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Exhibit 99.1
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STOCK PURCHASE AGREEMENT
BY AND AMONG
RESPONSE ONCOLOGY, INC.,
AND
STOCKHOLDERS OF RYMER, ZARAVINOS & FAIG, M.D., P.A.
JULY 1, 1996
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of July 1, 1996, by and among
RESPONSE ONCOLOGY, INC., a Tennessee corporation (the "Purchaser"), and THE
STOCKHOLDERS OF RYMER, ZARAVINOS AND FAIG, M.D., 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").
W I T N E S S E T H:
WHEREAS, the Sellers own in the aggregate 100% of the issued and
outstanding shares (the "Shares") of the common stock of Rymer, Zaravinos &
Faig, M.D., P.A., a Florida professional association (the "Corporation"); 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 Corporation or the Purchaser.
"Affiliate" has the meaning set forth in Rule 12b-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.
"Applicable Rate" means the corporate base rate of interest announced from
time to time by NationsBank of Tennessee, N.A., Nashville, Tennessee plus two
percent (2%).
"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.
"Corporation" has the meaning set forth in the first recital above.
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"Deferred Intercompany Transaction" has the meaning set forth in Treasury
Regulation Section 1.1502-13.
"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
Section 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 Statements" has the meaning set forth in Section 4(f) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Group" means Southeast Florida Hematology Oncology Associates, P.A., a
Florida professional association wholly owned by the Sellers.
"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.
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"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 one-third (1/3).
"Purchase Price" has the meaning set forth in Section 2(a) below.
"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 amount, in dollars, of the Corporation's accounts
receivable as of the close of business on the day prior to the Closing Date,
net of contractual adjustments, courtesy discounts and other historical
adjustments.
"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.
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"Seller" has the meaning set forth in the preface above.
"Sellers' Disclosure Letter" has the meaning set forth in Section 3(a)
below.
"Shares" means all of the issued and outstanding shares of all classes of
the Common Stock of the Corporation.
"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(c) below.
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 an aggregate
price (the "Purchase Price") of Seven Million Three Hundred Fifty Thousand
Dollars ($7,350,000.00), plus Receivables and minus Liabilities of the
Corporation as of the Closing Date.
(b) Payment of Purchase Price. The Purchaser shall pay or satisfy the
Purchase Price in the following manner: (i) Five Million Eight Hundred Eighty
Thousand Dollars ($5,880,000.00), plus Receivables minus Liabilities in cash to
the Sellers at Closing (hereinafter defined), (ii) issuance and delivery of
117,600 shares of Response Stock to the Sellers, with all of the foregoing to
be distributed Pro Rata to the Sellers. For purposes of this subsection (b),
the Receivables balance as of the Closing Date shall be $760,000. In the event
that the Purchaser shall collect more than said Receivables balance after
Closing, then the Purchaser shall remit such excess to the Sellers, Pro Rata,
upon receipt as additional Purchase Price. In the event that the Purchaser
shall collect less than said Receivables balance after Closing, then the amount
of Receivables for purposes of this Agreement shall be deemed $760,000.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Geiger, Kasdin,
Heller, Kuperstein, et. al., 1428 Brickell, 6th Floor, Miami, Florida
commencing at 9:00 a.m. local time on July 3, 1996, or such other date as the
Purchaser and the Sellers may mutually determine (the "Closing Date");
provided, however, that the Closing Date shall be no later than September 1,
1996.
(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.
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(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 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. No Seller is
required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Person in order to consummate
the transactions contemplated by this Agreement , or, if any such filing,
authorization, consent or approval is required, the same has been or, as
of the Closing Date, shall have been made or obtained. 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 Corporation (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.
(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
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notice to, make any filing with, or obtain any authorization, consent,
or approval of any Person in order to consummate the transactions
contemplated by this Agreement, or, if any such filing, authorization,
consent or approval is required, the same has been or, as of the Closing
Date, shall have been made or obtained.
(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 CORPORATION. The
Sellers , 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 Corporation is
a business corporation duly organized, validly existing, and in good standing
under the laws of the State of Florida. The Corporation is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required. The Corporation 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 Corporation. The Sellers have delivered to the Purchaser
correct and complete copies of the charter and bylaws of the Corporation (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
Corporation are correct and complete. The Corporation 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
Corporation consists of one (1) share of Class A common stock, $1.00 par value
per share, which is issued and outstanding, and five hundred shares of Class B
common stock, $1.00 par value per share, all of which is 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 Corporation 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
Corporation. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of the
Corporation.
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(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 Corporation is subject or any
provision of the charter or bylaws of the Corporation 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 Corporation 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 Corporation
is not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Person in order for the Parties to
consummate the transactions contemplated by this Agreement, or, if any such
filing, authorization, consent or approval is required, the same has been or,
as of the Closing Date, shall have been made or obtained.
(d) Brokers' Fees. The Corporation 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 Corporation 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"): as of and for the fiscal year ended January 31,
1996 (the "Most Recent Fiscal Year End") for the Corporation; and (the "Most
Recent Financial Statements") as of and for the three (3) months ended April
30, 1996 (the "Most Recent Fiscal Month End") for the Corporation. The
Financial Statements (i) are materially accurate, correct and complete based on
the income tax basis of accounting; (ii) are prepared on the income tax basis
of accounting in accordance with the books of account and records of the
Corporation; and (iii) fairly present the assets, liabilities and equity and
revenues and expenses, income tax basis, of the Corporation for the periods
presented.
(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 Corporation. Without limiting the generality of the foregoing,
since that date:
(i) the Corporation 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 Corporation 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 canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) involving more than $25,000.00 to which the Corporation is a
party or by which the Corporation or its properties are bound;
(iv) the Corporation has not created, suffered or permitted to
attach or be imposed any Security Interest upon any of its assets,
tangible or intangible;
(v) the Corporation 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;
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(vi) the Corporation 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 Corporation 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 Corporation has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary Course of
Business;
(ix) the Corporation has not canceled, 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 Corporation 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 Corporation;
(xii) the Corporation 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 Corporation 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 Corporation has not experienced any damage, destruction,
or loss (whether or not covered by insurance) to its property;
(xv) the Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation has not made or pledged to make any charitable
or other capital contribution outside the Ordinary Course of Business;
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(xxi) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving the Corporation; and
(xxii) the Corporation has not committed to any of the foregoing.
(h) Undisclosed Liabilities. The Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation (whether or not shown on any Tax
Return) through the Closing Date have been duly paid or accrued. The
Corporation 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 Corporation 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 Corporation that
arose in connection with any failure (or alleged failure) to pay any Tax.
(ii) The Corporation 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 Corporation 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 Corporation 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 Corporation 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
Corporation 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 Corporation since December 31, 1991.
(iv) The Corporation 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 Corporation has not filed a consent under Code Section
341(f) concerning collapsible corporations. The Corporation 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
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not be deductible under Code Section 280G. The Corporation 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 Corporation has 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 Corporation is not a party to any Tax allocation
or sharing agreement. The Corporation (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
Corporation under Treasury Regulation Section 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 Corporation as of the most
recent practicable date: (A) the depreciation schedule attached to the
Corporation's most recent tax return; 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 Corporation does not own any real property and
has not executed and delivered or otherwise entered into any contract to
purchase any real property. As of the Closing Date, the Purchaser and a owners
comprised of the Sellers have executed and delivered a new lease for the office
facilities at 5700 North Federal Highway, Suite 5, Fort Lauderdale, Florida
33308.
(l) Tangible Assets. The Corporation owns or leases all buildings,
machinery, equipment, and other tangible assets necessary for the conduct of
its business as presently conducted. The Corporation has received with respect
to all such buildings, machinery, and equipment all approvals of governmental
authorities (including licenses, permits and certificates of need) required in
connection with the operation thereof, and the same have been operated and
maintained in accordance with applicable laws, rules, and regulations
(m) Inventory. The inventory of the Corporation consists of medical
supplies and pharmaceuticals, all of which is merchantable and fit for the
purpose for which it was procured or manufactured.
(n) Contracts. Paragraph 4(n) of the Sellers' Disclosure Letter lists
the following contracts and other agreements to which the Corporation 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 Corporation, 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
Corporation 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);
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(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 Corporation 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
Corporation; or
(xii) any other agreement (or group of related agreements, except
contracts with third party payors) the performance of which involves
consideration in excess of $25,000.00.
The Sellers have delivered to the Purchaser a correct and complete copy of each
written agreement in the possession of the Sellers or the Corporation listed in
Paragraph 4(n) of the Sellers' Disclosure Letter (as amended to date), and each
written agreement in the possession of the Corporation with third party payors,
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) Accounts Receivable. All accounts receivable of the Corporation
are valid receivables subject to no setoffs or counterclaims except contractual
adjustments within arrangements with third-party reimbursers and other
adjustments customarily made by the Corporation's third party reimbursers.
(p) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Corporation.
(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 Corporation 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
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(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is in full force and
effect; (B) the policy will continue to be in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby unless and until canceled by the Purchaser; (C) neither the Corporation
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 Corporation 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 Corporation.
(r) Litigation. Section 4(r) of the Sellers' Disclosure Letter sets
forth each instance in which either the Corporation (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 Section 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 the
Corporation . Neither the Sellers nor the directors and officers (and
employees with responsibility for litigation matters) of the Corporation has
any reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against the Corporation .
(s) Employees. To the best of the Sellers' Knowledge, no physician, key
employee, or group of employees has any plans to terminate employment with the
Corporation . The Corporation 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 Corporation 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 Corporation.
(t) Employee Benefits.
(i) Paragraph 4(t) of the Sellers' Disclosure Letter lists each
Employee Benefit Plan that the Corporation maintains or to which the
Corporation contributes or has contributed prior to closing.
(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 Corporation. All premiums
or
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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 Corporation
maintains or ever has maintained or to which it contributes, ever has
contributed, or ever has been required to contribute:
(A) 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 Corporation has
any Knowledge of any Basis for any such action, suit, proceeding,
hearing, or investigation.
(iii) The Corporation 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 Corporation 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 retired or terminated employees (either
current or future), their spouses, or their dependents (other than in
accordance with Code Sec. 4980B).
(u) Guaranties. The Corporation 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 Corporation 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
Corporation 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
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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 Corporation has no Liability (and none of the Sellers, the
Corporation 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
Corporation 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 Corporation 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. To the best of the Sellers' knowledge,
neither the Corporation nor any physician associated with or employed by the
Corporation 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. Section 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. To the best of the
Sellers' knowledge, no Physician associated with or employed by the Corporation
has made any referral of any patient to any entity in which such Physician or a
member of his or her immediate family has any ownership or investment interest
or with which such Physician or family member has any financial relationship in
violation of 42 U.S.C. Section 1395 nn of any state law prohibiting referrals
to such entities. The Corporation 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. 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 Corporation is in full compliance with the
requirements of all such third party payor programs applicable thereto.
(x) Fraud and Abuse. To the best of the Sellers' knowledge, the
Corporation and persons and entities providing professional services for the
Corporation have not engaged in any activities which are prohibited under 42
U.S.C. Section 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
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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 Corporation is duly licensed, and the
Corporation and its clinics, offices and facilities are lawfully operated in
accordance with the requirements of all applicable laws and certificates of
need and has all necessary authorizations and certificates of need for their
use and operation, all of which are in full force and effect. There are no
outstanding notices of deficiencies relating to the Corporation 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 Corporation has no Knowledge or reason to believe that such necessary
authorizations may be revoked or not renewed in the ordinary course.
(z) 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 Corporation to
give any notices to third parties, and will cause the Corporation 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 Corporation
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
Corporation 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
Corporation 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 Corporation to
keep its properties substantially intact, including its present physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, and employees.
(e) Full Access. The Sellers will permit, and the Sellers will cause the
Corporation 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 Corporation, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Corporation. In that regard, the Sellers will cause the
Corporation to permit the independent accountants for the Purchaser to conduct
such audits of the financial statements of the Corporation as the Purchaser
shall elect or be required to obtain, and shall cause the accounting personnel
of the Corporation to assist such accountants in the preparation for and
conduct of such audit.
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(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 Corporation 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 Corporation (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 Corporation. 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.
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
Corporation.
(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 Corporation 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 Corporation from maintaining the
same business relationships with the Corporation or the Group after the Closing
as it maintained with the Corporation prior to the Closing. The Sellers will
refer all inquiries relating to the businesses of the Corporation to the
Purchaser from and after the Closing.
(d) Name Change. At the time of Closing, the Purchaser shall cause the
name of the Corporation to be changed to something distinguishable, within the
meaning of the corporation statutes of the state of Florida, from
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the name of the Corporation 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 "Southeast
Florida Hematology Oncology Group, P.A."
(e) Custody of Patient Records. The Purchaser shall maintain custody of
all existing records, files, charts, x-ray files and similar data pertaining to
each patient in accordance with Applicable Laws and canons of professional
ethics.
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 Corporation to make all
filings, give all notices and procure all of the third party consents and
authorizations 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 Corporation, or (D) affect adversely the right of the
Corporation 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 Corporation 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 Corporation 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 Geiger, Kasdin, Heller,
Kuperstein, Chames & Weil, P.A., counsel to the Sellers and the
Corporation, 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; and
(viii) 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.
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(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; and
(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.
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) certificates representing 117,600 shares of Response Stock
issuable to the Sellers pursuant to Section 2(b) above;
(ii) the certificate described in Section 7(b)(iv) above; and
(iii) 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 Corporation, dated not
more than five (5) days prior to the Closing Date;
(iii) all consents necessary regarding the transaction contemplated
by this Agreement;
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(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 Certificate described in Section 7(a)(v) above; and
(vi) 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 for a period of three (3) years thereafter
(subject to reduction by any applicable statutes of limitations); provided,
however, that with respect to Federal and state tax matters, such survival
period shall be equal to the statute of limitations (without regard to any
extension by the Purchaser following Closing) for assessment of additional
taxes.
(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 that
materially adversely affects 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 , 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; provided, however, that if an event for which the
Purchaser shall be entitled to indemnification is directly attributable to a
particular Seller or disproportionately among the Sellers, then the Purchaser
shall first seek satisfaction of any indemnification obligation hereunder from
those Sellers to whom such event is attributable, and shall seek satisfaction
from the other Sellers only after every reasonable effort shall have been made
to recover in the manner hereinabove described..
(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 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 Third Party Claim involves only money damages
and does not seek an injunction or other equitable relief, , and (C) the
Sellers conduct the defense of the Third Party Claim actively and
diligently.
(iii) So long as the Sellers 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
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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 (not to be withheld unreasonably), and
(C) the Sellers 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 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 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) 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 Corporation by reason of the
fact that they were directors, officers, employees, or agents of the
Corporation 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 (A) in the event
any of the Sellers has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Purchaser has notified the Seller of the breach, and the breach has
continued without cure for a period of 10 days after the notice of breach
or (B) if the Closing shall not have occurred on or before October 1,
1996, by reason of the failure of any condition precedent under Section
7(a) hereof (unless the failure results primarily from the Purchaser
itself breaching any representation, warranty, or covenant contained in
this Agreement); and
(iii) the Sellers may terminate this Agreement by giving written
notice to the Purchaser at any time prior to the Closing (A) in the event
the Purchaser has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, any of the
Sellers has notified the Purchaser of the breach, and the breach has
continued without cure for a period of 10 days after the notice of breach
or (B) if the Closing shall not have occurred on or before October 1,
1996 by reason of the failure of any condition precedent under Section
7(b) hereof (unless the failure results primarily from any
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of the Sellers themselves breaching any representation, warranty, or
covenant contained in 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.
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 Florida Uniform Arbitration Act, with any such
arbitration proceeding being conducted in accordance with the rules of the
American Arbitration Corporation. 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 Fort Lauderdale, Broward County, Florida
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) 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.
(d) 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.
(e) 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).
(f) 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.
(g) 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.
(h) 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:
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If to the Seller: Copy to:
William Rymer, M.D. Stanley H. Kuperstein, Esq.
5700 North Federal Highway, Suite 5 Geiger, Kasdin, Heller & Kuperstein, P.A.
Fort Lauderdale, Florida 33308 1428 Brickell Ave., 6th Floor
Miami, Florida 33131
If to the Purchaser: Copy to:
Joseph T. Clark John A. Good, Esq.
Response Oncology, Inc. Response Oncology, Inc.
1775 Moriah Woods Blvd. 1775 Moriah Woods Blvd.
Memphis, Tennessee 38117 Memphis, Tennessee 38117
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.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
(j) 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.
(k) 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.
(l) 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.
(m) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
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(n) 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.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on [as
of] the date first above written.
PURCHASER:
Response Oncology, Inc.
By:_______________________________________________
Title:____________________________________________
SELLERS:
__________________________________________________
William Rymer, M.D.
__________________________________________________
Theodore Zaravinos, M.D.
__________________________________________________
Douglas Faig, M.D.
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