, consulting, or other basis providing annual compensation in
excess of $25,000.00 or providing severance benefits;
(x) any agreement under which the Association has advanced or loaned
any amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xi) any agreement under which the consequences of a default or
termination could have an adverse effect on the business, financial condition,
operations, results of operations, or future prospects of the Association; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $25,000.00.
The Sellers has delivered to the Purchaser a correct and complete copy of each
written agreement listed in Paragraph 4(n) of the Sellers' Disclosure Letter
(as amended to date) and a written summary setting forth the terms and
conditions of each oral agreement referred to in Paragraph 4(n) of the Sellers'
Disclosure Letter. With respect to each such agreement: (1) the agreement is
legal, valid, binding, enforceable, and in full force and effect; (2) the
agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby; (3) no party is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit termination, modification, or acceleration, under the
agreement; and (4) no party has repudiated any provision of the agreement.
(o) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable of
the Association are reflected properly on its books and records, are valid
receivables subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Association.
(p) POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of the Association.
(q) INSURANCE. Paragraph 4(q) of the Sellers' Disclosure Letter sets
forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, medical
malpractice, and workers' compensation coverage and bond and surety
arrangements) to which the Association has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five (5)
years:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage was
on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (C) neither the Association nor any other party to the policy is in
breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse
of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (D) no party to the policy
has repudiated any provision thereof. The Association has been covered during
the past five (5) years by insurance in scope and amount customary and
reasonable for the businesses in which it has engaged during the aforementioned
period. Paragraph 4(q) of the Sellers' Disclosure Letter describes any self-
insurance arrangements affecting the Association.
(r) LITIGATION. Paragraph 4(r) of the Sellers' Disclosure Letter sets
forth each instance in which either the Association (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (ii) is a
party or is threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in Paragraph 4(r) of the Sellers' Disclosure Letter
could result in any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of either the
Association or the Group. Neither the Sellers nor the directors and officers
(and employees with responsibility for litigation matters) of the Association
and the Group has any reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against the Association
or the Group.
(s) EMPLOYEES. To the best of the Sellers' Knowledge, no physician,
executive, key employee, or group of employees has any plans to terminate
employment with the Association or, after the Closing, with the Group. The
Association is not a party to or bound by any collective bargaining agreement,
nor has it experienced any strikes, grievances filed pursuant to any work rules
of any organized labor organization, claims of unfair labor practices, or other
collective bargaining disputes. To the best of the Sellers' Knowledge, the
Association has not committed any unfair labor practice. To the best of the
Sellers' Knowledge, no organizational effort is presently being made or
threatened by or on behalf of any labor union with respect to employees of the
Association.
(t) EMPLOYEE BENEFITS.
(i) Paragraph 4(t) of the Sellers' Disclosure Letter lists each
Employee Benefit Plan that the Association maintains or to which the
Association contributes.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in all respects
with the applicable requirements of ERISA, the Code, and other applicable laws.
(B) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to each
such Employee Benefit Plan. The requirements of Part 6 of Subtitle B of Title
I of ERISA and of Code Sec. 4980B have been met with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(C) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such Employee Benefit Plan which is an Employee Pension Benefit Plan and all
contributions for any period ending on or before the Closing Date which are not
yet due have been paid to each such Employee Pension Benefit Plan or accrued in
accordance with the past custom and practice of the Association. All premiums
or other payments for all periods ending on or before the Closing Date have
been paid with respect to each such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
(D) Each such Employee Benefit Plan which is an Employee Pension
Benefit Plan meets the requirements of a "qualified plan" under Code Sec.
401(a) and has received, within the last two years, a favorable determination
letter from the Internal Revenue Service.
(E) The market value of assets under each such Employee Benefit
Plan which is an Employee Pension Benefit Plan (other than any Multiemployer
Plan) equals or exceeds the present value of all vested and nonvested
Liabilities thereunder determined in accordance with PBGC methods, factors, and
assumptions applicable to an Employee Pension Benefit Plan terminating on the
date for determination.
(F) The Sellers have delivered to the Purchaser correct and
complete copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue Service, the
most recent Form 5500 Annual Report, and all related trust agreements,
insurance contracts, and other funding agreements which implement each such
Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that the Association
maintains or ever has maintained or to which it contributes, ever has
contributed, or ever has been required to contribute:
(A) No such Employee Benefit Plan which is in Employee Pension
Benefit Plan (other than any Multiemployer Plan) has been completely or
partially terminated or been the subject of a Reportable Event as to which
notices would be required to be filed with the PBGC. No proceeding by the PBGC
to terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(B) There have been no Prohibited Transactions with respect to
any such Employee Benefit Plan. No Fiduciary has any Liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any such Employee Benefit Plan.
No action, suit, proceeding, hearing, or investigation with respect to the
administration or the investment of the assets of any such Employee Benefit
Plan (other than routine claims for benefits) is pending or threatened.
Neither the Sellers nor the directors and officers (and employees with
responsibility for employee benefits matters) of the Association has any
Knowledge of any Basis for any such action, suit, proceeding, hearing, or
investigation.
(C) The Association has not incurred, and neither the Sellers
nor the directors and officers (and employees with responsibility for employee
benefits matters) of the Association has any reason to expect that the
Association will incur, any Liability to the PBGC (other than PBGC premium
payments) or otherwise under Title IV of ERISA (including any withdrawal
Liability) or under the Code with respect to any such Employee Benefit Plan
which is an Employee Pension Benefit Plan.
(iii) The Association does not contribute to, has never contributed
to, and has not been required to contribute to any Multiemployer Plan or has
any Liability (including withdrawal Liability) under any Multiemployer Plan.
(iv) The Association does not maintain, has never maintained, has
never contributed, and has not been required to contribute to any Employee
Welfare Benefit Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or terminated employees,
their spouses, or their dependents (other than in accordance with Code Sec.
4980B).
(u) GUARANTIES. The Association is not a guarantor or is not otherwise
liable for any Liability or obligation (including indebtedness) of any other
Person.
(v) ENVIRONMENT, HEALTH, AND SAFETY.
(i) Each of the Sellers, the Association and their respective
Affiliates has complied with all Environmental, Health, and Safety Laws, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply. Without limiting the generality of the preceding
sentence, each of the Sellers, the Association and their respective Affiliates
has obtained and been in compliance with all of the terms and conditions of all
permits, licenses, and other authorizations which are required under, and has
complied with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all Environmental, Health, and Safety Laws.
(ii) The Association has no Liability (and none of the Sellers, the
Association and their respective Affiliates has handled or disposed of any
substance, arranged for the disposal of any substance, exposed any employee or
other individual to any substance or condition, or owned or operated any
property or facility in any manner that could form the Basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against the Association giving rise to any Liability) for
damage to any site, location, or body of water (surface or subsurface), for any
illness of or personal injury to any employee or other individual, or for any
reason under any Environmental, Health, and Safety Law.
(iii) All properties and equipment used in the business of the
Sellers, the Association and their respective Affiliates have been free of
asbestos, PCB's, methylene chloride, trichloroethylene, 1,2-trans-
dichloroethylene, dioxins, dibenzofurans, and Extremely Hazardous Substances.
(w) HEALTHCARE COMPLIANCE. Neither the Association nor any physician
associated with or employed by the Association has received payment or any
remuneration whatsoever to induce or encourage the referral of patients or the
purchase of goods and/or services as prohibited under 42 U.S.C. 1320a 7b(b),
or otherwise perpetrated any Medicare or Medicaid fraud or abuse nor has any
fraud or abuse been alleged within the last five (5) years by any government
agency. The Association and/or each physician employed thereby is
participating in or otherwise authorized to receive reimbursement from or is a
party to Medicare, Medicaid, and other third party payor programs, and, after
the execution and delivery hereof and of the Service Agreement, the foregoing
representation shall be true with respect to the Group and all physicians
employed thereby. All necessary certifications and contracts required for
participation in such programs are in full force and effect and have not been
amended or otherwise modified, rescinded, revoked or assigned and, to the best
of the Sellers' Knowledge, no condition exists or event has occurred which in
itself or with the giving of notice or the lapse of time or both would result
in the suspension, revocation, impairment, forfeiture or non-renewal of any
such third party payor program. The Association is and, after the execution
and delivery hereof and of the Service Agreement, the Group will be, in full
compliance with the requirements of all such third party payor programs
applicable thereto.
(x) FRAUD AND ABUSE. The Association and persons and entities providing
professional services for the Association have not engaged in any activities
which are prohibited under 42 U.S.C. 1320a 7b, or the regulations promulgated
thereunder pursuant to such statutes, or related state or local statutes or
regulations, or which are prohibited by rules of professional conduct,
including but not limited to the following:
(i) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment;
(ii) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment;
(iii) failing to disclose knowledge by a claimant of the occurrence
of any event affecting the initial or continued right to any benefit or payment
on its own behalf or on behalf of another, with intent to fraudulently secure
such benefit or payment; and
(iv) knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay or receive such remuneration
(A) in return for referring an individual to a person for the furnishing or
arranging for the furnishing or any item or service for which payment may be
made in whole or in part by Medicare or Medicaid, or (B) in return for
purchasing, leasing, or ordering or arranging for or recommending purchasing,
leasing, or ordering any good, facility, service or item for which payment may
be made in whole or in part by Medicare or Medicaid.
(y) FACILITY COMPLIANCE. The Association is duly licensed, and the
Association and its clinics, offices and facilities are lawfully operated in
accordance with the requirements of all applicable law and has all necessary
authorizations for their use and operation, all of which are in full force and
effect. There are no outstanding notices of deficiencies relating to the
Association or any physician employed thereby issued by any governmental
authority or third party payor requiring conformity or compliance with any
applicable law or condition for participation of such governmental authority or
third party payor, and after reasonable and independent inquiry and due
diligence and investigation, the Association has no Knowledge or reason to
believe that such necessary authorizations may be revoked or not renewed in the
ordinary course.
(z) RATES AND REIMBURSEMENT POLICIES. The jurisdiction in which the
Association is located does not currently impose any restrictions or
limitations on rates which may be charged to private pay patients receiving
services provided by the Association. The Association has no rate appeal
currently pending before any governmental authority or any administrator of any
third party payor program. The Association has no Knowledge of any applicable
law, which has been enacted, promulgated or issued within the eighteen (18)
months preceding the date of this Agreement or any such legal requirement
proposed or currently pending in the jurisdiction in which the Association is
located which could have a material adverse effect on the Association or may
result in the imposition of additional Medicaid, Medicare, charity, free care,
welfare, or other discounted or government assisted patients at the Association
or require the Association to obtain any necessary authorization which the
Association does not currently possess.
(aa) DISCLOSURE. The representations and warranties contained in this
Section 4 and in the Sellers' Disclosure Letter do not contain any untrue or
misleading statement of a fact.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use his or its best efforts to
take all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 7 below).
(b) NOTICES AND CONSENTS. The Sellers will cause the Association to give
any notices to third parties, and will cause the Association to use its best
efforts to obtain any third-party consents, that may be required by law or the
terms of any contract to which the Sellers may be subject or that the Purchaser
may request in connection with the transaction contemplated by this Agreement.
Each of the Parties will (and the Sellers will cause the Association to) give
any notices to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental
agencies required to consummate the transaction contemplated by this Agreement.
(c) OPERATION OF BUSINESS. The Sellers will not cause or permit the
Association or the Group to engage in any practice, take any action, or enter
into any transaction outside the Ordinary Course of Business. Without limiting
the generality of the foregoing, the Sellers will not cause or permit the
Association to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock or (ii) otherwise engage in any
practice, take any action, or enter into any transaction of the sort described
in Section 4(g) above.
(d) PRESERVATION OF BUSINESS. The Sellers will cause the Association to
keep its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, patients, and employees.
(e) FULL ACCESS. The Sellers will permit, and the Sellers will cause the
Association to permit, representatives of the Purchaser to have full access at
all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Association, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Association.
(f) NOTICE OF DEVELOPMENTS. The Sellers will give prompt written notice
to the Purchaser of any material adverse development of which any of them
learns which would constitute or otherwise cause a breach of any of the
representations and warranties in Section 4 above. Each Party will give prompt
written notice to the others of any material adverse development causing a
breach of any of his or its own representations and warranties in Section 3
above. No disclosure by any Party pursuant to this Section 5(f), however,
shall be deemed to amend or supplement the Sellers' Disclosure Letter or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(g) EXCLUSIVITY. For so long as this Stock Purchase Agreement shall
remain in effect, the Sellers will not (and the Sellers will not cause or
permit the Association to) (i) solicit, initiate, or encourage the submission
of any proposal or offer from any Person relating to the acquisition of any
capital stock or other voting securities, or any substantial portion of the
assets of, the Association (including any acquisition structured as a merger,
consolidation, or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. The Sellers will not vote their
Shares in favor of any such acquisition structured as a merger, consolidation,
or share exchange. The Sellers will notify the Purchaser immediately if any
Person makes any proposal, offer, inquiry, or contact with respect to any of
the foregoing.
(h) RELEASE FROM PERSONAL GUARANTIES. The Purchaser shall use its best
efforts to obtain the release of each Seller from any personal guarantee of any
obligation of the Association. Failure of the Purchaser to obtain any such
release shall not be a breach of this Agreement or otherwise, without the
existence of a separate breach hereof, excuse any Seller from performance
hereunder. In that regard, the Purchaser hereby agrees to indemnify and hold
each Seller harmless from and against any claim made by such Seller in respect
of any such personal guarantee.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing.
(a) GENERAL. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party may reasonably request, all at
the sole cost and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefor under Section 9 below). The Sellers
acknowledge and agree that from and after the Closing the Purchaser will be
entitled to possession of all documents, books, records (including Tax
records), agreements, and financial data of any sort relating to the
Association.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Association or any Seller, each of the other
Parties will cooperate with him or it and his or its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be necessary in connection with the contest
or defense, all at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to indemnification
therefor under Section 9 below).
(c) TRANSITION. The Sellers will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Association from maintaining the
same business relationships with the Association or the Group after the Closing
as it maintained with the Association prior to the Closing. The Sellers will
refer all inquiries relating to the businesses of the Association to the
Purchaser from and after the Closing.
(d) NAME CHANGE. At the time of Closing, the Purchaser shall cause the
name of the Association to be changed to something distinguishable, within the
meaning of the corporation statutes of the state of Florida, from the name of
the Association and shall execute, deliver and/or cause to be filed such
documents or instruments that may be necessary to permit the Group to change
its name to and to do business under the name "Oncology Hematology Group of
South Florida, P.A."
(e) MEDICAL DIRECTOR ARRANGEMENT. From and after Closing, the Parties
will continue to negotiate in good faith and establish consistent with past
practice all fees related to the performance by some or all of the Sellers of
services as medical directors of the Purchaser's IMPACT Center in Miami,
Florida.
7. CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE PURCHASER. The obligation of the
Purchaser to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3(a) and
Section 4 above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Sellers shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) the Sellers shall have caused the Association to procure all of
the third party consents specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, (C) affect adversely the right of the
Purchaser to own the Shares and to control the Association, or (D) affect
adversely the right of the Association to own its assets and to operate its
businesses (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(v) the Sellers and the Group shall have delivered to the Purchaser a
certificate to the effect that each of the conditions specified above in
Section 7(a)(i) (iv) is satisfied in all respects;
(vi) the Purchaser shall have received the resignations, effective as
of the Closing, of each director and officer of the Association other than
those whom the Purchaser shall have specified in writing at least five business
days prior to the Closing;
(vii) the Purchaser shall have received from Cohen, Chase, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, P.A., counsel to the Sellers and the Association, an opinion as to
matters customarily addressed in opinions of counsel in transactions such as
that described herein, which opinion shall be in form and substance reasonably
acceptable to the Purchaser and its counsel;
(viii) the Group shall have executed and delivered the Service
Agreement to the Purchaser;
(ix) the President of the Association shall have executed and
delivered to Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇, a professional corporation,
and any state healthcare counsel engaged to render the opinion described in
subparagraph (x) below, the Certificate of Fact in substantially the form set
forth as Exhibit 7(a)(ix) hereto
(x) the Purchaser shall have received an opinion from Florida
counsel reasonably satisfactory to the Purchaser that the Service Agreement is
the legal, valid and binding obligation of the Group, enforceable according to
its terms (subject to standard bankruptcy, insolvency and principles of equity
exceptions) and that the performance of the Service Agreement by the Purchaser
and the Group will not violate any statute, regulation, official
interpretation, order, decree or other law of the state of Florida;
(xi) the Purchaser shall have received an opinion from Baker,
Donelson, Bearman & ▇▇▇▇▇▇▇▇ that the performance of the Service Agreement by
the Purchaser and the Group will not violate any statute, regulation, official
interpretation, order, decree or other law of the United States of America;
(xii) each Seller shall have executed an employment contract with
the Group in substantially the form required by the Service Agreement; and
(xiii) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinion, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the
Purchaser.
The Purchaser may waive any condition specified in this Section 7(a) if it
executes a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of the
Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3(b)
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Purchaser shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(iv) the Purchaser shall have delivered to the Sellers a certificate
to the effect that each of the conditions specified above in Section 7(b)(i)-
(iii) is satisfied in all respects;
(v) all actions to be taken by the Purchaser in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
the Sellers.
(vi) the Sellers shall have received an opinion from Baker,
Donelson, Bearman & ▇▇▇▇▇▇▇▇, in form and substance satisfactory to the Sellers
and their counsel with respect to the enforceability of the Long-Term Note and
the legality of the rate of interest thereupon.
(vii) the Sellers shall have received an opinion from Florida
counsel reasonably satisfactory to the Sellers that the Service Agreement is
the legal, valid and binding obligation of the Purchaser, enforceable according
to its terms (subject to standard bankruptcy, insolvency and principles of
equity exceptions) and that the performance of the Service Agreement by the
Purchaser and the Group will not violate any statute, regulation, official
interpretation, order, decree or other law of the state of Florida.
(viii) the Sellers shall have received an opinion from Baker,
Donelson, Bearman & ▇▇▇▇▇▇▇▇ that the performance of the Service Agreement by
the Purchaser and the Group will not violate any statute, regulation, official
interpretation, order, decree or other law of the United States of America;
The Sellers may waive any condition specified in this Section 7(b) if they
execute a writing so stating at or prior to the Closing.
8. DELIVERIES AT CLOSING.
(a) DOCUMENTS TO BE DELIVERED BY THE PURCHASER. At the Closing, the
Purchaser shall deliver the following instruments and documents to the Sellers
or other appropriate party:
(i) the amount described in Section 2(b)(i) above;
(ii) the Long-Term Note, payable to the order of the Sellers;
(iii) the Warrants;
(iv) the certificate described in Section 7(b)(iv) above;
(v) the opinions of counsel, in a form reasonably satisfactory to
the Sellers' counsel, required pursuant to Sections 7(b)(vi) through (viii)
above; and
(vi) such other documents as the Sellers may reasonably request to
affect the transactions contemplated by this Agreement.
(b) DOCUMENTS TO BE DELIVERED BY THE SELLER. At the Closing, the Sellers
shall deliver the following instruments and documents to the Purchaser:
(i) stock certificates representing all of the Shares, endorsed in
blank or accompanied by duly executed assignment documents;
(ii) a certificate of existence from the Florida Secretary of State
evidencing the existence and good standing of the Association, dated not more
than five (5) days prior to the Closing Date;
(iii) all consents necessary regarding the transaction contemplated
by this Agreement;
(iv) the opinion of counsel to the Sellers, in a form reasonably
satisfactory to the Purchaser's counsel, required by Section 7(a)(vii) above;
(v) the opinion, in a form reasonably acceptable to the Purchaser's
counsel, required by Section 7(a)(ix) above;
(vi) the Certificate described in Section 7(a)(v) above;
(vii) the Service Agreement, duly executed by the Group; and
(viii) such other documents as the Purchaser may reasonably request
to affect the transactions contemplated by this Agreement.
9. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder (even if the damaged Party knew or had reason to
know of any misrepresentation or breach of warranty at the time of Closing) and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations).
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE PURCHASER . In the
event any of the Sellers breaches (or in the event any third party alleges
facts that, if true, would mean the Seller has breached), in a manner which has
a material adverse effect on the Purchaser, any of such Seller's
representations, warranties, and covenants contained herein and, provided that
the Purchaser makes a written claim for indemnification against the Seller
pursuant to Section 9(c)(i) below, then the Sellers and the Group, jointly and
severally, agree to indemnify the Purchaser from and against the entirety of
any Adverse Consequences the Purchaser may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences the Purchaser
may suffer after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach (or the
alleged breach). or otherwise.
(c) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify the Purchaser with respect to any
matter (a "Third Party Claim") which may give rise to a claim for
indemnification under this Section 9, then the Purchaser shall promptly notify
the Sellers thereof in writing; provided, however, that no delay on the part of
the Purchaser in notifying the Sellers shall relieve the indemnitor from any
obligation hereunder unless (and then solely to the extent) the indemnitor
thereby are prejudiced.
(ii) The Sellers and the Group will have the right to defend the
Purchaser against the Third Party Claim with counsel of its choice satisfactory
to the Purchaser so long as (A) they notify the Purchaser in writing within 15
days after the Purchaser has given notice of the Third Party Claim that the
Sellers will indemnify the Purchaser from and against the entirety of any
Adverse Consequences the Purchaser may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (B) the
Sellers and the Group provides the Purchaser with evidence acceptable to the
Purchaser that the Sellers and the Group will have the financial resources to
defend against the Third Party Claim and fulfill his indemnification
obligations hereunder, (C) the Third Party Claim involves only money damages
and does not seek an injunction or other equitable relief, (D) settlement of,
or an adverse judgment with respect to, the Third Party Claim is not, in the
good faith judgment of the Purchaser, likely to establish a precedential custom
or practice adverse to the continuing business interests of the Purchaser, and
(E) the Sellers and the Group conduct the defense of the Third Party Claim
actively and diligently.
(iii) So long as the Sellers and the Group are conducting the defense
of the Third Party Claim in accordance with Section 9(c)(ii) above, (A) the
Purchaser may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (B) the Purchaser will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Sellers and
the Group (not to be withheld unreasonably), and (C) the Sellers and the Group
will not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Purchaser.
(iv) In the event any of the conditions in Section 9(c)(ii) above is
or becomes unsatisfied, however, (A) the Purchaser may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it may deem appropriate (and the
Purchaser need not consult with, or obtain any consent from, the Seller in
connection therewith), (B) the Sellers and the Group will reimburse the
Purchaser promptly and periodically for the costs of defending against the
Third Party Claim (including attorneys' fees and expenses), and (C) the Sellers
and the Group will remain responsible for any Adverse Consequences the
Purchaser may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim to the fullest extent provided in this
Section 9.
(d) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall take into
account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this Section 9. All
indemnification payments under this Section 9 shall be deemed adjustments to
the Purchase Price.
(e) RECOUPMENT UNDER THE LONG-TERM NOTE. In the event that the Purchaser
shall suffer Adverse Consequences for which indemnification pursuant to the
foregoing provisions shall be payable by the Sellers and the Sellers shall not
make any such indemnification payment within sixty (60) days after such
indemnity amount shall become payable, the Purchaser shall have the option of
recouping all or any part of any Adverse Consequences it may suffer by
notifying the Sellers that the Purchaser is offsetting the amount of such
Adverse Consequences against the principal amount outstanding under the Long-
Term Note. An offset pursuant to this subsection shall affect the timing and
amount of payments required under the Long-Term Note in the same manner as if
the Purchaser had made a permitted prepayment (without premium or penalty)
thereunder.
(f) OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of
representation, warranty, or covenant. The Sellers hereby agree that they will
not make any claim for indemnification against the Association by reason of the
fact that they were directors, officers, employees, or agents of the
Association or were serving at the request thereof as a partner, trustee,
director, officer, employee, or agent of another entity (whether such claim is
for judgments, damages, penalties, fines, costs, amounts paid in settlement,
losses, expenses, or otherwise and whether such claim is pursuant to any
statute, charter document, bylaw, agreement, or otherwise) with respect to any
action, suit, proceeding, complaint, claim, or demand brought by the Purchaser
against the Sellers (whether such action, suit, proceeding, complaint, claim,
or demand is pursuant to this Agreement, applicable law, or otherwise).
10. TERMINATION.
(a) TERMINATION OF AGREEMENT. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Purchaser and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Purchaser may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing in the event any of the
Sellers has breached or failed to satisfy in any material respect any
representation, warranty, covenant or condition contained in this Agreement,
the Purchaser has notified the Seller of the breach or failure, and the breach
or failure has continued without cure for a period of 10 days after the notice
of breach or failure;
(iii) the Sellers may terminate this Agreement by giving written
notice to the Purchaser at any time prior to the Closing in the event the
Purchaser has breached or failed to satisfy in any material respect any
representation, warranty, covenant or condition contained in this Agreement,
any of the Sellers has notified the Purchaser of the breach or failure, and the
breach or failure has continued without cure for a period of 10 days after the
notice of breach or failure; and
(iv) if the Closing shall not have occurred on or before February
29, 1996 (unless the failure to close is primarily attributable to the breach
of or failure to satisfy any representation, warranty, covenant or condition
contained in this Agreement by the Party seeking to terminate this Agreement).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 10(a) above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any Liability of any Party then in breach).
11. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the Purchaser and the
Seller; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its best efforts to advise the other Parties prior to
making the disclosure).
(b) ARBITRATION OF DISPUTES; LEGAL FEES. Any dispute arising under this
Stock Purchase Agreement shall be submitted by the parties to binding
arbitration pursuant to the Tennessee Uniform Arbitration Act, with any such
arbitration proceeding being conducted in accordance with the rules of the
American Arbitration Association. Any arbitration panel presiding over any
arbitration proceeding hereunder is hereby empowered to render a decision in
respect of such dispute, to award costs and expenses (including reasonable
attorney fees) as it shall deem equitable and to enter its award in any court
of competent jurisdiction. Each of the Parties submits to the jurisdiction of
any state or federal court sitting in Memphis, Shelby County, Tennessee for
purposes of enforcement of any arbitration award hereunder. Each Party also
agrees not to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought
and waives any bond, surety, or other security that might be required of any
other Party with respect thereto.
(c) LIQUIDATED DAMAGES. In the event that the Sellers shall be willing,
ready and able to close on the Closing Date and the Purchaser shall fail to
close on such date, the Purchaser shall pay to the Sellers, as liquidated
damages and in complete satisfaction of all claims that Sellers may have
against the Purchaser on account of said failure, the amount of $250,000.00,
which shall be payable within ten (10) business days after such failure shall
occur, and such reasonable attorneys' fees as shall have been incurred by the
Sellers or the Group in connection with this Agreement.
(d) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(e) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes
any prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(f) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the prior
written approval of the Purchaser and the Seller; provided, however, that the
Purchaser may (i) assign any or all of its rights and interests hereunder to
one or more of its Affiliates and (ii) designate one or more of its Affiliates
to perform its obligations hereunder (in any or all of which cases the
Purchaser nonetheless shall remain responsible for the performance of all of
its obligations hereunder).
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(h) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Seller: Copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D. ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Oncology Hematology Group Cohen, Chase, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
of South Florida, P.A. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Purchaser: Copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. Good, Esq.
Response Oncology, Inc. Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(j) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Tennessee without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Tennessee or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Tennessee.
(k) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Purchaser and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(l) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(m) EXPENSES. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. The Sellers agree that
neither the Association has not borne or will not bear any of the Sellers'
costs and expenses (including any of their legal fees and expenses) in
connection with this Agreement or any of the transactions contemplated hereby.
(n) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(o) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(p) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, in addition to any other remedy
to which they may be entitled, at law or in equity.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on [as
of] the date first above written.
PURCHASER:
Response Oncology, Inc.
By:__________________________________
Title:_______________________________
GROUP:
South Florida Oncology Hematology Associates, P.A.
By:__________________________________
Title:_______________________________
SELLERS:
_____________________________________
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, individually and as
duly-authorized attorney-in-fact
Exhibit 2(b)(i)
to
Stock Purchase Agreement
NON-NEGOTIABLE PROMISSORY NOTE
$5,959,972.00 Miami, Florida
January 2, 1996
FOR VALUE RECEIVED, the undersigned, RESPONSE ONCOLOGY, INC., a Tennessee
corporation (the "Maker"), promises to pay to the order of ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
a resident of the State of Florida, individually and acting as attorney-in-fact
for all Selling Shareholders pursuant to that certain Agreement among Selling
Shareholders of even date herewith (the "Lender"), the principal sum of FIVE
MILLION NINE HUNDRED FIFTY-NINE THOUSAND NINE HUNDRED SEVENTY-TWO DOLLARS
($5,959,972.00), together with interest from date until maturity at the rate of
nine (9%) percent per annum from date until Maturity (hereinafter defined),
said principal and interest being payable in fifty nine (59) consecutive,
equal, quarterly amortized installments of ONE HUNDRED EIGHTY-TWO THOUSAND
SEVEN HUNDRED THIRTEEN AND FIFTY-FOUR ONE HUNDREDTHS DOLLARS ($182,713.54),
commencing April 1, 1996, and on the first day of each calendar quarter
thereafter. The entire remaining unpaid balance of principal, and any accrued
interest thereon, shall be due and payable on January 1, 2011.
This Note may be prepaid in whole or in part prior to Maturity only with
the advance written consent of the Lender. Any partial prepayment of principal
shall, however, not have the effect of suspending or deferring the payments
provided for herein, but the same shall continue to be due and payable on each
due date subsequent to any such partial prepayment of the principal and shall
operate to effect full payment of the principal at an earlier date.
At the option of the Lender, exercisable not later than ten (10) days
prior to any payment of principal or interest on this Note, such payment shall
be paid in whole or in part in shares of common stock of the Maker, $.01 par
value per share (the "Shares"). For purposes of this paragraph, the number of
Shares to which the Lender shall be entitled upon exercise of the option
provided hereunder shall be determined by dividing the amount of principal and
interest to be paid in Shares by the Maker by $17.50, which price shall be
adjusted for stock splits, stock dividends, reverse stock splits,
recapitalizations, reorganizations and other changes in the capital structure
of the Maker affecting the value of the Shares.
Any amounts not paid when due hereunder (whether by acceleration or
otherwise) shall bear interest after maturity at the lesser of (a) eighteen
percent (18%) per annum or (b) the maximum effective contract rate which may be
charged by the Lender under applicable law from time to time in effect.
In the event that the foregoing provisions should be construed by a court
of competent jurisdiction not to constitute a valid, enforceable designation of
a rate of interest or method of determining same, the indebtedness hereby
evidenced shall bear interest at the maximum effective contract rate which may
be charged by the Lender under applicable law from time to time in effect.
This Note is non negotiable.
Notwithstanding anything to the contrary, the payments required pursuant
to this Note are subject to a right of offset, setoff, and recoupment as a
result of any indemnification required pursuant to the provisions of that
certain Stock Purchase Agreement by and between Lender and Maker dated as of
December ___, 1995.
All installments of interest, and the principal hereof, are payable by
Maker's corporate check at ______________________________ or at such other
place as the holder may designate in writing, in lawful money of the United
States of America, which shall be legal tender in payment of all debts and
dues, public and private, at the time of payment.
If the Maker shall fail to make payment of any installment of principal
and interest, as above provided, and such failure shall continue unremedied for
a period of thirty (30) days following written notice thereof, or upon the
dissolution of the Maker or any endorser, and (if there is a cure period
applicable thereto) such default is not cured within such applicable cure
period, then and in any such event, the entire unpaid principal balance of the
indebtedness evidenced hereby, together with all interest then accrued, shall,
at the absolute option of the holder hereof, at once become due and payable,
without demand or notice, the same being hereby expressly waived.
If this Note is placed in the hands of an attorney for collection, by suit
or otherwise, the Maker shall pay on demand all costs of collection and
litigation (including court costs), together with a reasonable attorney's fee
if Lender is successful in the litigation.
It is the intention of the Lender and the Maker to comply strictly with
applicable usury laws; and, accordingly, in no event and upon no contingency
shall the holder hereof ever be entitled to receive, collect, or apply as
interest any interest, fees, charges or other payments equivalent to interest,
in excess of the maximum effective contract rate which the Lender may lawfully
charge under applicable statutes and laws from time to time in effect; and in
the event that the holder hereof ever receives, collects, or applies as
interest any such excess, such amount which, but for this provision, would be
excessive interest, shall be applied to the reduction of the principal amount
of the indebtedness hereby evidenced; and if the principal amount of the
indebtedness evidenced hereby, all lawful interest thereon and all lawful fees
and charges in connection therewith, are paid in full, any remaining excess
shall forthwith be paid to the Maker, or other party lawfully entitled thereto.
All interest paid or agreed to be paid by the Maker shall, to the maximum
extent permitted under applicable law, be amortized, prorated, allocated and
spread throughout the full period until payment in full of the principal so
that the interest hereon for such full period shall not exceed the maximum
amount permitted by applicable law. Any provision hereof, or of any other
agreement between the holder hereof and the Maker, that operates to bind,
obligate, or compel the Maker to pay interest in excess of such maximum
effective contract rate shall be construed to require the payment of the
maximum rate only. The provisions of this paragraph shall be given precedence
over any other provision contained herein or in any other agreement between the
holder hereof and the Maker that is in conflict with the provisions of this
paragraph.
Neither Lender, nor any subsequent holder of this Note, shall have any
right to commute, sell, assign, transfer or otherwise convey the right to
receive any payments hereunder (except to the Maker, or to ONCOLOGY HEMATOLOGY
GROUP OF SOUTH FLORIDA, P.A. [the "P.A."]), which payments and the rights
thereto are hereby expressly declared: (i) to be nonassignable and non-
transferrable (except to the Maker or to the P.A.), and (ii) not liable for or
subject to the debts, liabilities, or obligations or the Lender or the P.A.
(except for those debts, obligations and liabilities of the P.A. to Maker which
are secured by the security interest in this Note granted to Maker pursuant to
a security agreement of even date herewith; and, in the event of any attempted
assignment or transfer (except to the Maker or to the P.A.), the Maker shall
have no further liability under this Note.
This Note shall be governed and construed according to the statutes and
laws of the State of Tennessee from time to time in effect.
RESPONSE ONCOLOGY, INC.
By:_____________________________________
Title:__________________________________
Exhibit 2(b)(ii)
to
Stock Purchase Agreement
COMMON STOCK PURCHASE WARRANT
Certificate No. SF-Specimen
This Warrant has not been registered under the Securities Act of 1933 or any
state securities law, has been acquired for investment only and may not be
sold, transferred, assigned, pledged, hypothecated or otherwise disposed of
unless it has been registered under the Securities Act of 1933 and any
applicable state securities law, or the proposed transfer is exempt from the
registration requirements of the Securities Act of 1933 and any applicable
state securities law.
____________________________________________________________________________
WARRANT TO PURCHASE COMMON STOCK
OF
RESPONSE ONCOLOGY, INC.
____________________________________________________________________________
This Warrant is granted as of January 2, 1996 by Response Oncology, Inc.,
a Tennessee corporation (the "Issuer"), which certifies that, for value
received, the registered holder hereof, or his registered assigns (the
registered holder or assigns are referred to herein as the "Holder"), is
entitled to purchase from the Issuer, at any time and from time to time during
the Exercise Period (as hereinafter defined) at the Exercise Price (as
hereinafter defined) per share (as adjusted as herein provided), 160,000 shares
of common stock (the "Common Stock") of Response Oncology, Inc. (the "Company")
(such number of shares of Common Stock purchasable upon the exercise of this
Warrant to Purchase Common Stock, as adjusted from time to time pursuant to the
provisions hereinafter set forth, are referred to in this Warrant as the
"Warrant Shares"). This Warrant has been issued in connection with and as
partial consideration for the acquisition (the "Stock Purchase") by the Issuer
of all of the outstanding shares of capital stock of Oncology Hematology Group
of South Florida, P.A. (the "Association") pursuant to that certain Stock
Purchase Agreement dated as of December 20, 1995 among the Issuer and the
stockholders of the Association.
VOID AFTER 5:00 P.M. MEMPHIS, TENNESSEE TIME, ON DECEMBER 31, 2000,
SUBJECT TO EARLIER TERMINATION AS HEREINAFTER SET FORTH
This Warrant is subject to the following terms and conditions:
1. EXERCISE PERIOD. The period in which the Holder shall have the right
to exercise this Warrant (the "Exercise Period") shall commence on the date
hereof and shall terminate on (the "Termination Date") the earlier of (i)
December 31, 2000, (ii) the occurrence of any merger, voluntary dissolution or
other event pursuant to which the existence of the Issuer shall terminate, or
(iii) thirty (30) days following the occurrence of any Oncology Event of
Default as defined in that certain Service Agreement between the Issuer and
Oncology Hematology Group of South Florida, P.A. dated as of January 2, 1996
(taking into account, for purposes of determining the date of occurrence of
such Oncology Event of Default, any curative period).
2. EXERCISE PRICE. The Exercise Price shall be equal to $12.50 per
share. The Exercise Price is subject to adjustment as provided in Section 5
below.
3. TERMINATION OF WARRANTS. The Warrants shall terminate on the
Termination Date and shall not be exercisable thereafter.
4. EXERCISE OF WARRANTS. (a) The Warrants may be exercised in whole or in
part, at any time and from time to time, during the Exercise Period by
surrendering this Warrant, with the purchase form provided for herein duly
executed by the Holder or by the Holder's duly authorized attorney-in-fact, at
the principal office of the Issuer or at such other office in the United States
as the Issuer may designate by notice in writing to the Holder (the "Issuer's
Office") accompanied by payment of the Exercise Price in full, in cash or by
certified or cashier's check, payable to the order of the Issuer, or, at the
option of the Holder, by wire transfer in accordance with instructions provided
by the Issuer. If fewer than all of the Warrants are exercised, the Issuer
shall, upon each exercise prior to the expiration of the Exercise Period,
execute and deliver to the Holder an amendment to this Warrant (dated the date
hereof) evidencing the balance of the Warrants that remain exercisable.
(b) On the date of exercise of the Warrant, the Holder exercising the
same shall be deemed to have become the holder of record for all purposes of
the Warrant Shares to which the exercise relates.
(c) As soon as practicable, but not later than ten (10) days after the
exercise of all or part of the Warrants, the Issuer shall, at the Issuer's
expense (including the payment of any applicable issue taxes and the cost of
any opinion of counsel required by the Issuer or its transfer agent), cause to
be issued in the name of and delivered to the Holder a certificate or
certificates evidencing the number of fully paid and nonassessable Warrant
Shares to which the Holder shall be entitled upon such exercise.
(d) The Warrant Shares issued upon exercise of this Warrant will not be
registered under the Securities Act of 1933, as amended (the "Act") or the
securities laws of any state in reliance on exemptions from the registration
requirements of the Act and such laws. Accordingly, the Warrant Shares may be
sold or otherwise transferred only upon (i) registration under the Act and
qualification under applicable state securities laws, (ii) compliance with Rule
144 under the Act, or (iii) the Issuer's receipt of an opinion, at the Holder's
expense, from counsel reasonable acceptable to the Issuer to the effect that
any such sale or transfer will not violate the Act or any state law. The
Issuer will cause an appropriate legend to be placed on certificates
representing the Warrant Shares to the foregoing effect.
5. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND CHARACTER OF WARRANT SHARES,
AND NUMBER OF WARRANTS. The Exercise Price, the number and kind of securities
purchasable upon the exercise of each Warrant, and the number of Warrants
outstanding shall be subject to adjustment from time to time upon the happening
of the events enumerated in this Section 5.
(a) In case the Issuer shall at any time on or after the date hereof (i)
pay a dividend in shares of Common Stock or other securities of the Issuer or
make a distribution in shares of Common Stock or such other securities to
holders of all its outstanding shares of Common Stock, (ii) subdivide or
reclassify the outstanding shares of Common Stock into a greater number of
shares, (iii) combine the outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iv) issue by reclassification of its
shares of Common Stock other securities of the Issuer (including any such
reclassification in connection with a consolidation or merger in which the
Issuer is the continuing corporation), then the number and kind of Warrant
Shares purchasable upon exercise of each Warrant outstanding immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of shares of Common Stock or other securities of the Issuer
which the Holder would have owned or have been entitled to receive after the
happening of any of the events described above had such Warrant been exercised
in full immediately prior to the earlier of the happening of such event or any
record date in respect thereof. In the event of any adjustment of the total
number of shares of Common Stock purchasable upon the exercise of the then
outstanding Warrants pursuant to this Section 5(a), the Exercise Price shall be
adjusted to be the amount resulting from dividing the number of shares of
Common Stock (including fractional shares of Common Stock) covered by such
Warrant immediately after such adjustment into the total amount payable upon
exercise of such Warrant in full immediately prior to such adjustment. An
adjustment made pursuant to this Section 5(a) shall become effective
immediately after the effective date of such event retroactive to the record
date for any such event. Such adjustment shall be made successively whenever
any event listed above shall occur.
(b) In case the Issuer shall at any time after the date hereof fix a
record date for the issuance of rights, options, or warrants to all holders of
its outstanding shares of Common Stock, entitling them (for a period expiring
within forty-five (45) days after such record date) to subscribe for or
purchase shares of Common Stock (or securities exchangeable for or convertible
into shares of Common Stock) at a price per common share (or having an exchange
or conversion price per common share, with respect to a security exchangeable
for or convertible into shares of Common Stock) which is lower than the
Exercise Price per common share on such record date, then the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect immediately prior
to such record date by a fraction, of which the numerator shall be the number
of shares of Common Stock outstanding on such record date plus the number of
shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial exchange
or conversion price of the exchangeable or convertible securities so to be
offered) would purchase at such current Exercise Price and of which the
denominator shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock to be offered
for subscription or purchase (or into which the exchangeable or convertible
securities so to be offered are initially exchangeable or convertible). Such
adjustment shall become effective at the close of business on such record date;
however, to the extent that shares of Common Stock (or securities exchangeable
for or convertible into shares of Common Stock) are not delivered after the
expiration of such rights, options, or warrants, the Exercise Price shall be
readjusted (but only with respect to Warrants exercised after such expiration)
to the Exercise Price which would then be in effect had the adjustments made
upon the issuance of such rights, options, or warrants been made upon the basis
of delivery of only the number of shares of Common Stock (or securities
exchangeable for or convertible into shares of Common Stock) actually issued.
In case any subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Issuer and
shall be described in a statement mailed to the Holder. Shares of Common Stock
owned by or held for the account of the Issuer shall not be deemed outstanding
for the purpose of any such computation.
(c) In case the Issuer shall at any time after the date hereof distribute
to all holders of its shares of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Issuer is the
surviving corporation) evidences of its indebtedness or assets (excluding cash
dividends and distributions payable out of consolidated net income or earned
surplus in accordance with applicable law and dividends or distributions
payable in shares of stock described in Section 5(a) above) or rights, options,
or warrants or exchangeable or convertible securities containing the right to
subscribe for or purchase shares of Common Stock (or securities exchangeable
for or convertible into shares of Common Stock) (excluding those expiring
within forty-five (45) days after the record date referred to in Section 5(b)
above), then the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the record date for such distribution by a
fraction, of which the numerator shall be the fair market value of the shares
of Common Stock on such day, as determined in good faith by the Board of
Directors of the Issuer whose determination shall be conclusive, and described
in a notice to the Holder of the portion of the evidences of indebtedness or
assets so to be distributed or of such rights, options or warrants applicable
to one common share and of which the denominator shall be such fair market
value per common share. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of distribution
retroactive to the record date for such transaction.
(d) For the purpose of this Warrant, the fair market value per share of
Common Stock shall be determined by reference to the latest independent bid for
the Common Stock as set forth in the National Market of The Nasdaq Stock Market
or, if the Common Stock shall be traded on any national or regional securities
exchange, the latest bid price for the Common Stock, or, if none of the
foregoing apply, as determined in good faith by the Board of Directors of the
Issuer.
(e) No adjustment in the Exercise Price or the number of Warrant Shares
purchasable shall be required unless such adjustment would require an increase
or decrease of at least ten percent (10%) in the Exercise Price or the number
of Warrant Shares purchasable; provided, however, that any adjustments which by
reason of this Section 5(e) are not required to be made (i) shall be carried
forward and taken into account in any subsequent adjustment or (ii) if no
subsequent adjustment occurs, shall be made immediately prior to exercise of
this Warrant. All calculations under this Section 5 shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be.
(f) Unless the Issuer shall have exercised its election as provided in
Section 5(g), upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 5(b) or (c), each Warrant outstanding prior to
the making of the adjustment in the Exercise Price shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that number of shares of
Common Stock (calculated to the nearest hundredth) obtained by (i) multiplying
the number of shares of Common Stock purchasable upon exercise of a Warrant
prior to adjustment of the number of shares of Common Stock by the Exercise
Price in effect prior to adjustment of the Exercise Price and (ii) dividing the
product so obtained by the Exercise Price in effect after such adjustment of
the Exercise Price.
(g) The Issuer may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Warrants, in substitution for any
adjustment in the number of Warrant Shares purchasable upon the exercise of
Warrants as provided in Sections 5(a) and (f). Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be
exercisable for one share of Common Stock. Each Warrant held of record prior
to such adjustment of the number of Warrants shall become that number of
Warrants (calculated to the nearest hundredth) obtained by dividing the
Exercise Price in effect prior to adjustment of the Exercise Price by the
Exercise Price in effect after adjustment of the Exercise Price. The Issuer
shall send to each Holder a notice of its election to adjust the number of
Warrants, indicating the record date for the adjustment, and if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Exercise Price is adjusted or any day thereafter, but shall
be at least ten (10) days after the date such announcement is sent to the
Holders. Upon each adjustment of the number of Warrants pursuant to this
Section 5(g) the Issuer shall, as promptly as practicable, cause to be
distributed to holders of record of Warrants on such record date new
certificate(s) evidencing the additional Warrants to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Issuer,
shall cause to be distributed to such holders of record in substitution and
replacement for the certificates held by such holders prior to the date of
adjustments, and upon surrender thereof if required by the Issuer, new
certificates evidencing all the Warrants to which such holders shall be
entitled after such adjustment.
(h) In case of any capital reorganization of the Issuer, or of any
reclassification of the shares of Common Stock [other than a reclassification,
subdivision or combination of shares of Common Stock referred to in Section
5(a)], or in case of the consolidation of the Issuer with, or the merger of the
Issuer with, or merger of the Issuer into, any other corporation, limited
partnership, limited liability company or other business entity (other than a
reclassification of the shares of Common Stock referred to in Section 5(a) or a
consolidation or merger which does not result in any reclassification or change
of the outstanding shares of Common Stock) or of the sale of the properties and
assets of the Issuer as, or substantially as, an entirety to any other
corporation or entity, each Warrant shall after such capital reorganization,
reclassification of shares of Common Stock, consolidation, merger, or sale be
exercisable, upon the terms and conditions specified in this Warrant, for the
kind, amount and number of shares or other securities, assets, or cash to which
a holder of the number of shares of Common Stock purchasable (at the time of
such capital reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale) upon exercise of such Warrant would have been
entitled to receive upon such capital reorganization, reclassification of
shares of Common Stock, consolidation, merger, or sale; and in any such case,
if necessary, the provisions set forth in this Section 5 with respect to the
rights and interests thereafter of the holders of the Warrants shall be
appropriately adjusted so as to be applicable, as nearly equivalent as
possible, to any shares or other securities, assets, or cash thereafter
deliverable on the exercise of the Warrants. The subdivision or combination of
shares of Common Stock at any time outstanding into a greater or lesser number
of shares shall not be deemed to be a reclassification of the shares of Common
Stock for purposes of this Section 5(h).
(i) In the event that at any time, as a result of an adjustment made
pursuant to this Section 5, the holders of an Warrant or Warrants shall become
entitled to purchase any shares or securities of the Issuer other than the
shares of Common Stock, thereafter the number of such other shares or
securities so purchasable upon exercise of each Warrant and the exercise price
for such shares or securities shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as possible to the provisions
with respect to the shares of Common Stock contained in Sections 5(a) through
(h), inclusive.
(j) In any case in which this Section 5 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Issuer may elect to defer until the occurrence of such event issuing
to the holder of any Warrant exercised after such record date the shares of
Common Stock, if any, issuable upon such exercise over and above the Warrant
Shares, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Issuer shall
deliver as soon as practicable to such holder a due ▇▇▇▇ or other appropriate
instrument provided by the Issuer evidencing such holder's right to receive
such additional shares of Common Stock upon the occurrence of the event
requiring such adjustment.
(k) Notwithstanding anything herein to the contrary, no adjustment shall
be required under this Section 5 in the event the Issuer (i) issues options to
purchase Common Stock or other securities to officers, directors, employees or
agents pursuant to an incentive or non-qualified stock option plan, or (ii)
issues shares of Common Stock or other securities pursuant to an offering for
cash or other consideration (including the assets or capital stock or
securities of any other corporation or other business entity), or pursuant to a
plan of merger whereby the Issuer is the surviving participant in the merger,
other than an issuance of rights, options or warrants exercisable for shares of
Common Stock (or securities exchangeable for or convertible into shares of
Common Stock) to all holders of its outstanding shares of Common Stock.
6. DEFINITION OF SHARES OF COMMON STOCK. The shares of Common Stock
issuable upon exercise of the Warrants shall be the shares of Common Stock as
constituted on the date hereof except as otherwise provided in Section 5.
7. NOTICE OF NUMBER OF WARRANT SHARES, ADJUSTMENT OR TERMINATION. Within
thirty (30) days of the occurrence of an event which results in an adjustment
in the number of Warrants, the number of Warrant Shares purchasable upon the
exercise of Warrants and/or the Exercise Price or the termination of the
Warrants shall have occurred as provided herein, the Issuer shall forthwith:
(a) prepare and hold for inspection at the Issuer's principal place of
business, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such subsequent
principal place of business (the "Issuer's Office"), a statement, signed by the
Chief Financial Officer of the Issuer, stating either (i) the number of
Warrants or Warrant Shares, (ii) the adjusted number of Warrants or Warrant
Shares purchasable upon the exercise of Warrants and/or Exercise Price
determined as herein provided, such statement to show in detail the facts
requiring such adjustment or (iii) the termination of the Warrants, and
(b) give notice embodying such statement to each Holder as provided in
Section 13. Where appropriate, such notice may be given in advance and may be
included as part of a notice required to be mailed pursuant to Section 8.
8. NOTICES OF RECORD DATE, ETC. In the event the Issuer shall propose to
take any action of the type requiring an adjustment of the Exercise Price or
the number or character of the Warrant Shares or Warrants pursuant to Section 5
or a dissolution, liquidation or winding up of the Issuer (other than in
connection with a consolidation, merger, or sale of all or substantially all of
its property, assets, and business as an entirety) shall be proposed, the
Issuer shall give notice to each Holder as provided in Section 13, which notice
shall specify the record date, if any, with respect to any such action and the
date on which such action is to take place. Such notice shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate
the effect of such action (to the extent such effect may be known at the date
of such notice) on the Exercise Price and the number, kind or class of shares
or other securities or property which shall be deliverable or purchasable upon
the occurrence of such action or deliverable upon the exercise of the Warrants.
In the case of any action which will require the fixing of a record date,
unless otherwise provided in this Warrant, such notice shall be given at least
twenty (20) days prior to the date so fixed, and in case of all other action,
such notice shall be given at least thirty (30) days prior to the taking of
such proposed action.
9. REPLACEMENT OF SECURITIES. If this Warrant shall be lost, stolen,
mutilated or destroyed, the Issuer shall, on such terms as to indemnity or
otherwise as the Issuer may in its discretion reasonably impose, issue a new
certificate of like tenor or date representing in the aggregate the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder. Any such new certificate shall
constitute an original contractual obligation of the Issuer, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time
enforceable by anyone.
10. RECORDKEEPING. This Warrant, as well as all other warrant
certificates representing Warrants of like tenor issued in connection with the
Stock Purchase shall be numbered beginning with the alphabetic prefix "SF" and
shall be registered in a register (the "Warrant Register") maintained at the
Issuer's Office as they are issued. The Warrant Register shall list the name,
address and Social Security or other Federal Identification Number, if any, of
all Holders. Upon notice duly given by the Holder, the Issuer shall be
entitled to recognize the Holder as set forth in the Warrant Register as the
nominee for the beneficial owners of the Warrants as set forth in such notice
or subsequent notices with respect to such beneficial ownership recognize for
all purposes and shall not be bound to recognize any equitable or other claim
to or interest in such Warrant on the part of any other person, and shall not
be liable for any registration of transfer of Warrants that are registered or
to be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with the actual knowledge that a fiduciary or nominee is committing
a breach of trust in requesting such registration of transfer, or with such
knowledge of such facts that its participation therein amounts to bad faith.
11. TRANSFER. This Warrant shall not be transferable and may not be the
subject of a sale, assignment, pledge or other conveyance without the Issuer's
advance consent, which the Issuer may withhold in its absolute discretion. The
Warrant shall be transferable only on the Warrant Register upon delivery of
such Warrants, with the assignment form provided for herein duly executed by
the Holder or by the Holder's duly authorized attorney-in-fact. Upon any
registration of transfer, the Issuer shall execute and deliver a new Warrant
certificate to the person entitled thereto.
The Warrants have not been registered under the Securities Act of 1933 or
any state securities law, and, accordingly, may not be sold, transferred,
assigned, pledged, hypothecated or otherwise disposed of unless they have been
registered under the Securities Act of 1933 and any applicable state securities
law or, in the opinion of counsel reasonably satisfactory to the Issuer, whose
fees and expenses in connection with such opinion will be borne by the Holder,
the proposed transfer is exempt from the registration requirements of the
Securities Act of 1933 and any applicable state securities law.
12. EXCHANGE OF WARRANT CERTIFICATES. This Warrant may be exchanged for
another certificate or certificates entitling the Holder thereof to purchase a
like aggregate number of Warrant Shares as this Warrant entitles such Holder to
purchase. A Holder desiring to so exchange this Warrant shall make such
request in writing delivered to the Issuer, and shall surrender this Warrant
therewith. Thereupon, the Issuer shall execute and deliver to the person
entitled thereto a new certificate or certificates, as the case may be, as so
requested.
13. PIGGYBACK REGISTRATION.
(a) NOTICE OF PIGGYBACK REGISTRATION AND INCLUSION OF WARRANT
SHARES.
If, after the Holder's exercise of the Warrants pursuant to Section 4
hereof, the Issuer shall elect to file a registration statement ("Registration
Statement") on Form S-2 or S-3 (or any successor form thereto) under the Act
with respect to any of its securities, either for its own account or the
account of a security holder or holders, other than a registration of a public
offering of Common Stock commenced within one (1) year of the date hereof or a
registration relating solely to employee benefit plans (excluding the foregoing
events, a "Registration"), the Issuer will: (i) promptly give each Holder
written notice thereof (which shall include a list of the jurisdictions in
which the Issuer intends to attempt to qualify such securities under the
applicable Blue Sky or other state securities laws) and (ii) include in such
Registration (and any related registration and/or qualification under Blue Sky
laws or other compliance), and in any underwriting involved therein, all the
Warrant Shares specified in a written request delivered to the Issuer by any
Holder within 30 days after delivery of such written notice from the Issuer.
(b) UNDERWRITING IN PIGGYBACK REGISTRATION.
(i) NOTICE OF UNDERWRITING IN PIGGYBACK REGISTRATION.
If the Registration of which the Issuer gives notice is for a
Registered public offering involving an underwriting, the Issuer shall so
advise the Holders as a part of the written notice given pursuant to Section
13(a). In such event, the right of any Holder to Registration shall be
conditioned upon such underwriting and the inclusion of such Holder's Warrant
Shares in such underwriting to the extent provided in this Section 13. All
Holders proposing to distribute their securities through such underwriting
shall (together with the Issuer and any other holders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the Underwriter ("Underwriter's
Representative") for such offering. The Holders shall have no right to
participate in the selection of underwriters for an offering pursuant to this
Section.
(ii) MARKETING LIMITATION IN PIGGYBACK REGISTRATION.
In the event the Underwriter's Representative advises the
Holders seeking Registration of Warrant Shares pursuant to Section 13 in
writing that market factors (including, without limitation, the aggregate
number of shares of Common Stock requested to be included in such Registration,
the general condition of the market, and the status of the persons proposing to
sell securities pursuant to the Registration) require a limitation of the
number of shares to be underwritten, the Underwriter's Representative (subject
to the allocation priority set forth in Section 13(a)(iii) may limit (or reduce
to zero) the number of Warrant Shares to be included in such Registration and
underwriting; provided however, that any Warrant Shares so excluded shall
retain any and all Registration rights set forth in Section 13 hereof.
(iii) ALLOCATION OF WARRANT SHARES IN PIGGYBACK
REGISTRATION.
In the event that the Underwriter's Representative limits the
number of shares to be included in a Registration pursuant to Section
13(a)(ii), the number of shares to be included in such Registration shall be
allocated in the following manner: Common Stock held by persons who are not
contractually entitled to include shares in such Registration shall be excluded
from such Registration and underwriting to the extent required by such
limitation. If a limitation of the number of shares is still required after
such exclusion, the number of shares of Common Stock that may be included in
the Registration and underwriting by all selling shareholders (including the
Holders and all other persons contractually entitled to such registration)
shall be allocated among Holders and other holders of securities other than
Warrant Shares requesting and contractually entitled to include shares in such
Registration, in proportion, as nearly as practicable, to the respective
amounts of securities (including Warrant Shares) which such Holders and such
other holders would otherwise be entitled to include in such Registration. No
Warrant Shares or other securities excluded from the underwriting by reason of
this Section 13(a)(iii) shall be included in the Registration Statement.
(iv) WITHDRAWAL IN PIGGYBACK REGISTRATION.
If any Holder disapproves of the terms of any such underwriting,
he may elect to withdraw therefrom by written notice to the Issuer and the
underwriter delivered at least seven days prior to the effective date of the
Registration Statement. Any Warrant Shares or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such Registration.
(c) BLUE SKY IN PIGGYBACK REGISTRATION.
In the event of any Registration of Warrant Shares pursuant to
Section 13, the Issuer will use its best efforts to register and/or qualify the
securities covered by the Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of such securities; provided, however, that notwithstanding
anything in this Agreement to the contrary, in the event any jurisdiction in
which the securities shall be qualified imposes a non-waivable requirement that
expenses incurred in connection with the qualification of the securities be
borne by selling shareholders, the Holders shall pay their pro rata share of
such expenses.
14. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION.
Subject to exceptions as hereinafter provided, after the first
anniversary of the Closing Date, the Holders which have exercised Warrants
pursuant to Section 4 hereof (the "Unregistered Shares"), may annually make a
single request (a "Demand") in writing within 30 days of the anniversary date
that the Issuer file and effect a registration statement with the Commission in
respect of all, but not less than all, shares of Unregistered Shares held by
the Holders. Upon receipt of a Demand, the Issuer shall as soon as practicable
cause a Registration Statement to be filed with the Commission, which
Registration Statement shall, if not an Underwritten Offering pursuant to
Section 13 above, contain all appropriate undertakings necessary to comply with
Rule 415 under the 1933 Act pertaining to "shelf registration", and the Issuer
shall use its best efforts to effect such Registration (including the execution
of an undertaking to file post effective amendments and any related
registration or qualification under Blue Sky Laws or other compliance with the
Securities Act) as may be so requested and as would permit or facilitate the
sale and distribution of the Unregistered Shares.
(b) REGISTRATION OF OTHER SECURITIES IN DEMAND REGISTRATION.
Any Registration Statement filed pursuant to the request of the
Holders under this Section 14 may, subject to the provisions of Section 14(c),
include securities of the Issuer other than the Unregistered shares.
(c) BLUE SKY IN DEMAND REGISTRATION.
In the event of any Registration of Warrant Shares pursuant to
Section 14, the Issuer will use its best efforts to register and/or qualify the
securities covered by the Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of such securities; provided, however, that notwithstanding
anything in this Agreement to the contrary, in the event any jurisdiction in
which the securities shall be qualified imposes a non-waivable requirement that
expenses incurred in connection with the qualification of the securities be
borne by selling shareholders, the Holders shall pay their pro rata share of
such expenses.
(d) UNDERWRITTEN DEMAND REGISTRATION.
The Holders making a Demand shall be entitled to engage an
underwriter reasonably acceptable to the Issuer to offer and sell in a public
offering the Unregistered Shares included in any Registration Statement filed
pursuant to Section 14(a) above. In such event, the Issuer and each
participating Holder shall enter into an underwriting agreement in customary
form with the representative of the underwriter ("Underwriter's
Representative") for such offering. Whether or not an underwriting agreement
is entered into, the Issuer shall:
(i) make such representation and warranties to the Holders
participating in such registration and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
comparable underwritten offerings;
(ii) obtain opinions of counsel to the Issuer and updates
thereof (which counsel and opinions (if form, scope and substance) shall be
reasonably satisfactory to the Underwriter's Representative, if any, and the
Holders of a majority in number of the Unregistered Shares being sold)
addressed to such Holders and underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and the
underwriters, if any;
(iii) obtain comfort letters and updates thereof from the
Issuer's independent certified public accountants addressed to the selling
Holders and the underwriters, if any, such letters to be in customary form and
covering matters of the type (including the "circling" of numbers in the
prospectus included in the Registration Statement, with appropriate legends
explaining the procedures performed with respect to "circled" numbers)
customarily covered in comfort letters by independent certified public
accountants in connection with underwritten offerings, on such date or dates as
may be reasonably requested by the Underwriters' Representative and the Holders
of a majority of the Unregistered Shares being sold; and
(iv) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority of the Unregistered Shares
being sold and the Underwriters' Representative, if any, to evidence compliance
with any customary conditions contained in the underwriting agreement.
In connection with such Underwritten Offering, the Issuer shall (i) make
provide to a single counsel for the Holders whose Unregistered Shares are
included in such Underwritten Offering, for such counsel's review and comment,
drafts of the Registration Statement; (ii) provide such counsel with a
reasonable number of executed copies of the Registration Statement and all
amendments thereto, as filed, as well as a reasonable number of preliminary
prospectuses used by the underwriters in such Underwritten Offering; (iii) give
prompt notice to such counsel of the effectiveness of such registration
statement and of any stop order issued by the Commission or proceeding, or
threat of such a proceeding, by the Commission for the purpose of issuing a
stop order or otherwise suspending the effectiveness of any Registration
Statement; (iv) provide to the Holders a reasonable number of final
prospectuses delivered to purchasers under the Securities Act; and (v) for such
period for which prospectuses are required to be delivered by dealers, provide
such dealers with an adequate number of final prospectuses in order to permit
the dealers to comply with their obligations under the Securities Act. In all
other regards, the Issuer agrees to comply with the requirements of the
Securities Act in connection with any Underwritten Offering.
(e) RIGHT OF REDEMPTION. The Issuer shall have the right to
redeem the Unregistered Shares at a price equal to the average of the price as
quoted for the Common Stock as set forth in the National Market of The Nasdaq
Stock Market or, if the Common Stock shall be traded on any national or
regional securities exchange, the latest bid price for the Common Stock, for
the prior ten (10) trading days prior to the date the Demand is received.
15. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered in person, against written
receipt therefor, or two days after being sent, by registered or certified
mail, postage prepaid, return receipt requested, and, if to the Holder, at such
address as is shown on the Warrant Register or as may otherwise may have been
furnished to the Issuer in writing by the Holder and, if to the Issuer, at the
Issuer's Office.
16. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This certificate is deemed to have been delivered in
the State of Tennessee and shall be construed and enforced in accordance with
and governed by the laws of such State. The headings in this Warrant to
Purchase Common Stock Certificate are for purposes of reference only, and shall
not limit or otherwise affect any of the terms hereof.
17. EXPIRATION. Unless as hereinafter provided, the right to exercise
these Warrants shall terminate upon the expiration of the Exercise Period.
IN WITNESS WHEREOF
Response Oncology, Inc.
DATED: January 2, 1996 By:_______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
PURCHASE FORM
TO: RESPONSE ONCOLOGY, INC.
Dated:_________________, 19__
The undersigned hereby irrevocably elects to exercise the within Warrants,
to the extent of purchasing __________ shares of Common Stock, and hereby makes
payment of $______________ in payment of the actual Exercise Price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:________________________________________________________________________
(Please typewrite or print in block letters)
Address:_____________________________________________________________________
Signature:___________________________________________________________________
(Signature must conform in all respects to the name of the Holder as
set forth on the face of this Warrant.)
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________ hereby sells,
assigns and transfers unto
Name:_______________________________________________________________________
(Please typewrite or print in block letters)
Address:____________________________________________________________________
the right to purchase shares of Common Stock represented by this Warrant to the
extent of ___________________________________________ shares as to which such
right is exercisable and does hereby irrevocably constitute and appoint
_______________________________
Attorney-in-Fact, to transfer the same on the books of the Issuer with full
power of substitution in the premises.
Dated:________________, 19__
Signature___________________________________________________________________
(Signature must conform in all respects to the name of the Holder as
set forth on the face of this Warrant.)
Exhibit 7(a)(x)
to
Stock Purchase Agreement
CERTIFICATE OF FACTS
This Certificate is provided in connection with the transactions
contemplated by the Stock Purchase Agreement dated as of December 20, 1995, by
and among the Stockholders (the "Sellers") of Oncology Hematology Group of
South Florida, P.A., a Florida professional association (the "Association"),
South Florida Oncology Hematology Associates, P.A., a Florida professional
association (the "New PA") and Response Oncology, Inc., a Tennessee corporation
("Response"), pursuant to which Response is to acquire from the Sellers all of
the outstanding capital stock of the Association and the new PA and Response
are to enter into a Service Agreement (the "Transaction").
The Association and Sellers acknowledge that the law firms of Baker,
Donelson, Bearman & ▇▇▇▇▇▇▇▇, a professional corporation, and Zack, Sparber,
Zosnitzky, Truxton, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A. may rely on the certification of
facts contained herein in connection with such firms' rendering their opinions
concerning the Transaction to Response and to such lender, underwriter or other
party as directed by Response.
The undersigned person, in his own behalf and on behalf of all Sellers,
and as President of the Association, does hereby certify the following:
1. The locations at which the Sellers and the Association conduct
their practice and a description of the nature of such practice at each
location is described on Exhibit "A" to this Certificate. The Sellers and the
Association do not conduct a practice or business at any locations other than
those identified on Exhibit "A."
2. A list of all employment agreements and non-competition agreements
and a description of the compensation arrangement with each employee whose
services are billable is provided on Exhibit "B" to this Certificate.
3. The Sellers and any professional associated with or employed by the
Association do not have any oral or written agreement or understanding with any
organization or individual that provides health services or supplies other than
those identified on Exhibit "C."
4. The Sellers and any professional associated with or employed by the
Association do not have any endorsement arrangement with any manufacturer of
drugs, biologicals or medical devices, including, but not limited to, surgical
instruments or intraocular lenses other than those identified on Exhibit "D."
5. The Sellers and any professional associated with or employed by the
Association do not have any oral or written agreements with professionals, or
legal entities with which such professionals have an investment or compensation
interest as defined by the Medicare and Medicaid Anti-Kickback Law (42 U.S.C.
1320a-7(b)(b)), the ▇▇▇▇▇ Self-Referral Law (42 U.S.C. 1395nn) or regulations
promulgated thereunder and applicable state law, who may refer to or receive
referrals from the Sellers or to professionals employed by the Association,
other than those identified on Exhibit "E."
6. The Sellers and professionals associated with or employed by the
Association are not members of a group referral service other than those
identified on Exhibit "F."
7. The Sellers and professionals associated with or employed by the
Association do not belong to a group purchasing organization other than those
identified on Exhibit "G."
8. The Sellers and professionals associated with or employed by the
Association are not parties to any recruitment or retention agreement with any
hospital or health care provider for which the terms are ongoing other than
those identified on Exhibit "H."
9. The Sellers and professionals associated with or employed by the
Association do not allow waiver of Medicare/Medicaid or insurance co-payments
and deductibles or their policy for waiver of Medicare/Medicaid or insurance
co-payments and deductibles is stated on Exhibit "I."
10. The Sellers and professionals associated with or employed by the
Association do not have any oral or written financial or cross-referral
arrangements with any other provider of health care services not employed by
the Association other than as identified on Exhibit "K."
11. The Sellers and professionals employed by the Association do not
have an ownership or an investment interest in or any kind of compensation
arrangement with any business that provides any of the following services other
than as identified on Exhibit "L:"
(a) An ambulatory surgery center;
(b) Any agency, institution, facility or place which provides the
following health care services: burn unit, neonatal, intensive care unit, open
heart surgery, cardiac catheterization, linear accelerator, positron emission
tomography, psychiatric, obstetrical, maternity;
(c) A diagnostic laboratory;
(d) Any major medical equipment with value exceeding $1,000,000;
(e) Home health services (services to patients on an outpatient
basis in either their regular or temporary place of residence);
(f) Hospital (in-patient or out-patient);
(g) Recuperation center;
(h) Nursing home;
(i) Convalescent home;
(j) Mental health hospital;
(k) Mental retardation institutional habilitation facility,
including, but not limited to, intermediate care facilities for mental
retardation and state-run institutions;
(l) Rehabilitation facility;
(m) Residential hospice;
(n) Mental health residential treatment facility;
(o) Home for the aged;
(p) Home health care agency;
(q) Alcohol and drug prevention treatment facility;
(r) Outpatient diagnostic center;
(s) Blood bank;
(t) Trauma center;
(u) X-ray equipment;
(v) Computerized axial topographers;
(w) Extracorporeal shock wave lithotripter;
(x) Magnetic resonance imagers;
(y) Physical therapy;
(z) Occupational therapy services;
(aa) Radiology or other diagnostic services;
(bb) Radiation therapy services;
(cc) Durable medical equipment;
(dd) Parenteral and enteral nutrients, equipment and supplies;
(ee) Prosthetics, orthotics and prosthetic devices.
12. The Sellers and professionals associated with or employed by the
Association are in compliance with all health care laws and licensing laws of
the states in which the Sellers and such professionals conduct their business
and have not received or made payment or any remuneration whatsoever to induce
or encourage the referrals of patients or the purchase of goods and/or services
as prohibited under 42 U.S.C. 1320a-7b(b) or the regulations promulgated
thereunder, or have not otherwise perpetrated any Medicare or Medicaid fraud or
abuse or false claims nor have any fraud or abuse or false claims been alleged
within the last five (5) years by any government agency.
13. The Sellers and all professionals associated with or employed by
the Association have all permits and licenses required by all applicable laws;
have made all regulatory filings necessary for the conduct of the Association's
business; and are not in violation of said permitting or licensing
requirements.
14. The Sellers and professionals associated with or employed by the
Association have not in the past referred patients to Response or any physician
or practitioner on Exhibit "M" or received referrals of patients from Response
or any physician or practitioner on Exhibit "M", except as identified on
Exhibit "M."
15. All agreements whereby Sellers or professionals associated with or
employed by the Association provide or obtain professional services, management
services, or use of space or equipment are identified on Exhibit "N" and each
such agreement is in writing, for a term of at least one year and provide
compensation or fees at fair market for such goods or services, except as
identified on Exhibit "N."
16. The Sellers and professionals associated with or employed by the
Association have not knowingly and willfully made or caused to be made any
false statement or representation of a material fact in any application for any
benefit or payment under the Medicare or Medicaid programs.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of January 2, 1996.
ONCOLOGY HEMATOLOGY GROUP OF
SOUTH FLORIDA, P.A.
By: _________________________________
Title: _______________________________
____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
Exhibit A
Office Locations
Exhibit B
List of Employment Agreements
Exhibit C
Agreements with Health Services or Supplies Providers
Exhibit D
Endorsement Arrangements
Exhibit E
Agreements with Professionals
Exhibit F
Group Referral Services
Exhibit G
Group Purchasing Organizations
Exhibit H
Recruitment Agreements
Exhibit I
Waiver Policy for Co-Payments and Deductibles
Exhibit K
Financial Arrangements with Health Care Professionals Not Employed
Exhibit L
Investment Interests
Exhibit M
List of Referrals
Exhibit N
Material Agreements