UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 11, 1996
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OAK TREE MEDICAL SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-16206 02-0401674
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2 Gannett Drive, Suite 215, White Plains, New York 10604
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 694-2500
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(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 11, 1996, Oak Tree Medical Systems, Inc. (the "Company")
completed the acquisition of four Long Island, New York, based physical therapy
centers, located in Brooklyn, Syosset, Lawrence and Rockville Centre. The
centers had profits of approximately $550,000 in the most recent fiscal year.
The acquisition also included a medical billing company with gross billing of
approximately $3 million. The clinic assets and related management contracts
were acquired for approximately $1.5 million in cash and stock.
ITEM 7. EXHIBITS.
4.1 Promissory Note dated December 11, 1996, between Oak Tree Medical
Management, Inc. and Maple Health, Inc., Northern Professionals, Inc.,
Southern Professional, Inc., Mark A. Gentile, James O'Neill, Robert
Einemann and Bernard Posner
4.2 Security Agreement dated December 11, 1996, between Oak Tree Medical
Management, Inc. and Maple Health, Inc., Northern Professional
Associates, Inc., and Southern Professional Associates, Inc.
10.1 Agreement of Sale dated December 11, 1996, between Maple Health, Inc.,
Northern Professional Associates, Inc., Southern Professional, Inc.,
Mark A. Gentile, James O'Neill, Robert Einemann and Bernard Posner and
Oak Tree Medical Management, Inc.
10.2 Agreement of Sale dated December 11, 1996, between Steven Rotwein,
P.T., P.C. and New Medical Practice, P.C.
10.3 Letter, dated December 26, 1996, in respect of modification of
Agreement of Sale, dated December 11, 1996, between Maple Health, Inc.,
Northern Professional Associates, Inc., Southern Professional, Inc.,
Mark A. Gentile, James O'Neill, Robert Einemann and Bernard Posner and
Oak Tree Medical Management, Inc.
99 Press Release
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
By: /s/ William Kedersha
--------------------
Name: William Kedersha
Title: Chief Executive Officer
Date: December 26, 1996
PROMISSORY NOTE
$300,000 December 11, 1996
FOR VALUE RECEIVED, OAK TREE MEDICAL MANAGEMENT, INC., (the
"Borrower"), or its assigns, at its offices at 2 Gannett Drive, Suite 215, White
Plains, New York 10604, hereby promises to pay to the order of MAPLE HEALTH,
Inc. ("Maple"), a New York corporation doing business at 70 Maple Avenue,
Rockville Centre, New York 11570, NORTHERN PROFESSIONALS INC. ("Northern"), a
New York corporation doing business at 10 Gordon Drive, Syosset, New York 11791,
SOUTHERN PROFESSIONALS, INC. ("Southern"), a New York corporation doing business
at 1500 Paerdegat Avenue North, Brooklyn, New York 11236 and at 235 Mill Street,
Lawrence, New York 11559, MARK A. GENTILE ("Gentile"), an individual residing at
3026 Club House Road, Merrick, NY 11566, and JAMES O'NEILL ("O'Neill"), an
individual residing at 856 South Long Beach Avenue, Freeport, NY 11520, ROBERT
EINEMANN ("Einemann"), an individual residing at 951 Woodoak Drive, Baldwin, NY
11510, and BERNARD POSNER ("Posner"), an individual residing at 3903 Nostrand
Avenue, Brooklyn, NY 11235, (collectively, the "Lenders") jointly and severally,
or at such other place as Lenders from time to time shall designate in writing,
the principal amount of Three Hundred Thousand Dollars ($300,000), together with
interest on the unpaid balance accruing from and after the date hereof.
Pursuant to the Security Agreement (the "Security Agreement") of even
date herewith between the Borrower and the Lenders, the Borrower has pledged
certain assets as collateral (the "Collateral") to the Lenders to secure its
prompt and full performance of its obligations hereunder and thereunder. Any
unpaid amounts due and payable under the Security Agreement shall constitute
principal amounts due under this Note. To the extent that the Collateral
(together with the proceeds thereof) is insufficient to satisfy all of the
Borrower obligations under this Note and the Security Agreement, the Borrower,
shall remain liable for any such deficiency.
1. Payments. The Borrower, agrees to pay the sum of Three Hundred Thousand
Dollars. This sum shall be amortized and shall be due and payable in
consecutive monthly payments, together with accrued interest, commencing on
January 15, 1997, and on the same day of each month thereafter until fully
paid. In any event, all outstanding principal and accrued interest shall be
due and payable on or before December 15, 1999. The payment schedule is
attached hereto.
2. Interest. The Borrower, agrees to pay interest from the date hereof accrued
on the unpaid principal amount of this Note from time to time outstanding
at the simple interest rate of Twelve and One-Half percent (12.5%) interest
per annum.
<PAGE>
3. Prepayment.
a. This Note may be prepaid in whole or in part, at any time prior to the
Maturity Date, without penalty or premium, provided that such
prepayment in principal shall include all accrued but unpaid interest
in respect of such principal through the date of such prepayment.
b. An accelerated payment will be made, at the time of Borrower's actual
receipt of any proceeds from any investment underwriting. The
accelerated payment amount will not exceed five (5%) percent of such
net proceeds from the underwriting(s). Such underwriting(s) must net
at least $500,000 for Borrower, in each instance.
c. An accelerated payment will be made, in any of the three years of the
Term, if the total combined pre-tax profits of all four facilities
acquired under the Separate Agreement of Sale between Lenders and
Borrower exceeds $750,000 in any of the three years of this Term. Such
payment shall be ten (10%) percent of such excess pre-tax profits, as
defined in such Agreement of Sale.
4. Assignment. The borrower shall not assign or transfer any of its rights or
delegate any of its obligations under this Note of the Security Agreement
without the prior written consent of the Lenders, except as may occur by
operation of law.
5. Event of Default. The Lenders may, by written notice o the Borrower,
declare this Note immediately due and payable, whereupon this Note and all
sums due hereunder and under the Security Agreement shall become
immediately due and payable without protest, presentment, demand or notice,
all of which are expressly waived by the Borrower, if any of the following
events ("Event of Default") shall occur:
a. The Borrower shall fail to make payment of any principal, interest or
any other amount under this Note or the Security Agreement when due
(whether at stated maturity, by acceleration or otherwise); or
b. Any representation or warranty relied upon by the Lenders and made or
repeated or deemed to have been made or repeated by the Borrower
herein or in the Security Agreement shall prove to be false or
misleading in any material respect as of the date made or repeated or
deemed to have been made or repeated; or
c. A default by the Borrower in the performance of any of the terms,
agreements, or conditions in this Note or the Security Agreement
(other than a payment default), and such default shall remain uncured
for a period of ten (10) business days after written notice by
Lenders; or
d. The Borrower shall default in due observance or performance of any
term, obligation, agreement or covenant to be observed or performed by
such Borrower pursuant to any evidence of indebtedness or liability
for borrowed money (other than this Note or the Security Agreement),
if such default
<PAGE>
permits the obligee thereof to accelerate the maturity of such
evidence of indebtedness or liability in excess of $500,000; or
e. The Borrower shall (I) apply for or consent to the appointment of a
receiver or trustee for itself or any of its assets or properties;
(ii) admit in writing its inability to pay its debts as they mature,
(iii) make a general assignment for the benefit of creditors, (iv) be
adjudicated a bankrupt or insolvent or (v) file a voluntary petition
in bankruptcy, or a petition or an answer seeking an arrangement with
creditors or to take advantage of any bankruptcy, insolvency or
readjustment of debt law or statute or a petition or an answer seeking
an arrangement with creditors or to take advantage of any bankruptcy,
insolvency or readjustment of debt law or statue, or any answer
admitting the material allegations of a petition filed against such
Borrower in any proceeding under any such law or if action shall be
taken by such Borrower for the purpose of effecting any of the
foregoing; or
f. A material adverse order, judgment or decree shall be entered against
the Borrower in excess of $500,000, and such order, judgment or decree
shall continue unstayed and in effect for a period of thirty (30)
days.
g. All of the outstanding stock of Borrower shall cease to be held by
existing shareholders, or Borrower shall sell, transfer or otherwise
dispose of any material amount of assets, except in the ordinary
course consistent with past practice and not otherwise prohibited
under the Security Agreement.
6. Methods of Payment. All payments of principal, interest or any other amount
under this Note or the Security Agreement shall be made in lawful money of
the United States of America.
7. Waiver of Notice, etc. The Borrower hereby waives presentment, notice of
demand for payment, protest, notice of dishonor and any other notice of any
kind with respect to this Note.
8. Amendment and Waivers. Failure of Lenders to insist upon the strict
performance of any term, provision, or covenant of this Note, or to
exercise any option or election hereby conferred, shall not be deemed to be
a waiver or relinquishment of any future breach of any such term, covenant,
condition, election or option. No provision of this Note may be waived,
modified or discharged, by course of dealing or otherwise, without a
writing signed by the party to be charged with such waiver, modification or
discharge.
9. Expenses. The Borrower, agrees to pay all expenses incurred by the Lenders
in connection with the collection and enforcement of this Note, including,
without limitation, reasonable attorneys' fees and disbursements.
10. Governing Law and Adjudication; Related Matters. This Note shall be
governed by and construed in accordance with the laws of the State of New
York, without reference to the principles of conflict of laws thereof. The
Borrower hereby irrevocably consents that any suit, action or proceeding
against the Borrower or any of the Borrowers' assets or properties arising
out of or in any way connected with this
<PAGE>
Note or the Security Agreement may be instituted in any courts of the State
of New York or any federal court located in such State, and by execution
and delivery of this Note, the Borrower hereby irrevocably submits to the
jurisdiction of the aforesaid courts in any such suit, action or
proceeding. The Borrower hereby irrevocably waives any objection which it
may have at any time to the laying of venue of any such suit, action or
proceeding brought in any such court, waives any claim that any such suit,
action or proceeding has been brought in an inconvenient forum and further
waives the right to object with respect to any such suit, action or
proceeding that such court does not have jurisdiction over the Borrower.
IN WITNESS WHEREOF, the Borrower has caused this instrument to be duly
executed as of the date set forth above.
OAK TREE MEDICAL MANAGEMENT, INC.
By: /s/ William Kedersha
--------------------
William Kedersha
President
By: /s/ William Kedersha
-----------------------
William Kedersha
Treasurer
<PAGE>
Revised $300,000 paid Monthly @12.5% Beginning Jan 15th, 1997
********EVALUATION COPY***********FINANCIAL WIZARD******************************
Principal $: $300,000 Interest per Year % : 12.50000
Payment per Month : $14,735.81
Number of Months : 23
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Towards Towards Cumulative Cumulative Remaining
Period Principal Interest Principal Interest Principal
- ------ --------- -------- --------- -------- ---------
1 $11,610.81 $3,125.00 $ 11,610.81 $ 3,125.00 $288,389.20
2 $11,731.76 $3,004.05 $ 23,342.57 $ 6,129.05 $276,657.40
3 $11,853.96 $2,881.85 $ 35,196.53 $ 9,010.90 $264,803.50
4 $11,977.44 $2,758.37 $ 47,173.97 $11,769.27 $252,826.00
5 $12,102.21 $2,633.60 $ 59,276.18 $14,402.87 $240,723.80
6 $12,228.27 $2,507.54 $ 71,504.45 $16,910.41 $228,495.50
7 $12,355.65 $2,380.16 $ 83,860.10 $19,290.57 $216,139.90
8 $12,484.35 $2,251.46 $ 96,344.45 $21,542.03 $203,655.50
9 $12,614.40 $2,121,41 $108,958.90 $23,663.44 $191,041.10
10 $12,745.80 $1,990.01 $121,704.70 $25,653.45 $178,295.30
11 $12,878.57 $1,857.24 $134,583.30 $27,510.69 $165,416.70
12 $13,012.72 $1,723.09 $147,596.00 $29,233.78 $152,404.00
13 $13,148.27 $1,587.54 $160,744.30 $30,821.32 $139,255.70
14 $13,285.23 $1,450.58 $174,029.50 $32,271.90 $125,970.50
15 $13,423.62 $1,312.19 $187,453.10 $33,584.09 $112,546.90
16 $13,563.45 $1,172.36 $201,016.50 $34,756.45 $ 98,983.50
17 $13,704.73 $1,031.08 $214,721.20 $35,787.53 $ 85,278.80
18 $13,847.49 $ 888.32 $228,568.70 $36,675.85 $ 71,431.30
19 $13,991.73 $ 744.08 $242,560.40 $37,419.93 $ 57,439.59
20 $14,137.48 $ 598.33 $256,697.90 $38,018.26 $ 43,302.09
21 $14,284.75 $ 451.06 $270,982.70 $38,469.32 $ 29,017.31
22 $14,433.55 $ 302.26 $285,416.30 $38,771.58 $ 14,583.69
23 $14,583.69 $ 151.91 $300,000.00 $38,923.49 $ 0.00
SECURITY AGREEMENT
(Chattel Mortgage)
THIS AGREEMENT, made the 11th day of December 1996 under the laws of
the state of New York BETWEEN OAK TREE MEDICAL MANAGEMENT, INC. herein called
the Debtor whose business address is 2 Gannett Drive, White Plains, N.Y. 10604
and whose residence address is [ ] and MAPLE HEALTH INC., SOUTHERN PROFESSIONAL
ASSOCIATES INC. and NORTHERN PROFESSIONAL ASSOCIATES INC., herein called the
Secured Parties, whose address is 40 Maple Avenue, Rockville Centre, New York
11570.
W I T N E S S E T H:
To secure the payment of an indebtedness in the amount of $300,000.00
with interest, payable as follows
Equal monthly payments of $14,735.81 commencing January 15, 1997 and
monthly thereafter for a total of twenty-three (23) monthly payments
with the final payment due and owing on December 15, 1998. Interest,
which is included in the monthly payment, has been calculated at 12
1/2% per annum.
as evidenced by a note or notes of even date herewith, and also to secure any
other indebtedness or liability of the Debtor to the Secured Party direct or
indirect, absolute or contingent, due or to become due, not existing or
hereafter arising, including all future advances or loans which may be made at
the option of the Secured Party, (all hereinafter called the "obligations")
Debtor hereby grants and conveys to the Secured Party a security interest in,
and mortgages to the Secured Party,
(a) the property described in the schedule herein (hereinafter called
the collateral), which collateral the Debtor represents will be used primarily
|_| for personal, family or household purposes
|_| in farming operations
|X| in business or other use
(b) all property, goods and chattels of the same classes as those
scheduled, acquired by the Debtor subsequent to the execution of this agreement
and prior to its termination
(c) all proceeds thereof, if any,
(d) all increases, substitutions, replacements, additions and
accessions thereto.
<PAGE>
1. DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
PAYMENT 1a To pay and perform all of the obligations secured by this agreement
according to their terms.
DEFEND 1b To defend the title to the collateral against all persons and
TITLE against all claims and demands whatsoever, which collateral, except for
the security interest granted hereby, is lawfully owned by the Debtor
and is now free and clear of any and all liens, security interests,
claims, charges, encumbrances, taxes and assessments except as may be
set forth in the schedule.
ASSURANCE 1c On demand of the secured party to do the following; furnish further
OF TITLE assurance of title, execute any written agreement or do any other acts
necessary to effectuate the purposes and provisions of this agreement,
execute any instrument or statement required by law or otherwise in
order to perfect, continue or terminate the security interest of the
Secured Party in the collateral and pay all costs of filing in
connection therewith.
POSSESSION 1d To retain possession of the collateral during the existence of
this agreement and not to sell, exchange, assign, loan, deliver, lease,
mortgage or otherwise dispose of same without the written consent of
the Secured Party.
LOCATION 1e To keep the collateral at the location specified in the schedule and
not to remove same (except in the usual course of business for
temporary periods) without the prior written consent of the Secured
Party.
LIENS 1f To keep the collateral free and clear of all liens, charges,
encumbrances, taxes and assessments.
TAXES 1g To pay, when due, all taxes, assessments and license fees relating
to the collateral.
REPAIRS 1h To keep the collateral, at Debtor's own cost and expense, in good
repair and condition and not to misuse, abuse, waste or allow to
deteriorate except for normal wear and tear and to make same available
for inspection by the Secured Party at all reasonable times.
INSURANCE 1i To keep the collateral insured against loss by fire (including
extended coverage), theft and other hazards as the Secured Party may
require and to obtain collision insurance if applicable. Policies shall
be in such form and amounts and with such companies as the Secured
Party may designate. Policies shall be obtained from responsible
insurers authorized to do business in this state. Certificates of
insurance or policies, payable to the respective parties as their
interest may appear, shall be deposited with the Secured Party who is
authorized, but under no duty, to obtain such insurance upon failure of
the Debtor to do so. Debtor shall give immediate written notice to the
Secured Party and to insurers of loss or damage to the collateral and
shall promptly file proofs of loss with insurers. Debtor hereby
appoints the Secured Party the attorney for the Debtor in obtaining,
adjusting and cancelling any such insurance and endorsing settlement
drafts and hereby assigns to the Secured Party all sums which may
become payable under such insurance, including return premiums and
dividends, as additional security for the indebtedness.
LOAN -- 1j If this agreement is security for a loan to be used to pay a part or
USE OF all of the purchase price of the collateral; to use the proceeds of the
PROCEEDS loan to pay the purchase price, filing fees and insurance premiums. The
Secured Party however, may pay the proceeds directly to the seller of
the collateral.
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<PAGE>
CHANGE 1k To immediately notify the Secured Party in writing of any change in
OF or discontinuance of Debtor's place or places of business and/or
ADDRESS residence.
AFFIXED 1l That if the collateral has been attached to or is to be attached to
TO real estate, a description of the real estate and the name and address
REALTY of the record owner is set forth in the schedule herein; if the said
collateral is attached to real estate prior to the perfection of the
security interest granted hereby, Debtor will on demand of the Secured
Party furnish the latter with a disclaimer or disclaimers, signed by
all persons having an interest in the real estate, of any interest in
the collateral which is prior to Secured Party's interest.
2. GENERAL PROVISIONS:
NOTES 2a Notes, if any, executed in connection with this agreement are
separate instruments and may be negotiated by Secured Party without
releasing Debtor, the collateral, or any guarantor or co-maker. Debtor
consents to any extension of time of payment. If there be more than one
Debtor, guarantor or co-maker of this agreement or of notes secured
hereby, the obligation of all shall be primary, joint and several.
NON- 2b Waiver of or acquiescence in any default by the Debtor, or failure
WAIVER of the Secured Party to insist upon strict performance by the Debtor of
any warranties or agreements in this security agreement, shall not
constitute a waiver of any subsequent or other default or failure.
NOTICES 2c Notices to either party shall be in writing and shall be delivered
personally or by mail addressed to the party at the address herein set
forth or otherwise designated in writing.
LAW 2d The Uniform Commercial Code shall govern the rights, duties and
APPLIC- remedies of the parties and any provisions herein declared invalid
ABLE under any law shall not invalidate any other provisions or this
agreement.
DEFAULT 2e The following shall constitute a default by Debtor:
non- Failure to pay the principal or any installment of principal or of
payment interest on the indebtedness or any notes when due.
viola- Failure by Debtor to comply with or perform any provision of this
tion agreement.
misre- False or misleading representations or warranties made or given by
presen Debtor in connection with this agreement.
tation
levy Subjection of the collateral to levy of execution or other judicial
process.
insol- Commencement of any insolvency proceeding by or against the Debtor or
vency of any guarantor of or surety for the Debtor's obligations.
death Death of the Debtor or of any Guarantor of or surety for the Debtor's
obligations.
impair- Any reduction in the value of the collateral or any act of the Debtor
ment of which imperils the prospect of full performance or satisfaction of the
security Debtor's obligations herein.
REMEDIES 2f Upon any default of the Debtor and at the option of the Secured
OF Party, the obligations secured by this agreement shall immediately
DEFAULT become due and payable in full without notice or demand and the Secured
Party shall have all the rights, remedies and privileges with respect
to repossession, retention and sale of the collateral and disposition
of the proceeds as are accorded to a Secured Party by the applicable
sections of the Uniform Commercial Code respecting "Default", in effect
as of the date of this Security Agreement.
attorneys' Upon any default, the Secured Party's reasonable attorneys' fees and
fees etc. the legal and other expenses for pursuing, searching for, receiving,
taking,keeping, storing, advertising, and selling the collateral shall
be chargeable to the Debtor.
defic- The Debtor shall remain liable for any deficiency resulting from a sale
iency of the collateral and shall pay any such deficiency forthwith on
demand.
monies If the Debtor shall default in the performance of any of the provisions
advanced of this agreement on the Debtor's part to be performed, Secured Party
may perform same for the Debtor's account and any monies expended in so
doing shall be chargeable with interest to the Debtor and added to the
indebtedness secured hereby.
seizure In conjunction with, addition to or substitution for those rights,
Secured Party, at his discretion, may: (1) enter upon Debtor's premises
peaceable by Secured Party's own means or with legal process and take
possession of the collateral, or render it unusable, or dispose of the
collateral on the Debtor's premises and the Debtor agrees not to resist
assem- or interfere; (2) require Debtor to assemble the collateral and make it
bling available to the Secured Party at a place to be designated by the
collat- Secured Party, reasonable convenient to both parties (Debtor agrees
eral that the Secured Party's address as set forth above is a place
reasonably convenient for such assembling); (3) unless the collateral
is perishable or threatens to decline speedily in value or is of a type
notice customarily sole on a recognized market, Secured Party will give Debtor
of sale reasonable notice of the time and place of any public sale thereof or
of the time after which any private sale or any other intended
disposition thereof is to be made. The requirements of reasonable
notice will be met if such notice is mailed, postage prepaid, to the
address of the Debtor shown above, at least three days before the time
of sale or disposition.
2g Secured Party may assign this agreement and if assigned the assignee
shall be entitled, upon notifying the Debtor, to performance of all of
Debtor's obligations and agreements hereunder and the assignee shall be
entitled to all of the rights and remedies of the Secured Party
hereunder. Debtor will assert no claims or defenses Debtor may have
against the Secured Party against the assignee.
FINANCING 2h The Secured Party is hereby authorized to file a Financing
STATEMENT Statement.
CAPTIONS 2i The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this
agreement nor the intent of any provision thereof.
<PAGE>
The terms, warranties and agreements herein contained shall bind and inure
to the benefit of the respective parties hereto, and their respective legal
representatives, successors and assigns.
The gender and number used in this agreement are used as a reference term
only and shall apply with the same effect whether the parties are of the
masculine or feminine gender, corporate or other form, and the singular shall
likewise include the plural.
This agreement may not be changed orally.
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<PAGE>
IN WITNESS WHEREOF, the Parties have respectively signed and sealed these
presents the day and year first above written.
Oak Tree Medical Management Inc. Maple Health Inc.
By /s/ By /s/
---------------------------- -------------------------------
Southern Professional Associates Inc.
By /s/
-------------------------------
Northern Professional Associates Inc.
By /s/
-------------------------------
SCHEDULE
Describe items of collateral, the address where each item will be located
and describe any prior liens, etc., and the amounts due thereon. If items are
crops or goods affixed or to be affixed to real estate describe the real estate
and state the name and address of the owner of record thereof.
Items Location, etc.
Fitness Equipment Physical Therapy Centers located at:
Furniture
Fixtures 40 Maple Avenue, Rockville Centre, New York
Leasehold Improvements
Leases 10 Gordon Drive, Syosset, New York
Equipment Leases
235 Mill St., Lawrence, New York
1500 Paerdegat Avenue North,
Brooklyn, New York
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================================================================================
AGREEMENT OF SALE
dated December 11, 1996
between
Southern Professional Associates, Inc. d/b/a Paerdegat Physical Therapy,
Maple Health, Inc. d/b/a/ Sportset Physical Therapy,
Southern Professional Associates, Inc. d/b/a Atrium Physical Therapy,
Northern Professional Associates, Inc. d/b/a Sportset-Syosset Physical Therapy,
Mark A. Gentile, James O'Neill, Robert Einemann and Bernard Posner, Sellers
and
Oak Tree Medical Management, Inc.
Purchaser
<PAGE>
AGREEMENT OF SALE
AGREEMENT OF SALE, made December 11, 1996, among MAPLE HEALTH, INC. ("Maple"), a
New York corporation doing business as Sportset Physical Therapy located at 70
Maple Avenue, Rockville Centre, New York 11570, NORTHERN PROFESSIONAL ASSOCIATES
INC. ("Northern") a New York corporation doing business as Sportset- Syosset
Physical Therapy located at 10 Gordon Drive, Syosset, New York 11791, SOUTHERN
PROFESSIONAL ASSOCIATES, INC. ("Southern"), a New York corporation doing
business as Paerdegat Physical Therapy located at 1500 Paerdegat Avenue North,
Brooklyn, New York 11236 and as Atrium Physical Therapy located at 235 Mill
Street, Lawrence, New York 11559 (collectively the "Corporate Sellers"), MARK
GENTILE ("Gentile") , an individual residing at 3026 Club House Road, Merrick,
NY 11566, JAMES O'NEILL ("O'Neill"), an individual residing at 856 South Long
Beach Avenue, Freeport, NY 11520, ROBERT EINEMANN ("Einemann"), an individual
residing at 951 Woodoak Drive, Baldwin, NY 11510, and BERNARD POSNER ("Posner"),
an individual residing at 3903 Nostrand Ave., Brooklyn, NY 11235, (collectively
the Shareholders), all parties collectively known as "Sellers," and STEVEN
ROTWEIN, P.T., P.C.("Rotwein"), the Specialist Provider, billing entity and
medical manager at each of the above-mentioned business locations of Maple,
Northern and Southern, and Oak Tree Medical Management, Inc., a New York
corporation, having an address at 2 Gannett Drive Suite 215, White Plains, NY
10604 ("Purchaser").
W I T N E S S E T H:
--------------------
WHEREAS, Purchaser desires to acquire, and Sellers desire to sell, the assets of
the corporations known as Northern Professionals, Inc., Southern Professionals,
Inc. and Maple Health, Inc., such corporations doing business as noted herein
and hereinafter specified, upon the terms and conditions hereinafter set forth,
and
WHEREAS, Gentile, O'Neill, Einemann and Posner are the Shareholders of Corporate
Sellers,
WHEREAS, Steven Rotwein, P.T., P.C. is the Specialist Provider billing entity
and medical manager of the business locations,
NOW, THEREFORE, in consideration of the covenants and agreements hereafter set
forth, and other valuable consideration, the receipt and sufficiency of which
hereby is acknowledged, the parties hereto agree as follows:
1. Agreement To Sell. Sellers agree to sell, transfer and deliver to Purchaser,
and Purchaser agrees to purchase, upon the terms and conditions hereinafter set
forth, all of the assets of the businesses of Sellers as noted herein. Rotwein
agrees to cooperate with Sellers for the purpose of effectuating the transfer of
the businesses, as outlined herein.
2
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2. The Assets of the Corporation. It is the understanding of the parties that
Sellers are the owners of the following assets (the "Assets"):
(a) the equipment and general assets described in Exhibit A-1 hereto and
all similar equipment acquired or owned by the businesses on or before
the closing date (the "General Assets");
(b) the furniture, fixtures and improvements described in Exhibit A-2
hereto and all similar items acquired or owned by the businesses on or
before the closing date (the "Improvements");
(c) the leases described in Exhibit A-3 hereto (the "Leases");
(d) the equipment leases, contracts and agreements described in Exhibit
A-4 hereto (the "Contracts");
(e) the Contractual Rights which sellers have with Rotwein;
(f) the bank accounts, lines of credit and safe deposit boxes (including a
list of the persons authorized to access the bank accounts and safe
deposit boxes), described in Exhibit A-5 hereto (the "Bank Accounts
and Boxes");
Notwithstanding anything to the contrary contained herein, there shall be
excluded from the Assets, all cash on hand and in Sellers' bank accounts, and
accounts receivable..
3. Purchase Price. The purchase price to be paid by Purchaser is One Million
Four Hundred Seventy Five Thousand Dollars ($1,475,000), plus Six Thousand
(6,000) shares of Oak Tree Medical Systems, Inc. stock, payable as follows:
(a) Two Hundred Twenty Five Thousand Dollars ($225,000) at the closing,
less any downpayment or loans already received by Sellers.
(b) Six Thousand (6,000) shares of stock given at closing.
(c) Five Hundred Thousand Dollars ($500,000.00) at the closing by giving
Sellers a Promissory Note, attached as Exhibit B hereto in said
principal amount, and paying such terms as indicated in Exhibit B. IN
NO CASE SHALL PURCHASER BE RESPONSIBLE FOR ANY INDEBTEDNESS OF
SELLERS, OTHER THAN AS INDICATED HEREIN.
(d) One Hundred Thousand Dollars ($100,000), payable quarterly in three
equal installments, over three quarters (9 months), from the date of
closing.
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(e) Five Hundred Fifty Thousand Dollars ($550,000.00) in the form of Oak
Tree Medical Systems, Inc. common stock. If, during the next eighteen
(18) months from closing, the common stock reaches a trading price of
seven ($7.00) dollars per share or more, and remains at that level for
at least one full business week (M-F) during the eighteen month term,
then Seventy-Eight Thousand Five Hundred Seventy-One (78,571) shares
of common stock shall be issued to Sellers in satisfaction of the
selling price. If, during the next eighteen (18) months from closing
the common stock never reaches the seven ($7.00) dollar per share
threshold for one week, then One Hundred Thousand (100,000) shares of
common stock shall be issued to Sellers in satisfaction of the selling
price. Purchaser's parent, Oak Tree Medical Systems, Inc., will
reserve at closing the appropriate stock to be transferred, in support
of the obligations of Purchaser. Purchaser's parent signs this
Agreement only for the purpose of acknowledging this provision.
Delivery of the stock to be paid to the Sellers pursuant to this
sub-paragraph shall be made on the 25th monthly anniversary of the
closing, provided, however, that Sellers have faithfully and fully
performed all of their duties and obligations set forth in paragraph
ten (10) below through the 25th monthly anniversary of the closing,
and provided that Maple Health, Inc. and Mark Gentile have not
voluntarily terminated their employment with Purchaser as set forth in
the Employment and Management Agreement dated at closing.
(f) One Hundred Thousand Dollars ($100,000) in the form of Fourteen
Thousand Two Hundred Eighty Six (14,286) shares of Oak Tree Medical
Systems, Inc. common stock, to be given to the Brooklyn Facility
Landlords, in the names of Arnold Marshall and Richard Marshall, in
consideration of that Landlord's commitment to establish a new
leasehold relationship with purchaser. Eighteen months from the
closing the Fourteen Thousand Two Hundred Eight-six (14,286) shares of
Oak Tree Medical Systems, Inc. common stock shall be issued as
required in the sub-paragraph.. Purchaser's parent, Oak Tree Medical
Systems, Inc., will reserve at closing the appropriate stock to be
transferred, in support of the obligations of Purchaser. Purchaser's
parent signs this Agreement only for the purpose of acknowledging this
provision. Unless otherwise agreed to in writing, the closing in this
Agreement of Sale and the Agreement of Sale between Steven Rotwein,
P.C. and Purchaser shall be contingent upon the execution of the lease
agreement between Purchaser and the Brooklyn Landlord.
All shares hereunder will be unregistered, restricted securities within the
meaning of the federal securities laws and will contain the appropriate legends.
3A. Performance Incentive Agreement. As additional consideration, performance
incentive payments will be made as noted in Exhibit D.
4. The Closing. The "closing" means the settlement of the obligations of Sellers
and Purchaser to each other under this agreement, including the payment of the
purchase price to Sellers as provided in Article 3 hereof and the delivery of
the closing documents provided for in Article 5
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hereof. The closing shall be held at the offices of Purchaser and shall take
place on or about December 6, 1996 (the "closing date").
5. Closing Documents. At the closing Sellers shall execute and deliver to
Purchaser:
(a) an Assignment of the rights of the lessees under the Leases.
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(b) certified copies of resolutions duly adopted by the Boards of
Directors and Shareholders of Corporate Sellers authorizing the sale
of the Assets and the performance by Sellers of their obligations
hereunder
(c) an opinion of Sellers' counsel, Gallagher & Matthews of 11 Clinton
Avenue, Rockville Center, NY 11570 dated as of the closing date, in
form and substance satisfactory to Purchaser's counsel, stating such
counsel's opinion that: (i) Corporations are duly organized, validly
existing and in good standing under the laws of New York; (ii) Sellers
have full power and authority, corporate and otherwise, to enter into
this agreement and perform their obligations hereunder; (iii) the
execution and delivery of this agreement and the performance by
Corporate Sellers of their obligations hereunder have been duly
authorized by the Boards of Directors and Shareholders of Corporate
Sellers and no further action or approval is required in order to
constitute this agreement as the binding obligation of Sellers,
enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, moratorium, insolvency or other laws
affecting creditor's rights generally; (iv) the execution and delivery
of this agreement and the performance by Corporate Sellers of their
obligations hereunder do not and will not violate any provision of the
Certificates of Incorporation or Bylaws of Corporate Sellers; and (v)
except as may be set forth in this agreement, such counsel is not
representing Sellers in any suit, action or proceeding against them
which, if adversely determined, would prohibit the consummation of the
transactions contemplated by this agreement, nor is Counsel aware of
any other suits, actions, or proceedings which would affect this
transaction.
(d) the Certificates of Incorporation, Bylaws, filing receipts and other
organizational documents of Corporate Sellers; any bills, vouchers,
and records showing the ownership of the Assets used in the operations
of Sellers; and all other books of account, records and contracts of
Sellers; appropriate documentation evidencing Rotwein's relationship
with Sellers and the Assets, including such documentation as is
required to transfer Rotwein's interest in such Assets,
(e) Restrictive Covenant as enumerated in Article Ten (10),
(f) Statements executed by Sellers, releasing and indemnifying Purchaser
from any and all obligations and liabilities of Sellers, other than
those specifically assumed herein,
(g) such other instruments and information in form and substance
satisfactory to Purchaser's attorneys as may be necessary or proper to
transfer to Purchaser good and marketable title to all other ownership
interests in the Assets to be transferred under this agreement.
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At the closing Sellers shall deliver to Purchaser all keys for the businesses.
If any keys for the businesses or Assets are held by employees or others,
Sellers shall identify such individuals, their addresses and their relationship
to the Sellers. Sellers and Rotwein shall do all further acts and things as may
be necessary, or reasonably requested by Purchaser, to consummate the
transactions contemplated by this agreement, including the acquisition of and
possession of the Assets. Sellers and Rotwein shall advise Purchaser of, and
cause to be delivered to Purchaser, all applicable trade secrets and proprietary
information pertaining to the Assets of the businesses.
At the closing Purchaser shall execute and deliver to Sellers:
(i) an Assumption of the obligations of the lessees under the Leases and
Equipment Contracts.
(ii) the Promissory Note and appropriate Security Agreement evidencing the
$500,000 debt.
(iii) reciprocal documentation and Counsel's opinion as listed in
subparagraphs (b), (c), (d) and (f) above.
Except as expressly provided herein, Purchaser shall not be obligated to pay or
perform any obligations or liabilities of Rotwein or Sellers including without
limitation, obligations or liabilities of Rotwein or Sellers to their creditors
or any legal, accounting, brokerage or finder's fees or any taxes or other
expenses in connection with this agreement or the consummation of the
transactions contemplated hereby.
6. Closing Adjustments. The following items shall be apportioned as of midnight
of the day preceding the closing date:
(a) rent, including any additional rent, under the Real Estate leases or
Equipment leases
(b) taxes and applicable common charges under the leases
(c) water and sewer charges
(d) utilities , as applicable
(e) employee salaries and benefits
Any errors or omissions in computing apportionments shall be corrected after the
closing, with both parties fully cooperating.
7. Representations And Warranties Of Sellers. Sellers represent and warrant to
Purchaser as
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follows:
(a) Corporate Sellers are corporations duly organized and validly existing
under the laws of New York, and are duly qualified to do business in
New York. Corporate Sellers have full power and authority to own their
properties and to conduct their businesses as now carried on, and to
carry out and perform their undertakings and obligations as provided
herein. The execution and delivery by Corporate Sellers of this
agreement and the consummation of the transactions contemplated herein
have been duly authorized by the Boards of Directors and Shareholders
of Corporate Sellers and will not conflict with or breach any
provision of the Certificates of Incorporation or Bylaws of Corporate
Sellers, and do not and will not conflict with or result in any breach
of any condition or provision of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon the Assets by reason of the provisions of any
contract, lien, lease, agreement, instrument or judgment to which
Sellers or Rotwein are a party, or which are or purport to be binding
upon Sellers or Rotwein or which affect or purport to affect the
Assets. No further action or approval, corporate or otherwise, is
required in order to constitute this agreement the binding and
enforceable obligation of Sellers.
(b) No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any
governmental or quasi-governmental agency, commission, board, bureau
or instrumentality, is necessary for Sellers or Rotwein to constitute
this agreement the binding and enforceable obligation of Sellers or to
consummate the transactions contemplated hereby.
(c) Sellers are the owners of and have good and marketable title to the
Assets, free of all liens, claims and encumbrances, except as set
forth herein.
(d) There are no violations, potential claims of violations or questions
of irregularity regarding any law or governmental rule or regulation
pending or, to the best of Sellers' and Rotwein's knowledge,
threatened against Rotwein or Sellers, or the Assets. Sellers and
Rotwein have complied with all laws and governmental rules and
regulations applicable to the businesses or the Assets. Sellers and
Rotwein have duly notified all insurance carriers or third party
payers of any suspected or known claims or potential claims which may
be asserted against Sellers, Rotwein or the Assets.
(e) There are no judgments, liens, suits, actions or proceedings pending
or, to the best of Rotwein's and Sellers' knowledge, threatened
against Rotwein, Seller, or the Assets. Neither Seller, Rotwein nor
the Assets are a party to, subject to or bound by any agreement or any
judgment or decree of any court, governmental body or arbitrator which
would conflict with or be breached by the execution, delivery or
performance of this agreement, or which could prevent the carrying out
of the
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transactions provided for in this agreement, or which could prevent
the use by Purchaser of the Assets or adversely affect the conduct of
the businesses by Purchaser.
(f) Sellers have not entered into, and the Assets are not subject to, any:
(i) written contract or agreement for the employment of any employee
of the business; (ii) contract with any labor union or guild; (iii)
pension, profit-sharing, retirement, bonus, insurance, or similar plan
with respect to any employee of the business; or (iv) similar contract
or agreement affecting or relating to the Assets.
(g) At the time of the closing, there will be no (secured or unsecured)
creditors of Sellers, other than the holders of the Existing
Indebtedness, Exhibit B. Such payments on the Existing Indebtedness
are current and no payments are in arrears. General business creditors
and equipment lessors are listed in Exhibit A-4 attached hereto.
Except as set forth herein, Sellers shall be liable for all other
obligations incurred by Sellers prior to closing.
(h) The Leases are in full force and effect and without any default by
Sellers thereunder. All copies of the Leases provided by Sellers to
Purchaser are true and complete copies of the original Leases. The
leases may be assigned to Purchaser.
(i) Identified Contracts and Equipment Leases are in full force and effect
and without any default by Sellers or thereunder. All copies of the
Contracts and Leases provided by Sellers to Purchaser are true and
complete copies of the original Contracts. Sellers are not indebted
under any executory Contracts or Leases, except as may be set forth in
Exhibit A-4 hereto.
(j) Sellers have filed each tax return, including without limitation all
income, excise, property, capital gain, sales, franchise and license
tax returns, required to be filed by Sellers prior to the date hereof.
Each such return is true, complete and correct, and Sellers have paid
all taxes, assessments and charges of any governmental authority
required to be paid by them and have created reserves or made
provision for all taxes accrued but not yet payable. No government is
now asserting, or to Sellers' knowledge threatening to assert, any
deficiency or assessment for additional taxes or any interest,
penalties or fines with respect to Sellers. Sellers' federal tax
identification numbers are _________________. Sellers shall hold
Purchaser harmless and indemnify Purchaser against all claims for
taxes due from and owed by Sellers.
(k) The attached financial statements in Exhibit C are true and accurate.
The financial statements fairly and correctly present the financial
position of the Corporate Sellers and will so represent such as of the
date of closing.
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At the closing Sellers and Rotwein, as applicable, shall execute and deliver an
affidavit setting forth the above representations as of the date of the closing.
8. Representations And Warranties Of Purchaser. Purchaser represents and
warrants to Sellers as follows:
(a) Purchaser is a corporation organized under the laws of New York, and
is duly qualified to do business in New York. Purchaser has full power
and authority to carry out and perform its undertakings and
obligations as provided herein. The execution and delivery by
Purchaser of this agreement and the consummation of the transactions
contemplated herein have been duly authorized by the Board of
Directors of Purchaser and will not conflict with or breach any
provision of the Certificate of Incorporation or Bylaws of Purchaser.
No further action or approval, corporate or otherwise, is required in
order to constitute this agreement the binding and enforceable
obligation of Purchaser.
(b) No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any
governmental or quasi-governmental agency, commission, board, bureau
or instrumentality, is necessary for Purchaser to constitute this
agreement the binding and enforceable obligation of Purchaser or to
consummate the transactions contemplated hereby.
(c) There are no violations, potential claims of violations or questions
of irregularity regarding any law or governmental rule or regulation
pending or, to the best of Purchaser's knowledge, threatened against
Purchaser. Purchaser has complied with all laws and governmental rules
and regulations. Purchaser has duly notified all insurance carriers or
third party payers of any suspected or known claims or potential
claims which may be asserted against Purchaser.
(d) There are no judgments, liens, suits, actions or proceedings pending
or, to the best of Purchaser's knowledge, threatened against
Purchaser. Purchaser is not a party to, subject to or bound by any
agreement or any judgment or decree of any court, governmental body or
arbitrator which would conflict with or be breached by the execution,
delivery or performance of this agreement, or which could prevent the
carrying out of the transactions provided for in this agreement.
(e) Purchaser has filed each tax return, including without limitation all
income, excise, property, capital gain, sales, franchise and license
tax returns, required to be filed by Purchaser prior to the date
hereof. Each such return is true, complete and correct, and Purchaser
has paid all taxes, assessments and charges of any governmental
authority required to be paid by Purchaser and has created reserves or
made provision for all taxes accrued but not yet payable. No
government is now
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asserting, or to Purchaser's knowledge threatening to assert, any
deficiency or assessment for additional taxes or any interest,
penalties or fines with respect to Purchaser. Purchaser's' federal tax
identification number is _________________. Purchaser shall hold
Seller harmless and indemnify Seller against all claims for taxes due
from and owed by Purchaser.
(f) The attached financial statements in Exhibit C are true and accurate.
The financial statements fairly and correctly present the financial
position of the Purchaser and will so represent such as of the date of
closing.
9. Conditions To Closing. The obligations of Purchaser to close hereunder are
subject to the following conditions:
(a) All of the terms, covenants and conditions to be complied with or
performed by Sellers under this agreement on or before the closing
shall have been complied with or performed in all material respects.
(b) All representations or warranties of Sellers and Rotwein herein are
true in all material respects as of the closing date. Such
representations and warranties shall also survive closing.
(c) Satisfactory results of financial audit, as required by Purchaser.
(d) All Assets are in good working order, as applicable.
(e) On the closing date, there shall be no liens or encumbrances against
the Assets, except as provided for herein.
(f) The businesses of Sellers have been conducted only in the ordinary
course of business. No contracts or purchase agreements/orders will
have been entered into, other than in the ordinary course of business.
No expenditures or credit purchases will be made by Sellers other than
in the ordinary course of business.
(g) Sellers, and their representatives and advisors will supply, upon
request by Purchaser and its representatives, such pertinent
information as may be required by Purchaser in order to conduct its
due diligence survey of Sellers. It is agreed that any documents or
information provided hereunder shall be kept in full and complete
confidence.
(h) All payments under the Existing Indebtedness are current and not in
arrears, to date of closing.
(i) Mark Gentile will agree to be employed by Purchaser, as evidenced by
an
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Employment Agreement to be signed at closing, whereby Gentile will
serve as full-time Facilities Manager of the four purchased
facilities. Such employment agreement term will be established for a
minimum of three (3) years, with Purchaser's sole option to extend
such term for an additional two years. Gentile, as part of such
employment terms, will agree to spearhead and participate in a
facilities expansion program within the Long Island, NY area, or as
agreed to otherwise.
(j) Syosset facility rent will not exceed $5,500.00 per month for the
first five years. Atrium facility rent will not exceed $6,500.00 per
month for the first five years. Rockville Center facility rent will
not exceed $12,000.00 per month for the first five years. Brooklyn
facility rent will not exceed $6,000 per month and is expected to be
approximately $4,500.00 per month.
Sellers promptly shall notify the Lessors under the Leases (the "Lessors") of
the proposed assignment of the Leases to Purchaser, and shall request the
consent of the Lessors thereto. Sellers and Purchaser shall furnish to the
Lessors such information as may reasonably be required in connection with the
procuring of such consent, and shall otherwise cooperate in an effort to
expeditiously procure such consent. If the Lessors shall fail or refuse to grant
such consent in writing within ten (10) days after the date of this agreement
(the "Outside Date"), or shall require as a condition of the granting of such
consent that additional consideration be paid to the Lessors which neither
Sellers nor Purchaser are willing to pay, then Purchaser may terminate this
agreement, by written notice to the shareholders Gentile and O'Neill, delivered
within five days after the Outside Date.
If this agreement is terminated as provided above in this Article 9, Sellers
shall return any payments made by Purchaser on account of the purchase price,
whereupon all rights of Purchaser hereunder and to the businesses shall
terminate, and neither Sellers nor Purchaser shall have any further claim
against the other hereunder.
10. Restrictive Covenant Not to Compete. Sellers will not, for a period of four
(4) years from the date of closing, either directly or indirectly, engage in the
management or practice of physical therapy or related services, within lower
Westchester County, NY (up to and including latitude of White Plains, NY),
Fairfield County, CT and within a ten (10) mile radius of Sellers' current
addresses as listed herein. The Restrictive Covenant provisions pertaining to
Long Island, NY shall terminate if Purchaser discontinues the operation and
management of its physical therapy centers on Long Island, NY. Sellers shall
execute at closing, such documents as will evidence this surviving provision. To
the extent a court of competent jurisdiction determines this provision to be too
restrictive, the parties agree to abide by any modification acceptable to such
court.
11. Indemnification. Each party hereto shall indemnify and hold the other
parties harmless from and against all liability, claim, loss, damage or expense,
including reasonable attorneys' fees,
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incurred or required to be paid by such other parties by reason of any breach or
failure of observance or performance of any representation, warranty, covenant
or other provision (including lists and Exhibits) of this agreement by such
party. Sellers shall indemnify and hold Purchaser harmless against all actions,
suits, proceedings, judgments, costs and expenses incurred by or levied against
Purchaser, due to Sellers' prior acts, omissions, negligence or other wrongful
conduct. Purchaser shall indemnify and hold Seller harmless against all actions,
suits, proceedings, judgments, costs and expenses incurred by or levied against
Seller, due to Purchaser's acts, omissions, negligence or other wrongful
conduct.
12. Risk Of Loss. The risk of loss to the Assets of the businesses sold
hereunder, until the closing, is assumed and shall be borne by Sellers. Sellers
agree to keep all of its Assets fully insured against any loss, either by fire,
theft or casualty, to the date of closing. In the event that prior to closing,
such Assets are totally or substantially damaged by reason of fire, theft or
casualty, Purchaser may, in its sole discretion, terminate the within
transaction. In such case, all money heretofore deposited with Sellers or
Sellers' representative shall be refunded to Purchaser and the parties shall be
released from any further liability hereunder. If the Purchaser elects to
consummate this transaction despite such loss or damage, it may do so by paying
the purchase price set forth herein, reduced by any insurance proceeds received
by Sellers.
13. Brokerage. The parties hereto represent and warrant to each other that they
have not dealt with any broker or finder in connection with this agreement other
than American Health Resources, LLC. Purchaser and Sellers shall indemnify,
defend and hold each other harmless from and against any loss, cost, expense,
claim or liability (including, without limitation, reasonable attorney's fees)
arising under or in respect of any claim by any person or entity for any
commission, fee or expense in respect of the transaction contemplated by this
Agreement, where such claim is based in whole or in part upon any act of the
indemnifying party or its representatives. The provisions of this Article shall
survive the expiration, termination or cancellation of this Agreement, but shall
not be construed as a covenant for the benefit of any third party.
14. Individual Sellers. Robert Einemann, Bernard Posner, Mark A. Gentile and
James O'Neill hereby confirm all of the representations and warranties contained
herein, and agree to indemnify and hold Purchaser harmless from and against
misrepresentation or breach of any warranty by Corporate Sellers or any breach
or failure by Sellers to comply with any term, covenant or condition of this
agreement. Shareholders represent and warrant that they are the shareholders of
Corporate Sellers, and that they have full power and authority to carry out and
perform the undertakings and obligations as provided herein. Shareholders agree
as aforesaid to induce Purchaser to enter into this agreement. No action or
inaction of Sellers or Purchaser, including the giving of notices, shall affect,
change or discharge the obligations of the Purchaser's Guarantors hereunder.
15. Notices. All notices, demands and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
properly given if delivered by hand
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or by registered or certified mail, return receipt requested, with postage
prepaid, to Sellers' attorneys, Gallagher & Matthews at 11 Clinton Avenue,
Rockville Center, NY 11570, and to Purchaser's attorney, Frederick C. Veit,
Esq., at 2 Gannett Drive Suite 215, White Plains, NY 10604. The respective
attorneys for the parties hereby are authorized to give any notice required or
permitted hereunder and to agree to adjournments of the closing.
16. Survival. The representations, warranties and covenant contained herein or
in any document, instrument, certificate or schedule furnished in connection
herewith shall survive the delivery of the Bill of Sale and shall continue in
full force and effect after the closing, except to the extent waived in writing.
17. Further Assurances. In connection with the transactions contemplated by this
agreement, the parties agree to execute and deliver such further instruments,
and to take such further actions, as may be reasonably necessary or proper to
effectuate and carry out the transactions contemplated in this agreement.
18. Changes Must Be In Writing. No delay or omission by either Sellers or
Purchaser in exercising any right shall operate as a waiver of such right or any
other right. This agreement may not be altered, amended, changed, modified,
waived or terminated in any respect or particular unless the same shall be in
writing signed by the party to be bound. No waiver by any party of any breach
hereunder shall be deemed a waiver of any other or subsequent breach.
19. Captions And Exhibits. The captions in this agreement are for convenience
only and are not to be considered in construing this agreement. The Exhibits
annexed to this agreement are an integral part of this agreement, and where
there is any reference to this agreement it shall be deemed to include said
Exhibits.
20. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
21. Binding Effect. This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
22. Cancellation. Purchaser reserves the right to cancel this Agreement, without
penalty, if any negative disclosure is discovered regarding Sellers, Rotwein or
their Assets, which would materially affect the value of Sellers' Assets.
Purchaser's right to cancel shall be null and void subsequent to actual closing.
23. Confidentiality. Each party acknowledges and agrees that any information or
data it has acquired from the other party, not otherwise properly in the public
domain, was received in confidence. Each party hereto agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement (including conducting due diligence or notifying a party's
lender), or use to the detriment of the disclosing party or for the
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benefit of any other person or persons, or misuse in any way, any confidential
information of the disclosing party concerning the subject matter hereof,
including any trade or business secrets of the disclosing party and any
technical or business materials that are treated by the disclosing party as
confidential or proprietary, including without limitation information (whether
in written, oral or machine readable form) concerning: general business
operations: methods of doing business, servicing clients, client relations, and
of pricing and making charge for services and products; financial information,
including costs, profits and sales; marketing strategies; business forms
developed by or for the disclosing party; names of suppliers, personnel, clients
and potential clients; negotiations or other business contacts with suppliers,
personnel, clients and potential clients; form and content of bids, proposals
and contracts; the disclosing party's internal reporting methods; technical and
business data and documentation; software programs, however embodied; diagnostic
techniques; and information obtained by or given to the disclosing party about
or belonging to third parties.
24. Repurchase Option. (a) If at any time on or before two years from the
closing date (i) at least 51% of the outstanding equity stock of the Purchaser
shall be held, directly or indirectly, by Oak Tree Medical Systems, Inc. ("Oak
Tree") and (ii) there shall occur a Change of Control (as defined below) of Oak
Tree, the Sellers (or such fewer of them as shall then be in existence), jointly
and not severally, shall have the option (the "Option") to repurchase the Assets
and any additions or accretions thereto or substitutions therefor, to the extent
owned by the Purchaser at the time of occurrence of the change of control (the
"Option Assets"), at a price (the "Option Price") equal to the Purchase Value
(as defined below); provided, however, that if the Fair Market Value (as defined
below) of the Option Assets differs from the Purchase Value by more than 30% of
the Purchase Value, the Option Price shall equal the Fair Market Value. The
Option shall be exercisable by delivery of a written notice from the Sellers to
the Purchaser to that effect no later than 90 days after the occurrence of the
Change of Control. Such notice shall specify a date for consummation (the
"Consummation Date") of the acquisition by the Sellers of the Option Assets,
which date shall be a business day no later then 30 days after the delivery to
the Purchaser of the notice of exercise. On the Consummation Date, the Purchaser
shall transfer and convey to the Sellers all of the Purchaser's right, title and
interest in and to the Option Assets, free and clear of all claims, liens and
encumbrances. The Purchaser and the Company agree to take all such action and to
execute all such agreements and documents as shall reasonably be required to
effect the transfer and conveyance of the Option Assets to the Sellers as
aforesaid.
(b) The Option Price shall be paid in cash on the Consummation Date,
subject, however, to the following provisions.
(i) Sellers, at their election, may deliver 6,000 shares of Oak Tree
common stock in lieu of a cash payment in the amount set forth in
clause (y) of the definition of "Purchase Value".
(ii) Sellers, at their election, may deliver the shares of Oak Tree
common stock issuable to them pursuant to clause (e) of Section 3
in lieu of the payment of 550,000 in cash; and
(iii) Sellers, at their election, may deliver the Promissory Note
referred to in clause (e) of Section 3 in lieu of the payment of
cash in the amount of the outstanding principal amount of the
Promissory Note.
14
<PAGE>
(c) For purposes of this Section,
"Change of Control" shall mean the occurrence of either on of the following
events:
(i) Any person or entity (including any group as such term is used
under Section 13 (d) of the Securities Exchange Act of 1934),
other than Henry Dubbin, becomes a "beneficial owner", as such
term is used in Rule 13d-3 promulgated under such Act, of 50% or
more of the voting stock of the Oak Tree; or
(ii) The majority of the Board consists of individuals other than
Incumbent Directors, which term means the members of the Board on
the date of this Agreement; provided that any person becoming a
director subsequent to such date whose election of nomination for
election was supported by two-thirds of the directors who then
comprised the Incumbent Directors shall be considered to be an
Incumbent Director.
(d) The Option shall not be assignable without the written consent of the
Company except by operation of law. Sellers shall be entitled to specific
performance of the Option.
(e) For all purposes under this Section 24 Sellers shall be represented by Mark
Gentile or if he be incapable of functioning by James O'Neill, or if he be
incapable of functioning, by Robert Einemann, or if he is incapable of
functioning by Bernard Posner, and all rights, privileges, duties and
obligations of Sellers hereunder shall be exercised and enforced by the
Seller Representative in such capacity.
"Fair Market Value" shall mean the fair market value of the Option
Assets as determined by an independent appraiser selected by the Sellers and
reasonably acceptable to the Purchaser.
"Purchase Value" shall mean (x) $1,500,000 plus (y) the value of 6,000
shares of Oak Tree common stock determined on the basis of the average of the
last reported bid prices for such stock on the five days prior to the
Consummation Date plus (z) the amount of any payments made by the Purchaser
pursuant to the Performance Incentive Agreement, of even date, between the
Sellers and the Purchaser.
15
<PAGE>
IN WITNESS WHEREOF, the parties have executed this agreement the date first
above written.
SELLERS:
By /s/ Mark A. Gentile
--------------------------
Mark A. Gentile
By /s/ James O'Neill
--------------------------
James O'Neill
By /s/ Robert Einemann
--------------------------
Robert Einemann
By /s/ Bernard Posner
--------------------------
Bernard Posner
By /s/ Steven Rotwein
--------------------------
Steven Rotwein
SOUTHERN PROFESSIONAL ASSOCIATES, INC. d/b/a Paerdegat Physical Therapy
ATTEST:
By /s/
--------------------------
President
By /s/
---------------------
Secretary
SOUTHERN PROFESSIONAL ASSOCIATES, INC. d/b/a/ Atrium Physical Therapy
ATTEST:
By /s/
-------------------------
President
By /s/
--------------------
Secretary
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this agreement the date first
above written.
TRANSFERORS:
By /s/ Mark A. Gentile
--------------------------
Mark A. Gentile
By /s/ James O'Neill
--------------------------
James O'Neill
By /s/ Robert Einemann
--------------------------
Robert Einemann
By /s/ Bernard Posner
--------------------------
Bernard Posner
SOUTHERN PROFESSIONAL ASSOCIATES, INC. d/b/a Paerdegat Physical Therapy
ATTEST:
By /s/
--------------------------
President
By /s/
---------------------
Secretary
SOUTHERN PROFESSIONAL ASSOCIATES, INC. d/b/a/ Atrium Physical Therapy
ATTEST:
By /s/
-------------------------
President
By /s/
--------------------
Secretary
<PAGE>
MAPLE HEALTH d/b/a Sportset Physical Therapy
ATTEST:
By /s/
-----------------------
President
By /s/ James J. O'Neill
- ------------------------
Secretary
NORTHERN PROFESSIONAL ASSOCIATES, INC. d/b/a/ Sportset-Syosset Physical Therapy
ATTEST:
By /s/
-----------------------
President
By /s/ James J. O'Neill
- ------------------------
Secretary
STEVEN ROTWEIN, P.T., P.C..
ATTEST:
By /s/ Steven Rotwein
-----------------------
Steven Rotwein
By /s/
---------------------
Secretary
PURCHASER:
OAK TREE MEDICAL MANAGEMENT, INC.
ATTEST:
By /s/
----------------------
President
By /s/
---------------------
Treasurer
17
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC. for purposes of paragraphs 3(e) and 3(f) only.
ATTEST:
By /s/
-----------------------
CEO
By /s/ David D. Rosenberg
----------------------
CFO
18
<PAGE>
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Mark Gentile, to
me known, who being duly sworn, did depose and say that he resides at
; that he is the President of Maple Health, Inc. d/b/a Sportset
Physical Therapy the corporation described in and which executed the foregoing
Agreement of Sale; and that he signed his name thereto by the order of the board
of directors of the said corporation.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Mark Gentile, to
me known, who being duly sworn, did depose and say that he resides at
; that he is the President of Northern Professional Associates,
Inc. d/b/a/ Sportset-Syosset Physical Therapy, the corporation described in and
which executed the foregoing Agreement of Sale; and that he signed his name
thereto by the order of the board of directors of the said corporation.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
19
<PAGE>
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Mark Gentile, to
me known, who being duly sworn, did depose and say that he resides at
; that he is the President of Southern Professional Associates,
Inc. d/b/a/ Atrium Physical Therapy, the corporation described in and which
executed the foregoing Agreement of Sale; and that he signed his name thereto by
the order of the board of directors of the said corporation.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Mark Gentile, to
me known, who being duly sworn, did depose and say that he resides at
; that he is the President of Southern Professional Associates,
Inc. d/b/a/ Paerdegat Physical Therapy, the corporation described in and which
executed the foregoing Agreement of Sale; and that he signed his name thereto by
the order of the board of directors of the said corporation.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
20
<PAGE>
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally Steven Rotwein, to me
known, who being duly sworn, did depose and say that he resides at
; that he is the President of
Steven Rotwein, P.T., P.C., the corporation described in and which executed the
foregoing Agreement of Sale; and that he signed his name thereto by the order of
the board of directors of the said corporation.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came William
Kedersha, to me known, who being duly sworn, did depose and say that he resides
at
; that he is the Chief Executive
Officer of Oak Tree Medical Management, Inc., the corporation described in and
which executed the foregoing Agreement of Sale; and that he signed his name
thereto by the order of the board of directors of the said corporation.
/s/ Frederick C. Veit
-------------------------------
Notary Public
My commission expires on
FREDERICK C. VEIT
Notary Public, State of New York
No. 4036646
Qualified in Westchester County
Commission Expires Nov. 13, 1998
21
<PAGE>
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December 1996, before me personally came William Kedersha,
to me known, who being duly sworn, did depose and say that he resides at
; that he is the Chief Executive
Officer of Oak Tree Medical Systems, Inc., the corporation described in and
which executed the foregoing Agreement of Sale; and that he signed his name
thereto by the order of the board of directors of the said corporation.
/s/ Frederick C. Veit
-------------------------------
Notary Public
My commission expires on
FREDERICK C. VEIT
Notary Public, State of New York
No. 4036646
Qualified in Westchester County
Commission Expires Nov. 13, 1998
22
<PAGE>
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Mark Gentile, to
me known to be the individual described in and who executed the foregoing
Agreement of Sale, and acknowledged that he executed said Agreement of Sale.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the day of December, 1996, before me personally came James
O'Neill, to me known to be the individual described in and who executed the
foregoing Agreement of Sale, and acknowledged that he executed said Agreement of
Sale.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Bernard Posner,
to me known to be the individual described in and who executed the foregoing
Agreement of Sale, and acknowledged that he executed said Agreement of Sale.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
23
<PAGE>
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Robert Einemann,
to me known to be the individual described in and who executed the foregoing
Agreement of Sale, and acknowledged that he executed said Agreement of Sale.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the 11 day of December, 1996, before me personally came Steven Rotwein,
to me known to be the individual described in and who executed the foregoing
Agreement of Sale, and acknowledged that he executed said Agreement of Sale.
/s/ John A. Matthews, Jr.
-------------------------------
Notary Public
My commission expires on
John A. Matthews, Jr.
Notary Public, State of New York
No. 30-4738305
Qualified in Nassau County
Commission Expires Nov. 30, 1997
24
<PAGE>
EXHIBIT A-1
Equipment and General Assets
Business/Trade Names
Attached Equipment Lists
25
<PAGE>
EXHIBIT A-2
Furniture
Fixtures
Improvements
26
<PAGE>
EXHIBIT A-3
The Leases
22
<PAGE>
EXHIBIT A-4
Contracts and Equipment Leases
23
<PAGE>
EXHIBIT A-5
Bank Accounts, Safe Deposit Boxes, Lines of Credit
and Persons Authorized to Access Each
24
<PAGE>
EXHIBIT B
Promissory Note Terms
Principal Amount: $500,000.00
Term: Payable in quarterly installments, over three (3) years from
date of closing.
Interest: Simple interest at Twelve and One-Half percent (12.5%)
interest per year.
Collateral: The assets of Oak Tree Medical Management, Inc.
Prepayment: a) No Penalty.
b) An accelerated payment will be made, at the time of the
receipt of any proceeds from any investment
underwriting. The accelerated payment amount may not
exceed five (5%) percent of such net proceeds from the
underwriting(s). Such underwriting(s) must net at least
$500,000 for Purchaser.
c) An accelerated payment will be make in any of the three
years of the Term, if the total combined pre-tax
profits of all four facilities acquired under this
Agreement exceeds $750,000 in any of the three years of
this Term. Such payment shall be ten (10%) percent of
such excess pre-tax profits.
Equity Conversion: It is the intention of the Parties to convert the
subject debt to a stock interest in the parent company. Sellers will cooperate
in this endeavor.
30
<PAGE>
EXHIBIT C
FINANCIAL STATEMENTS
- 34 -
<PAGE>
EXHIBIT D
PERFORMANCE INCENTIVE AGREEMENT
As additional consideration for the Covenants and Agreements contained in the
Agreement of Sale between the Parties,(the "Agreement of Sale"), it is agreed
that additional incentive payments will be made by Purchaser to Sellers, when
certain financial benchmarks (using Generally Accepted Accounting Principles)
are reached by the subject practices, subsequent to closing on the Agreement of
Sale. The following formulas will serve as the basis for such incentive
payments:
(A) Syosset; at one (1) year from closing, for the calendar year 1997,
Sellers will receive an additional payment based on the following
formula: One Hundred Twenty percent (120%) of allocated pre-tax
profits for 1997, to be paid out in three equal installments over
three years.
(B) Atrium; to the extent the practice allocated pre-tax profits exceed
$250,000 within the first year of closing and $400,000 the second year
(calendar years 1997 and 1998 respectively), Sellers will receive an
additional payment of twenty (20%) percent of such pre-tax profits,
for each year such excess profits exceed the minimum levels stated
($250,000 & $400,000 respectively). Such payments, if any, will be
made on the one and two year anniversaries of closing, respectively.
(C) Brooklyn; to the extent the practice allocated pre-tax profits exceed
$100,000 above earnings as of closing, Sellers will be paid ten
percent (10%) of such excess. Such earnings and payment, if any, will
be determined at the end of each of the four calendar years following
Closing. 1997 will be the first year considered. The year 2000 will be
the last year considered. Sellers will not be paid more than a total
of $100,000 under this provision.
(D) If the total pre-tax profits for all four of the New York Facilities
acquired under the Agreement of Sale exceeds a $750,000 benchmark base
within any one (1) calendar year during the three (3) calendar years
following the closing, and while an employment agreement with is in
effect with Mark Gentile, then Sellers will receive ten (10%) percent
of such pre-tax profits which exceed $750,000 for each applicable
year. Payments, if any, will be made at the close of each year's
anniversary following closing.
(E) If Purchaser or its parent company, Oak Tree Medical Systems, Inc., is
sold or transferred within eighteen (18) months of the date of this
Agreement, then a special "transfer incentive payment" will be made to
Sellers. Such payment will be made in the form of cash, based on the
following formula, but in no event shall such payment under this
provision exceed Two Hundred Fifty Thousand dollars ($250,000):
32
<PAGE>
1)a At the time of Purchaser's sale or transfer within
eighteen (18) months, in calculating the maximum transfer
incentive payment of $250,000.00, the parties will consider
the appreciation of the Stock transferred pursuant to
paragraph 3(e) of the subject Agreement of Sale. (the
"Stock"). If, on the date of Purchaser's sale or transfer,
the Stock appreciated such that it is worth $900,000 or more
on the date of Purchaser's sale or transfer, then no
transfer incentive payment will be made hereunder.
b If, on the date of Purchaser's sale or transfer, the Stock
appreciated but it is worth less than $900,000 on the date
of Purchaser's sale or transfer, then a transfer incentive
cash payment will be made to Sellers, such that the total
value of the Stock as of the date of sale or transfer and
the cash transfer incentive payment, will equal $900,000.
2) If, on the date of Purchaser's sale or transfer, the Stock
has depreciated in value below $650,000 then a cash transfer
incentive payment will be made to Sellers in the amount of
$250,000.
3) Any cash transfer incentive payments made hereunder shall
never exceed twenty (20%) percent of any cash payments made
to Purchasers or its Parent, Oak Tree Medical Systems, Inc.,
under the terms of a sale or transfer made within eighteen
(18) months of this Agreement
4) No cash transfer incentive payments will be made hereunder
unless the pre-tax profits for all four of the New York
Facilities acquired under the Agreement of Sale equals or
exceeds $550,000 per year, (prorata) for the eighteen months
from the date of this Agreement, or as pro-rated if
Purchaser is sold or transferred within one (1) year.
(F) Purchaser will have up to Sixty (60) days after the end of any year,
within which to calculate any payments due sellers here under.
(G) Pretax profits shall be determined in accordance with generally
accepted accounting principles, and shall include all operating income
of the respective facilities less all direct, indirect, and allocable
expenses. Allocable expenses shall include an allocation of all
corporate office (Oak Tree Medical Systems, Inc. and Purchaser)
payroll, rent, office, and other operating expenses which shall be
allocated based upon the relative time input of employee and/or
relative operating revenue of the respective facilities to all
facilities. Allocable costs shall not include any interest on
corporate debt (except with respect to equipment utilized at the
facility), and amortization of goodwill. All allocations will be
determined in accordance with the Corporation's allocation procedures.
33
================================================================================
AGREEMENT OF SALE
dated December 11, 1996
between
Steven Rotwein, P.T., P.C., Seller
and
New Medical Practice, P.C.
Purchaser
================================================================================
<PAGE>
AGREEMENT OF SALE
-----------------
AGREEMENT OF SALE, made December 11, 1996, among STEVEN ROTWEIN, P.T., P.C.
("Seller"), the Specialist Provider, billing entity and Medical Manager at each
of the physical therapy business locations of Sportset Physical Therapy, located
at 70 Maple Avenue, Rockville Centre, New York 11570, Sportset-Syosset Physical
Therapy located at 10 Gordon Drive, Syosset, New York 11791, Paerdegat Physical
Therapy located at 1500 Paerdegat Avenue North, Brooklyn, New York 11236 and
Atrium Physical Therapy located at 235 Mill Street, Laawrence, New York 11559,
and New Medical Practice, P.C., a New York Professional Corporation, having an
address at 2 Gannett Drive Suite 215, White Plains, NY 10604 ("Purchaser").
W I T N E S S E T H:
--------------------
WHEREAS, Purchaser desires to acquire, and Seller desires to sell, the assets of
the corporation Steven Rotwein, P.T., P.C. located at each of the four (4) sites
noted above, such corporation doing business as noted herein and hereinafter
specified, upon the terms and conditions hereinafter set forth, and
WHEREAS, Steven Rotwein is the sole shareholder of Seller,
WHEREAS, Steven Rotwein, P.T., P.C. is the Specialist Provider billing entity
and medical manager of the business locations,
NOW, THEREFORE, in consideration of the covenants and agreements hereafter set
forth, and other valuable consideration, the receipt and sufficiency of which
hereby is acknowledged, the parties hereto agree as follows:
1. Agreement To Sell. Seller agrees to sell, transfer and deliver to Purchaser,
and Purchaser agrees to purchase, upon the terms and conditions hereinafter set
forth, all of the assets of the four (4) businesses of Seller as noted herein.
2. The Assets of the Corporation. It is the understanding of the parties that
Seller is the owner of the following assets (the "Assets"):
(a) the equipment and general assets including patient files, goodwill,
name and records acquired or owned by the business on or before the
closing date (the "General Assets");
(b) the provider agreements noted in Exhibit A-1;
(c) the equipment leases, contracts and agreements described in Exhibit
A-2 hereto (the "Contracts");
2
<PAGE>
(d) the Contractual Rights which seller has with the Management
Corporations at each of the four (4) locations;
Notwithstanding anything to the contrary contained herein, there shall be
excluded from the Assets, all cash on hand and in Seller's bank accounts and all
patient receivables.
3. Purchase Price. The purchase price to be paid by Purchaser is Twenty Five
Thousand Dollars ($25,000) payable as follows:
(a) Five Thousand Dollars ($5,000) at the closing.
(b) Twenty Thousand Dollars ($20,000) on January 1, 1997
-
4. The Closing. The "closing" means the settlement of the obligations of Seller
and Purchaser to each other under this agreement, including the payment of the
purchase price to Seller as provided in Article 3 hereof and the delivery of the
closing documents provided for in Article 5 hereof. The closing shall be held at
the offices of Purchaser and shall take place on or about December 5, 1996 (the
"closing date").
5. Closing Documents. At the closing Sellers shall execute and deliver to
Purchaser:
(a) certified copies of resolutions duly adopted by the Board of Directors
and Shareholder of Seller authorizing the sale of the Assets and the
performance by Seller of its obligations hereunder
(b) an opinion of Seller's counsel, Gallagher & Matthews of 11 Clinton
Avenue, Rockville Center, NY 11570 dated as of the closing date, in
form and substance satisfactory to Purchaser's counsel, stating such
counsel's opinion that: (i) Corporation is duly organized, validly
existing and in good standing under the laws of New York; (ii) Seller
has full power and authority, corporate and otherwise, to enter into
this agreement and perform its obligations hereunder; (iii) the
execution and delivery of this agreement and the performance by Seller
of its obligations hereunder have been duly authorized by the Board of
Directors and Shareholder of Seller and no further action or approval
is required in order to constitute this agreement as the binding
obligation of Seller, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, moratorium, insolvency
or other laws affecting creditor's rights generally; (iv) the
execution and delivery of this agreement and the performance by Seller
of its obligations hereunder do not and will not violate any provision
of the Certificate of Incorporation or Bylaws of Seller; and (v)
except as may be set forth in this agreement, such counsel is not
representing Seller in any suit, action or proceeding against them
which, if adversely determined, would prohibit the consummation of the
transactions contemplated by this agreement, nor is counsel aware of
any other
3
<PAGE>
suits, actions or proceedings which would affect this transaction.
(c) the Certificate of Incorporation, Bylaws, filing receipt and other
organizational documents of Seller; any bills, vouchers, and records
showing the ownership of the Assets used in the operations of Seller;
and all other books of account, records and contracts of Seller;
appropriate documentation evidencing the Management Companies'
relationship with Seller and the Assets, including such documentation
as is required to transfer Seller's interest in such Assets,
(d) Restrictive Covenant as enumerated in Article Nine (9),
(e) Statement executed by Seller, releasing and indemnifying Purchaser
from any and all obligations and liabilities of Seller, other than
those specifically assumed herein,
(f) such other instruments and information in form and substance
satisfactory to Purchaser's attorneys as may be necessary or proper to
transfer to Purchaser good and marketable title to all other ownership
interests in the Assets to be transferred under this agreement.
At the closing Seller shall deliver to Purchaser all keys for the businesses. If
any keys for the businesses or Assets are held by employees or others, Seller
shall identify such individuals, their addresses and their relationship to the
Seller. Seller shall do all further acts and things as may be necessary, or
reasonably requested by Purchaser, to consummate the transactions contemplated
by this agreement, including the acquisition of and possession of the Assets.
Seller shall advise Purchaser of, and cause to be delivered to Purchaser, all
applicable trade secrets and proprietary information pertaining to the Assets of
the businesses.
Except as expressly provided herein, Purchaser shall not be obligated to pay or
perform any obligations or liabilities of or Seller including without
limitation, obligations or liabilities of Seller to its creditors or any legal,
accounting, brokerage or finder's fees or any taxes or other expenses in
connection with this agreement or the consummation of the transactions
contemplated hereby.
Purchaser shall execute and deliver to Seller:
Reciprocal documentation and Counsel opinion, as noted in sub paragraphs (a),
(b), (c) above.
6. Representations And Warranties Of Sellers. Seller represents and warrants to
Purchaser as follows:
(a) Seller is a corporation duly organized and validly existing under the
laws of New York, and is duly qualified to do business in New York.
Seller has full power and authority to own its properties and to
conduct its businesses as now carried on, and
4
<PAGE>
to carry out and perform its undertakings and obligations as provided
herein. The execution and delivery by Seller of this agreement and the
consummation of the transactions contemplated herein have been duly
authorized by the Board of Directors and Shareholder of Seller and
will not conflict with or breach any provision of the Certificates of
Incorporation or Bylaws of Seller, and do not and will not conflict
with or result in any breach of any condition or provision of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon the Assets by reason of the
provisions of any contract, lien, lease, agreement, instrument or
judgment to which Seller is a party, or which are or purport to be
binding upon Seller or which affect or purport to affect the Assets.
No further action or approval, corporate or otherwise, is required in
order to constitute this agreement the binding and enforceable
obligation of Seller.
(b) No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any
governmental or quasi-governmental agency, commission, board, bureau
or instrumentality, is necessary for Seller to constitute this
agreement the binding and enforceable obligation of Seller or to
consummate the transactions contemplated hereby.
(c) Seller is the owner of and has good and marketable title to the
Assets, free of all liens, claims and encumbrances, except as set
forth herein.
(d) There are no violations, potential claims of violations or questions
of irregularity regarding any law or governmental rule or regulation
pending or, to the best of Seller's knowledge, threatened against
Seller, or the Assets. Seller has complied with all laws and
governmental rules and regulations applicable to the businesses or the
Assets. Seller has duly notified all insurance carriers or third party
payers of any suspected or known claims or potential claims which may
be asserted against Seller or the Assets.
(e) There are no judgments, liens, suits, actions or proceedings pending
or, to the best of Seller's knowledge, threatened against Seller, or
the Assets. Neither Seller nor the Assets are a party to, subject to
or bound by any agreement or any judgment or decree of any court,
governmental body or arbitrator which would conflict with or be
breached by the execution, delivery or performance of this agreement,
or which could prevent the carrying out of the transactions provided
for in this agreement, or which could prevent the use by Purchaser of
the Assets or adversely affect the conduct of the businesses by
Purchaser.
(f) Seller has not entered into, and the Assets are not subject to, any:
(i) written contract or agreement for the employment of any employee
of the business; (ii) contract with any labor union or guild; (iii)
pension, profit-sharing, retirement, bonus, insurance, or similar plan
with respect to any employee of the business; or
5
<PAGE>
(iv) similar contract or agreement affecting or relating to the
Assets.
(g) At the time of the closing, there will be no (secured or unsecured)
creditors of Seller. General business creditors and equipment lessors
are listed in Exhibit A-3 attached hereto. Except as set forth herein,
Seller shall be liable for all other obligations incurred by Sellers
prior to closing.
(h) Identified Contracts and Equipment Leases are in full force and effect
and without any default by Seller or thereunder. All copies of the
Contracts and Leases provided by Seller to Purchaser are true and
complete copies of the original Contracts. Seller is not indebted
under any executory Contracts or Leases, except as may be set forth in
Exhibit A-3 hereto.
(i) Seller has filed each tax return, including without limitation all
income, excise, property, capital gain, sales, franchise and license
tax returns, required to be filed by Seller prior to the date hereof.
Each such return is true, complete and correct, and Seller has paid
all taxes, assessments and charges of any governmental authority
required to be paid by them and have created reserves or made
provision for all taxes accrued but not yet payable. No government is
now asserting, or to Seller's knowledge threatening to assert, any
deficiency or assessment for additional taxes or any interest,
penalties or fines with respect to Seller. Seller's federal tax
identification numbers is _________________. Seller shall hold
Purchaser harmless and indemnify Purchaser against all claims for
taxes due from and owed by Seller.
At the closing Seller shall execute and deliver an affidavit setting forth the
above representations as of the date of the closing.
7. Representations And Warranties Of Purchaser. Purchaser represents and
warrants to Seller as follows:
(a) Purchaser is a corporation organized under the laws of New York, and
is duly qualified to do business in New York. Purchaser has full power
and authority to carry out and perform its undertakings and
obligations as provided herein. The execution and delivery by
Purchaser of this agreement and the consummation of the transactions
contemplated herein have been duly authorized by the Board of
Directors of Purchaser and will not conflict with or breach any
provision of the Certificate of Incorporation or Bylaws of Purchaser.
No further action or approval, corporate or otherwise, is required in
order to constitute this agreement the binding and enforceable
obligation of Purchaser.
(b) No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any
governmental or quasi-
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governmental agency, commission, board, bureau or instrumentality, is
necessary for Purchaser to constitute this agreement the binding and
enforceable obligation of Purchaser or to consummate the transactions
contemplated hereby.
(c) There are no violations, potential claims of violations or questions
of irregularity regarding any law or governmental rule or regulation
pending or, to the best of Purchaser's knowledge, threatened against
Purchaser. Purchaser has complied with all laws and governmental rules
and regulations applicable to the business. Purchaser has duly
notified all insurance carriers or third party payers of any suspected
or known claims or potential claims which may be asserted against
Purchaser.
(d) There are no judgments, liens, suits, actions or proceedings pending
or, to the best of Purchaser's knowledge, threatened against
Purchaser. Purchaser is not a party to, subject to or bound by any
agreement or any judgment or decree of any court, governmental body or
arbitrator which would conflict with or be breached by the execution,
delivery or performance of this agreement, or which could prevent the
carrying out of the transactions provided for in this agreement.
(e) Purchaser has filed each tax return, including without limitation all
income, excise, property, capital gain, sales, franchise and license
tax returns, required to be filed by Purchaser prior to the date
hereof. Each such return is true, complete and correct, and Purchaser
has paid all taxes, assessments and charges of any governmental
authority required to be paid by them and have created reserves or
made provision for all taxes accrued but not yet payable. No
government is now asserting, or to Purchaser's knowledge threatening
to assert, any deficiency or assessment for additional taxes or any
interest, penalties or fines with respect to Purchaser. Purchaser's
federal tax identification numbers is _________________. Purchaser
shall hold Seller harmless and indemnify Seller against all claims for
taxes due from and owed by Purchaser.
8. Conditions To Closing. The obligations of Purchaser to close hereunder are
subject to the following conditions:
(a) All of the terms, covenants and conditions to be complied with or
performed by Seller under this agreement on or before the closing
shall have been complied with or performed in all material respects.
(b) All representations or warranties of Seller herein are true in all
material respects as of the closing date. Such representations and
warranties shall also survive closing.
(c) Satisfactory results of financial audit, as required by Purchaser.
(d) All Assets are in good working order, as applicable.
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(e) On the closing date, there shall be no liens or encumbrances against
the Assets, except as provided for herein.
(f) The businesses of Seller have been conducted only in the ordinary
course of business. No contracts or purchase agreements/orders will
have been entered into, other than in the ordinary course of business.
No expenditures or credit purchases will be made by Seller other than
in the ordinary course of business.
(g) Seller, and its representatives and advisors will supply, upon request
by Purchaser and its representatives, such pertinent information as
may be required by Purchaser in order to conduct its due diligence
survey of Seller. It is agreed that any documents or information
provided hereunder shall be kept in full and complete confidence.
If this agreement is terminated as provided above in this Article 9, Seller
shall return any payments made by Purchaser on account of the purchase price,
whereupon all rights of Purchaser hereunder and to the businesses shall
terminate, and neither Seller nor Purchaser shall have any further claim against
the other hereunder.
9. Restrictive Covenant Not to Compete. Seller will not, for a period of four
(4) years from the date of closing, either directly or indirectly, engage in the
management or practice of physical therapy or related services, within lower
Westchester County, NY (up to and including latitude of White Plains, NY),
Fairfield County, CT and within a ten (10) mile radius of Seller's current
addresses as listed herein. Sellers shall execute at closing, such documents as
will evidence this surviving provision. To the extent a court of competent
jurisdiction determines this provision to be too restrictive, the Parties agree
to abide by any modification acceptable to such court.
10. Indemnification. Each party hereto shall indemnify and hold the other
parties harmless from and against all liability, claim, loss, damage or expense,
including reasonable attorneys' fees, incurred or required to be paid by such
other parties by reason of any breach or failure of observance or performance of
any representation, warranty, covenant or other provision (including lists and
Exhibits) of this agreement by such party. Seller shall indemnify and hold
Purchaser harmless against all actions, suits, proceedings, judgments, costs and
expenses incurred by or levied against Purchaser, due to Seller's prior acts,
omissions, negligence or other wrongful conduct. Purchaser shall indemnify and
hold Seller harmless against all actions, suits, proceedings, judgments, costs
and expenses incurred by or levied against Seller, due to Purchaser's acts,
omissions, negligence or other wrongful conduct.
11. Risk Of Loss. The risk of loss to the Assets of the businesses sold
hereunder, until the closing, is assumed and shall be borne by Seller. Seller
agrees to keep all of its Assets fully insured against any loss, either by fire,
theft or casualty, to the date of closing. In the event that prior to closing,
such Assets are totally or substantially damaged by reason of fire, theft or
casualty, Purchaser may, in its sole discretion, terminate the within
transaction. In such case, all money heretofore deposited
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with Seller or Seller's representative shall be refunded to Purchaser and the
parties shall be released from any further liability hereunder. If the Purchaser
elects to consummate this transaction despite such loss or damage, it may do so
by paying the purchase price set forth herein, reduced by any insurance proceeds
received by Seller.
12. Brokerage. The parties hereto represent and warrant to each other that they
have not dealt with any broker or finder in connection with this agreement other
than American Health Resources, LLC. Purchaser and Seller shall indemnify,
defend and hold each other harmless from and against any loss, cost, expense,
claim or liability (including, without limitation, reasonable attorney's fees)
arising under or in respect of any claim by any person or entity for any
commission, fee or expense in respect of the transaction contemplated by this
Agreement, where such claim is based in whole or in part upon any act of the
indemnifying party or its representatives. The provisions of this Article shall
survive the expiration, termination or cancellation of this Agreement, but shall
not be construed as a covenant for the benefit of any third party.
13. Individual Seller. Steven Rotwein hereby confirms all of the representations
and warranties contained herein, and agrees to indemnify and hold Purchaser
harmless from and against misrepresentation or breach of any warranty by Seller
or any breach or failure by Seller to comply with any term, covenant or
condition of this agreement. Shareholder represents and warrants that he is the
shareholder of Seller, and that he has full power and authority to carry out and
perform the undertakings and obligations as provided herein. Shareholder agrees
as aforesaid to induce Purchaser to enter into this agreement. No action or
inaction of Seller or Purchaser, including the giving of notices, shall affect,
change or discharge the obligations of the Purchaser's Guarantor hereunder.
14. Notices. All notices, demands and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
properly given if delivered by hand or by registered or certified mail, return
receipt requested, with postage prepaid, to Seller's attorneys, Gallagher &
Matthews at 11 Clinton Avenue, Rockville Center, NY 11570, and to Purchaser's
attorney, Frederick C. Veit, Esq., at 2 Gannett Drive Suite 215, White Plains,
NY 10604. The respective attorneys for the parties hereby are authorized to give
any notice required or permitted hereunder and to agree to adjournments of the
closing.
15. Survival. The representations, warranties and covenant contained herein or
in any document, instrument, certificate or schedule furnished in connection
herewith shall survive the delivery of the Bill of Sale and shall continue in
full force and effect after the closing, except to the extent waived in writing.
16. Further Assurances. In connection with the transactions contemplated by this
agreement, the parties agree to execute and deliver such further instruments,
and to take such further actions, as may be reasonably necessary or proper to
effectuate and carry out the transactions contemplated in this agreement.
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17. Changes Must Be In Writing. No delay or omission by either Seller or
Purchaser in exercising any right shall operate as a waiver of such right or any
other right. This agreement may not be altered, amended, changed, modified,
waived or terminated in any respect or particular unless the same shall be in
writing signed by the party to be bound. No waiver by any party of any breach
hereunder shall be deemed a waiver of any other or subsequent breach.
18. Captions And Exhibits. The captions in this agreement are for convenience
only and are not to be considered in construing this agreement. The Exhibits
annexed to this agreement are an integral part of this agreement, and where
there is any reference to this agreement it shall be deemed to include said
Exhibits.
19. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
20. Binding Effect. This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
21. Cancellation. Purchaser reserves the right to cancel this Agreement, without
penalty, if any negative disclosure is discovered regarding Seller, Rotwein or
their Assets, which would materially affect the value of Seller's Assets.
Purchaser forfeits all rights to cancel, subsequent to actual closing.
22. Confidentiality. Each party acknowledges and agrees that any information or
data it has acquired from the other party, not otherwise properly in the public
domain, was received in confidence. Each party hereto agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement (including conducting due diligence or notifying a party's
lender), or use to the detriment of the disclosing party or for the benefit of
any other person or persons, or misuse in any way, any confidential information
of the disclosing party concerning the subject matter hereof, including any
trade or business secrets of the disclosing party and any technical or business
materials that are treated by the disclosing party as confidential or
proprietary, including without limitation information (whether in written, oral
or machine readable form) concerning: general business operations: methods of
doing business, servicing clients, client relations, and of pricing and making
charge for services and products; financial information, including costs,
profits and sales; marketing strategies; business forms developed by or for the
disclosing party; names of suppliers, personnel, clients and potential clients;
negotiations or other business contacts with suppliers, personnel, clients and
potential clients; form and content of bids, proposals and contracts; the
disclosing party's internal reporting methods; technical and business data and
documentation; software programs, however embodied; diagnostic techniques; and
information obtained by or given to the disclosing party about or belonging to
third parties.
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IN WITNESS WHEREOF, the parties have executed this agreement the date first
above written.
SELLER:
STEVEN ROTWEIN, P.T., P.C.
ATTEST:
By /s/ Steven Rotwein
------------------
Steven Rotwein
By /s/
- ---------------------------
Secretary
PURCHASER:
OAK TREE MEDICAL MANAGEMENT, INC.
ATTEST:
By /s/
------------------
President
By /s/
- ---------------------------
Secretary
SHAREHOLDER:
By /s/ Steven Rotwein
------------------
Steven Rotwein
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STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the day of November, 1996, before me personally came Steven Rotwein, to me
known, who being duly sworn, did depose and say that he resides at
; that he is the President Steven Rotwein, P.T., P.C.,
the corporation described in and which executed the foregoing Agreement of Sale;
and that he signed his name thereto by the order of the board of directors of
the said corporation.
/s/
-------------------------------
Notary Public
My commission expires on
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the day of November, 1996, before me personally came William Kedersha, to me
known, who being duly sworn, did depose and say that he resides at
;that he is the President of Oak Tree Medical
Management, Inc. the corporation described in and which executed the foregoing
Agreement of Sale; and that he signed his name thereto by the order of the board
of directors of the said corporation.
/s/
-------------------------------
Notary Public
My commission expires on
STATE OF NEW YORK, COUNTY OF WESTCHESTER, SS.:
On the day of November, 1996, before me personally came Steven
Rotwein, to me known to be the individual described in and who executed the
foregoing Agreement of Sale, and acknowledged that he executed said Agreement of
Sale.
/s/
-------------------------------
Notary Public
My commission expires on
12
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EXHIBIT A-1
Provider Agreements
12
<PAGE>
EXHIBIT A-2
Equipment, Leases, Contracts
13
Frederick C. Veit
ATTORNEY AT LAW
21 GORDON AVENUE
BRIARCLIFF MANOR, NEW YORK 10510
Admitted to NY, NJ, CT & DC Bars Telephone (914) 762-8824
Fax (914) 923-1744
John Matthews, Esq. December 26, 1996
Gallagher & Matthews
11 Clinton Avenue
Rockville Centre, NY 11570
Re: Modification of Agreement of Sale dated December 11, 1996, between Sellers
Southern Professional Associates, Inc., Northern Professional Associates, Inc.,
Maple Health, Inc., Shareholders Gentile, O'Neill, Einemann and Posner and Oak
Tree Medical Management, Inc., Purchaser
Dear Mr. Matthews:
Pursuant to our clients' agreement to modify the terms of the above noted
Agreement of Sale, I have enclosed a new Promissory Note and four (4) original
copies of the Security Agreement. The terms of the original Promissory Note have
changed such that instead of borrowing $500,000.00 Oak Tree Medical Management
is borrowing $300,000.00 with the balance of $200,000.00 being paid to Sellers
in the form of Oak Tree Medical Systems, Inc. stock. Also, Oak Tree Medical
Management, Inc. will be paying $14,735.81 per month for twenty three (23)
months in order to retire the Note. You should hold the new Promissory Note in
escrow until the original Note ($500,000) is returned to me.
Please have your clients sign all four originals of the Security Agreement and
return two (2) fully executed originals to me. You should also hold these
Security Agreements in escrow until the former originals are returned to me.
As concerns the stock, Oak Tree Medical Systems, Inc. will issue 33,333 shares
of its common stock to Sellers in satisfaction of Oak Tree Medical Management's
remaining $200,000.00 obligation to Sellers. If during the next eighteen (18)
months from December 11, 1996, the common stock reaches a trading price of seven
($7.00) dollars per share or more, and remains at that level for at least one
full business week (M-F) during the eighteen month term, then the 33,333 shares
of the common stock issued will have satisfied the $200,000.00 balance due,
under the terms of the Agreement of Sale.
<PAGE>
If, during the eighteen (18) month term, the common stock never reaches the
seven ($7.00) dollar per share threshold for one week, then an additional 8,772
shares of Oak Tree Medical Systems, Inc. common stock will be issued to Sellers
in satisfaction of the purchase price balance of $200,000.00.
Please acknowledge, on behalf of your clients, your agreement with this
modification of the Agreement of Sale terms, as contained herein.
Most Sincerely,
/s/ Frederick C. Veit
- ---------------------
Frederick C. Veit
_______________________
John Matthews, Esq.
EXHIBIT 99
FOR IMMEDIATE RELEASE CONTACT
WILLIAM KEDERSHA, CEO
OAK TREE MEDICAL SYSTEMS, INC.
(914) 694-2500
OAK TREE MEDICAL SYSTEMS, INC. CONCLUDES PURCHASE OF FOUR LONG
ISLAND, NY BASED PHYSICAL THERAPY FACILITIES
WHITE PLAINS, NEW YORK, December 12, 1996--Oak Tree Medical Systems, Inc.
(MOAK:BB) announced completion of its acquisition of four Long Island, NY, based
physical therapy Facilities, located in Brooklyn, Syosset, Lawrence, and
Rockville Centre, and one medical billing company with gross billing of
approximately $3 million. The four clinics produced profits of approximately
$550,000 in the most recent fiscal year. The assets and related management
contracts were acquired for $1.5 million in cash and stock.
Commenting on the transaction, William Kedersha, Chief Executive Officer of the
Company, said: "With this acquisition, Oak Tree Medical Systems, Inc. continues
its growth strategy in the New York Metropolitan area." The Long Island
purchases enhance the company's New York holdings, bringing the total number of
physical therapy/physical rehabilitation facilities to eleven.
Oak Tree Medical Systems, Inc. operates physical therapy clinics and
comprehensive outpatient rehabilitation facilities, and manages related medical
practices, in Florida and New York.
