AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 7, 1997
REGISTRATION NO. 333-17627
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SPECIALTY CARE NETWORK, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 8011 62-1623449
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
44 UNION BOULEVARD, STE. 600
LAKEWOOD, COLORADO 80228
(303) 716-0041
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------
KERRY R. HICKS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SPECIALTY CARE NETWORK, INC.
44 UNION BOULEVARD, STE. 600
LAKEWOOD, COLORADO 80228
(303) 716-0041
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
Copies to:
ALAN SINGER, ESQUIRE MICHAEL D. NATHAN, ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP SIMPSON THACHER & BARTLETT
2000 ONE LOGAN SQUARE 425 LEXINGTON AVENUE
PHILADELPHIA, PA 19103 NEW YORK, NY 10017
(215) 963-5000 (212) 455-2000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number ofthe
earlier effective registration statement for the same offering. / / ___________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. /X/ 333-17627
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table set forth fees payable to the Securities and Exchange
Commission, National Association of Securities Dealers, Inc. and The Nasdaq
Stock Market and other expenses expected to be incurred in connection with the
issuance and distribution of the securities being registered. All the fees and
expenses will be paid by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee..................................... $ 13,063
National Association of Securities Dealers, Inc. Filing Fee............................. 4,604
The Nasdaq Stock Market Listing Fee..................................................... 50,000
Printing Expenses....................................................................... 150,000
Legal Fees and Expenses................................................................. 400,000
Accounting Fees and Expenses............................................................ 400,000
Blue Sky Qualification Fees and Expenses (including counsel fees)....................... 7,500
Transfer Agent Fees and Expenses........................................................ 2,500
Miscellaneous Expenses.................................................................. 82,333
----------
Total.............................................................................. $1,110,000
----------
----------
</TABLE>
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporation Law (the 'DGCL')
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of directors
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty, except for liability (a) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the DGCL, or (d) for any transaction from which
the director derived an improper personal benefit. Article 7 of the registrant's
Certificate of Incorporation provides that the personal liability of directors
of the registrant is eliminated to the fullest extent permitted by Section
102(b)(7) of the DGCL.
Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorney's
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of being a director or officer of the
corporation if it is determined that the director or officer acted in accordance
with the applicable standard of conduct set forth in such statutory provision.
Article 6 of the registrant's Bylaws provides that the registrant will indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reasons of the
fact that he is or was a director, officer, employee or agent of the registrant,
or is or was serving at the request of the registrant as a director, officer,
employee or agent of another entity, against certain liabilities, costs and
expenses. Article 6 further permits the agent of the registrant, or is or was
serving at the request of the registrant as a director, officer, employee or
agent of another entity, against any liability asserted against such person and
incurred by such person in any such capacity or arising out of his status as
such, whether or not the registrant would have the power to indemnify such
person against such liability under the DGCL.
The Company has purchased directors and officers liability insurance.
II-1
<PAGE>
15. RECENT SALES OF UNREGISTERED SECURITIES
Since December 22, 1995, the date the Company was incorporated, the Company
has issued and sold the following unregistered securities:
1. On December 25, 1995, the Company issued 1,265,000 shares of Common
Stock to private investors for an aggregate price of $1,265 or $.001 per share.
In addition, on December 22, 1995, 500,000 Shares of Common Stock were issued to
an employee of the Company of which 425,000 shares were returned to the Company
in connection with the termination of such employee's employment with the
Company.
2. From January 15, 1996 through July 1, 1996, the Company issued
$1,869,999 of convertible debentures to private investors for an aggregate price
of $1,870,000. The convertible debentures bore interest at 5% per annum and were
converted at a rate of one share of Common Stock for each $1.00 of indebtedness
into 1,920,222 shares of Common Stock on November 12, 1996.
3. On October 1, 1996, the Company issued Debentures to a private investor
for an aggregate price of $300,000. The convertible debentures bore interest a
5% per annum and were converted at a rate of one share of common stock for each
$3.00 of indebtedness, into 100,569 shares of Common Stock on November 12, 1996.
4. On November 4, 1996, the Company issued 100,000 shares of Common Stock
to a private investor for an aggregate price of $300,000.
5. On November 12, 1996, in connection with the Initial Affiliation
Transactions, the Company entered into agreements with the Predecessor Practices
and issued an aggregate of 7,659,115 shares of Common Stock to the physician
owners of the Predecessor Practices. See 'Certain Transactions' for a more
detailed description of the Initial Affiliation Transactions.
The Company believes that the transactions described above were exempt from
registration under Section 4(2) of the Act because the subject securities were
sold to a limited group of persons, each of whom was believed to have been a
sophisticated investor or had a pre-existing business or personal relationship
with the Company or its management and was purchasing for investment without a
view to further distribution. Restrictive legends were placed on stock
certificates evidencing the shares and/or agreements relating to the right to
purchase such shares described above.
16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits. The following exhibits are filed as part of this registration
statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1+ Form of Underwriting Agreement
3.1+ Amended and Restated Certificate of Incorporation
3.2+ Amended and Restated Bylaws
5+ Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered
10.1+ Specialty Care Network, Inc. 1996 Equity Compensation Plan
10.2+ Specialty Care Network, Inc. 1996 Incentive and Non-Qualified Stock Option Plan
10.3+ Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and Kerry
R. Hicks
10.4+ Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and
Patrick M. Jaeckle
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
10.5+ Employment Agreement dated as of March 11, 1996 by and between Specialty Care Network, Inc. and
William Behrens
10.6+ Employment Agreement dated as of February 22, 1996 by and between Specialty Care Network, Inc. and
Paul Davis
10.7+ Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and Peter
A. Fatianow
10.8+ Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and David
Hicks
10.9+ Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Reconstructive
Orthopaedic Assocs., Inc.
10.10**,+ Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc.,
Reconstructive Orthopaedic Associates II, P.C. and Richard H. Rothman, M.D., Robert E. Booth, Jr.,
M.D., Richard Balderston, M.D., Arthur R. Bartolozzi, M.D., William J. Hozack, M.D., Michael G.
Ciccotti, M.D., Todd J. Albert, M.D., Alexander R. Vaccaro, M.D. and Peter F. Sharkey, M.D.
10.11+ Letter agreement dated October 29, 1996 by and between Arthur R. Bartolozzi, M.D. and Specialty Care
Network, Inc.
10.12+ Letter agreement dated October 29, 1996 by and between Robert E. Booth, Jr., M.D. and Specialty Care
Network, Inc.
10.13+ Letter agreement dated November 11, 1996 by and between Richard H. Rothman, M.D. and Specialty Care
Network, Inc.
10.14+ Stock Exchange Agreement dated October 21, 1996 by and among Specialty Care Network, Inc. and Michael
N. Jolley, M.D., Harvey E. Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E.
Fleming, Jr., M.D., W. Thomas Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D.
and David M. Smith, M.D.
10.15**,+ Service Agreement dated as of November 1, 1996, by and between Specialty Care Network, Inc., SCN of
Princeton, Inc., Princeton Orthopedic Associates II, P.A. and Michael N. Jolley, M.D., Harvey E.
Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E. Fleming, Jr., M.D., W. Thomas
Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D. and David M. Smith, M.D.
10.16+ Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and TOC Services,
Inc.
10.17**,+ Service Agreement dated as of November 12, 1996 by and between TOC Specialists, P.L., (d/b/a
Tallahassee Orthopedic Clinic) TOC Services, Inc. (f/k/a Tallahassee Orthopedic Clinic, P.A.) and
Greg A. Alexander, M.D., David C. Berg, M.D., Richard E. Blackburn, M.D., Donald Dewey, M.D., Mark E.
Fahey, M.D., Tom C. Haney, M.D., William D. Henderson, Jr., M.D., Steve E. Jordan, M.D., J. Rick
Lyon, M.D., Kris D. Stowers, M.D., Robert L. Thornberry, M.D., Billy C. Weinstein, M.D. and Charles
H. Wingo, M.D.
10.18+ Asset Exchange Agreement dated as of November 12, 1996 by and among Specialty Care Network, Inc.,
Greater Chesapeake Orthopaedic Associates, L.L.C., Stuart D. Miller, M.D., Leslie S. Matthews, M.D.,
Paul L. Asdourian, M.D., Frank R. Ebert, M.D., Mark S. Myerson, M.D., John B. O'Donnell, M.D. and Lew
C. Schon, M.D.
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
10.19**,+ Service Agreement dated as of November 12, 1996 by and between Speciality Care Network, Inc., Greater
Chesapeake Orthopaedic Associates, L.L.C., Stuart D. Miller, M.D., Leslie S. Matthews, M.D., Paul L.
Asdourian, M.D., Frank R. Ebert, M.D., Mark S. Myerson, M.D., John B. O'Donnell, M.D. and Lew C.
Schon, M.D.
10.20+ Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Vero
Orthopaedic, Inc.
10.21**,+ Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc., Vero
Orthopaedics II, P.A. and James L. Cain, M.D., David W. Griffin, M.D., George K. Nichols, M.D., Peter
G. Wernicki, M.D. and Charlene Wilson, M.D.
10.22+ Revolving Loan and Security Agreement dated as of November 1, 1996 among Specialty Care Network,
Inc., SCN of Princeton, Inc., NationsBank of Tennessee N.A. and NationsBank of Tennessee, N.A. as
Agent.
10.23+ Merger Agreement dated December 6, 1996 by and among Specialty Care Network, Inc., Riyaz H. Jinnah,
M.D., P.A. and Riyaz H. Hinnah, M.D.
10.24+ Merger Agreement dated December 6, 1996 by and among Specialty Care Network, Inc., Floyd Jaeggers,
M.D., P.C. and Floyd Jaggers, M.D.
10.25+ Merger Agreement dated December 6, 1996 by and among Specialty Care Nettwork, Inc., Medical
Rehabilitation Specialists, P.A. and Kirk J. Mauro, M.D.
10.26**,+ Term Sheet by and among Reconstructive Orthopaedic Associates II, P.C., Specialty Care Network, Inc.,
Robert E. Booth, Jr., M.D. and Arthur R. Bartolozzi, M.D.
10.27+ Amendment to the Specialty Care Network, Inc. 1996 Incentive and Non-Qualified Stock Option Plan
11 Statement re: computation of per share earnings
21+ Subsidiary of the Company
23.1 Consent of Ernst & Young LLP
23.2+ Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5 hereto)
24+ Powers of Attorney (included as part of the signature page hereof)
27+ Financial Data Schedule
</TABLE>
- ------------------
* To be filed by amendment.
** Portions of this exhibit were omitted and filed separately with the Secretary
of the Commission pursuant to an application for confidential treatment filed
with the Commission pursuant to Rule 406 under the Securities Act.
+ Previously filed.
(b) Financial Statement Schedules
None.
17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the registrant's Articles of Incorporation, its Bylaws,
the Underwriting Agreement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
II-4
<PAGE>
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in Lakewood, Colorado, on February 7, 1997.
SPECIALTY CARE NETWORK, INC.
By: /s/ Patrick M. Jaeckle
---------------------------------
Patrick M. Jaeckle
Executive Vice President of
Financial Development
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board of
- ------------------------------------- Directors
Richard H. Rothman, M.D., Ph.D.
* Principal Executive Officer
- ------------------------------------- and Director
Kerry R. Hicks
/s/ Patrick M. Jaeckle Principal Financial Officer February 7, 1997
- ------------------------------------- and Director
Patrick M. Jaeckle
* Principal Accounting Officer
- ------------------------------------- Officer
D. Paul Davis
* Director
- -------------------------------------
Robert E. Booth, Jr., M.D.
* Director
- -------------------------------------
James L. Cain, M.D.
* Director
- -------------------------------------
Peter H. Cheesbrough
* Director
- -------------------------------------
Richard E. Fleming, Jr., M.D.
* Director
- -------------------------------------
Thomas C. Haney, M.D.
* Director
- -------------------------------------
Leslie S. Matthews, M.D.
* Director
- -------------------------------------
Wiliam C. Behrens
*By: /s/ Patrick M. Jaeckle February 7, 1997
--------------------------------
As Attorney-in-Fact
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1+ Form of Underwriting Agreement
3.1+ Amended and Restated Certificate of Incorporation
3.2+ Amended and Restated Bylaws
5+ Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered
10.1+ Specialty Care Network, Inc. 1996 Equity Compensation Plan
10.2+ Specialty Care Network, Inc. 1996 Incentive and Non-Qualified Stock Option Plan
10.3+ Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and Kerry
R. Hicks
10.4+ Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and
Patrick M. Jaeckle
10.5+ Employment Agreement dated as of March 11, 1996 by and between Specialty Care Network, Inc. and
William Behrens
10.6+ Employment Agreement dated as of February 22, 1996 by and between Specialty Care Network, Inc. and
Paul Davis
10.7+ Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and Peter
A. Fatianow
10.8+ Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and David
Hicks
10.9+ Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Reconstructive
Orthopaedic Assocs., Inc.
10.10**,+ Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc.,
Reconstructive Orthopaedic Associates II, P.C. and Richard H. Rothman, M.D., Robert E. Booth, Jr.,
M.D., Richard Balderston, M.D., Arthur R. Bartolozzi, M.D., William J. Hozack, M.D., Michael G.
Ciccotti, M.D., Todd J. Albert, M.D., Alexander R. Vaccaro, M.D. and Peter F. Sharkey, M.D.
10.11+ Letter agreement dated October 29, 1996 by and between Arthur R. Bartolozzi, M.D. and Specialty Care
Network, Inc.
10.12+ Letter agreement dated October 29, 1996 by and between Robert E. Booth, Jr., M.D. and Specialty Care
Network, Inc.
10.13+ Letter agreement dated November 11, 1996 by and between Richard H. Rothman, M.D. and Specialty Care
Network, Inc.
10.14+ Stock Exchange Agreement dated October 21, 1996 by and among Specialty Care Network, Inc. and Michael
N. Jolley, M.D., Harvey E. Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E.
Fleming, Jr., M.D., W. Thomas Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D.
and David M. Smith, M.D.
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.15**,+ Service Agreement dated as of November 1, 1996, by and between Specialty Care Network, Inc., SCN of
Princeton, Inc., Princeton Orthopedic Associates II, P.A. and Michael N. Jolley, M.D., Harvey E.
Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E. Fleming, Jr., M.D., W. Thomas
Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D. and David M. Smith, M.D.
10.16+ Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and TOC Services,
Inc.
10.17**,+ Service Agreement dated as of November 12, 1996 by and between TOC Specialists, P.L., (d/b/a
Tallahassee Orthopedic Clinic) TOC Services, Inc. (f/k/a Tallahassee Orthopedic Clinic, P.A.) and
Greg A. Alexander, M.D., David C. Berg, M.D., Richard E. Blackburn, M.D., Donald Dewey, M.D., Mark E.
Fahey, M.D., Tom C. Haney, M.D., William D. Henderson, Jr., M.D., Steve E. Jordan, M.D., J. Rick
Lyon, M.D., Kris D. Stowers, M.D., Robert L. Thornberry, M.D., Billy C. Weinstein, M.D. and Charles
H. Wingo, M.D.
10.18+ Asset Exchange Agreement dated as of November 12, 1996 by and among Specialty Care Network, Inc.,
Greater Chesapeake Orthopaedic Associates, L.L.C., Stuart D. Miller, M.D., Leslie S. Matthews, M.D.,
Paul L. Asdourian, M.D., Frank R. Ebert, M.D., Mark S. Myerson, M.D., John B. O'Donnell, M.D. and Lew
C. Schon, M.D.
10.19**,+ Service Agreement dated as of November 12, 1996 by and between Speciality Care Network, Inc., Greater
Chesapeake Orthopaedic Associates, L.L.C., Stuart D. Miller, M.D., Leslie S. Matthews, M.D., Paul L.
Asdourian, M.D., Frank R. Ebert, M.D., Mark S. Myerson, M.D., John B. O'Donnell, M.D. and Lew C.
Schon, M.D.
10.20+ Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Vero
Orthopaedic, Inc.
10.21**,+ Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc., Vero
Orthopaedics II, P.A. and James L. Cain, M.D., David W. Griffin, M.D., George K. Nichols, M.D., Peter
G. Wernicki, M.D. and Charlene Wilson, M.D.
10.22+ Revolving Loan and Security Agreement dated as of November 1, 1996 among Specialty Care Network,
Inc., SCN of Princeton, Inc., Nations Bank of Tennessee, N.A. and Nations Bank of Tennessee, N.A., as
Agent.
10.23+ Merger Agreement dated December 6, 1996 by and among Specialty Care Network, Inc., Riyaz H. Jinnah,
M.D., P.A. and Riyaz H. Hinnah, M.D.
10.24+ Merger Agreement dated December 6, 1996 by and among Specialty Care Network, Inc., Floyd Jaeggers,
M.D., P.C. and Floyd Jaggers, M.D.
10.25+ Merger Agreement dated December 6, 1996 by and among Specialty Care Nettwork, Inc., Medical
Rehabilitation Specialists, P.A. and Kirk J. Mauro, M.D.
10.26**,+ Term Sheet by and among Reconstructive Orthopaedic Associates II, P.C., Specialty Care Network, Inc.,
Robert E. Booth, Jr., M.D. and Arthur R. Bartolozzi, M.D.
10.27+ Amendment to the Specialty Care Network, Inc. 1996 Incentive and Non-Qualified Stock Option Plan
11 Statement re: computation of per share earnings
21+ Subsidiary of the Company
23.1 Consent of Ernst & Young LLP
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -------------
<S> <C>
23.2+ Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5 hereto)
24+ Powers of Attorney (included as part of the signature page hereof)
27+ Financial Data Schedule
</TABLE>
- ------------------
* To be filed by amendment.
** Portions of this exhibit were omitted and filed separately with the Secretary
of the Commission pursuant to an application for confidential treatment filed
with the Commission pursuant to Rule 406 under the Securities Act.
+ Previously filed.
(iii)
Specialty Care Network, Inc.
Computation of Per Share Earnings
<TABLE>
<CAPTION>
Pro Forma Pro Forma
For the Year For the Year
Ended Ended
December 31, 1995 September 30, 1996
----------------- -----------------
<S> <C> <C>
Average shares outstanding ................. 1,517,905 1,517,905
Net effect of convertible debentures ....... 2,020,901 2,020,901
Acquisition shares issued .................. 7,659,115 7,659,115
Dividends paid to promoters --
see SAB topic 1.B.3 and E&Y SEC
Manual page 7,402
using treasury stock method ................ 192,234 192,234
Stock sold to TOC -- working capital ....... 100,000 100,000
Net effect of common stock,
stock options and warrants -- based
on the treasury stock method using
initial public offering price .............. 603,961 603,961
----------- -----------
Total Pro forma Average weighted number of
shares outstanding ......................... 12,094,116 12,094,116
=========== ===========
Pro forma net income ....................... $ 3,447,299 $ 2,639,864
----------- -----------
Pro forma per share amount ................. $ 0.29 $ 0.22
=========== ===========
</TABLE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our reports dated November 12, 1996, except for Note 9, as to which
the date is February 4, 1997, (Specialty Care Network, Inc.), July 12, 1996
(Reconstructive Orthopaedic Associates, Inc.), August 28, 1996 (Princeton
Orthopaedic Associates, P.A.), October 15, 1996 (Tallahassee Orthopedic Clinic,
Inc.), October 11, 1996 (Greater Chesapeake Orthopaedic Associates, LLC) and
August 20, 1996 (Vero Orthopaedics, P.A.) in Amendment No. 3 to the Registration
Statement (Form S-1 No. 333-17627) and related Prospectus of Specialty
Care Network, Inc. for the registration of 3,198,062 shares of its common stock.
/s/ Ernst & Young LLP
-----------------
ERNST & YOUNG LLP
Denver, Colorado
February 4, 1997
