EXHIBIT 10.3
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement (this "Agreement") dated as of September
18, 1997 is by and among Metroplex Hematology/Oncology Associates, L.L.P., a
Texas limited liability partnership ("Metroplex"), MHOA Texas I, L.L.C., a Texas
limited liability company ("Texas Sub"), Physician Health Corporation, a
Delaware corporation ("PHC") and each of the undersigned partners of Metroplex
(the "Metroplex Providers").
RECITALS:
WHEREAS, Metroplex, Texas Sub, PHC and the Metroplex Providers are
parties to that certain Management Services Agreement dated as of June 1, 1997
(the "Management Services Agreement"); and
WHEREAS, Metroplex, Texas Sub and PHC are parties to that certain
Assumption and Release Agreement dated as of June 16, 1997 (the "Assumption and
Release Agreement"); and
WHEREAS, Metroplex, Texas Sub, PHC and the Metroplex Providers are
parties to that certain Exchange Rights Agreement dated as of June 16, 1997 (the
"Exchange Rights Agreement"); and
WHEREAS, the undersigned parties desire to amend the Management
Services Agreement, the Assumption and Release Agreement and the Exchange Rights
Agreement as set forth herein;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual agreements contained herein, Metroplex, Texas Sub, PHC and the Metroplex
Providers hereby agree as follows:
1. Paragraph I of the Assumption and Release Agreement is hereby
amended to read in its entirety as follows:
I. PHC has executed and delivered that certain promissory note
(the "Note"), dated the date hereof, in the original principal
amount of $6,210,000.00, payable to the order of Payee, pursuant
to that certain Asset Purchase and Contribution Agreement of even
dated herewith executed by and between Payee, PHC, MHOA, and
certain other parties.
2. Paragraph 3 of the Assumption and Release Agreement is hereby
amended to read in its entirety as follows:
3. Principal Balance. The unpaid principal balance of the Note as
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of the date hereof is $6,210,000.
3. Section 6.5 of the Management Services Agreement is hereby amended
to read in its entirety as attached to Exhibit A of this
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Agreement.
4. Section 1(e)(ix) of the Management Services Agreement is hereby
amended to read in its entirety as follows:
(ix) $180,000 per year for a period of six years after the Closing
Date, representing the amount approximately equal to the annual
accrued but unpaid interest of the Metroplex Loans as of the
Closing Date;
5. Section 2.2 of the Exchange Agreement is hereby amended to read in
its entirety as follows:
2.3 Termination of Obligation to Issue PHC Shares. The Exchange
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Rights shall expire with respect to any Texas Sub Interests for
which a Notice of Exchange has not been delivered to PHC on or
before the first anniversary of the consummation of the earlier to
occur of (i) PHC's initial public
offering or (ii) a transaction pursuant to which PHC's Common
Stock is converted into or exchanged for equity securities that
are registered under the Securities Exchange Act of 1934, as
amended.
6. Section 3.1 of the Exchange Agreement is hereby amended to read in
its entirety as follows:
Section 3.1 Covenants of PHC.
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A. During the pendency of the Exchange Rights, PHC shall deliver
to Metroplex in a timely manner all reports filed by PHC with the
SEC to the extent PHC also transmits such reports to its
shareholders and all other communications transmitted from time to
time by PHC to its shareholders generally.
B. PHC shall notify Metroplex, upon the written request of
Metroplex, of the then current Exchange Factor.
The parties hereto further acknowledge that Gemini Rx, Inc. is part of
the existing Medical Offices, as that term is defined in the Management Services
Agreement.
Except as specifically amended above, the Management Services
Agreement, the Exchange Rights Agreement and the Assumption and Release
Agreement shall remain in full force and effect.
EXECUTED as of the date first above written.
METROPLEX
HEMATOLOGY/ONCOLOGY
ASSOCIATES, L.L.P., a Texas limited
liability partnership
By: /s/ Xxxxxx XxXxxxxxx, M.D., P.A.
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Title: Managing Partner and President
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METROPLEX PROVIDERS:
Xxxxxx XxXxxxxxx, M.D., P.A.
By: /s/ Xxxxxx XxXxxxxxx, M.D., P.A.
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Its: President
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Xxxxxx Xxxxxxxxxxxx, M.D., P.A.
By: /s/ Xxxxxx Xxxxxxxxxxxx, M.D., P.A.
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Its: Xxxxxx Xxxxxxxxxxxx, M.D., P.A.
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Xxxxx Xxxxxxxxxxx, D.O., P.A.
By: /s/ Xxxxx Xxxxxxxxxxx, D.O., P.A.
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Its: Xxxxx Xxxxxxxxxxx, D.O., P.A.
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Xxxx X. Xxxxx, D.O., P.A.
By: /s/ Xxxx X. Xxxxx D.O.,P.A.
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Its:
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Xxxxxx Xxxxxx, M.D., P.A.
By: /s/ Xxxxxx Xxxxxx, M.D., P.A.
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Its:
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Xxxxx Xxxxx, M.D., P.A.
By: /s/ Xxxxx Xxxxx, M.D., P.A.
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Its:
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Caderao Radiation Oncology, P.A.
By: /s/ Xxxxx X. Xxxxxxx, P.A.
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Its:
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PHYSICIAN HEALTH CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Its:
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MHOA TEXAS I, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
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Its:
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EXHIBIT A
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6.5 Repurchase of Assets.
(c) If this Agreement is terminated during the Repurchase Period,
except pursuant to Section 6.2(c)(iv) hereof, Metroplex shall purchase
from Texas Sub all of the FFE for cash in an amount (the "Metroplex
Buyout Amount") equal to the lesser of (i) $13,000,000, or (ii) the
balance of the DVI Purchase Loans at the Termination Date (as hereafter
defined), assuming the reduction of principal balance occurring between
June 16, 1997, and the date of termination of this Agreement (the
"Termination Date") pursuant to the amortization schedule attached
hereto as Schedule 6.5(a). In no event, however, shall the Metroplex
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Buyout Amount be less than the fair market value of the FFE. Beginning
on the seventh anniversary of the date of this Agreement, the Metroplex
Buyout Amount shall equal the fair market value of the FFE.
(d) Upon receipt of the Metroplex Buyout Amount by Texas Sub, Texas
Sub shall transfer and assign all of the FFE to Metroplex free and
clear of liens, other than liens securing PHC Expansion Borrowings,
provided, however, that on the date of transfer of the FFE (the "FFE
Transfer Date"), the PHC Expansion Borrowings secured by liens on the
FFE shall not exceed $13,000,000. In addition, in the event of the
purchase of all the FFE by Metroplex pursuant to this Section 6.5(b):
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(i) Fair market value of the FFE and the Metroplex Buyout
Amount, as applicable, shall be determined by a nationally
recognized accounting firm capable of making such
determinations and chosen by Metroplex from a list of
three such firms submitted by Texas Sub. Metroplex shall
submit its choice of such firms in writing no later than
five days after receipt of such list from Texas Sub. Texas
Sub and Metroplex shall bear the cost of such
determination equally; and
(ii) The restrictive covenants contained in Section 4.7(b) of
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this Agreement shall terminate and Texas Sub shall cease
to be a third-party beneficiary to any Physician Owner
Employment Agreement upon payment at any time by Metroplex
of the Metroplex Buyout Amount in accordance with Section
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6.5(a) or upon termination of this Agreement pursuant to
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Section 6.2(c)(iv) hereof. If Metroplex does not remit
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the Metroplex Buyout Amount in accordance with Section
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6.5(a) hereof to Texas Sub within six months after
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determination of the Metroplex Buyout Amount, the
provisions of Section 4.7 of this Agreement shall survive
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in their entirety for a period of two years following the
Termination Date and Texas Sub may dispose of all or any
of the FFE in any manner that Texas Sub shall determine in
its sole discretion.
(e) If this Agreement is terminated pursuant to Section 6.2(c)(iv)
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hereof, in exchange for the assumption by Metroplex of all indebtedness
and obligations of Texas Sub under the DVIFS Loan Agreement, Texas Sub
agrees to take all reasonable and necessary steps to transfer the
Metroplex Assets to Metroplex. In addition, Texas Sub shall (i) take
all steps requested by Metroplex reasonably necessary to assign to
Metroplex Texas Sub's interest and obligations under all Clinic real
estate leases and other Clinic contracts which Texas Sub is a party,
and (ii) assign to Metroplex Texas Sub's rights and obligations under
the employment agreements of those employees employed by Metroplex
prior to the Effective Date and subsequently employed by Texas Sub.
Section 7. Representations and Warranties of the Parties.
7.1 Metroplex. Metroplex hereby represents and warrants to Texas Sub,
as of the Effective Date, as follows:
(a) Organization and Good Standing. Metroplex is a limited
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liability partnership duly organized, validly existing and in good
standing under the laws of the State of Texas. Metroplex has all
necessary power to own all of its properties and assets and to carry on
its business as now being conducted.
(b) No Violations. Metroplex has the partnership authority to
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execute, deliver and perform this Agreement and all agreements executed
and delivered by it pursuant to this Agreement, and has taken all
action required by law, its partnership agreement or otherwise to
authorize the execution, delivery and performance of this Agreement and
such related documents. The execution and delivery of this Agreement
does not and, subject to the consummation of the transactions
contemplated hereby, will not, violate any provisions of the
partnership agreement of Metroplex or any provisions of or result in
the acceleration of any obligation under any mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment or decree, to
which Metroplex is a party, or by which it is bound. This Agreement
has been duly executed and delivered by Metroplex and constitutes the
legal, valid and binding obligation of Metroplex, enforceable in
accordance with its terms.
(c) Financial Information. Metroplex has hereto furnished Texas Sub
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with complete copies of financial records pursuant to the Purchase
Agreement about the Clinic which records are true and correct in all
material respects and are reflective of the financial results
experienced by the Clinic for the periods addressed in such records.
7.2 Texas Sub. Texas Sub hereby represents to Metroplex, as of June 16,
1997, as follows:
(a) Organization and Good Standing. Texas Sub is a limited
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liability company duly organized, validly existing and in good standing
under the laws of the State of Texas. Texas Sub has all necessary power
to own all of its properties and assets and to carry on its business as
now being conducted.
(b) No Violations. Texas Sub has the authority to execute, deliver
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and perform this Agreement and all agreements executed and delivered by
it pursuant to this Agreement, and has taken all action required by
law, its articles of organization, regulations or otherwise to
authorize the execution, delivery and performance of this
