MERGER AGREEMENT
BY AND AMONG
SPECIALTY CARE NETWORK, INC.,
ORTHOPAEDIC SURGERY, LTD.,
J.C.P. XXXXXXX, JR., M.D.,
XXXXXXX X. XXXXXX, M.D.
XXXXX X. XXXXXXX, M.D.,
XXXXXXX XXXXXXX-XXXXX, M.D.
and
XXXX X. XXXXXX, M.D.
June 30, 1997
MERGER AGREEMENT
----------------
THIS MERGER AGREEMENT (this "Agreement") is entered into this the 30th
day of June, 1997, by and among SPECIALTY CARE NETWORK, INC., a Delaware
corporation ("SCN"), ORTHOPAEDIC SURGERY, LTD., a Virginia professional
corporation ("OSL") , J.C.P. XXXXXXX, JR., M.D., XXXXXXX X. XXXXXX, M.D., XXXXXX
X. XXXX, M.D., and XXXXXXX XXXXXXX-XXXXX, M.D. (collectively, the "OSL
Stockholders"). SCN, OSL and the OSL Stockholders are referred to collectively
herein as the "Parties".
W I T N E S S E T H:
--------------------
WHEREAS, SCN and OSL have determined that it is desirable and in the
best interests of their respective corporations and stockholders that OSL merge
with and into SCN, with SCN as the surviving corporation, on the terms and
subject to the conditions set forth in this Agreement and the corresponding
Agreement and Plan of Merger in the form attached hereto as Exhibit 1 (the
"Agreement and Plan of Merger");
WHEREAS, SCN and OSL intend that the transaction contemplated by this
Agreement shall qualify as a tax-free reorganization under Section 368(a)(1)(A)
of the Internal Revenue Code of 1986, as amended (the "Code") and intend that
this Agreement along with the Agreement and Plan of Merger shall constitute a
"plan of reorganization" within the meaning of Section 368 of the Code;
WHEREAS, the Parties do not intend for this Agreement to be a binding
obligation of any Party unless and until the provisions of Section 6 are
satisfied or waived by the appropriate party; and
WHEREAS, the Parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.
NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the Parties, and in accordance with the applicable
provisions of the Delaware General Corporation Law and the Virginia Stock
Corporation Act, the parties hereby agree as follows:
1. Definitions
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Agreement" has the meaning set forth in the preface above.
"Agreement and Plan of Merger" has the meaning set forth in the first
recital above.
"Applicable Laws" has the meaning set forth in Section 3(r).
"Closing Date" has the meaning set forth in Section 2(b) below.
"Closing" has the meaning set forth in Section 2(b) below.
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"Code" has the meaning set forth in the recitals above.
"Conversion Ratio" has the meaning set forth in Section 2(d)(v) below.
"Delaware Certificate of Merger" has the meaning set forth in Section
2(a) below.
"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Effective Time" has the meaning set forth in Section 2(d)(i) below.
"Employee Benefit Plans" has the meaning set forth in Section 3(p)(i)
below.
"Environmental Laws" means all federal, state, and local laws, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder and other governmental requirements relating to pollution,
control of chemicals, storage and handling of petroleum products, management of
waste (including biohazardous or biomedical waste), discharges of materials into
the environment, health, safety, natural resources, and the environment,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
"ERISA" has the meaning set forth in Section 3(p)(i) below.
"Excluded Assets" has the meaning set forth in Section 5(m) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Hazardous Materials" has the meaning set forth in Section 3(t) below.
"IRS" means the Internal Revenue Service.
"Knowledge" means actual knowledge without any independent
investigation.
"Medical Waste" includes, but is not limited to, pathological waste,
blood, sharps, wastes from surgery or autopsy, dialysis waste, including
contaminated disposable equipment and supplies, cultures and stock of infectious
agents and associated biological agents, contaminated animals, isolation wastes,
contaminated equipment, laboratory waste, various other biological waste and
discarded materials contaminated with or exposed to blood, excretion or
secretion from human beings or animals, and any substance, pollutant, material
or contaminant listed or regulated under the Medical Waste Tracking Act of 1988,
42 U.S.C. xx.xx. 6992, et seq.
"Medical Waste Law" means the Medical Waste Tracking Act of 1988, as
amended, the U.S. Public Vessel Medical Waste Anti-Dumping Act of 1988, 33
U.S.C.A. xx.xx. 2501, et seq., the Marine Protection, Research and Sanctuaries
Act of 1972, 33 U.S.C.A. xx.xx. 1401, et seq., the Occupational Safety and
Health Act, 29 U.S.C.A. xx.xx. 651, et seq., the United States Department of
Health and Human Services, National Institute for Occupational Self-Safety
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and Health Infectious Waste Disposal Guidelines, Publication No. 88-119, all
regulations and orders issued pursuant to any of the foregoing, and any other
federal, state, regional, county, municipal or other local laws, regulations and
ordinances insofar as they purport to regulate Medical Waste or impose
requirements relating to Medical Waste.
"Merger" has the meaning set forth in Section 2(a) below.
"OSL" has the meaning set forth in the preface above.
"OSL Share" means any share of the common stock of OSL issued and
outstanding at the date of this Agreement.
"OSL Stockholders" has the meaning set forth in the preface above.
"OSCII" has the meaning set forth within the definition of "Service
Agreement" below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.
"Parties" has the meaning set forth in the preface above.
"PBGC" has the meaning set forth in Section 3(p)(ii) below.
"PCBs" has the meaning set forth in Section 3(t) below.
"Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Practice Assets" has the meaning set forth in Section 3(l) below.
"SCN Share Price" means the average of the closing asking price of one
(1) share of SCN common stock as reported on the NASDAQ National Market System
for the ten (10) trading days immediately preceding June 30, 1997.
"SCN Share" means any share of the common stock, $.001 par value per
share, of SCN.
"SCN" has the meaning set forth in the preface above.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge or other security interest other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
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"Service Agreement" shall mean that certain Service Agreement dated as
of June 30, 1997 by and among SCN, Orthopaedic Surgery Centers, P.C. II,
("OSCII") and the OSL Stockholders to be executed and delivered at the Closing.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Surviving Corporation" has the meaning set forth in Section 2(a)
below.
"Virginia Articles of Merger" has the meaning set forth in Section 2(a)
below.
"Virginia Stock Corporation Act" means the Stock Corporation Act of the
State of Virginia, as amended.
2. Basic Transaction
(a) The Merger. On and subject to the terms and conditions of this
Agreement, OSL will merge with and into SCN (the "Merger") at the Effective
Time. SCN shall enter into the Agreement and Plan of Merger upon adoption of the
Agreement and Plan of Merger by the Board of Directors of SCN and the
satisfaction or waiver of the conditions precedent to SCN's obligations set
forth in this Agreement. OSL shall enter into the Agreement and Plan of Merger
upon adoption of the Agreement and Plan of Merger by the Board of Directors of
OSL and the OSL Stockholders and the satisfaction or waiver of the conditions
precedent to OSL's obligation set forth in this Agreement. Upon all other
conditions herein being satisfied or waived in accordance with the terms of this
Agreement, a Certificate of Merger in substantially the form attached hereto as
Exhibit 2(a)(1) (the "Delaware Certificate of Merger") shall be executed and
filed with the Secretary of State of the State of Delaware and Articles of
Merger in substantially the form attached hereto as Exhibit 2(a)(2) (the
"Virginia Articles of Merger")shall be executed and filed with the State
Corporation Commission of the State of Virginia, together with all certificates
or documents as may be required to be filed under the laws of the State of
Delaware and the State of Virginia to effect the Merger. Thereafter, the
separate corporate existence of OSL shall cease and OSL shall be merged with and
into SCN (the "Surviving Corporation").
(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxx & Xxxxxxx,
Norfolk, Virginia, commencing at 9:00 A.M. local time on June 30, 1997, or such
other date or place as the Parties may mutually determine (the "Closing Date").
Time is of the essence for this Agreement.
(c) Actions at the Closing. At the Closing, (i) OSL will deliver to SCN
the various certificates, instruments, and documents referred to in Section 7(a)
below, (ii) SCN will deliver to OSL the various certificates, instruments, and
documents referred to in Section 7(b) below, (iii) SCN and OSL will file with
the Secretary of State of the State of Delaware the Delaware Certificate of
Merger, and (iv) SCN and OSL will file with the State Corporation Commission of
the State of Virginia the Virginia Articles of Merger.
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time
(the "Effective Time") set forth in the Delaware Certificate of Merger
which shall be filed with the Secretary of State of the State of
Delaware and the Virginia Articles of Merger which shall be filed with
the State Corporation Commission of the State of Virginia . The Merger
shall have the effect set forth in the Delaware General Corporation Law
and the Virginia Stock Corporation Act. The Surviving Corporation may,
at any time after the Effective Time, take any action
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(including executing and delivering any document) in the name and on
behalf of either SCN or OSL in order to carry out and effectuate the
transactions contemplated by this Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation of SCN in effect at and as of the Effective Time will
remain the Certificate of Incorporation of the Surviving Corporation
without any modification or amendment as a result of the Merger.
(iii) Bylaws. The Bylaws of SCN in effect at and as of the
Effective Time will remain the Bylaws of the Surviving Corporation
without any modification or amendment as a result of the Merger.
(iv) Directors and Officers. The directors and officers of SCN
in office at and as of the Effective Time will remain the directors and
officers of the Surviving Corporation (retaining their respective
positions and terms of office).
(v) Conversion of OSL Shares. At and as of the Effective Time,
each share of stock of SNG shall be converted into the right to receive
an aggregate payment of $8,065.70. At the option of each SNG
Stockholder, such consideration may be paid up to fifty-three percent
(53%) in cash with the remainder to be paid by delivery of that certain
number of SCN shares equal to the dollar amount of the portion of the
Merger Consideration payable in SCN shares divided by the SCN Share
Price (the "Conversion Ratio"). The ratio between SCN Shares and cash
to be received by each SNG Stockholder is set forth on Schedule
2(d)(v). The Conversion Ratio shall be subject to equitable adjustment
in the event of any stock split, stock dividend, reverse stock split,
or other change in the number of OSL Shares or SCN Shares outstanding.
(vi) SCN Shares. Each SCN Share issued and outstanding at and
as of the Effective Time will remain issued and outstanding and shall
be unaffected by the Merger.
(e) No Fractional Shares. No fractional SCN Shares shall be issued
pursuant to the Merger. In lieu of the issuance of any such fractional SCN
Shares, cash adjustments will be paid to holders in respect of any fractional
SCN Shares that would otherwise be issuable. The amount of such adjustment shall
be the product of such fraction of a SCN Share multiplied by the SCN Share
Price.
3. Representations and Warranties of OSL and OSL Stockholders. OSL and
the OSL Stockholders, separately (both as to each OSL Stockholder and OSL and
with respect to each OSL Stockholder only as to any breach of the representation
and warranties caused by such OSL Stockholder or by OSL) and not jointly and
severally, represent and warrant to SCN that the statements contained in this
Section 3 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 3), except as set forth in the disclosure schedule (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Section 3. Information
included in the Disclosure Schedules, regardless of the section of the
Disclosure Schedule under which it appears, shall be deemed sufficient
disclosure so long as such information constitutes fair notice. The Disclosure
Schedule will be delivered upon execution of this Agreement; provided, however,
that OSL and the OSL Stockholders shall have the right to update the Disclosure
Schedule and deliver such updated Disclosure Schedule to SCN on the Closing
Date.
(a) Organization, Qualification, and Corporate Power. OSL is a
professional corporation duly organized, validly existing, and in good standing
under the laws of the State of Virginia . OSL is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in which
the character or location of the properties
5
owned or the business conducted by OSL makes such qualification necessary. OSL
has the full corporate power and authority to carry on the business in which it
is engaged and to own and use the properties owned and used by it.
(b) OSL Stockholder Interests and Capitalization. The capital stock of
OSL is owned in the manner set forth in Section 3(b) of the Disclosure Schedule.
All of the issued and outstanding OSL Shares have been duly authorized and are
validly issued, fully paid, and nonassessable. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights or other contracts or commitments that could require OSL
to issue, sell or otherwise cause to become outstanding any of its capital
stock. There are no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to OSL. As of the date of
this Agreement, the authorized capital stock of OSL consists of 15,000 shares of
OSL common stock, of which 736.7647 shares are issued and outstanding.
(c) Authorization of Transaction. OSL has the full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of OSL and the OSL Stockholders, enforceable in accordance with its terms and
conditions.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, professional regulatory organization or court to which OSL
is subject or any provision of the charter or bylaws of OSL or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which OSL is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). OSL is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(e) Subsidiaries and Investments. Except as listed on Section 3(e) of
the Disclosure Schedule, OSL does not own, directly or indirectly, any capital
stock or other equity ownership or proprietary interest in any other
corporation, partnership, association, limited liability company, trust, joint
venture or other entity.
(f) Financial Statement. OSL has furnished SCN with unaudited balance
sheets dated December 31, 1995 and 1996 and April 30, 1997 and unaudited income
statements for the twelve (12) month periods ending December 31, 1996, 1995 and
1994 and the four (4) months ended April 30,1997. Such financial statements,
including the notes thereto, except as indicated therein, were prepared on a
basis consistent with past accounting practices of OSL and fairly present the
results of operations for the periods noted therein. The balance sheets of OSL
delivered by OSL to SCN fairly present the financial condition of OSL at the
date thereof, and except as indicated therein, reflect all claims against and
all debts and liabilities of OSL, fixed or contingent, as of the date thereof.
(g) Undisclosed Liabilities. OSL has no material, uninsured liability
(whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, and whether due or to become
due), including any liability for taxes, except for (i) liabilities set forth on
the face of the balance sheet dated as of December 31, 1996 and (ii) liabilities
which have arisen after December 31, 1996 in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused in any material respect by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
6
(h) Brokers' Fees. OSL does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(i) Material Contracts. Section 3(i) of the Disclosure Schedule lists
the following contracts and other material agreements to which OSL is a party:
(i) any agreement (or group of related agreements) for the
lease of real or personal property to or from any Person;
(ii) any agreement (or group of related agreements) for the
purchase or sale of supplies, products, or other personal property or
for the furnishing or receipt of services;
(iii) any agreement concerning a partnership, limited
liability company or joint venture;
(iv) any agreement (or group of related agreements) under
which OSL has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation
pursuant to which it has imposed a Security Interest in respect of any
of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of OSL's current or former directors,
officers, and employees;
(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $25,000 or providing severance benefits;
(viii) any agreement pursuant to which OSL has advanced or
loaned any amount to any of its directors, officers, and employees;
(ix) any agreement pursuant to which the consequences of a
default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or
future prospects of OSL; or
(x) any other agreement (or group of related agreements)
outside the ordinary course of OSL's business or operations the
performance of which involves consideration in excess of $15,000.
OSL has delivered or given SCN access to a correct and complete copy of each
written agreement listed in Section 3(i) of the Disclosure Schedule (as amended
through the Closing Date) and a written summary setting forth the terms and
conditions of each oral agreement referred to in Section 3(i) of the Disclosure
Schedule. With respect to each such agreement: (A) the agreement is legal,
valid, binding, enforceable, and in full force and effect; (B) except as set
forth in Section 3(i) of the Disclosure Schedule, no notice of this Agreement or
consent of any third party is required in order for OSL to execute and deliver
this Agreement or to consummate the transactions contemplated hereby, and, after
assignment to SCN at Closing, the agreement will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms; (C) no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) no party has
repudiated any provision of the agreement.
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(j) Insurance; Malpractice. Section 3(j) of the Disclosure Schedule
contains a list and brief description of all policies or binders of fire,
liability, product liability, workers compensation, health and other forms of
insurance policies or binders currently in force insuring against risks which
will remain in full force and effect at least through the Closing Date. Section
3(j) of the Disclosure Schedule contains a description of all current
malpractice liability insurance policies of OSL Stockholders, OSL and OSL's
professional employees and all predecessor policies in effect since February 1,
1990. Neither OSL, the OSL Stockholders, nor OSL's professional employees have,
in the last seven (7) years, filed a written application for any insurance
coverage relating to OSL's business or property which has been denied by an
insurance agency or carrier. OSL, OSL's professional employees and the OSL
Stockholders have been continuously insured for professional malpractice claims
during the same period. Section 3(j) of the Disclosure Schedule also sets forth
a list of all claims for any insured loss in excess of Five Thousand Dollars
($5,000.00) per occurrence filed by or against OSL, OSL's professional employees
or the OSL Stockholders during the three (3) year period immediately preceding
the date hereof, including workers compensation, general liability,
environmental liability and professional malpractice liability claims. None of
OSL, OSL's professional employees or the OSL Stockholders is in material default
with respect to any provision contained in any such policy and none of them has
failed to give any notice or present any claim under any such policy in due and
timely fashion.
(k) No Changes Prior to Closing Date. During the period from December
31, 1996 through the date hereof, OSL has not (i) incurred any liability or
obligation of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and
whether due or to become due), except in the Ordinary Course of Business, (ii)
written off as uncollectible any notes or accounts receivable, except write-offs
in the Ordinary Course of Business charged to applicable reserves, none of which
individually or in the aggregate is material to OSL, (iii) conducted its
business in such a manner so as to materially increase its accounts payable or
so as to materially decrease its accounts receivable, (iv) granted any increase
in the rate of wages, salaries, bonuses, or other remunerations of any employee,
except in the Ordinary Course of Business, (v) canceled or waived any claims or
rights of substantial value, (vi) made any change in any method of accounting,
(vii) otherwise conducted its business or entered into any transaction, except
in the usual and ordinary manner and in the Ordinary Course of Business, (viii)
agreed, whether or not in writing, to do any of the foregoing, or (ix) disposed
of its assets other than in the Ordinary Course of Business.
(l) Title; Condition. Section 3(l) of the Disclosure Schedule contains
a complete, true and correct list of those assets which are material to the
business or operations of OSL (the "Practice Assets"). OSL has good and
marketable title to all of the Practice Assets subject to no mortgage, pledge,
lien, lease, conditional sales agreement, option, right of first refusal or any
other encumbrance or charge, including taxes. OSL agrees to remove all security
interests reflected on any search of public records, if any, prior to the
Effective Time and remove any other security interest filed with respect to the
Practice Assets between the date of such search of public records and the
Effective Time.
(m) Litigation. There is no suit, action, proceeding at law or in
equity, arbitration, administrative proceeding or other proceeding or
investigation by any governmental entity pending, or threatened against, or
affecting OSL or any of the Practice Assets, or any physician or other health
care professional engaged or employed by OSL, and there is no basis for any of
the foregoing. None of the actions, suits, proceedings, hearings, and
investigations set forth in Section 3(m) of the Disclosure Schedule could result
in any material adverse change in the operations, results of operations, or
future prospects of the business assets to be operated by SCN after the Closing.
(n) Permits and Licenses. OSL and all physicians and other health care
professionals engaged or employed by OSL have all material permits and licenses
required by all applicable laws; have made all material regulatory filings
necessary for the conduct of OSL's business; and are not in material violation
of any of said permitting or licensing requirements.
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(o) Tax Matters. All federal, state and other tax returns of OSL
required by law to be filed have been timely filed, and OSL has paid or
adequately provided for all taxes (including taxes on properties, income,
franchises, licenses, sales and payrolls) which have become due pursuant to such
returns or pursuant to any assessment, except for any taxes and assessments, the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which OSL has set aside on
its books adequate reserves. There are no tax liens on any of OSL's assets
except those with respect to taxes not yet due and payable. There are no pending
tax examinations of OSL's tax returns nor has OSL received a revenue agent's
report asserting a tax deficiency in the last twelve (12) months. There are not
and will not be at the Closing Date, any claims pending or asserted against OSL
for unpaid taxes by any federal, state or other governmental body. OSL has
withheld from each payment made to employees of OSL the amount of all taxes
(including, but not limited to, federal, state and local income taxes and
Federal Insurance Contribution Act taxes) required to be withheld therefrom and
all amounts customarily withheld therefrom, and has set aside all other employee
contributions or payments customarily set aside with respect to such wages and
has paid or will pay the same to, or has deposited or will deposit such payment
with, the proper tax receiving officers or other appropriate authorities.
(p) Employee Benefit Plans.
(i) List of Plans. Section 3(p) of the Disclosure Schedule
contains an accurate and complete list of all employee benefit plans
("Employee Benefit Plans") within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
whether or not any Employee Benefit Plans are otherwise exempt from the
provisions of ERISA, established, maintained or contributed to by OSL
(including all employers (whether or not incorporated) which by reason
of common control are treated together with OSL and/or the OSL
Stockholders as a single employer within the meaning of Section 414 of
the Code) since September 2, 1974.
(ii) Status of Plans. OSL has never maintained and does not
now maintain or contribute to any Employee Benefit Plan subject to
ERISA which is not in substantial compliance with ERISA, or which has
incurred any accumulated funding deficiency within the meaning of
Section 412 or 418B of the Code, or which has applied for or obtained a
waiver from the Internal Revenue Service of any minimum funding
requirement under Section 412 of the Code or which is subject to Title
IV of ERISA. OSL has not incurred any liability to the Pension Benefit
Guaranty Corporation ("PBGC") in connection with any Employee Benefit
Plan covering any employees of OSL or ceased operations at any facility
or withdrawn from any such Plan in a manner which could subject it to
liability under Section 4062(f), 4063 or 4064 of ERISA, and knows of no
facts or circumstances which might give rise to any liability of OSL to
the PBGC under Title IV of ERISA which could reasonably be anticipated
to result in any claims being made against OSL by the PBGC. OSL has not
incurred any withdrawal liability (including any contingent or
secondary withdrawal liability) within the meaning of Sections 4201 and
4202 of ERISA, to any Employee Benefit Plan which is a Multi employer
Plan (as defined in Section 4001 of ERISA), and no event has occurred,
and there exists no condition or set of circumstances, which represent
a material risk of the occurrence of any withdrawal from or the
partition, termination, reorganization or insolvency of any
Multiemployer Plan which would result in any liability of OSL.
(iii) Contributions. Full payment has been made of all amounts
which OSL is required, under applicable law or under any Employee
Benefit Plan or any agreement relating to any Employee Benefit Plan to
which OSL is a party, to have paid as contributions thereto as of the
last day of the most recent plan year of such Employee Benefit Plan
ended prior to the date hereof. OSL has made
9
adequate provision for reserves to meet contributions that have not
been made because they are not yet due under the terms of any Employee
Benefit Plan or related agreements. Benefits under all Employee Benefit
Plans are as represented and have not been increased subsequent to the
date as of which documents have been provided.
(iv) Tax Qualification. Each Employee Benefit Plan intended to
be qualified under Section 401(a) of the Code has been determined to be
so qualified by the Internal Revenue Service and nothing has occurred
since the date of the last such determination which resulted or is
likely to result in the revocation of such determination.
(v) Transactions. OSL has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a
material tax, penalty or liability for prohibited transactions under
ERISA or the Code nor have any of its directors, officers or employees
to the extent they or any of them are fiduciaries with respect to such
plans, breached any of their responsibilities or obligations imposed
upon fiduciaries under Title I of ERISA which would result in any
material claim being made under or by or on behalf of any such plans by
any party with standing to make such claim.
(vi) Other Plans. OSL presently does not maintain any Employee
Benefit Plans or any other foreign pension, welfare or retirement
benefit plans other than those listed on Section 3(p) of the Disclosure
Schedule.
(vii) Documents. OSL has delivered or caused to be delivered
to SCN true and complete copies of (i) all Employee Benefit Plans as in
effect, together with all amendments thereto which will become
effective at a later date, as well as the latest IRS determination
letter obtained with respect to any such Employee Benefit Plan
qualified under Section 401 or 501 of the Code, and (ii) the most
recently filed Form 5500 for each Employee Benefit Plan required to
file such form.
(q) Third-Party Relations. OSL has not received any written notice that
any material patient, supplier, employee or associated physician intends to
cease doing business with OSL.
(r) Compliance with Applicable Laws. OSL has operated in compliance in
all material respects with all federal, state, county and municipal laws,
constitutions, ordinances, statutes, rules, regulations and orders applicable
thereto ("Applicable Laws"). No item disclosed in Section 3(r) of the Disclosure
Schedule could have a material effect on SCN. Neither OSL nor any physician
associated with or employed by OSL has received payment or any remuneration
whatsoever to induce or encourage the referral of patients or the purchase of
goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b), or
otherwise perpetrated any Medicare or Medicaid fraud or abuse nor has any fraud
or abuse been alleged within the last five (5) years by any government agency.
(s) Employee Compensation. OSL has paid or discharged or will pay or
discharge or assume all liabilities for compensation and benefits to which all
employees, including physician employees, are entitled through the Closing Date,
including but not limited to all salaries, wages, bonuses, incentive
compensation, payroll taxes, hospitalization and medical expenses, deferred
compensation, and vacation and sick pay, as well as any severance pay becoming
due as a result of the termination of OSL's employees; provided, however, that
SCN hereby agrees to assume and OSL is not required to pay or discharge prior to
closing, liability for one (1) week of accrued sick leave and one (1) week of
accrued vacation leave for each employee of OSL who becomes an employee of SCN
pursuant to the Merger.
(t) Environmental Matters.
10
(i) OSL is in full compliance in all material respects with
all applicable Environmental Laws.
(ii) OSL has not authorized or conducted the disposal or
release, or other handling of any hazardous substance, Medical Waste,
hazardous waste, hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls ("PCBs"), petroleum product or waste (including crude oil or
any fraction thereof), natural gas, liquefied gas, synthetic gas,
biohazardous or biomedical material, or other material defined,
regulated controlled or potentially subject to any remediation
requirement under any Environmental Law (collectively "Hazardous
Materials"), on, in, under or affecting any property owned or leased by
OSL.
(iii) OSL has, and is in compliance, in all material respects,
with, all licenses, permits, registrations, and government
authorizations necessary to operate under all applicable Environmental
Laws. Section 3(t) of the Disclosure Schedule lists all such licenses,
permits, registrations and government authorizations required by any
Environmental Law.
(iv) OSL has not received any written or oral notice from any
governmental agency or entity or any other Person and there is no known
pending or threatened claim, litigation or any administrative agency
proceeding that: (a) alleges a violation of any Environmental Law(s) by
OSL or, with respect to the Practice Assets or any property owned or
leased by OSL (b) alleges that OSL is a liable party or potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601, et seq., or any
analogous state law, (c) has resulted or could result in the attachment
of an environmental lien on any of the Practice Assets or property
owned or leased by OSL, or (d) alleges that OSL is liable for any
contamination of the environment, contamination of any property owned
or leased by OSL, damage to natural resources, property damage, or
personal injury based on its activities or the activities of any
predecessor or third parties involving Hazardous Materials, whether
arising under the Environmental Laws, common law principles, or other
legal standards.
(v) With respect to the generation, transportation, treatment,
storage and disposal or other handling of Medical Waste, OSL has
complied in all material respects with all Medical Waste Laws.
(u) Healthcare Compliance. OSL is participating in or otherwise
authorized to receive reimbursement from Medicare and Medicaid and is a party to
other third-party payor agreements if any, discussed in Section 3(i) of the
Disclosure Schedule. All necessary certifications and contracts required for
participation in such programs are in full force and effect and have not been
amended or otherwise modified, rescinded, revoked or assigned, and no condition
exists or event has occurred which in itself or with the giving of notice or the
lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such third-party payor program. OSL is in
compliance in all material respects with the requirements of all such
third-party payors. OSL, the OSL Stockholders, and OSL's physician employees do
not have any financial relationship (whether investment interest, compensation
interest, or otherwise) with any entity to which any of the foregoing refer
patients, except for such financial relationships that qualify for exceptions to
state and federal laws restricting physician referrals to entities in which they
have a financial interest.
(v) Fraud and Abuse. OSL, the OSL Stockholders and persons and entities
providing professional services for OSL have not engaged in any activities which
are prohibited under 42 U.S.C. ss. 1320a-7b, or the regulations promulgated
thereunder pursuant to such statutes, or related state or local statutes or
regulations, or which are prohibited by rules of professional conduct, including
the following: (a) knowingly and willfully making or causing to be made
11
a false statement or representation of a material fact in any application for
any benefit or payment; (b) knowingly and willfully making or causing to be made
any false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to fraudulently secure such benefit or payment; or (d) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay or receive such remuneration (1) in return for referring an
individual to a person for the furnishing or arranging for the furnishing or any
item or service for which payment may be made in whole or in part by Medicare or
Medicaid, or (2) in return for purchasing, leasing, or ordering or arranging for
or recommending purchasing, leasing, or ordering any good, facility, service or
item for which payment may be made in whole or in part by Medicare or Medicaid.
(w) Practice Compliance. OSL is duly licensed as a medical practice and
is lawfully operated in accordance with all material requirements of all
Applicable Laws and has all necessary authorizations for the use and operation
of a medical practice, all of which are in full force and effect. There are no
outstanding notices of deficiencies relating to OSL issued by any governmental
authority or third-party payor requiring conformity or compliance with any
applicable law or condition for participation with such governmental authority
or third-party payor, and after reasonable and independent inquiry and due
diligence and investigation, OSL has neither received notice nor has any
Knowledge or reason to believe that such necessary authorizations may be revoked
or not renewed in the Ordinary Course of Business.
(x) Rates and Reimbursement Policies. The jurisdiction in which OSL is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by OSL. OSL
does not have any rate appeal currently pending before any governmental
authority or any administrator of any third-party payor program. No Applicable
Law which affects rates or reimbursement procedures has been enacted,
promulgated or issued within the eighteen (18) months preceding the date of this
Agreement and no such legal requirement is proposed or currently pending in the
jurisdiction in which OSL is located, which could have a material adverse effect
on OSL or may result in the imposition of additional Medicaid, Medicare,
charity, free care, welfare, or other discounted or government assisted patients
at OSL or require OSL to obtain any necessary authorization which OSL does not
currently possess.
(y) Accounts Receivable. All accounts receivable, unbilled invoices and
other debts due or recorded in the respective records and books of account of
OSL, as being due to OSL, (i) are valid, existing and are collectible within one
hundred eighty (180) days following the date of this Agreement without resort to
legal proceedings or use of collection agencies, (ii) have arisen in the
Ordinary Course of Business, and (iii) none of such accounts receivable or other
debts is or will at the Closing Date be subject to any counterclaim or set-off
except to the extent of any such provision or reserve. There has been no
material adverse change since April 30, 1997, in the amount of accounts
receivable or other debts due OSL, the allowances with respect thereto, or
accounts payable of OSL from that reflected in the most recent balance sheet
previously delivered by OSL to SCN.
(z) Guaranties. Except as listed in Section 3(z) of the Disclosure
Schedule, OSL is not a guarantor and otherwise is not liable for any liability
or obligation (including indebtedness) of any other Person.
(aa) Powers of Attorney. There are no outstanding powers of attorney
executed by OSL, except as may be contained in financing documents or security
agreements listed in Section 3(i) of the Disclosure Schedule.
(bb) Tangible Assets. OSL owns or leases all land, buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
business as presently conducted. Each tangible asset is free from defects, has
been
12
maintained in accordance with normal industry practice, and is in good operating
condition and repair (subject to normal wear and tear).
(cc) SCN Share Ownership; Investment Intent.
(i) Neither OSL nor the OSL Stockholders owns, beneficially
or otherwise, any SCN Shares.
(ii) SCN Shares issuable in the Merger are being acquired by
the OSL Stockholders solely for their own account for investment and
not with a view to the distribution thereof, and the OSL Stockholders
acknowledge and understand that the certificate(s) representing such
SCN Shares will bear a legend in substantially the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER ANY STATE SECURITIES ACT AND CANNOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
SUCH ACTS OR UNLESS EXEMPTIONS FROM REGISTRATION ARE
AVAILABLE.
(iii) The OSL Stockholders represent and warrant as follows:
(A) The OSL Stockholders confirm that SCN has made
available to them or to their representatives the opportunity
to ask questions of SCN officers and directors and to acquire
such information about the SCN Shares and the business and
financial condition of SCN as the OSL Stockholders requested,
which additional information has been received.
(B) In deciding to acquire SCN Shares pursuant to
this Agreement, the OSL Stockholders consulted with their
legal, financial, and tax advisors with respect to the Merger
and the nature of the investment together with any additional
information provided under subsection (B) above.
(C) Each OSL Stockholder has adequate means of
providing for his current needs and personal contingencies and
has no need for liquidity in his investment in SCN. Each OSL
Stockholder, either alone or with his representatives, has
such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and
risks of the Merger.
(D) The OSL Stockholders understand and acknowledge
that the investment in the SCN Shares is a speculative
investment which involves a high degree risk of loss of such
OSL Stockholders' investment therein; that there are
substantial restrictions on the transferability of the SCN
Shares under the applicable provisions of the Securities Act
and the rules and regulations promulgated thereunder and
applicable state securities or "blue sky" laws; and,
accordingly, that it may not be possible to liquidate an
investment in the SCN Shares.
(E) The OSL Stockholders have been advised and
understand that (i) the offer and sale of the SCN Shares have
not been registered under the Securities Act; (ii) the SCN
Shares must held indefinitely and the OSL Stockholders must
continue to bear the economic risk of the investment in the
SCN Shares until the offer or sale of the SCN Shares is
subsequently registered under the Securities Act or any "blue
sky" laws or an exemption from such registration is available;
(iii) Rule
13
144 promulgated under the Securities Act is not presently
available with respect to the sale of any securities of SCN,
including the SCN Shares, and when and if the SCN Shares may
be disposed of without registration in reliance on Rule 144,
such disposition can be made only in accordance with the terms
and conditions of such Rule; (iv) the restrictive legends
described in Section 3(cc)(ii) shall be placed on the
certificates representing the SCN Shares; and (v) a notation
shall be made in the appropriate records of SCN indicating
that the SCN Shares are subject to restrictions on transfer
and appropriate stop-transfer instructions will be issued to
any transfer agent with respect to the SCN Shares.
(dd) Full Disclosure. No representation or warranty made by OSL in this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
4. Representations and Warranties of SCN. SCN represents and warrants
to OSL that the statements contained in this Section 4 are correct and complete
as of the date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4).
(a) Organization and Qualification. SCN is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware. SCN has the requisite corporate power and authority to carry on its
business as it is now being conducted and to own the properties and assets it
now owns and to consummate the transactions contemplated hereby. SCN is duly
qualified to do business as a foreign corporation in good standing in every
jurisdiction where the failure to be so qualified would have a material adverse
effect on the business of SCN.
(b) Capitalization. As of the date of this Agreement, the entire
authorized capital stock of SCN consists of fifty million (50,000,000) SCN
Shares, of which Fourteen Million Six Hundred Sixty-Two Thousand Five Hundred
Seventy-Five (14,662,575) SCN Shares are issued and outstanding and two million
(2,000,000) shares of preferred stock, none of which are issued and outstanding.
All of the issued and outstanding shares of capital stock of SCN are duly
authorized, validly issued, fully paid and nonassessable. All of the SCN Shares
to be issued in the Merger have been duly authorized and, upon consummation of
the Merger, will be validly issued, fully paid, and nonassessable.
(c) Authorization of Transaction. SCN has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and all documents ancillary hereto, to issue the SCN Shares and
otherwise to perform its obligations hereunder; provided, however, that SCN
cannot consummate the transaction unless and until the Merger receives the
approval of the SCN Board of Directors. Except as set forth in the preceding
sentence, this Agreement constitutes the valid and legally binding obligation of
SCN, enforceable in accordance with its terms and conditions subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
laws affecting creditors' rights generally and the availability of equitable
remedies generally.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, professional regulatory organization or court to which SCN
is subject or may become subject as a result of the transaction contemplated by
this Agreement, or any provision of the certificate of incorporation or bylaws
of SCN or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument or other arrangement to which SCN is a
party or by which it is bound or to which any of its assets is subject. Other
than state and federal filings
14
required by the Securities Act and similar state statutes, SCN does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(e) Brokers' Fees. SCN does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which SCN could become liable or
obligated.
(f) Compliance with Applicable Laws. SCN has operated in compliance in
all material respects with all Applicable Laws. No item disclosed in Section
4(f) of the Disclosure Schedule could have a material effect on SCN.
(g) Financial Statements. SCN has furnished OSL and the OSL
Stockholders with audited consolidated balance sheets dated December 31, 1995
and 1996, an audited consolidated statements of operations for the twelve (12)
month periods ending December 31, 1996, an unaudited consolidated balance sheet
dated March 31, 1997 and an unaudited consolidated statement of operations for
the three (3) month period ended March 31, 1997. Such income statements of
operations, including the notes thereto, except as indicated therein, were
prepared in conformance with generally accepted accounting principles, on a
basis consistent with past accounting practices of SCN and fairly present the
results of operations for the periods noted therein. The balance sheets of SCN
delivered by SCN to OSL fairly present the financial condition of SCN at the
date thereof, and except as indicated therein, reflect all claims against and
all debts and liabilities of OSL, fixed or contingent, as of the date thereof.
(h) Undisclosed Liabilities. SCN has no uninsured liability (whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and whether due or to become due),
including any liability for taxes, except for (i) liabilities set forth on the
face of the balance sheet dated as of March 31, 1997 and (ii) liabilities which
have arisen after March 31, 1997 in the Ordinary Course of Business.
(i) Absence of Certain Changes or Events. Since the date of the latest
financial statements of SCN delivered to OSL, there has not been (a) any
material adverse change in the business, results of operations, assets,
financial condition or prospects or the manner of conducting the business of SCN
other than changes in the ordinary course of business, none of which
individually or in the aggregate have had or may have a material adverse effect
on the business, results of operation, assets, financial condition or prospects
of SCN; (b) any damage, destruction or loss, whether covered by insurance or
not, which has had or will have a material adverse effect on the business,
results of operations, assets, financial condition or prospects of SCN; or (c)
any other material transaction entered into by SCN other than in the ordinary
course of business.
(j) Litigation. Except as set forth in Section 4(j) of the Disclosure
Schedule, there is no material suit, action, proceeding at law or in equity,
arbitration, administrative proceeding or other proceeding or investigation by
any governmental entity pending, or threatened against, or affecting SCN and to
the best of SCN's Knowledge, there is no basis for any of the foregoing. None of
the actions, suits, proceedings, hearings, and investigations set forth in
Section 4(j) of the Disclosure Schedule could result in any material adverse
change in the operations, results of operations, or future prospects of SCN.
(k) Tax Matters. All federal, state and other tax returns of SCN
required by law to be filed have been timely filed, and SCN has paid or
adequately provided for all taxes (including taxes on properties, income,
franchises, licenses, sales and payrolls) which have become due pursuant to such
returns or pursuant to any assessment, except for any taxes and assessments, the
amount, applicability or validity of which is currently being contested in good
faith by appropriate
15
proceedings and with respect to which SCN has set aside on its books adequate
reserves. There are no tax liens on any of SCN's assets except those with
respect to taxes not yet due and payable. There are no pending tax examinations
of SCN's tax returns nor has SCN received a revenue agent's report asserting a
tax deficiency in the last twelve (12) months.
(l) Insurance. Section 4(l) of the Disclosure Schedule contains a list
and brief description of all policies or binders of fire, liability, product
liability, workers compensation, health and other forms of insurance policies or
binders currently in force insuring against risks. To the best of SCN Knowledge,
such policies or binders provide adequate insurance of the properties and
conduct of SCN's business.
(m) Public Filings. SCN has made all filings with the Securities and
Exchange Commission that it has been required to make under the Securities Act
and the Exchange Act (collectively, the "Public Reports"). Each of the Public
Reports has complied with the Securities Act and the Exchange Act in all
material respects. None of the Public Reports, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(n) Xxxx-Xxxxx-Xxxxxx. SCN is of sufficiently small size as to cause
the consummation of the transactions contemplated hereby not to be subject to,
or to be exempt from, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
(o) Full Disclosure. No representation or warranty made by SCN in this
Agreement or in connection with this transaction or in any document furnished
pursuant to this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
5. Covenants. The Parties agree as follows with respect to the period
from and after the execution of this Agreement.
(a) General. Each of the Parties will use its or his best efforts to
take all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 6 below) to be
satisfied by him or it. This paragraph shall not be construed to obligate any of
the Parties to waive any condition precedent to his or its obligations to
perform hereunder.
(b) Notices and Consents. OSL will give any notices to third parties,
and will use its best efforts to obtain any third party consents necessary or
required to consummate the Merger or that SCN reasonably may request in
connection with the matters referred to in Section 3(i) above.
(c) Regulatory Matters and Approvals. Each of the Parties will give any
notices to, make any filings with, and use its reasonable best efforts to obtain
any necessary authorizations, consents, and approvals of governments and
governmental agencies in connection with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing:
(i) Tax Reporting. The Merger is intended to qualify as a
reorganization under Code Section 368(a)(1)(A). Each of the parties
agrees to report this transaction for all purposes in accordance with
the foregoing.
16
(ii) Licenses and Permits. Each of the Parties shall have
obtained all licenses and permits necessary to operate their respective
businesses.
(d) Operation of Business. From the date of this Agreement through the
Closing Date, OSL will not engage in any practice, take any action, or enter
into any transaction outside the Ordinary Course of Business. Without limiting
the generality of the foregoing:
(i) OSL will not authorize or effect any change in its
charter documents or bylaws;
(ii) OSL will not grant any options, warrants, or other rights
to purchase or obtain any of its capital stock or issue, sell or
otherwise dispose of any of its capital stock (except upon the
conversion or exercise of options, warrants, and other rights currently
outstanding);
(iii) OSL will not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in
kind), or redeem, repurchase, or otherwise acquire any of its capital
stock in either case outside the Ordinary Course of Business without
the consent of SCN, which consent shall not be unreasonably withheld;
(iv) OSL will not issue any note, bond or other debt security
or create, incur, assume or guarantee any indebtedness for borrowed
money or capitalized lease obligation outside the Ordinary Course of
Business;
(v) OSL will not impose any Security Interest upon any of its
assets outside the Ordinary Course of Business;
(vi) OSL will not make any capital investment in, make any
loan to, or acquire the securities or assets of any other Person
outside the Ordinary Course of Business;
(vii) OSL will not make any change in employment terms for any
of its directors, officers or employees outside the Ordinary Course of
Business; and
(viii) OSL will not commit to do any of the foregoing.
(e) Further Acts and Assurances. OSL and the OSL Stockholders shall, at
any time and from time to time at and after the Effective Time, upon request of
SCN, take any and all steps necessary to place SCN in possession and operating
control of the Practice Assets and to effectuate the Merger, and will do,
execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney, and assurances as may be required
for better transferring and confirming to SCN or its successors and assigns, or
for better reducing to possession, any or all of the Practice Assets or
consummating the Merger.
(f) Full Access. Upon three (3) days prior notice, OSL will permit
representatives of SCN to have full access to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to OSL during normal business hours. SCN will treat and hold as
such any confidential information it receives from OSL in the course of the
reviews contemplated by this Section 5(f), will not use any of the confidential
information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, agrees to return to OSL all tangible
embodiments (and all copies) thereof which are in its possession.
17
(g) Notice of Developments. Each Party will give prompt written notice
to the other Parties of any material adverse development causing a breach of any
of its own representations and warranties in Section 3 or Section 4 above, as
applicable. No disclosure by any Party pursuant to this Section 5(g), however,
shall be deemed to amend or supplement the Disclosure Schedule or to prevent or
cure any misrepresentation, breach of warranty, or breach of covenant.
(h) Exclusivity. Until the earlier of (i) July 31, 1997, or (ii) the
Effective Time, OSL will not solicit, initiate, or encourage the submission of
any proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of OSL (including any
acquisition structured as a merger, consolidation, or share exchange). OSL shall
notify SCN immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(i) Collection of Accounts Receivable. The OSL Stockholders agree to
cooperate with SCN in the collection of accounts receivable owned by OSL as of
the Effective Time acquired pursuant to this Agreement. SCN, at its option,
shall have the right to require the collection of said accounts receivable
through a lockbox or bank account sweep arrangement. In connection therewith,
the OSL Stockholders agree to execute the necessary documents and follow the
necessary procedures as described in the Service Agreement to accommodate the
collection of the accounts receivable in such manner.
(j) Payment of Expenses. On or before the Effective Time, OSL shall
have paid or discharged any and all liabilities or charges for costs or fees
owed as a result of the transaction contemplated by this Agreement.
(k) Corporate Authorization. By execution of this Agreement, the OSL
Stockholders agree to take any and all steps necessary and will do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, all such acts, deeds and assurances required in order to consummate
the Merger, including voting as directors of OSL in favor of the Merger and
voting as stockholders of OSL in favor of the Merger at any meetings (or in any
action by written consent) required by the Virginia Stock Corporation Act.
(l) Malpractice Insurance. On or before the Effective Time, all
physicians and employees of OSL must be covered by medical malpractice insurance
and, if required by SCN, medical malpractice tail insurance to cover prior
occurrences shall be procured by OSL.
(m) Distribution of Excluded Assets. Prior to the Effective Time, OSL
shall have distributed to the OSL Stockholders all of the assets listed on
Schedule 5(m), which constitute the entirety of the assets owned by OSL not
being acquired by SCN (the "Excluded Assets").
(n) Satisfaction of Indebtedness. Prior to the Effective Time, OSL
shall have caused the payoff of all liabilities owed to third-parties (with the
exception of thirty (30) days worth of trade payables, one (1) week of accrued
vacation pay per employee, and one (1) week of accrued sick leave per employee,
which shall be assumed by SCN) and all indebtedness owed to banks or other
financial institutions or lenders or shall have caused the assumption thereof by
a new entity organized by the OSL Stockholders. Notwithstanding any contrary
provision contained herein, SCN shall not be deemed to have assumed, nor shall
SCN assume: (i) any liability which may be incurred by reason of any breach of
or default under such contracts, leases, commitments or obligations which
occurred prior to the Closing Date; (ii) any liability for any employee benefits
payable to employees of OSL, including, but not limited to, liabilities arising
under any Employee Benefit Plan; (iii) any liability based upon or arising out
of a violation of any laws by OSL, including, without limiting the generality of
the foregoing, any such liability which may arise in connection with agreements,
contracts, commitments or provision of services by OSL; nor (iv) any liability
based upon or arising out of any tortious
18
or wrongful actions of OSL or any Physician Owner, or any liability for the
payment of any taxes imposed by law on OSL arising from or by reason of the
transactions contemplated by this Agreement. In addition, the OSL Stockholders
shall cause to be filed on behalf of OSL all final tax returns required by
Applicable Law to be filed and shall pay all Taxes owed by OSL for the tax
period ended as of the Effective Time.
(o) Conversion into Business Corporation. If required by the Virginia
Stock Corporation Act, prior to the Effective Time, the OSL Stockholders shall
have caused the conversion of OSL to a Virginia business corporation.
(p) Employee Benefit Plans. Prior to the Effective Time, all Employee
Benefit Plans other than employee benefit plans which are both "pension plans"
under Section 3 of ERISA ("Pension Plan") and tax qualified under Section 401(a)
of the Code, shall be terminated in accordance with Applicable Law. Prior to the
Effective Time, OSL will take all necessary actions to ensure that on and after
the Effective Time no further benefits will accrue under the Pension Plans
within the contemplation of Section 410(b) of the Code. As soon as practicable
after the Effective Time, SCN shall merge the Pension Plan of OSL into the
corresponding plan(s) of SCN; provided, however, that such merger of Pension
Plans shall not occur until: (i) SCN, acting reasonably, has satisfied itself
that OSL's Pension Plans meet all applicable qualification requirements of the
Internal Revenue Code; (ii) SCN, acting reasonably, has tendered to OSL such
amendments to OSL's Pension Plans as SCN deems necessary or appropriate to
conform such plans to the pension plans of SCN and (iii) all amendments to the
Pension Plans requested by SCN have been made; and (iv) SCN, acting reasonably,
is satisfied that OSL has taken all actions necessary to ensure operational
compliance with the operative documents and Applicable Law.
(q) Securities Laws Compliance. No OSL Stockholder shall dispose of the
SCN Shares received as a result of the Merger except in accordance with the
provisions of the Securities Act, the provisions of any rule adopted by the
Securities and Exchange Commission pursuant to the Securities Act and the "blue
sky" laws of any applicable state.
6. Conditions to Obligation to Close
(a) Conditions to Obligation of SCN. The obligation of SCN to
consummate the Merger is subject to satisfaction of the following conditions or
before the Closing Date:
(i) OSL shall have procured all of the third party consents
specified in Section 5(b) above;
(ii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of
the Closing Date;
(iii) OSL shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Surviving
Corporation to own the former assets or to operate the former business
of OSL;
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(v) SCN shall have received the resignations, effective as of
the Closing, of each director and officer of OSL other than those whom
SCN shall have specified in writing at least five (5) business days
prior to the Closing;
(vi) all actions to be taken by OSL and/or the OSL
Stockholders in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and
other documents required to effect the transactions contemplated hereby
have been taken or delivered to SCN and are satisfactory in form and
substance to SCN;
(vii) the issuance of the SCN Shares to the OSL Stockholders
will not violate federal securities laws or the securities laws of any
state of the United States;
(viii) SCN shall have completed and be satisfied with its due
diligence review, including SCN's review of the Disclosure Schedule;
and
(ix) SCN's Board of Directors shall have approved the Merger
in their sole and absolute discretion.
SCN may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of OSL. The obligation of OSL to
consummate the Merger is subject to satisfaction of the following conditions:
(i) This Agreement and the Merger shall have received the OSL
director and OSL Stockholders' approval required by the Virginia Stock
Corporation Act.
(ii) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of
the Closing Date;
(iii) SCN shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing; and
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Surviving
Corporation to own the former assets of OSL.
OSL may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Items to be Delivered at or Prior to Closing
(a) By the OSL Stockholders or OSL. The OSL Stockholders or OSL, as
applicable, shall execute and deliver to SCN, prior to or at the Closing:
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(i) Certified resolutions of the directors and stockholders of
OSL authorizing the execution of all documents and the consummation of
all transactions contemplated hereby;
(ii) The Virginia Articles of Merger which shall be in the
form required by SCN's legal counsel;
(iii) Stock Certificates representing ownership of all shares
of OSL, duly endorsed to SCN;
(iv) A Service Agreement in the form attached hereto as
Exhibit 7(a)(iv);
(v) A certificate duly executed by the President of OSL and
the OSL Stockholders stating as of the Closing Date, all
representations and warranties are true, all covenants and agreements
contained in the Agreement to be performed by OSL and the OSL
Stockholders have been performed or complied with and all conditions to
closing have been complied with;
(vi) An opinion from OSL's counsel in substantially the form
attached hereto as Exhibit 7(a)(vi); and
(vii) Such other instruments as may be reasonably requested by
SCN in order to effect to or carry out the intent of this Agreement.
(b) By SCN. SCN shall deliver to OSL at or prior to the Closing:
(i) Stock Certificates representing the SCN Shares being
issued to the OSL Stockholders pursuant to Section 2(d)(v);
(ii) The Delaware Certificate of Merger in substantially the
form attached hereto as Exhibit 2(a)(1);
(iii) An opinion from SCN's counsel in substantially the form
attached hereto as Exhibit 7(b)(iii);
(iv) A certificate, duly executed by an officer of SCN,
stating as of the Closing Date, all representations and warranties of
SCN are true, all covenants and agreements contained in the Agreement
to be performed by SCN have been performed or complied with and all
conditions to Closing have been satisfied;
(v) A Service Agreement in the form attached hereto as Exhibit
7(a)(iv); and
(vi) Such other instruments as may be reasonably requested by
OSL or the OSL Stockholders in order to effect to or carry out the
intent of this Agreement.
8. Termination
(a) Termination of Agreement. Either of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether before
or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(ii) SCN may terminate this Agreement by giving written notice
to OSL at any time prior to the Effective Time (A) in the event OSL has
breached any representation, warranty, or covenant contained in this
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Agreement in any material respect, SCN has notified OSL of the breach,
and the breach has continued without cure for a period of 30 days after
the notice of breach, (B) if the Closing shall not have occurred on or
before July 31, 1997 by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure results
primarily from SCN breaching any representation, warranty, or covenant
contained in this Agreement) or (C) in accordance with Section
6(a)(viii) or (ix); or
(iii) OSL may terminate this Agreement by giving written
notice to SCN at any time prior to the Effective Time (A) in the event
SCN has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, OSL has notified SCN of the
breach, and the breach has continued without cure for a period of 30
days after the notice of breach or (B) if the Closing shall not have
occurred on or before July 31, 1997 by reason of the failure of any
condition precedent under Section 6(b) hereof (unless the failure
results primarily from OSL breaching any representation, warranty, or
covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 8(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any party to any other Party
(except for any liability of any Party then in breach).
9. Indemnification.
(a) Indemnification by the OSL Stockholders. The OSL Stockholders,
separately and not jointly and severally, agree to and shall defend, indemnify
and hold harmless SCN, its successors and assigns, officers and directors
against any and all losses, liabilities, expenses (including, but without
limitation, reasonable attorneys fees) and damages resulting from or arising out
of the breach, untruth or inaccuracy of any representation, warranty or covenant
of OSL or the OSL Stockholders set forth in this Agreement or from any loss,
liability or expense resulting from or related to OSL's operation of its
business prior to the Effective Time. The OSL Stockholders shall not be liable
to SCN for any claims against the OSL Stockholders under this Section 9(a)
unless and until the aggregate of all claims against the OSL Stockholders
exceeds the sum of $25,000.00, whereupon SCN shall be entitled to recover the
full amount of all claims, including the initial $25,000.00. Notwithstanding the
foregoing provisions, the obligations of any OSL Stockholder hereunder to
indemnify SCN shall not exceed the value (at the time of Closing) of the portion
of the SCN shares and cash delivered to such OSL Stockholder at the Closing. In
addition to the foregoing $25,000 "threshold", in the event SCN has received
service fees (as defined in the Service Agreement) pursuant to the Service
Agreement in excess of the Base Service Fee (as defined in the Service
Agreement) then (i) SCN shall charge the first $100,000 of claims to OSC II as a
Clinic Expense(as defined in the Service Agreement) and the Physician Owners
shall cause OSC II to pay such claim as a Clinic Expense pursuant to the terms
of the Service Agreement and (ii) any amounts in excess of $100,000 shall be
paid to SCN directly by the Physician Owners.
(b) Notice to the OSL Stockholders; Opportunity to Defend. SCN agrees
to give prompt notice to the OSL Stockholders of the assertion of any claim, or
the commencement of any suit, action or proceeding, in respect of which
indemnity may be sought under Section 9(a). The OSL Stockholders may participate
in and at their election, or at the request of SCN, assumes the defense of any
such suit, action or proceeding at the OSL Stockholders' expense. The OSL
Stockholders shall not be liable under Section 9(a) for any settlement effected
without their consent of any claim, litigation or proceeding in respect of which
indemnity may be sought under Section 9(a) which consent shall not be
unreasonably withheld.
(c) General Indemnification by SCN. SCN agrees to and shall defend,
indemnify and hold harmless the OSL Stockholders, their heirs and assigns
against any and all losses, liabilities, expenses (including, but without
limitation, reasonable attorneys fees) and damages resulting from the breach,
untruth or inaccuracy of any representation, warranty
22
or covenant of SCN set forth in this Agreement. SCN shall not be liable to the
OSL Stockholders for any claims against SCN under this Section 9(c) unless and
until the aggregate of all claims against SCN exceeds the sum of $25,000.00,
whereupon the OSL Stockholders shall be entitled to recover the full amount of
all claims, including the initial $25,000.00.
(d) Notice to SCN; Opportunity to Defend. The OSL Stockholders agree to
give prompt notice to SCN of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which indemnity may be sought under
Section 9(c). SCN may participate in and at its election, or at the request of
the OSL Stockholders, assume the defense of any such suit, action or proceeding
at SCN's expense. SCN shall not be liable under Section 9(c) for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder, which consent shall not be
unreasonably withheld.
(e) Right of Set-off. In the event of any breach of warranty,
representation, covenant or agreement by any party hereto, the Claiming Party
(as defined in the Service Agreement) may set-off against any Additional Payment
(as defined in the Service Agreement) to the other party pursuant to the
provisions of Section 10.4.3 of the Service Agreement.
10. Miscellaneous.
(a) Survival. The representations and warranties of the OSL
Stockholders, OSL and SCN contained in this Agreement and the indemnifications
contained herein shall survive the Closing for a period of two (2) years.
Notwithstanding the foregoing, any claim to indemnification that a party may
have arising from the breach of representations and warranties or covenants
relating to tax matters shall survive for three (3) years following the Closing
Date. Any matter to which indemnification pertains and with respect to which a
claim has been asserted or threatened following the Closing Date shall continue
to be subject to the indemnification under this Agreement until finally
terminated, settled, resolved or adjudicated; and all terms, conditions and
stipulations of this Agreement shall likewise continue to apply.
(b) No Third-Party Beneficiaries. Except as provided in Section 9(e),
this Agreement shall not confer any rights or remedies upon any Person other
than the parties and their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the parties and supersedes
any prior understandings, agreements, or representations by or between the
parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
23
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to OSL: Copy to:
Orthopaedic Surgery Centers, P.C. II T. Xxxxxxx XxXxx, Esq.
0000 Xxxx Xxxxxx Xxxxxxx & Xxxxxxx
Xxxxxxxxxx, XX 00000 One Commercial Place
Attn: President P. O. Box 3037
Facsimile: (000) 000-0000 Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to SCN:
Copy to:
Xxxxx X. Xxxxx, President
Specialty Care Network, Inc. Xxxxx X. Xxxxxxx, Esq.
00 Xxxxx Xxxxxxxxx, Xxxxx 000 Baker, Donelson, Bearman & Xxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000 000 Xxxxxxx Xxx, Xxxxx 0000
Facsimile: (000) 000-0000 Xxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
(h) Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware. Each of the
parties submits to the jurisdiction of any state or federal court sitting in
Norfolk, Virginia, in any action or proceeding arising out of or relating to
this Agreement and agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court. Each party also agrees not to
bring any action or proceeding arising out of or relating to this Agreement in
any other court. Each of the parties waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought and waives any bond,
surety, or other security that might be required of any other party with respect
thereto.
(i) Amendments and Waivers. The parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
that any amendment effected subsequent to OSL stockholder approval will be
subject to the restrictions contained in the Virginia Stock Corporation Act. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by both of the parties. No waiver by any party of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
24
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(m) No Referrals Required. The Parties agree that no part of this
Agreement shall be construed to induce or encourage the referral of patients or
the purchase of health care services or supplies. The Parties acknowledge that
there is no requirement under this Agreement or any other agreement between OSC
II and SCN that any party refer any patients to any health care provider or
purchase any health care goods or services from any source. Additionally, no
payment under this Agreement is in return for the referral of patients, if any,
or in return for purchasing, leasing or ordering services from SCN or any of
SCN's affiliates. The Parties may refer patients to any company or person
providing services and will make such referrals, if any, consistent with
professional medical judgment and the needs and wishes of the relevant patients.
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
* * * * *
25
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
SPECIALTY CARE NETWORK, INC.
By:
Title:
ORTHOPAEDIC SURGERY, LTD.
By:
Title:
J.C.P. XXXXXXX, JR., M.D., Stockholder
XXXXXXX X. XXXXXX, M.D., Stockholder
XXXXX X. XXXXXXX, M.D., Stockholder
XXXXXXX XXXXXXX XXXXX, M.D., Stockholder
XXXX X. XXXXXX, M.D., Stockholder
26
EXHIBIT LIST
EXHIBIT 1 - Agreement and Plan of Merger of Orthopaedic Surgery, Ltd.
with and into Specialty Care Network, Inc.
EXHIBIT 2(a)(1) - Certificate of Merger of Orthopaedic Surgery, Ltd. into
Specialty Care Network, Inc.
EXHIBIT 2(a)(2) - Form of Virginia Articles of Merger
EXHIBIT 2(d)(v) - Consideration Allocation
EXHIBIT 5(m) - Excluded Assets
EXHIBIT 7(b)(iv) - Service Agreement
EXHIBIT 7(a)(vi) - OSL Opinion Letter
EXHIBIT 7(b)(iii) - SCN Opinion Letter
