EXHIBIT 10(ah)
TERMINATION OF SERVICE AGREEMENT AND
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Termination of Service Agreement and Agreement for Purchase and
Sale of Assets ("AGREEMENT") is made as of the 30th day of November, by and
among RESPONSE ONCOLOGY, INC., a Tennessee corporation ("ROI"), RO-Tamarac, a
Florida corporation ("RO-T"), ("ROI" and "RO-T" are hereinafter jointly referred
to as "RESPONSE"), ONCOLOGY & HEMATOLOGY ASSOCIATES OF WEST BROWARD, P.A., a
Florida professional association ("OHAWB"), and the Stockholders of OHAWB who
are in the R&K division of OHAWB (the "STOCKHOLDERS"). (Each of ROI, RO-T, OHAWB
and the Stockholders are sometimes referred to herein individually as a "Party"
and collectively as "Parties.")
RECITALS:
WHEREAS, ROI and certain of its wholly owned affiliates are
debtors-in-possession under a case filed under Chapter 11 of Title 11 of the
United States Code (the "BANKRUPTCY CODE") on March 29, 2001 (the "PETITION
DATE") in the United States Bankruptcy Court for the Western District of
Tennessee (the "BANKRUPTCY COURT"); and
WHEREAS, ROI, OHAWB and the Stockholders entered into a Service
Agreement dated AUGUST 1, 1997 (the "SERVICE AGREEMENT"), pursuant to which ROI
agreed to perform certain practice management functions described therein in
exchange for payment by OHAWB to ROI of various fees, as described therein; and
WHEREAS, the parties mutually desire to terminate the Service Agreement
and all of the parties' respective rights, obligations, and liabilities
thereunder (except as otherwise provided herein) and under the Notes, and to
provide for the transfer and/or assumption of certain assets and liabilities,
all upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the purchase price described hereunder and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. RECITALS. The recitals set forth above are true and correct and are
incorporated herein by reference.
2. TERMINATION OF SERVICE AGREEMENT.
(a) TERMINATION OF SERVICE AGREEMENT. Subject to the performance
by each of the Parties of their respective obligations under this Agreement, the
approval of this Agreement and the transactions contemplated hereby by the
Bankruptcy Court and the survival of any obligations which by the terms of this
Agreement are intended to survive, the parties hereby terminate the Service
Agreement effective as of the Closing Date (as hereinafter defined). As of the
close of business on the Closing Date, ROI and OHAWB shall be relieved of all
obligations imposed upon
them pursuant to the Service Agreement and shall have no further duties or
obligations to one another except those specifically set forth in this
Agreement.
(b) TERMINATION FEE. As consideration for the termination of the
Service Agreement and the mutual release of the parties from their respective
obligations thereunder, and as consideration for all other services performed by
ROI for and on behalf of OHAWB, OHAWB shall pay to ROI at Closing a termination
fee (the "TERMINATION FEE") (which amount includes without limitation, a payment
of $106,000.00 (which represents an amount equal to two (2) times an annualized
EBITDA amount of approximately $53,000.00, which EBITDA includes the R&K
Division of OHAWB and a seventy-five percent (75%) allocable portion of OHAWB's
ancillary profit center, but excludes the WWW division, using the ROI/OHAWB
Statement of Operations for the period ending May 31, 2001)) in an amount equal
to the value of the Transferred Accounts Receivable (as defined in SECTION 2(C)
below) as of the Closing Date (as defined in SECTION 2(C) below). In payment of
the Termination Fee, OHAWB agrees on the Closing Date to sell, convey, transfer,
assign, and deliver all of its right, title, and interest in and to all the
Non-Medicare Accounts Receivable to ROI and shall grant to ROI a first priority
security interest, to be evidenced by a Security Agreement in the form attached
hereto as EXHIBIT 2(B), in and to the proceeds of all the Medicare Accounts
Receivable. OHAWB hereby agrees that it shall pay over to ROI from and after the
Closing Date all amounts actually received by it in respect of all the Medicare
Accounts Receivable consistent with the post-closing covenant set forth in
SECTION 15(D) of this Agreement.
(c) ACCOUNTS RECEIVABLE. "Transferred Accounts Receivable" for
purposes of this Agreement shall be defined to mean both the Medicare Accounts
Receivable (as defined below) and the Non-Medicare Accounts Receivable (as
defined below). For purposes of this Agreement, (i) "Medicare Accounts
Receivable" shall refer to the outstanding Medicare, Medicaid, and
CHAMPUS/TriCare program receivables (including both the R&K Division of OHAWB
and OHAWB's ancillary profit center) as of the Closing Date, as set forth on
EXHIBIT 2(C)(i); and (ii) "Non-Medicare Accounts Receivable" shall refer to all
outstanding Accounts Receivable (as defined in the Service Agreement) other than
the Medicare Accounts Receivable (including both the R&K division of OHAWB and
OHAWB's ancillary profit center) as of the Closing Date, as set forth on EXHIBIT
2(C)(ii). The parties acknowledge that the listings on EXHIBITS 2(C)(i) AND (ii)
will not be complete on the Closing Date and agree to amend EXHIBIT 2(C)(i) and
EXHIBIT 2(C)(ii) to more accurately reflect the actual accounts receivable that
are the subject of this SECTION 2(C) within thirty (30) days after Closing.
(d) RECEIVABLES LINE. Pursuant to SECTION 5.12 of the Service
Agreement, ROI established an accounts receivable line of credit (the
"RECEIVABLES LINE" as described therein), constituting a line of credit
available to OHAWB and secured by a first priority security interest in and to
all Accounts Receivable (as defined in the Service Agreement). ROI shall deliver
such releases of the Receivables Line, as may be necessary to satisfy all
liability of OHAWB and/or its principals under the Receivables Line and to
release OHAWB's Accounts Receivable arising after the Closing Date from any
liens, including, without limitation, UCC-3 amendments to financing statements,
limiting the lien of ROI and/or any other party claiming by or through ROI to
the Accounts Receivable, to the actual Accounts Receivable as of the Closing
Date.
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3. PURCHASE AND SALE OF ASSETS.
(a) PURCHASE AND SALE. Subject to the terms and conditions set
forth in this Agreement, including the conditions precedent set forth in
SECTIONS 5 AND 9 hereof, Response agrees to sell, convey, transfer, assign and
deliver to OHAWB, free and clear of all liens and encumbrances, and OHAWB agrees
to purchase from Response for the consideration described in SECTION 3(B) below,
certain of the assets of Response consisting of all or substantially all of the
assets used in the operation of OHAWB's business, as described below:
(i) All property, furniture, fixtures, and equipment
currently utilized by OHAWB in its practice at any location, a
list of which is attached as EXHIBIT 3(A)(I) hereto and
incorporated herein by reference (the "PERSONAL PROPERTY");
(ii) All usable supply inventory, including
pharmaceuticals (but not "replacement drugs" as such term has
been generally used by the parties) and pharmacy supplies, both
on hand at the offices of OHAWB and in transit, as listed on
EXHIBIT 3(A)(II) hereto and incorporated herein by reference
(the "SUPPLY INVENTORY");
(iii) All of Response's rights in and to all of the
unused portion of expenses that have been prepaid in connection
with the assets transferred hereunder ("PREPAID EXPENSES") and
in deposits and advances that have been paid in connection
therewith, including without limitation, the Premises Leases and
the Equipment Leases ("DEPOSITS AND ADVANCES"). The Deposits and
Advances and Prepaid Expenses are listed and described on
EXHIBIT 3(A)(III) attached hereto and incorporated herein by
reference; and
(iv) All of the goodwill associated with OHAWB's
practice.
(b) CONSIDERATION FOR THE PURCHASE AND SALE OF ASSETS. The sole
consideration payable for the purchase and sale of the assets described in
SECTION 3(A), above, shall be OHAWB's assumption of those certain lease
obligations described in SECTION 3(C), below.
(c) PREMISES AND EQUIPMENT LEASES. Subject to the terms and
conditions set forth in this Agreement, by assignment or other appropriate
instrument of transfer, Response shall assign to OHAWB the premises lease for
the 7431 North University Drive, Suite 110, Tamarac, Florida business location
(the "ASSIGNED LEASE") and OHAWB shall assume and agree to perform and to pay
when due all obligations on the Assigned Lease and the Equipment Leases (as
defined below) arising from and after the Closing Date. All obligations in
respect of the Assigned Lease and the Equipment Leases shall have been cured and
paid current by Response on a prorated basis through the Closing Date. A copy of
the Assigned Lease has been provided to OHAWB. Copies of all of the leases on
equipment and other tangible personal property to be assumed by OHAWB (the
"EQUIPMENT LEASES") have been provided to OHAWB and a listing of same is
attached as composite EXHIBIT 3(C) hereto. Response agrees to file with the
Bankruptcy Court such applicable motions as may be allowed and permitted under
11 U.S.C. ss. 365 in order to approve the assumption and assignment of the
Assigned Lease and the Equipment Leases to OHAWB. A final,
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non-appealable Order from the Bankruptcy Court authorizing the assumption and
assignment of the Assigned Lease and the Equipment Leases shall be procured by
Response in advance of the Closing Date (as defined below). Except to the extent
required under 11 U.S.C. ss. 365(b)(1) (in respect of the obligation of Response
to cure defaults under executory contracts or unexpired leases), Response shall
only be obligated for and shall indemnify OHAWB from and hold it harmless
against any amounts due under the Assigned Lease or the Equipment Leases through
the Closing Date and OHAWB shall be obligated for and shall indemnify Response
from and hold it harmless against any amounts from and after the Closing Date.
(d) ACCOUNTS PAYABLE. Response is obligated to various unsecured
creditors of Response's estate. OHAWB shall not and does not assume any
pre-Closing obligations with respect to such creditors pursuant to this
Agreement or the transactions contemplated hereby.
(e) TAX FREE. Notwithstanding anything stated in this Agreement,
the sale and transfer of assets from Response to OHAWB as described herein is
intended to be made in contemplation of a plan and therefore free of any stamp
tax or similar tax pursuant to SECTION 1146(c) of the Bankruptcy Code.
4. COVENANTS PRIOR TO CLOSING.
(a) OPERATION OF BUSINESS. OHAWB and the Shareholders agree to
operate the R&K division of OHAWB and its medical practice, including without
limitation, the ordering of pharmaceuticals and supplies and the provision of
medical services, in substantially the same manner as such medical practice has
been carried on by OHAWB and the R&K division of OHAWB in the past.
(b) SUPPORT OF BANKRUPTCY COURT APPROVAL. OHAWB and the
Stockholders agree to exercise all efforts to support without reservation or
condition the receipt of the Bankruptcy Court's approval of this Agreement.
5. BANKRUPTCY COURT AND OTHER CONDITIONS PRECEDENT. As conditions
precedent to OHAWB's and the Stockholders' and to Response's obligation to close
hereunder, the following must occur:
(a) BANKRUPTCY COURT. This Agreement shall become effective and
legally binding upon the parties upon the entry of a final, nonappealable Order
of the Bankruptcy Court that approves the terms of this Agreement. The Parties
agree that facsimile copies of the execution pages of this Agreement shall be
valid and binding for purposes of the submission of this Agreement to the
Bankruptcy Court for approval.
(b) WAIVER OF CROSS-DEFAULTS. Each of the Parties to this
Agreement agree that the cross-default provision(s) of the Service Agreement
that are set forth in SECTIONS 11.3(D) AND (E) of the Service Agreement to the
extent enforceable are hereby fully, completely, and forever waived, terminated
and shall be hereinafter considered null and void.
(c) BANK LETTER. OHAWB shall have received a statement
substantially in the form of EXHIBIT 5 attached hereto and incorporated herein
by reference, executed by AmSouth Bank
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("AMSOUTH"), Response's lead lender for the Receivables Line ("RESPONSE ACCOUNTS
RECEIVABLE LOAN"), on its own behalf and on behalf of all other lenders who have
participated in the Response Accounts Receivable Loan, stating each of the
following:
(i) it has received reviewed and approved this
Agreement;
(ii) subject to assignment of the Non-Medicare Accounts
Receivable and grant by OHAWB of a first priority security
interest in the proceeds of the Medicare Accounts Receivable, it
releases any claims against OHAWB and OHAWB's Representatives
(as defined in SECTION 7(A) below) and all liens or encumbrances
against the assets of OHAWB, other than the Accounts Receivable
arising prior to the Closing Date;
(iii) it acknowledges that the AmSouth acknowledgment
and estoppel letter shall constitute a release of all liens and
encumbrances against the assets to be acquired by OHAWB, as set
forth in this Agreement, other than the Accounts Receivable
arising prior to the Closing Date; and
(iv) its commitment to execute and deliver such
releases, satisfactions, and termination statements, as shall be
necessary to release or discharge any liens against the assets
of OHAWB created or arising in connection with the Response
receivables loan that relate to the Accounts Receivable arising
after the Closing Date.
(d) PHARMACY SERVICES AGREEMENT. Execution and delivery by OHAWB
of the Pharmacy Services Agreement described in SECTION 9 below.
6. TERMINATION OF RESTRICTIVE COVENANTS. In consideration of obligations
and credits contained herein, the restrictive covenants of the physicians
employed by OHAWB in its R&K Division and described in Article 7 of the Service
Agreement are hereby terminated and forever waived by ROI.
7. RELEASES.
(a) Except for Response's rights and OHAWB's and the
Stockholders' obligations arising from this Agreement, Response does hereby
remise, release, acquit, and forever discharge OHAWB and OHAWB's present and
former shareholders, officers, directors, employees, agents and attorneys and
its and their heirs, successors, and employees, and each of them (collectively
"OHAWB'S REPRESENTATIVES"), of and from any and all manner of actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims, and demands
whatsoever, in law or in equity or otherwise, whether known or unknown, matured
or unmatured, which Response ever had, now has, hereafter can, shall or may have
against OHAWB and/or OHAWB's Representatives arising from or relating to acts or
omissions which occurred prior to the Closing Date except those (i) relating to
the provision of or failure to provide patient care services or issues of
record-keeping related to such services, and (ii) relating to fraudulent acts or
omissions or alleged fraudulent acts or omissions by OHAWB and/or OHAWB's
Representatives.
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Notwithstanding the foregoing, in the event that any claim(s) relating to any
statement or submission made to any governmental or other payor is asserted
against Response or Response's Representatives (as defined below), or any of
them, by a person or entity that is not a party to this Agreement, Response or
Response's Representatives (as defined below), and each of them, hereby
specifically reserve and retain any and all rights, claims, and defenses that
they, or any of them, now have, have had, or would otherwise have against OHAWB
or OHAWB's Representatives, or any of them, arising out of the act(s) or
omission(s) that is the subject matter of each claim(s) against Response or
Response's Representatives (as defined below), or any of them.
(b) Except for OHAWB's rights and Response's obligations arising
from this Agreement, OHAWB does hereby remise, release, acquit, and forever
discharge Response and Response's present and former shareholders, officers,
directors, employees, agents and attorneys and its and their heirs, successors,
and assigns, and each of them (collectively "RESPONSE'S REPRESENTATIVES"), of
and from any and all manner of actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims, and demands whatsoever, in law or in equity or
otherwise, whether known or unknown, matured, or unmatured, which OHAWB ever
had, now has, hereafter can, shall or may have against Response and/or
Response's Representatives, arising from or relating to facts or circumstances
which occurred prior to the Closing Date, except those (i) relating to the
provision of or failure to provide patient care service by any Response
employee(s) or issues related to such services by any Response employee(s) and
(ii) relating to fraudulent acts or omissions or alleged fraudulent acts or
omissions by Response and/or Response's Representatives. Notwithstanding the
foregoing, in the event that any claim(s) relating to any statement or
submission made to any governmental or other payor is asserted against OHAWB or
OHAWB's Representatives, or any of them, by a person or entity which is not a
party to this Agreement, OHAWB or OHAWB's Representatives, hereby specifically
reserve and retain any and all rights, claims, and defenses, that they, or any
of them, now have, have had, or would otherwise have against Response or
Response's Representatives, or any of them, arising out of the act(s) or
omission(s) that is the subject matter of each claim(s) against OHAWB or OHAWB's
Representatives, or any of them.
(c) As consideration for the releases described in SECTION 7(a)
above, the Stockholders do hereby agree to cancel those certain Non-Negotiable
Promissory Notes dated August 30, 1996 ("NOTES"), each in the original principal
amount of $950,000 payable to Abraham Rosenberg, M.D., and Alfred M. Kalman,
M.D., respectively, by Response, and the Stockholders do hereby further agree to
forever waive any right to receive from Response any Prepetition Practice
Retainage Payment(s) owed to the Stockholders under the Service Agreement for
periods accruing prior to the Petition Date ("PREPETITION RETAINAGE PAYMENTS"),
and the Stockholders do hereby further agree to the cancellation and termination
of all options to purchase any ROI stock held by or otherwise granted in favor
of said Stockholders (the "RESPONSE STOCK OPTIONS"), effective as of the Closing
Date, and the Stockholders do hereby remise, release, acquit, satisfy, and
forever discharge Response and Response's Representatives of and from any and
all manner of actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands whatsoever, in law or in equity or otherwise,
whether known or
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unknown, matured or unmatured, which the Stockholders ever had, now have,
hereafter can, shall or may have against Response and/or Response's
Representatives, arising from or relating to the Notes, the Response Stock
Options or the Prepetition Practice Retainage Payment(s) under the Service
Agreement.
8. EMPLOYEES. Effective as of the Closing Date, the employment of any
Executive Director (as such position is described in SECTION 5.6 of the Service
Agreement) and all other administrative personnel employed by Response at a
Clinic (as defined under SECTION 2.1 of the Service Agreement) shall be
terminated. All of such individuals may be hired by OHAWB as employees
simultaneously with such persons' termination of employment by Response,
effective as of the Closing Date. Beginning with the date of Closing, OHAWB
shall be responsible for the provision of and cost of all aspects of the
employment of each of such individuals so employed, including without
limitation, salaries, employee benefits, taxes, insurance, and other costs and
benefits. A list of all of the employees to be hired by OHAWB as of the Closing
Date is attached hereto as EXHIBIT 8.
9. PHARMACY SERVICES AGREEMENT. Effective as of the Closing Date and as
a condition precedent to Response's Obligation to close, the parties shall
execute and deliver an Agreement for Pharmacy Services in the form attached
hereto as EXHIBIT 9.
10. REPRESENTATIONS AND WARRANTIES OF OHAWB AND THE STOCKHOLDERS. OHAWB
the Stockholders represent, warrant, covenant, and agree with Response that:
(a) ORGANIZATION. OHAWB is a professional association duly
organized, validly existing and in good standing under the laws of the State of
Florida. The R&K Division of OHAWB consists of Abraham Rosenberg, M.D. and
Alfred Kalman, M.D., and certain physician(s) employed by them. OHAWB has the
full power and authority to own OHAWB's property, to carry on OHAWB's business
as presently being conducted, to execute, deliver, and perform this Agreement
and all other agreements and documents contemplated hereby, and to consummate
the transactions contemplated hereby.
(b) AUTHORITY. OHAWB has and the Stockholders have taken all
necessary action to authorize the execution, delivery, and performance of this
Agreement as well as the consummation of the transactions contemplated hereby.
The execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not violate any provisions of the charter
or the bylaws of OHAWB or any indenture, mortgage, deed of trust, lien, lease
agreement, arrangement, contract, instrument license, order, judgment or decree,
or result in the acceleration of any obligation thereunder, to which OHAWB is a
party or by which it is bound. The President of OHAWB, or his designee, has been
authorized to execute and deliver this Agreement, the agreements and documents
contemplated hereby, and all such further documents as shall be necessary or
desirable to consummate the transactions contemplated hereby.
(c) LITIGATION. No action or proceeding by or before any court
or other Governmental Authority has been instituted or is, to the best of
OHAWB's knowledge, threatened with respect to the transactions contemplated by
this Agreement except as set forth on EXHIBIT 10(c).
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(d) FULL DISCLOSURE. When considered in the context of all
information contained herein, no representation or warranty made by OHAWB and/or
the Stockholders in this Agreement contains or will contain any untrue statement
of a material fact. All representatives and warranties contained in this
Agreement are true and correct as of the date of their Agreement and shall
remain true and correct throughout the term of this Agreement.
(e) FAIR CONSIDERATION; REPRESENTATION BY COUNSEL. OHAWB and the
Stockholders have reviewed each and every term and provision of this Agreement
with counsel of their choosing and have accepted same as being fair and
reasonable. OHAWB acknowledges that the consideration tendered to Response is
fair and reasonable and constitutes a reasonably equivalent value for the
consideration paid to them by Response. OHAWB acknowledges that the tender of
the consideration to Response is not undertaken in fraud of or to hinder or
delay any of its creditors and will not render it insolvent.
(f) NO LIENS OR ENCUMBRANCES. The assets to be transferred to
ROI hereunder shall be delivered free and clear of any liens or encumbrances.
11. REPRESENTATIONS AND WARRANTIES OF RESPONSE. Response represents,
warrants, covenants, and agrees with OHAWB and the Stockholders that:
(a) ORGANIZATION. ROI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee. RO-T is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida. ROI an RO-T each have the full power to own their
respective properties, to carry on their respective businesses as presently
conducted, to execute, deliver, and perform this Agreement, and all other
agreements and documents contemplated hereby, and to consummate the transactions
contemplated hereby.
(b) AUTHORITY. Response has taken all necessary action to
authorize the execution, delivery, and performance of this Agreement as well as
the consummation of the transactions contemplated hereby. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby will not, violate any provisions of the charter or the
bylaws of Response or any indenture, mortgage, deed of trust, lien, lease
agreement, arrangement, contract, instrument license, order, judgment or decree,
or result in the acceleration of any obligation thereunder, to which Response is
a party or by which it is bound. The President of ROI, or his designee, and the
President of RO-T, or his designee, have each been authorized to execute and
deliver this Agreement, the agreements and documents contemplated hereby, and
all such further documents as shall be necessary or desirable to consummate the
transactions contemplated hereby.
(c) LITIGATION. No action or proceeding by or before any court
or other Governmental Authority has been instituted or is, to the best of
Response's knowledge, threatened with respect to the transactions contemplated
by this Agreement except as set forth on EXHIBIT 11(C).
(d) FULL DISCLOSURE. When considered in the context of all
information contained herein, no representation or warranty made by Response in
this Agreement contains or will contain any untrue statement of a material fact.
All representatives and warranties contained in this
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Agreement are true and correct as of the date of this Agreement and shall remain
true and correct throughout the term of this Agreement.
(e) FAIR CONSIDERATION; REPRESENTATION BY COUNSEL. Response has
reviewed each and every term and provision of this Agreement with counsel of its
choosing and has accepted same as being fair and reasonable. Response
acknowledges that the consideration tendered to OHAWB is fair and reasonable and
constitutes a reasonably equivalent value for the consideration paid to them by
OHAWB. Response acknowledges that the tender of the consideration to OHAWB is
not undertaken in fraud of or to hinder or delay any of its creditors and will
not render it insolvent.
(f) NO LIENS OR ENCUMBRANCES. Upon issuance of the documents
described in SECTIONS 4(a) and (b) above, the assets to be transferred hereunder
shall be delivered free and clear of any liens or encumbrances.
12. CLOSING. The Closing of the transactions contemplated hereby,
including without limitation, the transfer of assets and leases by Response to
OHAWB (the "CLOSING"), shall take place on that date (the "CLOSING DATE") on
which the Bankruptcy Court shall have issued a final, non-appealable Order
approving this Agreement and the transactions contemplated herein, or such
mutually agreeable time within five (5) business days following the entry of
such a final, non-appealable Order that the Parties may agree to.
(a) RESPONSE DELIVERABLES. At the Closing, Response shall
execute and deliver, or cause to be delivered, to OHAWB the following
instruments and documents, against execution and delivery of the items specified
in SECTION 12(B):
(i) A true and accurate copy of an Order of the
Bankruptcy Court approving this Agreement;
(ii) Assignment of Response's interests in the Assigned
Lease and Equipment Leases as described in SECTION 3(C) above
and Order(s) from the Bankruptcy Court authorizing such
assumption and assignment of such Assigned Lease and Equipment
Leases;
(iii) Estoppel Certificates from all affected Lessors
affirming that cure amounts under all applicable leases have
been paid;
(iv) The original note and/or other instruments
establishing and/or securing the Receivables Line marked
satisfied in full.
(v) A bill of sale and/or assignment instrument(s)
conveying title to any other assets to be transferred hereunder
not already conveyed by the deliverables described in
SUBSECTIONS 12(A)(ii) AND (iii), free and clear of liens and
encumbrances.
(vi) Corporate resolutions of ROI authorizing the
transaction provided for herein.
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(vii) Appropriate UCC termination statements relating to
the existing financing statements of record relating to the
purchased assets.
(b) OHAWB DELIVERABLES. At the Closing, OHAWB and/or the
Stockholders (as the case may be) shall execute and deliver, or cause to be
delivered, to Response the following instruments and documents against execution
and delivery of the items specified in SECTION 12(A):
(i) The original Notes (as defined in SECTION 7(C)
above) marked satisfied in full.
(ii) Evidence of termination of the Response Stock
Options as described in SECTION 7(C) hereof.
(iii) An assignment of OHAWB and/or the Stockholder's
interest (as the case may be), if any, in its Non-Medicare
Accounts Receivable to ROI, subject to the terms and conditions
hereof.
(iv) A Security Agreement executed by OHAWB and the
Stockholders, as may be appropriate, granting to ROI a first
priority Security Interest in and to the Medicare Accounts
Receivable as described in SECTION 2(B) above, and an
appropriate UCC financing statements relating thereto.
(v) A general assumption instrument assuming the
Assigned Lease and the Equipment Leases, the accounts payable in
respect thereof arising from and after the Closing Date, and any
other obligations to be assumed hereunder.
(vi) An Agreement for Pharmacy Services effective as of
the Closing Date by and between ROI and OHAWB, in the form set
forth at EXHIBIT 9 and executed by OHAWB.
(vii) OHAWB's certified corporate resolutions of
shareholders and directors authorizing the transaction.
(c) PRORATIONS. Rent, utilities, telephone charges, personal
property taxes, employee wages, salaries, and benefits, and all other comparable
expenses capable of proration shall be prorated as of the Closing Date.
(d) FURTHER ASSURANCES. Each of the parties, at any time before
or after the Closing Date, will execute, acknowledge and deliver any further
documents, instruments, assignments, and other instruments of transfer,
reasonably requested by the other party, and will take any other action
consistent with the terms of this Agreement that may reasonably be requested by
the other party for the purpose of assigning, transferring, granting, conveying,
and confirming to the other party, or reducing to possession, any or all
property to be conveyed and transferred by this Agreement.
13. BROKERS. Each of the parties represents and warrants that it has
dealt with no broker or finder in connection with any of the transactions
contemplated by this Agreement and, insofar as it
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knows, no person or entity is entitled to a commission or finder's fee in
connection with any of these transactions except to the extent that the
President and CEO of ROI and the Chief Financial Officer of ROI may receive
additional compensation for having obtained the satisfaction of debt by virtue,
in part, of the closing of this Agreement. Response, OHAWB and the Stockholders
each agree to indemnify and hold harmless one another against any loss,
liability, damage, cost, claim, or expense incurred by reason of any brokerage,
commission, or finder's fee alleged to be payable because of any act, omission,
or statement of the indemnifying party.
14. COSTS. Except as may otherwise be provided in this Agreement, each
of the parties shall pay all costs and expenses incurred or to be incurred by it
in negotiating and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement.
15. ADDITIONAL POST-CLOSING COVENANTS.
(a) NON-SOLICITATION. OHAWB covenants that, for a period of two
(2) years after Closing, neither it nor OHAWB's Representatives (as defined in
SECTION 7(A) above), successors, or assigns will actively solicit or attempt to
influence any employee of Response to terminate his or her relationship with
Response nor will it employ any such individual or former Response employee
(within twelve (12) months of the effective date of the individual's termination
of his or her employment with Response). This provision shall have no
applicability to the employees identified on EXHIBIT 8.
(b) EXHIBITS. The parties agree that they will amend EXHIBITS
2(c)(ii) and 2(c)(ii) within thirty (30) days after the Closing Date to reflect
the actual inventory, prepaid expenses, deposits, advance and accounts payable,
as appropriate and applicable and consistent with the prior practices of OHAWB
and Response, as of the Closing Date.
(c) RETAINAGE PAYMENT. Notwithstanding the termination of the
Service Agreement, ROI shall cause to be paid to OHAWB, or to the individual
physicians employed by OHAWB entitled to such payment, as appropriate, at
Closing, eighty percent (80%) of the average Retainage Payment such physician
received during the months of May, June and July, 2001 as a partial payment of
the Retainage Payment applicable to the period beginning November 1, 2001 and
ending on the Closing Date. The balance of the Retainage Payments shall be
tendered in a manner consistent with prior practice between the parties.
(d) POST-CLOSING COLLECTIONS. To assist ROI in collecting the
Accounts Receivable, OHAWB will promptly cooperate and assist in such collection
efforts as reasonably requested by ROI. In regard to both Non-Medicare Accounts
Receivable and Medicare Accounts Receivable, OHAWB shall continue to receive
collections on account of said Accounts Receivable consistent with the customary
practice prior to the Closing Date and shall pay an amount equal to all amounts
actually received by them and which are attributable to the Accounts Receivable
to ROI not less frequently than twice per week. Further, OHAWB and the
Stockholders agree to exercise reasonable care and diligence in its and their
assistance to ROI with respect to collection efforts relating to the Accounts
Receivable and shall not take any action that is inconsistent with either
applicable law, rule, or regulation affecting the collection of debts and/or
prior collection practices. The parties acknowledge and agree that in the event
the aforesaid procedure in regard to payments on
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account of the Medicare Accounts Receivable is not permitted under applicable
laws, rules, or regulations affecting same, then the parties shall use such
other reasonable means to effect substantially the same results. As to any and
all pending hearings and appeals relating to Medicare Accounts Receivable,
OHAWB, and the Stockholders individually, each agree to exercise their
respective best efforts to cooperate with and assist ROI in pursuing such
matters.
16. MISCELLANEOUS PROVISIONS.
(a) This Agreement constitutes the entire understanding of the
parties in respect of the subject matter hereof and supercedes and replaces all
prior understandings and agreements of the parties, oral or written, in respect
of the subject matter of the Agreement. The provisions of this Agreement may be
amended, supplemented, waived, or changed only by a writing signed by the party
against whom enforcement of any such amendment, supplement, waiver, or
modification is sought and making specific reference to this Agreement.
(b) Neither party may assign its rights and/or delegate its
obligations hereunder without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
(c) All notices, requests, consents, and other communications
required or permitted under this Agreement shall be in writing (including
facsimile and telegraphic communication) and shall be (as elected by the person
giving such notice) hand delivered by messenger or courier service,
telecommunicated (to be followed by hard copy by overnight delivery), or mailed
(airmail if international) by registered or certified mail (postage prepaid),
return receipt requested, addressed to such address as any party may designate
by notice complying with the terms of this Section. Each such notice shall be
deemed delivered (a) on the date delivered if by personal delivery, and (b) on
the date upon which the return receipt is signed or delivery is refused or the
notice is designated by the postal authorities as not deliverable, as the case
may be, if mailed. Notices in respect of this Agreement shall be provided to the
following individuals or entities:
If to Response:
1805 Moriah Woods Boulevard
Memphis, TN 38117
Attn: Chief Executive Officer
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.
1333 New Hampshire Avenue, N.W.
Washington, DC 20036
Attn: James A Barker, Jr.
If to OHAWB/Stockholders:
7431 North University Drive
Suite 110
Tamarac, FL 33321
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with a copy to:
James Harris Fierberg, Esquire
Berger Singerman
Suite 1000
200 South Biscayne Boulevard
Miami, FL 33131
(d) If any part of this Agreement or any other Agreement entered
into pursuant hereto is contrary to, prohibited by or deemed invalid under
applicable law or regulation, such provision shall be inapplicable and deemed
omitted to the extent so contrary, prohibited, or invalid, but the remainder
hereof shall not be invalidated thereby and shall be given full force and effect
so far as possible.
(e) In this Agreement, the use of any gender shall be deemed to
include all genders, and the use of the singular shall include the plural,
wherever it appears appropriate from the context.
(f) The failure or delay of any party at any time to require
performance by another party of any provision of this Agreement, even if known,
shall not affect the rights of such party to require performance of that
provision or to exercise any right, power, or remedy hereunder, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of the provision itself, or a waiver of any right, power,
or remedy under this Agreement. No notice to or demand on any party in any case
shall, of itself, entitle such party to any other or further notice or demand in
similar or other circumstances.
(g) Nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any person other than the parties hereto and their respective legal
representatives, successors and permitted assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation or action over or against any party to
this Agreement.
(h) No remedy herein conferred upon any party is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise. No single
or partial exercise by any party of any right, power, or remedy hereunder shall
preclude any other or further exercise thereof.
(i) This Agreement and all transactions contemplated by this
Agreement shall be governed by, and construed and enforced in or accordance
with, the internal laws of the State of Florida without regard to principles of
conflicts or choice of laws.
(j) Any suit, action, or other legal proceeding arising out of
or relating to this Agreement shall be brought in the Bankruptcy Court, if
available, or otherwise in a court of the State
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of Florida, Broward County, or in the United States District Court for the
Southern District of Florida, having subject matter jurisdiction thereof, and
both parties agree to submit to the jurisdiction of such forum.
(k) Without the prior written consent of the other party,
neither party will disclose any term or condition of this Agreement to any
person or entity except that such disclosure may be made (i) to any lender to or
other person in a business relationship with any of the parties to whom such
disclosure is necessary in order to satisfy any of the conditions to the
consummation of this Agreement; (ii) to the extent appropriate, by each party,
to employees and legal counsel of that party; (iii) to the extent the party
making such disclosure believes in good faith that such disclosure is required
by law (in which case such party will consult with the other party prior to
making such disclosure), and (iv) to the extent such disclosure is required in
order to obtain the approval of the United States Bankruptcy Court for the
Western District of Tennessee. OHAWB hereby consents to a public announcement
Response will make on or after the Closing Date announcing the consummation of
the Agreement and the transactions contemplated thereby. Notwithstanding the
foregoing, no such press release or other public announcement related to this
Agreement or the transactions contemplated hereby will be issued by any party
hereto without the prior approval of the other party, except that any party may
make such public disclosure which it believes in good faith to be required by
law (in which case such party will consult with the other party prior to making
such disclosure).
(l) Each covenant set forth in SECTIONS 5(B), 6, 7, 15, and 16
of this Agreement shall survive the Closing and delivery of the documents and
other deliverables contemplated herein.
(m) If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys' fees and expenses, court costs and all expenses
even if not taxable as court costs (including without limitation, all attorneys'
fees and expenses incident to any appeals), incurred in that action or
proceeding, in addition to any other relief to which such party or parties may
be entitled.
(n) The parties hereby agree from time to time to execute and
deliver such further and other transfers, assignments and documents and do all
matters and things which may be convenient or necessary to more effectively and
completely carry out the intentions of this Agreement.
(o) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(p) The parties to this Agreement understand and agree that the
consideration recited in this Agreement is the sole and only consideration for
this Agreement. Further, the parties agree that no unrecited promise, inducement
or agreement contained in this Agreement has been made on any subject in
connection with this Agreement and that they have not been induced to execute
this Agreement by reason of non-disclosure or suppression of any fact.
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(q) The use in this Agreement of paragraph headings is for
convenience only and is not intended to limit or enlarge the rights of any
party.
(r) The terms and provisions of this Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and assigns, including, but not limited to, any trustee appointed in
the chapter 11 bankruptcy case of Response or in any chapter 7 case to which the
chapter 11 case of Response may be converted. The terms of this Agreement shall
survive and may not be modified in any way by confirmation of a chapter 11 plan
of reorganization in the bankruptcy case of Response, regardless of who the
proponent of such plan(s) may be.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
ONCOLOGY & HEMATOLOGY RESPONSE ONCOLOGY, INC.,
ASSOCIATES OF WEST BROWARD, P.A., A TENNESSEE CORPORATION
FLORIDA PROFESSIONAL ASSOCIATION
By: By:
------------------------------ --------------------------------
President: Chief Executive Officer:
----------------------- Anthony M. LaMacchia
STOCKHOLDERS
RO-TAMARAC
- ---------------------------------
Alfred M. Kalman, M.D. By:
--------------------------------
- ---------------------------------
Abraham Rosenberg, M.D. Its:
-------------------------------
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