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: May 29, 1998
(Date of earliest event reported)
CANCER TREATMENT HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
0-16964 87-0410907
(Commission File Number) (IRS Employer Identification No.)
4491 South State Road Seven, Suite 200
Ft. Lauderdale, Florida 33314
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (954) 321-9555
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Item 2. Acquisition or Disposition of Assets.
On May 29, 1998, Cancer Treatment Holdings, Inc. ("CTH") sold all of
its operating subsidiaries and related assets (except as stated below) to
Greenstar Holdings, Inc. and Homecare Holdings, Inc. Homecare Holdings, Inc.
purchased the home health operating companies (Med Tech Services of South
Florida, Inc., Med Tech Services of Palm Beach, Inc., and Advanced Oncology
Services, Inc.). Greenstar Holdings, Inc. purchased the balance of the CTH
operating subsidiaries. CTH retained one subsidiary (CTI Management, Inc., a
small management-services company), and a commercial condominium unit with a
fair market value estimated by management to be approximately $190,000. The
purchase price paid to CTH was $2,810,000, of which $500,000 was placed in
escrow and is to be released to CTH upon consummation of the transfer of two
subsidiary companies that are developing oncology treatment centers in West
Virginia, for which regulatory approval is being sought. The management of CTH
assumes the regulatory approvals required for the transfer of the West Virginia
facilities will be received during the third calendar-quarter of 1998. The
Buyers also assumed certain liabilities and guarantees of CTH, including the
payment of $500,000 owed by CTH to its Chief Executive Officer.
Management of CTH believes that the exchange of the purchase price for
the assets and liabilities transferred to the Buyer, together with CTH's
transaction costs, will not result in a material gain or loss for CTH. The
purchase price for the assets and liabilities was negotiated on an arms-length
basis, and is supported by a fairness opinion.
Louis Boisvert, III, CTH's chief financial officer, resigned from CTH
in advance of the closing of the sale. Mr. Boisvert informed CTH during the
negotiation of the sale and again at the closing of the sale that he is the
principal shareholder and the chief executive officer of Homecare Holdings, Inc.
Barry Stark, who is a principal in the accounting and consulting firm of Stark &
Bennett, P.A., is the chief executive officer of Greenstar Holdings, Inc. Stark
& Bennett, P.A. has provided consulting services to the subsidiary companies
acquired by Homecare Holdings, Inc., but not to any of the CTH subsidiaries that
were acquired by Greenstar Holdings, Inc.. Mr. Stark is neither a shareholder
nor officer of Homecare Holdings, Inc.
Pursuant to the terms of the Purchase Agreement, CTH's potential
liability to the Buyers under the Purchase Agreement is limited to $1.5 million
for six months, $750,000 after six months until the first anniversary of the
sale's closing, and zero thereafter. The Purchase Agreement requires CTH to
retain assets of $1.5 million ($500,000 in cash) for the initial six months
after the closing of the sale, and $750,000 ($375,000 in cash) thereafter until
the first anniversary after the closing of the sale.
The lease for CTH's headquarter space was assigned to Greenstar
Holdings, Inc. Greenstar Holdings, Inc. has agreed to allow CTH's Chief
Executive Officer to temporarily use certain office space in the headquarter
offices. CTH may relocate its offices. Currently, CTH's only officers are its
Chief Executive Officer and President, Ullrich Klamm, and its Secretary, Carol
O'Donnell.
CTH's Board of Directors intends to consider proposals presented to CTH
regarding use of the funds for items that may include future operations,
liquidation and distribution of funds as available to be distributed consistent
with CTH's obligations under the Purchase Agreement, and other proposals that
may come before it regarding the use of the proceeds of the sale.
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CTH has been advised that currently it is below the American Stock
Exchange's listing guidelines, and there can be no assurances that CTH's listing
will be continued.
Item 7. Financial Statements and Exhibits.
Exhibit 10.10 Copy of Purchase Agreement.
Exhibit 10.11 Fairness Opinion
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 hereunto duly authorized.
CANCER TREATMENT HOLDINGS, INC.
By: /S/CAROL O'DONNELL
---------------------------
Carol O'Donnell, Secretary
Date: June 11 , 1998.
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
10.10 Copy of Purchase Agreement.
10.11 Fairness Opinion.
Exhibit 10.10
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") made this ____ day of May, 1998,
by and among GREENSTAR HOLDINGS, INC., a Florida corporation ("Buyer"), and
CANCER TREATMENT HOLDINGS, INC., a Nevada corporation ("CTH") and ADVANCED
ONCOLOGY SERVICES, INC., a Florida corporation ("AOS"), (CTH and AOS are
sometimes referred to herein jointly and severally as"Seller").
RECITALS:
A. Seller desires to sell to Buyer substantially all of the assets of
Seller used or held for use in the conduct of Seller's and each "Affiliates'"
(as hereinafter defined) business (the "Business"), and Buyer desires to
purchase such assets , and to assume certain specified liabilities of Seller, on
the terms and conditions hereinafter set forth.
B. CTH owns, or as of the Closing shall own, one hundred percent of the
issued and outstanding shares of each of the entities set forth on EXHIBIT A
attached ("CTH Subsidiaries").
C. Cancer Treatment Inc. ("CTI") owns, or as of the Closing shall own,
one hundred percent (100%) of the issued and outstanding shares of CTI of Palm
Beach, Inc. and AOS.
D. AOS owns, or as of the Closing shall own, one hundred percent (100%)
of the issued and outstanding shares of: (i) Med Tech Services of South Florida,
Inc., a Florida corporation ("MTSSF"); and (ii) Med Tech Services of Palm Beach,
Inc., a Florida corporation ("MTSPB").
E. SCHEDULE 4.1(A) attached hereto sets forth a true and complete
organizational chart of the Seller and each of the entities set forth on
SCHEDULE 4.1(A) hereto as of the date hereof. SCHEDULE 4.1(B) attached hereto
sets forth a true and complete organizational chart of the Seller and each of
the entities set forth on SCHEDULE 4.1(B) hereto as of the Closing Date. Each of
the entities other than CTH and CTI Management, Inc. ("CTIM") set forth on
SCHEDULE 4.1(A) and 4.1(B) are hereinafter jointly and severally referred to as
an "Affiliate".
F. It is anticipated that as of the "Closing" (as hereinafter defined),
the Seller shall not have been able to obtain the "Regulatory Approvals" (as
hereinafter defined) with respect to CTI of West Virginia, Inc. ("Logan") and
Ambergris, Inc. ("Martinsburg") ("Deferred Assets") and the parties desire to
set forth a method for the Buyer to acquire the Deferred Assets subsequent to
the Closing, subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
1. TRANSFERRED AND EXCLUDED ASSETS.
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1.1 TRANSFERRED ASSETS. Seller agrees to sell, transfer,
convey, assign and deliver to Buyer, and Buyer agrees to purchase and accept
from Seller all of Seller's right, title, and interest in and to the Transferred
Assets. The consummation of the sale and purchase of the Transferred Assets
shall occur at the "Closing" (as defined below). Except as provided in Section
1.2 hereof, "Transferred Assets" shall mean all of the following assets and
rights, wherever located and whether or not recorded on Seller's books:
(a) FIXED ASSETS, MACHINERY AND EQUIPMENT All fixed
assets, machinery and equipment (including office furniture and equipment and
computer equipment and Seller's interest in computer software), fixtures,
leasehold improvements, tools, vehicles, parts and supplies that are necessary
to conduct, or are used or held for use in the conduct of the Business;
(b) INVENTORY. All inventory of merchandise and goods
used or held for use in the conduct of the Business ("Inventory");
(c) CONTRACTS. All rights and interests of Seller in
and to all executory contracts, agreements and arrangements, including, without
limitation, those identified on SCHEDULE 1.1, 2.1, 4.9, 4.16, 4.17 AND 4.19
attached hereto (the "Contracts");
(d) PERMITS. To the extent assignable, all rights and
interests of Seller under all permits, licenses and approvals necessary for the
conduct of the Business, including without limitation, those items identified on
SCHEDULE 4.13 attached hereto;
(e) DOCUMENTS AND RECORDS. Copies of all documents
and records of Seller relating to the operation of the Business and originals of
all documents and records relating to Seller's ownership, use, maintenance, or
repair of any of the Transferred Assets including, without limitation, sales and
cost records, inspection records, inventory records, employee and payroll
records, customer records and files, lists of suppliers and related files, all
financial, tax, sales tax exemption certificates and other books and records
that Buyer, in its good faith judgment, determines to be necessary for the
operation of the Business by Buyer after the Closing Date;
(f) INTELLECTUAL PROPERTY. All customer lists and
records, trade secrets, technology, know-how, computer records (including
without limitation, all computer data relating to contracts, agreements or
commitments with customers or suppliers, and the Seller's interest in software
used to store and retrieve any such data), Seller's interest in the trade name
"Cancer Treatment Holdings" (and any variation thereof) and other intellectual
property of any kind or description used by Seller in the conduct of the
Business;
(g) RECEIVABLES. All of Seller's accounts and notes
receivable;
(h) PREPAID EXPENSES AND DEPOSITS. All of Seller's
prepaid expenses, deposits and cash-on-hand at the Closing (including deposits
in bank accounts);
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(i) STOCK IN SUBSIDIARIES. One hundred percent (100%)
of the issued and outstanding capital stock of:
(1) the CTH Subsidiaries; and
(2) AOS.
(j) REAL PROPERTY. All real property leases and
improvements and appurtenances associated therewith or owned by the Seller
("Real Property");
(k) ASSETS REFLECTED ON FINANCIAL STATEMENT. Except
to the extent such constitutes "Excluded Assets" as set forth in Paragraph 2
below, all the assets reflected on the February 28, 1998 Financial Statements
reported on Form 10-QSB of the Seller for the period ending February 28, 1998,
as filed with the SEC; and
(l) LEADER AND SC INCLUDED ASSETS. "Leader" and
"SC's" (as those terms are defined in Paragraph 1.2 below) cash and cash
equivalents including, without limitation, their respective accounts receivable
("Leader and SC Included Assets").
1.2 EXCLUDED ASSETS. Notwithstanding the foregoing, the
following assets of Seller (the "Excluded Assets") will not be purchased by or
transferred to Buyer and will not be included in the Transferred Assets:
(a) Any of the stock of Leader Healthcare Center,
Inc., a Florida corporation ("Leader"), Southern Cross Home Health, Inc. ("SC")
or CTIM.
(b) Assets of Leader and SC exclusive of the Leader
and SC Included Assets.
(c) Commercial condominium unit located at 4340
Sheridan Street, Hollywood, Florida.
(d) The directors, officers and corporate liability
insurance issued by National Union Fire Insurance Company of Pittsburgh,
Pennsylvania, relating solely to CTH.
2. ASSUMED AND EXCLUDED LIABILITIES.
2.1 ASSUMPTION OF LIABILITIES. Simultaneously with the
transfer of the Transferred Assets on the Closing Date in accordance with this
Agreement, Buyer shall assume the liabilities and obligations of Seller
identified on SCHEDULE 2.1 attached hereto and shall, subject to the
indemnifications set forth in this Agreement, acquire the stock of the CTH
Subsidiaries and AOS, all subject to the obligations of the Affiliates
(together, the "Assumed Liabilities"). Notwithstanding anything in this
Agreement to the contrary, the "Corporate Guaranty" set forth in Paragraph 2 of
SCHEDULE 2.1(A) shall not be deemed an Assumed Liability until the Deferred
Asset Closing and in
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the event the Buyer does not purchase the Deferred Assets by the Deferred Asset
Closing, then the Corporate Guaranty shall be deemed an Excluded Liability.
2.2 EXCLUDED LIABILITIES. Except for the liabilities and
obligations expressly assumed by Buyer in Section 2.1, Buyer shall not assume or
be responsible for any liabilities or obligations of Seller or any predecessor
of Seller, regardless of nature, whether accrued, absolute, contingent, known or
unknown including but not limited to any liabilities for accrued payroll, taxes,
payables to related parties, debt of Seller, and any litigation ("Excluded
Liabilities").
3. CALCULATION AND PAYMENT OF PURCHASE PRICE.
3.1 PURCHASE PRICE; TERMS OF PAYMENT. The purchase price
("Purchase Price") for the Transferred Assets shall be Two Million Eight Hundred
Ten Thousand Dollars ($2,810,000).
The Purchase Price shall be paid as follows:
(a) the Buyer has deposited the sum of Fifty Thousand
Dollars ($50,000) ("Deposit") with Ruden, McClosky, Smith, Schuster & Russell,
P.A. ("Escrow Agent"), which Deposit shall be paid toward the Purchase Price at
the Closing or disbursed to Seller or Buyer in accordance with the terms of this
Agreement;
(b) the payment by Buyer to Escrow Agent of the sum
of Five Hundred Thousand Dollars ($500,000) ("Deferred Assets Escrow") which
shall be paid by Escrow Agent to Seller at the "Deferred Assets Closing" (as
hereinafter defined) or, subject to the provisions of Section 25(iii) hereof,
paid to the Buyer in the event the Deferred Assets Closing has not taken place
on or prior to September 30, 1998.
(c) the payment by Buyer to CTH at the "Closing",
which shall be made in immediately available United States dollars by wire
transfer to a bank account designated by Seller, of Two Million Two Hundred
Sixty Thousand Dollars ($2,260,000.00).
3.2 ALLOCATION. The Purchase Price shall be allocated among the
Transferred Assets in the manner indicated on SCHEDULE 3.2 attached hereto. The
Seller and Buyer hereby covenant and agree that they will not take a position on
any income tax return (including any report filed on Internal Revenue Service
Form 8594), before any governmental agency charged with the collection of any
income tax or in any judicial proceeding that is in any way inconsistent with
the terms of this Section 3.2.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller represents and
warrants to Buyer that the following statements are true, accurate and complete
as of the date hereof and the Closing Date (and the Deferred Assets Closing with
respect to the Deferred Assets):
4.1 ORGANIZATION STANDING; CORPORATE POWER. Seller and each
Affiliate are entities duly organized, validly existing, and in good standing
under the laws of their respective states of incorporation and each has the full
power to carry on the Business as now conducted. Seller
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and each Affiliate are duly qualified to do business as a foreign corporation in
all jurisdictions in which it is required to be so qualified, except in such
jurisdictions where the failure to qualify will not have a material adverse
effect on the Business as a whole. Neither Seller nor any Affiliate is
restricted by any agreement or understanding with third parties or by any writs,
judgments or orders of any judicial or administrative body from carrying on the
Business anywhere in the world. Except as disclosed on SCHEDULE 4.1(A) attached
hereto with respect to the period prior to Closing and 4.1(B) attached hereto as
of the Closing, neither Seller nor any Affiliate participates, nor has any
equity interest in any joint venture or collective production, sales or
marketing arrangement or agreement. Seller and each Affiliate own the interests
in the entities as shown on SCHEDULE 4.1(A) attached hereto with respect to the
period prior to Closing and 4.1(B) attached hereto as of the Closing.
4.2 AUTHORIZATION. The execution, delivery, and performance of
this Agreement has been duly authorized and approved by Seller's Board of
Directors. Seller has full corporate power and authority, and full legal right,
to execute and deliver this Agreement and the other instruments and agreements
for which provision is made herein and to perform its obligations under this
Agreement and such other instruments and agreements. This Agreement constitutes
the valid and binding obligation of Seller, and, upon execution and delivery by
Seller, the other instruments for which provision is made herein will constitute
valid and binding obligations of Seller, enforceable against Seller in
accordance with the terms thereof except as enforcement may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer or similar laws
affecting the rights of creditors generally or by the application of equitable
principles. SCHEDULE 4.2 attached hereto contains copies of resolutions adopted
by Seller's Board of Directors, certified by the Secretary or an Assistant
Secretary of Seller approving the execution and delivery of this Agreement and
the performance by Seller of its obligations under this Agreement.
4.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the
execution and delivery by Seller of this Agreement or any instrument for which
provision is made herein, nor the performance by Seller of all of its
obligations under this Agreement or any instrument for which provision is made
herein, will (a) result in a violation of applicable statute, ordinance, rule,
or regulation, order, judgment, writ or decree of any court or governmental or
regulatory body applicable to it or any Affiliate, or by which any of the
Transferred Assets may be bound; (b) conflict with its articles of incorporation
or by-laws (or similar charter documents); or (c) other than as set forth on
SCHEDULE 4.3 attached hereto ("Consents"), result in the breach of, or
constitute a default under, any agreement or instrument to which Seller, or any
Affiliate, is a party, or by which Seller or any Affiliate or any of the
Transferred Assets is bound. Other than as set forth on SCHEDULE 4.13 attached,
no action, approval, consent or authorization by any governmental agency,
commission, board, bureau or instrumentality is required of Seller, or any
Affiliate, in order to consummate the transactions contemplated by this
Agreement. Seller shall promptly seek and diligently pursue obtaining the
Consents and shall deliver evidence of all such Consents it receives to the
Buyer at or prior to the Closing; it being acknowledged and agreed that in the
event Seller shall fail by the Closing to obtain and deliver to Buyer all the
Consents and all of the "Regulatory Approvals" (as defined in Paragraph 4.13
below) despite the good faith diligent effort of the Seller, then Buyer shall
have the right to terminate this Agreement and receive the return of the
Deposit; provided, however,
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with respect to the Deferred Assets, Seller shall have until the Deferred Asset
Closing to obtain the Regulatory Approvals applicable to the Deferred Assets.
4.4 FINANCIAL STATEMENTS. The consolidated balance sheets of
Seller and each Affiliate as of May 31, 1995, 1996 and 1997 and February 28,
1998 together with the related consolidated statements of income, and
consolidated statements of shareholders' equity (deficiency), and changes in
financial position for each of the years, and interim periods then ended,
together with the notes thereto (the "Financial Statements") have been provided
by Seller to Buyer and are attached hereto as SCHEDULE 4.4. The Financial
Statements have been prepared in accordance with historical accounting practices
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis and, to the best knowledge of the Seller, present fairly the
financial position of the Seller and each Affiliate at such dates, respectively,
and the results of the operations for such periods and fairly set forth the
information purported to be shown therein, subject, in the case of unaudited
interim statements, to year-end adjustments.
4.5 CONDUCT OF BUSINESS; NO DIVIDENDS OR DISTRIBUTIONS. Since
May 31, 1997, Seller and each Affiliate operated their respective Business in
the usual and ordinary manner, have not sold or otherwise disposed of or
encumbered any of the assets reflected in the February 28, 1998 balance sheet
(other than the sale of inventory or collection of receivables, both for
reasonably equivalent value and the payment of its obligations, in the ordinary
course of the Business, and the sale of Leader and Southern Cross [exclusive of
the Leader and SC Included Assets]) (all of the foregoing being hereinafter
referred to as the "Ordinary Conduct of Business") and has not declared or paid
any dividends or distributed bonuses to employees, directors, consultants or
officers or made any other distributions on its capital stock or repurchased or
agreed to repurchase any of its capital stock that would have a material adverse
effect on the Transferred Assets. Without limiting the term Ordinary Conduct of
Business, such term shall not include attorneys' fees of the Seller or any
Affiliate in connection with this Agreement and/or the transaction contemplated
hereunder.
4.6 UNDISCLOSED LIABILITIES. Seller and the Affiliates do not
have any liabilities, fixed or contingent, other than (i) liabilities fully
disclosed or reserved against in its balance sheet as of February 28, 1998, and
(ii) current and non-current liabilities, not unusual in nature or amount,
incurred in the ordinary course of business by Seller and its subsidiaries since
February 28, 1998. If reserved items are not adequate for the item reserved,
then such shall not be deemed a liability for purposes of this Section 4.6 and
Seller makes no representations or warranties for the adequacies of the accounts
receivable reserves in this Agreement, although Seller has established the
accounts receivable reserves in good faith.
4.7 NO ADVERSE CHANGE. Except as set forth in item 4 on
SCHEDULE 4.14 attached hereto, since February 28, 1998, there has not occurred:
(a) Any material adverse change in the assets,
liabilities, or financial position and results, or operating performance of the
Business;
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(b) Any material damage or destruction, whether or
not covered by insurance, affecting the assets, properties, or operations of the
Seller or any Affiliate or the Business;
(c) Any labor dispute or employee action, materially
affecting the financial position or operations of Seller or any Affiliate or the
Business;
(d) Any material adverse change in the sales, backlog
of customer orders, customer relations, employee relations, sourcing of
Inventory, or supplier or distributor relations with respect to Seller, any
Affiliate or the Business, including without limitation, the loss of any key
employee, customer or supplier; or
(e) Any other transaction, event, or condition of any
character relating to, and materially and adversely affecting, the results of
operations of Seller or any Affiliate or the Business or the financial position
or the prospects of Seller, any Affiliate or the Business.
4.8 TAX MATTERS. All returns and reports for Taxes, as defined
below, (i) for all taxable years or periods that end on or before the Closing
Date and (ii) with respect to any taxable year or period beginning before and
ending after the Closing Date, for the portion of such taxable year or period
ending on and including the Closing Date ("Pre-Closing Periods") that would be
required to be filed by Seller or any Affiliate on or before the Closing Date as
a result of the existence, ownership, or operation of the Transferred Assets or
the Business (collectively, the "Returns" and individually a "Return") have been
filed when due in a timely fashion and, to the extent that such Returns relate
to the Transferred Assets or the Business are, or will be, accurate in all
material respects; provided, however, that for purposes of this Agreement, any
U.S. federal income tax returns filed by Seller or any Affiliate that include
the income or losses of the Business shall be included within the definition of
"Returns" solely to the extent that such Returns relate to the Transferred
Assets of the Business. All Taxes owed by Seller or any Affiliate for all
Pre-Closing Periods with respect to the Transferred Assets and Business have
been, or will be prior to the Closing Date, fully paid or accrued in a timely
fashion to the extent due and payable. Neither Seller nor any Affiliate has any
liability, contingent or otherwise, for such Pre-Closing Period Taxes not due
and payable. No claim has ever been made by any taxing authority in a
jurisdiction where the Seller does not file Returns that Seller or any Affiliate
are subject to taxation in such jurisdiction as a result of the existence,
ownership, or operation of the Transferred Assets or the Business. There are no
agreements for the extension or waiver of the time for assessment of any Taxes
relating to the Transferred Assets or the Business for any Pre-Closing Period
and Seller and its subsidiaries have not been requested to enter into any such
agreement or waiver. All Taxes relating to the Transferred Assets and the
Business for any Pre-Closing Period that Seller and its subsidiaries are
required by law to withhold or collect (including without limitation (i) sales
and use taxes and (ii) employment and income taxes relating to payments to
employees or others) have been duly withheld or collected, and have been timely
paid over to the proper authorities to the extent due and payable. Seller and
the Affiliates are not now, nor have they ever been, a party to any Tax
allocation, sharing, indemnification, or similar agreement. Seller and each
Affiliate have properly completed and filed all sales tax exemption certificates
for sales where tax was not charged. For purposes of this Agreement, the term
"Taxes" shall mean all taxes, however denominated, including any interest,
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penalties, or other additions to tax that may become payable in respect thereof,
imposed by any federal, state, local, or foreign government or any agency or
political subdivision of any such government.
4.9 TRANSFERRED ASSETS. Except as disclosed on SCHEDULE 4.9,
Seller and the Affiliates have good and marketable title to the Transferred
Assets and the assets of each of the Affiliates free and clear of all mortgages,
security interests, title defects, pledges, liens, charges, options and
encumbrances of any kind or description. The Seller has done all things
necessary to comply with all its obligations under all bulk transfer laws
applicable to the transactions contemplated by this Agreement and has made
adequate provision for the payment in full of all amounts owing to Seller's
creditors (other than in respect of the Assumed Liabilities) when the same shall
become due and payable. The Transferred Assets constitute all of the assets
(other than the Excluded Assets) used or held for use by Seller and the
Affiliates in its conduct of the Business and are in sufficiently good condition
and repair to permit the operation of the Business after the Closing Date in the
same manner as it was operated prior to the Closing Date.
4.10 PATENTS, TRADE NAMES, ETC. Neither the operation of the
Business nor the products or services sold by Seller or the Affiliates infringe
upon the proprietary rights of others. Neither Seller nor any Affiliate has
received any notice alleging that it has infringed on any other party's
intellectual property rights. Neither Seller nor any Affiliate has to the best
knowledge of Seller, any liability for, nor has it given any indemnification
for, infringement of any other party's intellectual property rights.
4.11 CONTRACTS AND COMMITMENTS. SCHEDULE 1.1 identifies all
contracts and agreements to which Seller and each Affiliate is a party, or by
which it is bound that are material to the Business or the Transferred Assets.
Except for contracts, agreements, and commitments identified on SCHEDULE 1.1,
2.1, 4.9, 4.16, 4.17 AND 4.19(C), Neither Seller nor any Affiliate is a party to
or bound by any oral or written:
(a) Contract, agreement, or commitment for employment
or personal services or any severance agreement that is not terminable, without
liability or expense, by Seller on 30 days' or less notice;
(b) Dealer, distributor, sales agency, or brokerage
agreement;
(c) Material contract, agreement, or commitment
relating to real or personal property;
(d) Contract, agreement, or commitment for capital
expenditures in excess of $5,000.00 for any one project or $10,000.00 in the
aggregate;
(e) Contract, agreement, or commitment for the
purchase or sale of materials or supplies or the performance of services that
involves more than $10,000.00 or will not be fulfilled within 30 days from the
date of this Agreement;
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(f) Contract not made in the ordinary course of
business that is material to the Business or the Transferred Assets;
(g) Rebate arrangement or other similar agreement
given to any customer or received from any supplier;
(h) Consignment or similar contract with either a
supplier or a customer;
or
(i) Any other material contract.
Seller and each Affiliate has in all material respects performed all obligations
required to be performed by it prior to the date hereof, and neither Seller, nor
any Affiliate is in default under any contract, agreement, or commitment
pertaining to the Business or the Transferred Assets to which any of them is a
party. Neither Seller nor any Affiliate has received any notice of default under
any such contract, agreement, or commitment, nor to the knowledge of any Seller
has any event occurred which with notice or lapse of time or both would
constitute a default thereunder. None of such contracts, agreements, or
commitments is to the Seller's knowledge subject to any impending cancellation
or breach. Neither Seller nor any Affiliate is bound by any commitments for the
performance of services or delivery of products in excess of its ability prior
to Closing to provide such services or deliver such products during the time
available to satisfy such commitments; all outstanding commitments for the
performance of services or delivery of products were made on a basis calculated
to produce a profit as part of the Seller's overall business operation under the
circumstances prevailing when such commitments were made.
4.12 INVENTORY. All of the Inventory was acquired, and has
been maintained by Seller and each Affiliate in the ordinary course of the
Business; consists of a quality, quantity and condition usable and saleable in
the ordinary course of the Business; and is not subject to any write-down or
write-off other than as provided on the February 28, 1998 balance sheet. None of
the Inventory is held on consignment, and none of the Inventory is consigned to
third parties. Neither Seller nor any Affiliate is under any liability or
obligation with respect to the return of Inventory in the possession of any
third parties.
4.13 PERMITS AND LICENSES; COMPLIANCE WITH LAWS. SCHEDULE 4.13
attached hereto identifies all of the permits, licenses, or other governmental
authorizations required for the operation of the Business of the Seller and each
Affiliate as presently conducted or for the ownership of the Transferred Assets
("Regulatory Approvals"). Neither the ownership of the Transferred Assets by
Seller nor the operation of the Business of the Seller and each Affiliate as
presently conducted violates in a material way any applicable order, law,
ordinance, code, or regulation. To Seller's knowledge, except as disclosed on
SCHEDULE 4.14 attached hereto, no investigation is pending or threatened
regarding the existence of any such violation. Seller shall promptly seek and
diligently pursue obtaining the authorizations and consents required by the
Regulatory Approvals and shall deliver evidence of such authorizations and
approvals (including appropriate legal opinions) as it
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may receive at or prior to Closing and the Deferred Assets Closing with respect
to the Deferred Assets. In the event the Seller fails to obtain and deliver to
Buyer all of the Regulatory Approvals by the Closing, then Buyer shall have the
right to terminate this Agreement and receive the return of the Deposit as more
particularly set forth in Paragraph 4.3 of this Agreement. In the event the
Seller fails to obtain and deliver to Buyer all of the Regulatory Approvals with
respect to the Deferred Assets by the Deferred Assets Closing, then Buyer shall
have the right to terminate this Agreement and receive the return of the
Deferred Assets Escrow. Neither party has made any representation or warranty to
the other with respect to their ability to obtain Regulatory Approval with
respect to the Deferred Assets, although obtaining such Regulatory Approval
shall continue to be a condition precedent hereunder.
4.14 NO PENDING OR THREATENED LITIGATION AND CLAIMS. Except as
disclosed on SCHEDULE 4.14 attached hereto and the litigation filed by Stanley
Margulies, M.D. against Med Tech Services of South Florida, Inc.: (a) no suit or
proceeding is pending against or by Seller or any Affiliate or against the
Transferred Assets; (b) to Seller's knowledge, no claim has been asserted or
threatened against or by Seller or any Affiliate or against the Transferred
Assets; (c) the Seller does not know of any basis for any claim to be asserted
against it or any Affiliate or affecting the Transferred Assets; and (d) no
claim, action, cause of action, suit, proceeding, inquiry, investigation or
order by or before any governmental authority, administrative body or
arbitration panel has been instituted or prosecuted, or to Seller's knowledge,
threatened against Seller or any Affiliate in the past three years.
4.15 ENVIRONMENTAL AND SAFETY MATTERS. Seller, each Affiliate
and the Business are in compliance with all applicable laws, whether federal,
state or local, generally relating to the protection of health, safety or the
environment ("Environmental and Safety Laws"), and, to the best of Seller's
knowledge, there are no conditions on any real property owned or leased by the
Seller or any Affiliate that give rise to any cleanup obligations under any
Environmental and Safety Laws. Seller has not received notice of any violation
or potential violation of Environmental and Safety Laws. To the best of the
Seller's knowledge, there is no liability or obligation under Environmental
and Safety Laws which relates to the ownership or operation of the Transferred
Assets or the Business.
4.16 ASSETS OF CTIM. The only asset of CTIM is the contract
identified on SCHEDULE 4.16 attached hereto.
4.17 INSURANCE. SCHEDULE 4.17 contains a list of all insurance
policies maintained by Seller and each Affiliate in the last two years and
indicates in each case, the insurer, the types and amounts of coverage, the
applicable deductible, the expiration date, and any additional loss payees or
additional insureds. SCHEDULE 4.17 also lists all claims filed with respect to
such insurance policies during the past two years, as well as any open or
unresolved claims.
4.18 EMPLOYEE BENEFITS. SCHEDULE 4.18 lists and identifies:
(i) each employee pension benefit plan, as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") (a
"Pension Plan"); (ii) each employee welfare benefit plan, as defined in Section
3(l) of ERISA (a "Welfare Plan"); and (iii) each compensation and employment
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arrangement, including, but not limited to, any fringe benefit, incentive
compensation, bonus, severance, deferred compensation, and supplemental
executive compensation plan, and employment agreement (a "Benefit Arrangement"),
that is maintained by the Seller and each subsidiary. Each Welfare Plan that
provides medical benefits has been administered in compliance in all respects
with the requirements of Section 601 through 608 of ERISA. Neither the Seller
nor any ERISA Affiliate (as defined below) of the Seller has, or will have, any
liability to or in connection with any multi-employer plan, as defined in
Section 3(37) of ERISA and no Pension Plan, Welfare Plan, or Benefit Arrangement
will result in any liability to Buyer or will have a material adverse effect
upon the Transferred Assets or subject the Transferred Assets to any lien under
ERISA, the Internal Revenue Code ("Code"), or the laws of any state or country.
As used herein, the term "ERISA Affiliate" shall mean any subsidiary of the
Seller and any trade or business (whether or not incorporated) that is part of
the same controlled group, or under common control with, or part of an
affiliated service group that includes the Seller within the meaning of Sections
414(b), (c), (m) or (o) of the Code.
4.19 LABOR MATTERS.
(a) Seller and each Affiliate is in compliance in all
material respects with all laws, whether federal, state or local, respecting
employment and employment practice and conditions of employment, wages and
hours, and nondiscrimination in employment, and is not engaged in any unfair
labor practice.
(b) Neither Seller nor any Affiliate is a party to,
or subject to any obligation or commitment with respect to any written or oral
employment compensation, consulting, severance pay or similar agreement,
implied, other than the agreements listed on SCHEDULE 1.1, 2.1, 4.16, 4.17, 4.18
AND 4.19(C). SCHEDULE 4.19 attached hereto sets forth a payroll list as of
February 28, 1998, showing as of such date, each employee of Seller and each
Affiliate. Except as set forth on SCHEDULE 4.19, Seller has not been notified
that it has any workers' compensation claims or liabilities and has paid all
workers' compensation and unemployment compensation premiums due to date.
(c) Except as set forth on SCHEDULE 4.19(C), Seller
and each Affiliate has paid to each such employee all amounts owing through such
date, including any severance or termination pay obligations arising from the
transactions contemplated hereby other than accrued vacation, sick and personal
days. Except for the transactions as contemplated in this Agreement, Seller has
not taken any action which will cause Buyer to be or become a successor
corporation for purposes of Title IV of ERISA with respect to any Pension Plan,
Welfare Plan or Benefit Arrangement maintained by Seller or any Affiliate for
their employees. To the best knowledge of the Seller, all employees of the
Business intend to offer their services to Buyer as employees following the
Closing; however, Seller makes no representation that any particular employee
will continue employment after the Closing Date. Other than Ullrich Klamm and
Carol O'Donnell, Seller will not solicit for employment any employee of the
Seller or any Affiliate for employment for a period of two (2) years following
the Closing.
4.20 This space is intentionally left blank.
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4.21 FINDERS. No finder or broker has acted or is acting on
behalf of Seller in connection with the transactions contemplated by this
Agreement.
The following shall be applicable with respect to Article 4 of
this Agreement: (i) with respect to the Ordinary Conduct of Business in
subparagraph 4.5, and all of subparagraphs 4.6, 4.7, 4.8, 4.11 and 4.18, Buyer
shall not have the right to rely on those representations to the extent Seller
can prove (and the burden of proof shall be on the Seller) that Louis Boisvert,
III ever had actual knowledge that such representation was not true as of the
date hereof; and (ii) with respect to subparagraphs 4.4 and 4.17, Buyer shall
not have the right to rely on those representations to the extent Seller can
prove (and the burden of proof shall be on the Seller) that Louis Boisvert, III
ever had actual knowledge or in his capacity as a chief financial officer should
have known that such representation was not true as of the date hereof. The
foregoing provisions of this Paragraph are hereinafter referred to as the
"Imputed Knowledge Limitations".
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller that the following statements are true, accurate and complete
as of the date hereof and the Closing Date:
5.1 ORGANIZATION, EXISTENCE, AND STANDING OF BUYER. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida.
5.2 POWER OF BUYER. The execution, delivery, and performance
of this Agreement has been duly authorized and approved by Buyer's board of
directors and stockholders. Buyer has full corporate power and authority to
execute and deliver this Agreement and the other instruments and agreements for
which provision is made herein and to perform its obligations under this
Agreement and such other instruments and agreements. This Agreement constitutes
the valid and binding obligation of Buyer, and, upon execution and delivery by
Buyer, will constitute valid and binding obligations of Buyer, enforceable
against Buyer in accordance with the terms hereof except as enforcement may be
limited by bankruptcy, insolvency, reorganization, fraudulent transfer or
similar laws affecting the rights of creditors generally or by the application
of equitable principles.
5.3 FINDERS. No finder or broker is acting or has acted on
behalf of Buyer in connection with the transactions contemplated by this
Agreement.
5.4 FINANCIAL ABILITY. To the best of Buyer's knowledge, Buyer
has the financial ability to consummate the transactions contemplated in this
Agreement.
6. COVENANTS BY SELLER.
6.1 TRANSFER OF WARRANTIES. In the event that any of the
Transferred Assets is under any warranty from the manufacturer or the original
seller thereof, Seller will execute such instruments as reasonably may be
requested by Buyer to transfer the warranty to Buyer to the extent they are
assignable. The provisions of this paragraph shall survive the Closing.
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6.2 TAXES. Seller will pay all sales, use, business, franchise
taxes and transfer taxes, if any, applicable to the transactions provided for by
this Agreement, and subject to Buyer's reasonable cooperation, fully comply with
applicable regulations and statutes related thereto that require the filing of
any reports, notices or other information. The Seller agrees to cooperate with
Buyer in preparing and filing any reports, notices or other information which
may allow Buyer to insulate itself from any sales, business, franchise or other
tax liabilities to be incurred by Buyer after Closing that arise from or relate
to the operation of the Business by Seller prior to the Closing.
6.3 LIMITATION ON USAGE OF TRADE NAME. From and after the
Closing Date, Seller shall not use or employ in any manner, directly or
indirectly, the name "Cancer Treatment Holdings" or any derivation or variation
of such name, except as may be proper or appropriate to designate Seller's
history. Notwithstanding the foregoing, Seller shall have the right to use the
corporate name Cancer Treatment Holdings, Inc. for a period of up to one (1)
year following the Closing provided Seller does not conduct business operations
as and/or advertise the name Cancer Treatment Holdings or any derivation or
variation of such name.
6.4 COOPERATION AND FURTHER ASSURANCES. For a period of three
years after the Closing Date, Seller will give, or cause to be given, to Buyer
and its representatives, such reasonable access to the personnel, properties,
titles, contracts, books, records, files, documents and affairs of Seller and
each Affiliate and copies thereof as is necessary, in Buyer's reasonable
judgment, to allow Buyer to obtain information in connection with the
preparation, and any audit, of Buyer's tax returns and any tax related claims,
demands, other audits, suits, actions or proceedings by or against Buyer as the
owner and/or operator of the Business. Seller agrees to reasonably cooperate
with Buyer, without any unreasonable expense to Seller, after the Closing Date
in connection with the maintenance of favorable relations with all of Seller's
customers and suppliers and the assertion of warranty claims, if any, against
the suppliers with respect to any items in the Inventory, and to otherwise
provide Buyer with such reasonable cooperation as is necessary to allow Buyer to
obtain the full benefit of the transactions contemplated by this Agreement. In
addition, Seller will, from time to time during a three (3) year period after
the Closing, upon the reasonable request of Buyer and without any unreasonable
expense to Seller, execute, acknowledge, and deliver all deeds, assignments,
transfers, conveyances, and assurances as may be reasonably required to transfer
to and to vest in Buyer all right, title, and interest of Seller and each
Affiliate in and to the Transferred Assets and to protect the right, title, and
interest of Buyer in and to all of the Transferred Assets. Seller's obligations
under this Section 6.4 are subject to Seller's right to be subject to minimal
disturbance and to reimbursement by Buyer for any extraordinary costs incurred
in carrying out Seller's obligations under this Section 6.4.
6.5 APPROVALS AND CONSENTS. Seller shall promptly apply and
diligently pursue satisfying all the Consents and Regulatory Approvals
including, without limitation, consents required by those parties with whom the
Seller and the Affiliates has a contractual relationship whose consent is
required as a result of the transfer of the Transferred Assets.
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6.6 ORDINARY COURSE OF BUSINESS. Following the execution of
this Agreement, Seller covenant and agree to operate the Business, the Seller
and the Affiliates in the ordinary course of business and shall not, without
limitation: (i) incur any additional liabilities outside the ordinary course of
business; (ii) pledge or transfer any of the Transferred Assets; (iii) prepay
any expenses outside the ordinary course of business; (iv) take any action
outside the ordinary course of business, other than in connection with the
transfer to Buyer of the Transferred Assets, which would be binding upon the
Buyer or the Transferred Assets following the Closing; or (v) take any action
which would violate the representations and warranties of the Seller under this
Agreement.
6.7 NOTICE TO BUYER. Following the execution of this
Agreement, Seller shall provide to Buyer within two (2) business days following
receipt by Seller or any Affiliate copies of any material notices furnished to
the Seller or any Affiliate which could reasonably be expected to affect the
Business of the Seller and/or any Affiliate including, without limitation, any
notices received with respect to any governmental or quasi-governmental
investigation, review or similar proceeding. In addition, Seller covenants to
make its attorneys and other consultants available to Buyer (at no cost to
Buyer) to freely discuss any relevant Business of the Seller and the Affiliates.
6.8 REAL ESTATE NOTE AND MORTGAGE. Seller shall deliver to
Buyer, at or prior to the Closing, evidence that the promissory note and
mortgage that had encumbered the condominium unit located at 4340 Sheridan
Street, Hollywood, Florida have been paid in full and CTI has been released from
all obligations thereunder ("Lien Release").
6.9 UCC SEARCHES. Seller shall deliver UCC-11 searches
(including any financing statements reflected therein) from the Seller and each
Affiliate from each state in which each of them conducts business, is
incorporated and/or maintains its executive office.
7. COVENANTS OF BUYER.
7.1 ACCESS FOR SELLER. For three (3) years after the Closing
Date, Buyer shall retain in good order in South Florida, and make available to
Seller and its representatives for inspection and copying, all records
pertaining to the Business as may reasonably be requested by Seller in
connection with its rights or obligations as the former owner of the Transferred
Assets, including but not limited to all records transferred hereunder. Buyer's
obligations under this Section 7.1 are subject to its right to conduct its
operations with minimal disturbance and to reimbursement by Seller for
extraordinary out of pocket costs incurred in carrying out its obligations under
this Section 7.1.
7.2 BUYER INFORMATION. Buyer shall provide Seller all
information reasonably requested by Seller in connection with Seller's attempts
to comply with its obligations under this Agreement, including, without limiting
the generality of the immediately foregoing statement, Seller's preparation and
distribution of any materials prepared for or sent to any regulatory
authorities. Any and all such information provided by Buyer shall be provided to
Seller in a timely manner (time being of the essence to Seller's obligation to
notify regulatory authorities of the information regarding the transaction
contemplated herein and regarding the Buyer). To the best of
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Buyer's knowledge, any and all such information provided by Buyer shall be
complete and correct, to the best of Buyer's knowledge, in all material
respects.
7.3 COOPERATION. Buyer will, upon request, reasonably cooperate
with Seller in Seller's attempts to secure all third-party consents and other
obligations of Seller pursuant to this Agreement.
7.4 CONTINUED EMPLOYMENT. Not less than five (5) business days
prior to Closing, Buyer will, following notice from Seller, give CTH written
notice of which employees included on SCHEDULE 4.19 that Buyer will not continue
to cause to be so employed.
8. (A) BUYER'S CONDITIONS PRECEDENT. The Buyer's obligations to close
hereunder are contingent upon the satisfaction or waiver by Buyer of all of the
following conditions precedent (collectively, the "Buyer's Conditions
Precedent") at or prior to Closing (unless otherwise indicated): (i) no material
default by the Seller under any covenant, representation, warranty or obligation
of the Seller hereunder (as set forth herein, the term material default shall
mean any condition(s) which could reasonably be expected to result in a loss or
claim to the Buyer of in excess of Thirty Thousand Dollars [$30,000.00] in the
aggregate); (ii) delivery by Seller to Buyer of all the Consents and the
Regulatory Approvals; (iii) dismissal with prejudice of the injunction action
contemplated by the lawsuit identified on SCHEDULE 8(A)(III) attached hereto
("Palm Beach Litigation"); (iv) Buyer being satisfied with the status of the
Palm Beach Litigation which determination Buyer shall make within five (5)
business days following Buyer's receipt of the order dismissing the injunction
action relating to the Palm Beach Litigation; (v) receipt of an executed comfort
letter ("Comfort Letter") addressed to Seller and Buyer in the form attached
hereto and made a part hereof as EXHIBIT 8(A)(V) attached hereto; (vi) there
being no "Shareholder Challenge" or "Regulatory Challenge" (as those terms are
hereinafter defined) pending or threatened; (vii) receipt of evidence of
approval of this Agreement from the board of directors of the Seller ("Board
Approval") on or prior to May 18, 1998; (viii) substitution of Homecare
Holdings, Inc. for CTH under the guaranty of CTH for the Lease between Med Tech
Services of South Florida, Inc. and Arbors Associates, Inc. dated April 1, 1997
("Guaranty Substitution"); (ix) release of CTH from Corporate Guaranty dated
July 26, 1996 by CTH in favor of Copelco Capital, Inc. securing the obligation
of Logan Oncology Care Association, L.P. ("Copelco Release"); and (x) Buyer's
receipt of all issued and outstanding shares of stock of Ricardo T. Baldonado,
M.D., P.A. together with duly executed stock powers endorsed in blank. Except
for the Imputed Knowledge Limitations, the Buyer's inspection of the Business
and the Transferred Assets is for the sole benefit of the Buyer and shall not
reduce any representation or warranty of the Seller hereunder.
In the event all of the foregoing Buyer's Conditions Precedent
are not timely satisfied or waived by the Buyer, then Buyer shall have the right
to terminate this Agreement and receive the return of the Deposit, whereupon
each party shall, except for the termination fee contemplated in Section 8(C)
below, be released of all further obligations hereunder.
(B) SELLER'S CONDITIONS PRECEDENT. The Seller's obligations to
close hereunder are contingent upon the satisfaction or waiver by Seller of all
of the following conditions precedent at or prior to the Closing (unless
otherwise indicated): (i) no material default by Buyer of any covenant,
representation, warranty or obligation of the Buyer hereunder; (ii) receipt of
the Consents and
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Regulatory Approvals; (iii) a fairness opinion in form and substance reasonably
acceptable to CTH ("Fairness Opinion") which is obtained by CTH from a
recognized independent financial advisor selected by CTH; (iv) there shall not
be any litigation pending that challenges the propriety of, or the authority of,
the parties hereto to consummate the transactions contemplated herein by any
regulatory authority ("Regulatory Challenge"); (v) receipt of the Board Approval
on or prior to May 18, 1998; (vi) receipt of the Guaranty Substitution; (vii)
receipt of the Copelco Release; and (viii) receipt of a release with respect to
Seller's obligations under the guaranty specified on SCHEDULE 2.1(A)(5) and the
lease with Tri-County Development Group, Inc.
(C) ADDITIONAL CONDITIONS PRECEDENT. Seller covenants to
promptly proceed and diligently pursue in good faith the conditions precedent
set forth in this Section 8 and Buyer agrees, following receipt of written
request from Seller, to cooperate with the Seller in connection with obtaining
the Regulatory Approvals. In the event this Agreement is terminated based upon
the failure of any of the conditions precedent of Sections 8(A) or 8(B) above
(other than the provisions of: (i) subparagraphs 8(A)(i) for which Buyer shall
have all remedies available at law or in equity; and (ii) subparagraph 8(B)(i)
for which Seller shall have the sole right to retain the Deposit as liquidated
damages), then the following shall be applicable: (a) Buyer shall, except as set
forth in subparagraph (b) below, receive the return of the Deposit and the Buyer
and Seller shall be released of any further obligation under this Agreement; and
(b) in the event such failure is the result of the failure of the Seller to
obtain the Comfort Letter, the Fairness Opinion and/or any "Shareholder
Challenge", then in addition to the return of the Deposit, Buyer shall receive
from Seller a termination fee ("Termination Fee") in the amount of Fifty
Thousand Dollars ($50,000.00), which amount shall not be deemed a penalty, but
rather a stipulated amount to compensate the Buyer for the lost opportunity. As
set forth herein, "Shareholder Challenge" shall mean a shareholder of CTH has
obtained an injunction against the consummation of the transaction contemplated
herein.
9. CLOSING; CLOSING DATE.
9.1 DATE AND TIME. The closing of the purchase and sale
contemplated by this Agreement with respect to the Transferred Asset ("Closing")
shall take place at the office of Buyer's counsel in Fort Lauderdale, Florida,
at 10:00 a.m. EST. on a date mutually agreed to by the parties that is on or
before June 1, 1998 (with an effective date of May 31, 1998) (the date on which
the Closing occurs being hereinafter referred to as the "Closing Date"). In the
event Seller and Buyer are not in default under this Agreement and Seller has
diligently pursued the Consents and the Regulatory Approval and the Closing has
not occurred by June 1, 1998, then Buyer shall receive the return of the
Deposit, the Termination Fee, if applicable, and neither party shall have any
further obligations hereunder. All references in this Agreement to the Closing
or the Closing Date or June 1, 1998, shall mean the Deferred Assets Closing and
September 30, 1998, as applicable, with respect to the Deferred Assets;
provided, however, that Buyer shall not be entitled to the return of the Deposit
(to the extent such has already been credited towards the Purchase Price) or the
Termination Fee in connection with the sale of, or failure to sell, the Deferred
Assets. It is understood and agreed that the Deferred Assets Closing shall not
take place prior to the Closing Date. Time shall be of the essence under this
Agreement.
In the event the Buyer does not purchase the Deferred
Assets by the Deferred Assets Closing (other than by virtue of a material
default by the Buyer), then Seller agrees to pay to
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the Buyer one-half (1/2) of the purchase price for which the Seller sells (which
shall include, without limitation, a merger, consolidation or other arrangement
other than an outright sale) the Deferred Assets over and above $500,000 (which
$500,000 shall be reduced pro rata if less than all of the Deferred Assets are
being sold). The provisions of this Paragraph shall survive the Deferred Assets
Closing.
9.1 PROCEDURES. On the Closing Date, the Closing shall be
effected by the following actions:
(a) Seller Deliveries. The Seller shall deliver to
Buyer:
(i) stock certificates and stock powers to
transfer the shares in all of the Transferred Assets constituting stock duly
executed with all documentary transfer stamps affixed thereto;
(ii) duly executed separate assignments or
other appropriate instruments of transfer (including titles, warranty deed, and
original registrations for all titled property, Real Property, and a duly
executed general assignment and bill of sale of any of the Transferred Assets
not appropriately transferred by the transfer of capital stock referred to in
this Section 9.2(a)(i);
(iii) minute books for each corporation the
shares of which constitute Transferred Assets including the Affiliates;
(iv) any other documents and instruments
reasonably requested by Buyer to effectuate the intents and purposes of this
Agreement;
(v) certified articles of incorporation,
bylaws and current good standing certificates for Seller and each Affiliate from
their respective states of incorporation and authorization to do business in
each state in which they do business;
(vi) the original of each Contract;
(vii) opinions from the counsel for Seller
in form and substance reasonably satisfactory to the Buyer including opinions
regarding the following with respect to the Seller and each Affiliate: (a) the
good standing of the Seller and each Affiliate; (b) due execution; (c) valid and
binding and enforceability opinion subject to standard creditors' rights
exception; (d) that all Consents and Regulatory Approvals have been obtained for
the transfer of the Transferred Assets, including Consents and Regulatory
Approvals required by any Affiliate by virtue of the transactions contemplated
by this Agreement; and (e) that no consent is required in connection with the
Transferred Assets which are the subject of the Palm Beach Litigation;
(viii) The Comfort Letter;
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(ix) a certificate from the Seller updating
the representations and warranties hereunder; and
(x) the Lien Release.
(b) BUYER DELIVERIES. Buyer shall deliver to
Seller:
(i) the Purchase Price;
(ii) assumption agreements from Buyer in
form and substance reasonably acceptable to Seller pursuant to which Buyer shall
assume the Assumed Liabilities and indemnify the Seller with respect to claims
for matters first arising subsequent to the Closing and those customary and
reasonable expenses incurred in the ordinary course of the Seller's business in
connection with the Assumed Liabilities through the Closing (which the parties
agree shall not include any litigation matters and shall not include attorneys'
fees including, without limitation, those incurred in connection with this
Agreement and/or the transaction contemplated hereunder);
(iii) an opinion from the counsel for the
Buyer in form and substance reasonably satisfactory to CTH including opinions
regarding: (a) due execution; (b) proper formation; and (c) valid and binding
and enforceability opinion subject to standard creditor's rights exceptions.
9.3 POSSESSION. Possession of all of the Transferred Assets
will be delivered to Buyer on the Closing Date and the assignment to Buyer of
the Transferred Assets will be effective as between Seller and Buyer on and as
of the Closing.
10. CONFIDENTIAL INFORMATION.
10.1 At all times following the date hereof, Seller and Buyer
(prior to the Closing) agree to keep confidential and not to disclose to others
confidential, proprietary or secret information relating to the Business,
including, but not limited to, confidential or proprietary information regarding
customers or potential customers of the Business; vendors and suppliers of the
Business; pricing structure and profit margins; employees and payroll policies
of the Business; computer systems of the Business; and other proprietary,
confidential or secret information relating to the Business, products,
activities or operating aspects (hereafter "Confidential Information"). Seller
and Buyer (prior to the Closing) shall use all reasonable care to protect, and
prevent unauthorized disclosure of, any Confidential Information unless such
information is now or becomes generally known or available to the public without
any violation of this Agreement or is required to be disclosed by applicable law
or by court or governmental order. In addition to the foregoing, each party
hereto covenants and agrees to coordinate with the other all publicity relating
to the transaction contemplated by this Agreement. Neither party shall issue any
press release or other public or private notice related to the transaction
contemplated hereunder without the prior written consent of the other, which
consent shall not be unreasonably withheld; provided, however, CTH may issue any
disclosure required by law or applicable securities exchange; provided, further,
that CTH shall
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consult with the Buyer prior to any such release and shall not identify the
Buyer (or its principals) or the terms unless required to do so under applicable
law or exchange rules.
10.2 Seller and Buyer each acknowledge that a breach of its
obligations under this Section 10 would result in irreparable injury to the
other for which damages would not be an adequate remedy and consents to the
issuance of injunctive relief in the event of a breach of its or his obligations
under this Section 10, in addition to any other remedies to which such party may
be entitled by law.
10.3 Any provision of the foregoing covenant that is prohibited
or unenforceable, including without limitation, as to time, geographic area, or
scope of activity, shall be void to the extent of that prohibition or
unenforceability only; and the remaining provisions, including the remainder of
any provision found only partially invalid or unenforceable, shall continue to
be in full force and effect and shall not be affected by such invalidity or
unenforceability.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except for the Imputed
Knowledge Limitations, each party shall be entitled to rely on the
representations, warranties and covenants set forth herein. The representations,
warranties, indemnities and covenants that are contained in this Agreement will
survive the Closing for a period of one (1) year following the Closing. The
Seller's aggregate liability with respect to any and all breaches of this
Agreement shall not exceed the following: (i) $1,500,000 beginning on the
Closing Date and for the six (6) month period thereafter; (ii) $750,000 for the
period of six (6) months following the Closing Date through the first
anniversary of the Closing Date; and (iii) no liability thereafter. For a period
of six (6) months following the Closing the Seller covenants and agrees to
retain assets of the Seller in an amount not less than $1,500,000. After the six
(6) month period following the Closing until the first anniversary of the
Closing, the Seller agrees to retain assets in an amount not less than $750,000
until the first anniversary of the Closing. After one (1) year following the
Closing there shall be no requirement on Seller to retain any assets hereunder.
The provisions of this Paragraph shall survive the Closing. In conjunction with
the foregoing retainage of assets, the parties acknowledge that the retained
assets shall be cash or cash equivalent to the extent of $500,000 for the six
(6) month period following the Closing and $375,000 for the period of six (6)
months following the Closing through the first anniversary of the Closing.
Following the Closing and upon written request to Seller, Seller agrees to
provide evidence reasonably satisfactory to the Buyer of Seller's compliance
with the provisions of this Paragraph.
12. INDEMNIFICATION.
12.1 Subject to the limitation of liability set forth in
Section 11 above and, with respect to claims arising out of a breach of a
representation or warranty hereunder, subject to any Imputed Knowledge
Limitation, from and after the Closing Date the Seller agrees to hold harmless,
indemnify and defend Buyer and each of Buyer's legal representatives, successors
and assigns (the "Indemnified Buyers") from and against any loss, cost,
liability, or expense (including without limitation, costs and expenses of
litigation and, to the extent permitted by law, reasonable attorneys'
fees)("Losses," each a "Loss") incurred by any of them by reason of (a) the
breach of any of the
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representations or warranties, or the breach of any of the covenants or
agreements of Seller contained in this Agreement; (b) Seller's breach, on or
before the Closing Date, of any Contracts assumed by Buyer hereunder, other than
breaches disclosed by the Seller to Buyer in this Agreement; (c) the assertion
in a legal proceeding against any of the Indemnified Buyers of any Excluded
Liability or any liability to the extent it is based on or arising from any
Excluded Liability, including but not limited to any Excluded Liability; or (d)
a claim made or asserted by any person against any of the Indemnified Buyers or
the Transferred Assets under any bulk transfer or bulk sales law, or other
principle of successor liability (without regard to whether or not Seller or
Buyer had any knowledge thereof), arising from a claim such person has against
Seller or any Affiliate for the period prior to Closing (other than ordinary,
customary and reasonable expenses incurred by the Seller in the ordinary course
of business through Closing; provided, however, and without limiting the
foregoing, the parties acknowledge and agree that litigation matters and
attorneys' fees of any nature shall not be deemed in the ordinary course of
business), whether such claim is liquidated or unliquidated, contingent or
disputed. Notwithstanding anything to the contrary contained in this Agreement,
Buyer agrees not to pursue an action for indemnification from Seller: (i) unless
the Loss could reasonably be expected to exceed Thirty Thousand Dollars
($30,000) in the aggregate ; (ii) with respect to claims (other than those in
the ordinary course of business for which the $30,000 "basket" shall be
applicable) against Buyer which relate to matters arising prior to the Closing
and for which Seller had no knowledge, except for that portion of the Loss that
exceeds $200,000 in the aggregate with respect to all claims (Seller would be
responsible for any such claim(s) which exceeds $200,000 in the aggregate); and
(iii) to the extent fully covered by adequate insurance where there has been no
reservation of rights (any insurance deductible shall be included within the
$30,000 and $200,000 "baskets" set forth above. By way of example only, in the
event: (x) there is a malpractice claim which related to the period prior to the
Closing for which the Seller did not have knowledge, then such claim would be
the subject to the $200,000 "basket", (y) there is an invoice which is unpaid
relating to the period prior to the Closing then such claim would be subject to
the $30,000 "basket" regardless of whether Seller had knowledge of such claim.
12.2 DEFENSE OF THIRD-PARTY CLAIMS.
(a) Within fifteen (15) business days after receipt
of notice of commencement of any action or claim by any third-party (including
any governmental authority) before any court or other governmental authority of
competent jurisdiction (but in any event at least 10 business days preceding the
date on which an answer or other pleading must be served in order to prevent a
judgment by default in favor of the third-party claimant), each party entitled
to indemnification hereunder (the "Indemnified Party") in respect of such
third-party claim shall give each party obligated to provide such
indemnification hereunder (the "Indemnifying Party") written notice thereof,
together with a copy of such claim, process or other legal pleading, which
notice shall be provided by overnight express mail. Upon receipt of such notice,
the Indemnifying Party shall promptly notify the Indemnified Party as to whether
it intends to exercise its right to undertake the defense of such claim by
representatives of its own choosing who are reasonably acceptable to the
Indemnified Party. Notwithstanding the Indemnifying Party's undertaking of such
defense, the Indemnified Party shall have the right, at its own expense, to
engage its own counsel and participate in the defense of such claim, and no
settlement or compromise of such claim shall be made without
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the prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. In the event a consent to a bona fide settlement or
compromise is requested by an Indemnifying Party, but is rejected by an
Indemnified Party, the Indemnifying Party's liability with respect to such
matter for which indemnification is being provided shall be, thereupon, limited
to the liability the Indemnifying Party would have had if such settlement or
compromise had been accepted by the Indemnified Party. In connection with any
defense undertaken by the Indemnifying Party in accordance with this Section
12.2(a), the Indemnified Party will cooperate with all reasonable requests of
the Indemnifying Party and will be reimbursed all its reasonable out-of-pocket
expenses incurred in connection with its compliance with such requests, other
than its attorneys' fees.
(b) If the Indemnifying Party by the fifteenth (15th)
business day after receipt of notice of commencement of any such claim (or such
earlier date which is five (5) days before the date on which the answer or other
responsive pleading must be filed in order to prevent judgment by default in
favor of the third-party claimant), does not elect to undertake the defense of
such claim, the Indemnified Party (upon further written notice to the
Indemnifying Party) shall have the right to undertake the defense, compromise or
settlement of such claim on behalf of and for the account and risk of the
Indemnifying Party and will be reimbursed by the Indemnifying Party for all of
its out-of-pocket expenses, including its reasonable attorneys' fees, as
incurred; provided, however, that if the Indemnifying Party has delivered
written notice to the Indemnified Party acknowledging its obligation to
indemnify the Indemnified Party for any and all Losses suffered by the
Indemnified Party by reason of such claim, then, notwithstanding its failure to
undertake the defense of such claim, the Indemnifying Party shall be entitled to
be kept reasonably informed by the Indemnified Party of the progress of such
claim (including at least ten (10) days prior written notice of any compromise
or settlement) and shall have the right, upon delivery of written notice to the
Indemnified Party prior to the expiration of such ten-day period, to reasonably
reject any compromise and settlement and assume the defense of such claim in
accordance with the provisions of subsection (a) of this Section 12.2, subject
to its obligation to indemnify the Indemnified Party for all out-of-pocket
expenses, including reasonable attorneys' fees, incurred by the Indemnified
Party to such date in defense of such claim.
13. EXPENSES. Whether or not the transactions contemplated hereby are
consummated, each of the parties hereto will pay, except as otherwise provided
herein, its respective expenses, income and other taxes, and costs (including
without limitation, the fees, disbursements, and expenses of its attorneys,
accountants, and consultants) incurred by it in negotiating, preparing, closing,
and carrying out this Agreement and the transactions contemplated by this
Agreement. With respect to the foregoing costs of the Seller, such shall be paid
out of the Purchase Price and not out of existing funds of the Seller or any
Affiliate. Seller shall pay all costs associated with the transfer of the
Transferred Assets including, without limitation, documentary stamps on the
transfer of stock and any applicable documentary stamps on the lease assignments
with respect to the Real Property. Real estate taxes and expenses associated
with the Real Property shall be equitably prorated as of the Closing. There
shall be no proration for any prepaid expenses or deposits (including bank
deposits) associated with the Transferred Assets.
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<PAGE>
14. NOTICES. Notices hereunder will be effective when they are sent by
facsimile, with confirmation of receipt; one day after they are deposited with
an overnight courier; and three business days after they are deposited in the
official mails, postage prepaid, and, in each case, addressed:
In the case of Buyer, to:
c/o Barry Stark
8181 West Broward Boulevard, Suite 255
Plantation, Florida 33324
Telephone: (954) 452-5155
Fax No.: (954) 452-5221
With a copy to (which copy shall not constitute notice):
Mark K. Somerstein, Esq.
Ruden, McClosky, Smith, Schuster & Russell, P.A.
P.O. Box 1900
Fort Lauderdale, Florida 33302
Telephone: (954) 527-2415
Fax No.: (954) 764-4996
In the case of Seller to:
Ullrich Klamm, Ph.D.
Cancer Treatment Holdings, Inc.
4491 South State Road 7
Telephone: (954) 321-9555
Fax No.: (954) 321-9588
With a copy to (which copy shall not constitute notice):
Dennis Olle, Esq.
Adorno & Zeder, P.A.
2601 S. Bayshore Drive, Suite 1600
Miami, Florida 33133
Telephone: (305) 858-5555
Fax No.: (305) 858-4777
Any party may change the address to which notices are to be addressed by giving
the other parties notice in the manner herein set forth.
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15. GOVERNING LAW; VENUE. The validity, interpretation, and
performance of this Agreement will be determined in accordance with the laws of
the State of Florida. Any action arising under this Agreement shall be venued in
Broward County, Florida.
16. COUNTERPARTS; PREPARATION; FAX SIGNATURE. This Agreement may be
executed in two or more counterparts, each of which will be deemed an original,
but all of which together shall constitute but one and the same instrument. This
Agreement has been prepared by the mutual drafting by counsel for each of the
parties and, thus, this Agreement shall not be construed more strictly against
any of the parties by virtue of the preparation of this Agreement. This
Agreement may be executed via telecopy.
17. HEADINGS. The headings, subheadings, and captions in this Agreement
are for reference purposes only and are not intended to affect the meaning or
interpretation of this Agreement.
18. SCHEDULES AND ATTACHMENTS. The schedules to be attached and other
attachments hereto and the other documents delivered in connection herewith are
a part of this Agreement.
19. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to its subject matter and supersedes all
negotiations, prior discussions, agreements, arrangements, and understandings,
written or oral, relating to the subject matter of this Agreement.
20. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon Seller
and Buyer and their respective successors and assigns. Notwithstanding the
immediately preceding sentence, Seller may not assign its rights and delegate
its duties under this Agreement without the prior written consent of Buyer.
Buyer may assign its rights (in whole or in part) and delegate its duties to any
entity affiliated with Barry Stark or Louis Boisvert, III (collectively, the
"Principals").
21. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable, invalid, or void to any extent for any reason, that provision
shall remain in force and effect to the maximum extent allowable, if any, and
the enforceability and validity of the remaining provisions of this Agreement
shall not be affected thereby.
22. FEES OF PREVAILING PARTY. If there is a dispute under this
Agreement, the prevailing party shall be entitled to recover from the losing
party all reasonable attorneys' fees and costs incurred by it in the resolution
of such dispute.
23. ACKNOWLEDGMENT. Seller acknowledges that the Principals are the:
(i) outside CPA who has provided consulting services to some or all of the
Seller and/or Affiliates; and (ii) Louis W. Boisvert, III, chief financial
officer of the Seller and/or Affiliates, respectively, and Seller waives any
conflict of interest which the Principals may have which may have arisen at any
time to and including the Closing Date. The Seller agrees to indemnify and hold
the Principals and Stark & Bennett, P.A. harmless from any loss, cost, damage or
claim (whether pre-trial, trial or appellate
23
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level) incurred by any of them by virtue of any claim by any of Seller's
shareholders of a breach of conflict of interest with the Seller and/or any
Affiliate which may have arisen at any time to and including the Closing Date.
Provided, however, notwithstanding anything to the contrary herein, the Seller
shall not be required to indemnify Louis W. Boisvert, III to the extent any
loss, cost, damage or claim (or the defense thereof) arises by virtue of his
breach of those representations and warranties as provided for in the Imputed
Knowledge Limitations (defined above). The provisions of this Section with
regard to indemnification shall survive Closing for one (1) year and the
remaining provisions of this Paragraph shall survive the Closing without
limitation.
24. ESCROW AGENT. The following shall apply with respect to Escrow
Agent's involvement in the transaction contemplated herein:
24.1 Escrow Agent shall not release any portion of the Deposit
to any party hereto prior to forwarding notice to the other party hereto in
accordance with this Agreement ("Escrow Notice"). In the event Escrow Agent
shall receive a notice of objection within ten (10) days following either
party's receipt of the Escrow Notice, then Escrow Agent shall not disburse the
Deposit and shall, at either party's request, deposit the Deposit in the
registry of a court of competent jurisdiction where the Subject Property is
located.
24.2 Unless Buyer is in default of this Agreement, any
interest earned on any monies deposited with Escrow Agent shall be paid or
credited solely to Buyer.
24.3 Escrow Agent shall not be required to take notice of any
default by any of the parties hereto or take any action with respect to such
default which, in its opinion, involves any actual or potential expense or
liability to it unless notice in writing of such default is given to it and it
is indemnified in advance in a manner satisfactory to it against such expense or
liability. Escrow Agent shall not be under any obligation to take any legal
action in connection with this Agreement or for its enforcement or to appear in,
prosecute or defend any action or enforcement or legal proceeding, which in its
opinion, would or might involve it in any cost, expense, loss or liability,
unless, and as often as required by it, Escrow Agent shall be furnished with
security and indemnity satisfactory to it against all such costs, expenses, loss
or liability. In any case, Escrow Agent shall give notice to Buyer and Seller of
its requirement of indemnity specifying the action. Without limiting the
foregoing, each party agrees to indemnify and hold the Escrow Agent harmless
from all loss, cost or expense incurred by the Escrow Agent in connection with
acting as escrow agent hereunder including, without limitation, attorneys' fees
and costs (including retaining the services of Escrow Agent's own attorneys),
but excluding any loss or costs incurred in connection with any willful
misconduct of the Escrow Agent.
24.4 Escrow Agent shall incur no liability in acting upon any
signature, notice, request, waiver, consent, receipt or other paper or document
believed by it to be genuine, and it may assume that any person purporting to
give it any notice or advance in accordance with the provisions hereof has been
duly authorized to do so, and the undersigned hereby jointly and severally
indemnify and agree to hold and save Escrow Agent harmless from and against any
and all loss, damage, cost
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<PAGE>
or expense it may suffer or incur as depository hereunder, unless caused by its
willful refusal or willful failure to act pursuant to the terms hereof.
24.5 In the event Escrow Agent perceives there to be any BONA
FIDE disagreement between any of the parties to this Agreement and any other
person, whether or not a party hereto, resulting in adverse claims or demands
being made in connection with any sums or property involved herein or affected
hereby, then Escrow Agent shall be entitled:
(a) To refuse to comply with any claim or demands on
it as long as such BONA FIDE disagreement shall continue, and in so refusing, it
shall make no delivery or other disposition of any funds then held by it
pursuant to the terms of this Agreement, and it shall not be or become liable in
any way or to any person for its failure or refusal to comply with such
conflicting or adverse claims or demands, and
(b) It shall be entitled to continue so to refrain
from acting and to so refuse to act until (A) the right of adverse claimants
shall have been finally adjudicated in a court assuming and having jurisdiction
of the funds (or other property, if any), involved herein or affected hereby, or
(B) all differences shall have been adjusted by agreement and it shall have been
notified in writing signed by all persons interested; or
(c) Interplead the sums in controversy into a court
of competent jurisdiction after deducting therefrom its filing fees, expenses
and legal fees incurred in filing the interpleader. Following said interpleader,
Escrow Agent shall, IPSO FACTO, be relieved of all liability to any party hereto
for any claims arising out of or resulting from this Agreement.
24.6 Escrow Agent shall not be bound by or charged with notice
of any transfer or assignment of any interest herein or in the subject matter
hereof, in whole or in part, made by any of the parties hereto, or its
successors or assigns, until written notice thereof is delivered to it.
25. DEFERRED ASSETS. The following shall be applicable to the Deferred
Assets: (i) the closing upon the Deferred Assets shall be on or prior to
September 30, 1998 ("Deferred Assets Closing"); (ii) all the provisions of this
Agreement including, without limitation, those relating to the conditions
precedent shall also be applicable to the Deferred Assets; (iii) in the event
the Deferred Assets are not purchased by the Deferred Assets Closing (other than
by virtue of a material breach of the Seller [whereupon Buyer shall have all
remedies available at law and in equity including the return of the Deferred
Assets Escrow] or the Buyer [for which Seller shall have the right to retain the
Deferred Assets Escrow]) then the Buyer shall receive the return of the Deferred
Assets Escrow and all parties shall be released from all further obligations
relating to the Deferred Assets; (iv) in the event the Buyer can only buy one
(1) of the two (2) centers constituting the Deferred Assets, then the purchase
price for the Deferred Assets shall be split equally between the Deferred Assets
and Buyer shall receive the return of Two Hundred Fifty Thousand Dollars
($250,000) from the Deferred Assets Escrow and the remaining Two Hundred Fifty
Thousand Dollars ($250,000) shall be paid to the Seller in consideration for the
Deferred Assets actually conveyed; (v) in the event there are reasonable
partnership obligations due in connection with the
25
<PAGE>
operation of the two (2) centers constituting the Deferred Assets between the
Closing Date and the Deferred Assets Closing, then Buyer agrees to reimburse the
Seller for Seller's pro rata contribution relating to that time period; provided
such amount does not exceed $100,000.00 in the aggregate.
Seller acknowledges that Escrow Agent represents Buyer and may
represent Buyer in the event of a conflict hereunder.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered as of the day and year first above written.
SELLER:
CANCER TREATMENT HOLDINGS, INC., a
Nevada corporation
By: ILLEGIBLE (SEAL)
--------------------------------
Name: ILLEGIBLE
------------------------------
Title: CHAIRMAN, CEO
-----------------------------
ADVANCED ONCOLOGY SERVICES, INC., a
Florida corporation
By: ILLEGIBLE (SEAL)
--------------------------------
Name: ILLEGIBLE
------------------------------
Title: PRESIDENT
-----------------------------
BUYER:
GREENSTAR HOLDINGS, INC., a Florida
corporation
By: ILLEGIBLE (SEAL)
--------------------------------
Name: ILLEGIBLE
------------------------------
Title: PRESIDENT
-----------------------------
Exhibit 10.11
[FLORIDA ATLANTIC SECURITIES CORP. LETTERHEAD]
Friday, May 29, 1998
Ullrich Klamm, Ph.D.
Chairman & CEO
4491 South State Road Seven, Suite 200
Fort Lauderdale, FL 33314
We understand that the Cancer Treatment Holdings, Inc. ("CTH"), a
Nevada corporation, (referred herein as the "Seller") and Greenstar Holdings,
Inc. (referred to herein as the "Buyer") proposed to enter into a purchase
agreement (referred to herein as the "Purchase Agreement") providing for the
sale of substantially all the assets and liabilities of CTH for a total
aggregate consideration of $2,810,000 which is to be paid from a deposit of
$50,000 made by the Buyer and held in escrow by Ruden, McClosky, Smith, Schuster
& Russell, P.A., as escrow agent, $2,260,000 due at closing and an additional
deposit, also due at closing, of $50,000, which is to be held in escrow pending
the closing on the sale of certain deferred assets specifically indentified in
the Purchase Agreement. The terms and conditions of this Transaction are set
forth in more detail in the Purchase Agreement.
You have asked for our opinion, as investment bankers, as to whether
the consideration to be recieved by the Seller pursuant to the transaction
referred to above is fair to the Seller from a financial point of view, as of
the date hereof.
In connection with our opinion, we have, among other things: (i)
reviewed certain business, financial and other data with respect to the Seller,
including (a) the consolidated financial statements for recent years and interim
periods to February 28, 1997, and (b) certain other relevant financial and
operating data relating to the Seller; (ii) reviewed the financial terms and
conditions of the Purchase Agreement; (iii) reviewed certain publicly available
information concerning the trading of common stock of CTH; (iv) compared the
Seller from a financial point of view with certain other companies in the home
health care industry which we deemed to be relevant; (v) considered the
financial terms, to the extent publicly available, of selected recent business
combinations of companies in the home health care industry; (vi) reviewed and
discussed with representatives of the management of the Seller certain
information of a business and financial nature regarding the Seller, furnished
to us by them, including financial forecasts and related assumptions of the
Seller; (vii) made inquiries regarding, and discussed, proposed transactoin and
related Purchase Agreement and other matters related thereto with the Seller's
counsel and outside accountants; (viii) performed such other analyses and
examinations as we have deemed appropriate. We were not provided with any
information relating to the Buyer other than that Greenstar Holdings, Inc. was
established for the sole purpose of this transaction and that the two known
principals, Louis W. Boisert, III, the Chief Financial Officer of CTH and Barry
Stark, a consultant to CTH, are both related parties and are not independent, as
they are participants on both sides of the transaction. We have relied upon
their representations and certain critical documents, including the financial
statements and forecasts, which were prepared, at least in part, by them.
In connection with our review, we have not assumed any obligation independently
to verify the foregoing information and the information and representations of
management, and have relied on its being accurate and complete in all material
respects With respect to the financial forecasts for the Seller provided to us
by its management, upon their advice and with your consent we have assumed for
purposes of our opinion that the forecasts have been
<PAGE>
reasonably prepared on bases reflecting the best available estimates and
judgements of its management at the time of preparation as to the future
financial performance of the Seller and that they provide a reasonable basis
upon which we can form our opinion. We have also assumed that there have been no
material changes in the Seller's assets and liabilities, financial condition,
results of operations, business or prospects since the respective dates of their
last financial statements made available to us, or since the preparation of the
financial forecast which we have relied upon. We have relied on advice of
counsel and independent accountants to the Seller as to all legal and financial
reporting matters with respect to the Seller and the Purchase Agreement. We have
assumed that the transaction will be consummated in a matter that complies in
all respects with the applicable provisions of the Securities Act of 1933, as
amended (the "Securities Act"), the Securities Exchange Act of 1934 and all
other applicable federal and state statutes, rules and regulations. In addition,
we have not assumed responsibility for making an independent evaluation of the
reasonableness of the financial forecast provided, or the underlying assumptions
thereto, we have not assumed responsibility for making an independent
evaluation, appraisal or physical inspection of any of the assets or liabilities
(contingent or otherwise) of the Seller, nor have we been furnished with any
such appraisals. We have not been requested to, and do not, express any opinion
regarding the tax effect on, and the information made available to us as of, the
date hereof. Accordingly, although subsequent developments may affect this
opinion, we have not assumed any obligation to update, revise or reaffirm this
opinion.
We have assumed with your consent that the transaction will be
consummated in accordance with the terms described in the Purchase Agreement,
including the completion of the deferred assets sales described therein, which
is an integral part of the transaction, without any further amendments thereto,
without adjustment to the acquisition consideration and without waiver by either
the Seller or Buyer of any of the conditions to its obligations thereunder. We
have not been requested to, and do not, express any opinion regarding the
transaction as it relates to the holders of any debt instruments or promissory
notes described within the financial statements of CTH.
We will recieve a fee for services rendered in connection with our
rending of this opinion. We have met with CTH as possible financial advisor in
connection with providing future services relating to the disposition of the
remaining assets, primarily the public shell corporation, and may be asked to
act on their behalf in the future.
Based upon the foregoing and in reliance thereon, it is our opinion, as
qualified herein, that the consideration to be recieved by the Seller pursuant
to the transaction is fair to the Seller from a financial point of view, as of
the date hereof.
This opinion is directed to the Chairman of CTH in his connection of
the transaction and is not a recommendation to any party. Further, this opinion
addresses only the financial fairness of the consideration to the Seller and
does not address the relative merits of the transaction and any alternatives to
the transaction, the Seller's underlying decision to proceed with or effect the
transaction, or any other aspect of the transaction. This opinion may not be
used or referred to by the Seller, quoted or disclosed to any person in any
manner, without our prior written consent.
Very truly yours,
/s/ ALAN S. PAREIRA
- ---------------------------
Alan S. Pareira
Chief Executive Officer
