Exhibit 99.1
AGREEMENT OF PAYMENT AND SATISFACTION
This Agreement is made as of the 26th day of February, 1997, between
RESPONSE ONCOLOGY, INC., a Tennessee corporation ("Response") and SEAFIELD
CAPITAL CORPORATION, a Missouri corporation ("Seafield").
WHEREAS, Response and Seafield previously entered into that certain Loan
Agreement dated as of October 4, 1996 (the "Loan Agreement") pursuant to which
Seafield agreed to loan to Response up to $23,500,000, with the indebtedness
created as a result of said loan being evidenced by that certain Adjustable Rate
Convertible Note, No. 1996A-1, dated October 4, 1996, in the principal amount of
$23,500,000 (the "Note"); and
WHEREAS, on the date hereof, the outstanding principal of the Note is
$23,500,000; and
WHEREAS, on the date hereof, the accrued interest on the Note is
$664,287.66; and
WHEREAS, the parties have agreed that Response will pay and discharge the
principal of and the accrued interest on the Note and will satisfy its other
obligations under the Loan Agreement through the issuance to Seafield of a
number of shares of Response common stock, par value $.01 per share ("Stock")
determined by dividing $8 into the aggregate of the principal of the Note as of
the Closing Date (the "Principal Amount") and the accrued interest on the Note
as of the Closing Date (the "Accrued Interest");
NOW, THEREFORE, in consideration of the premises, the mutual promises
herein contained and for other good and valuable consideration the receipt
whereof is hereby acknowledged, the parties agree as follows:
1. Stock Issuance. On the Closing Date, Response shall pay and discharge
the Note by issuing to Seafield a number of shares of Stock determined by
dividing the aggregate of the Principal Amount and the Accrued Interest by $8.
Simultaneously therewith, Response shall cause to be delivered to Seafield a
certificate evidencing said number of shares of Stock, which shares shall be
duly authorized, validly issued and outstanding, fully paid and nonassessable.
Said certificate shall contain no legends or other indications of restrictions
on transfer other than a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THE CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION
STATEMENTS UNDER SUCH ACT AND LAWS OR AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
2. Cancellation of the Note. Upon issuance and delivery to Seafield of
the shares of Stock provided for in Section 1 immediately above (the "Shares"),
the Note shall have been paid in full. Thereupon, Seafield shall xxxx the Note
"Canceled - Paid in Full" and shall return it to Response.
3. Termination of the Loan Agreement. Also upon issuance and delivery to
Seafield of the Shares, the Loan Agreement and all of the rights and obligations
of Response and Seafield thereunder shall be canceled, terminated and of no
further force or effect.
4. Closing Date. The Closing Date shall be February 26, 1997, subject to
satisfaction of all conditions to closing set forth in Section 7 below.
5. Registration Rights. The terms and provisions of Section 5.1 of that
certain Security Purchase Agreement dated September 26, 1990 between Response
and Seafield, as amended (the "Securities Purchase Agreement"), shall apply to
Seafield and Response with respect to all shares of Stock owned by Seafield from
time to time, including without limitation all the Shares issued pursuant to
Section 1 hereof. To that end, the term "Shares" as used in said Section 5.1
shall hereafter include any and all shares of Response's common stock par value
$0.01, whether acquired pursuant to the aforementioned Security Purchase
Agreement, or thereafter and whether constituting Shares for purposes of this
Agreement or otherwise. Nothing in this Section 5 shall serve to restrict or
narrow any registration rights heretofore granted by Response to Seafield with
respect to shares of Response's Stock.
6. Representations, Etc..
(a) Seafield represents that it has knowledge and experience in
financial and business matters generally and that it has had access to
Response's records, operational affairs and other matters continually since
October, 1990 as a result of the fact that Seafield officers have been members
of Response's Board of Directors since that date. Accordingly, Seafield is
capable of evaluating the merits and risks of its purchase of the Shares and is
able to bear the economic risks of said investment. The Shares are being
acquired by Seafield solely for Seafield's own account and with no present
intention of making public distribution thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") other than pursuant to
a registration statement declared
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effective by the Securities and Exchange Commission. Seafield is aware that
none of the Shares have been registered under the Securities Act or any state
securities law and that, accordingly, the Shares must be held indefinitely
unless they are subsequently registered or an exemption from such registration
is available.
(b) Seafield agrees that the provisions of Section 2.7 ("Transfer")
of the Securities Purchase Agreement shall apply to the Shares.
(c) Response represents that Seafield's acquisition of the Shares on
the terms herein set forth has been approved by Response's Board of Directors;
that the Seafield representatives on the Board of Directors did not participate
in or vote upon such approval; that the Tennessee Business Combination Act as
such term is defined in Chapter 35 of the Tennessee Business Corporation Act
(the "Corporation Act") is not applicable to Seafield; and that the Tennessee
Control Share Acquisition Act as such term is defined in Chapter 35 of the
Corporation Act, is not applicable to Response nor to Seafield with respect to
the Shares.
7. Conditions to Closing. The obligations of Seafield hereunder, and,
specifically, the payment, satisfaction and cancellation of the Note in
consideration of the receipt by Seafield of the Shares are subject to each and
every one of the following:
(a) The accuracy of and compliance with, as of the Closing Date, the
representations, warranties and agreements herein contained;
(b) The delivery to Seafield of an opinion of Response's counsel to
the effect that, among other things, the Shares are duly authorized, validly
issued and outstanding, fully paid and nonassessable, which opinion shall be in
form reasonably acceptable to Seafield; and
(c) Response shall have taken all actions, including without
limitation the furnishing of notification under NASD Rule 4310(c)(17), and shall
pay all fees and expenses necessary, to cause the Shares to be included in and
eligible for trading on, and the Shares shall be included in and eligible for
trading on, the NASDAQ National Market.
8. Binding Effect; Inurement; Assignment.
(a) This Agreement and all of its terms and provisions will be
binding upon and shall inure to the benefit of Response and Seafield and their
respective successors and assigns. Response acknowledges and agrees that the
rights and privileges afforded Seafield in this Agreement, including without
limitation, those rights and privileges referred to in Section 5 hereof, are
held, owned and possessed by Seafield, and all obligations of Response under or
pursuant to the Securities Purchase Agreement as amended, including those
contained in Section 5.1 of the Securities Purchase Agreement,
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inure to the benefit of Seafield and its successors and assigns, notwithstanding
(or as a result of) the previous assignment by Seafield to its then wholly-owned
subsidiary Dakota Ventures, Inc., of Seafield's rights and privileges under the
Securities Purchase Agreement and the subsequent merger of that subsidiary into
Seafield.
(b) Seafield may assign its rights and privileges under this
Agreement to an entity which at the time of such assignment constitutes a
wholly-owned subsidiary of Seafield if simultaneously with such assignment there
are transferred to said subsidiaries some or all of the shares of Stock
previously owned or as a consequence of this Agreement acquired by Seafield.
Notwithstanding Seafield's assignment of such rights and privileges to a
wholly-owned subsidiary, Seafield shall remain responsible for its
representations
herein contained.
9. Notices. All notices, requests and other communications under this
Agreement shall be made as provided in the Securities Purchase Agreement.
10. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, without giving effect to the
principles of conflict of law.
11. Counterparts. This Agreement may be executed in counterparts which
together shall constitute one and the same instrument.
12. Entire Agreement. This Agreement, together with the Securities
Purchase Agreement to the extent referred to or incorporated herein, constitutes
the entire agreement between Response and Seafield relating to the subject
matter hereof and there are no other terms of such agreement except those
contained here and in the Securities Purchase Agreement. Nothing herein shall
amend or otherwise modify or affect the terms and provisions of the Securities
Purchase Agreement, as previously amended, all of which shall remain in full
force and effect. This Agreement may not be modified or amended except in
writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement of Payment and
Satisfaction to be executed on their respective behalves on the date first above
written.
RESPONSE ONCOLOGY, INC.
By: _______________________________
Name: _____________________________
Title: ____________________________
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SEAFIELD CAPITAL CORPORATION
By: _______________________________
Name: _____________________________
Title: ____________________________
