Exhibit 10.68


 


TRANSITION AGREEMENT AND STOCK PLEDGE


 


This Transition Agreement
and Stock Pledge (this “Agreement”) is made as of September 3, 2003, by
and between CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC. a
California corporation (“Management Services); 21ST CENTURY
ONCOLOGY OF CALIFORNIA, a California professional corporation (the “PC”); and
MICHAEL J. KATIN, M.D. (the “Current Shareholder”).


 


RECITALS


 


A.                The PC and Management
Services have entered into an Administrative Services Agreement, effective August 1,
2003 (the “ASA”), for the provision of certain administrative and billing
services to the PC in connection with the PC’s provision of radiation therapy
services in California (the “State”).


 


B.                 The Current Shareholder owns
all of the issued and outstanding shares of the PC’s stock.


 


C.                 The parties hereto believe
it to be in their best interest to make provision for the future disposition of
all of the shares of the capital stock of the PC whether currently issued and
outstanding or issued at any time (the “Shares”).


 


D.                The Current Shareholder may
desire to issue or transfer Shares to qualified shareholders satisfactory to
and approved by Management Services (together with the Current Shareholder the “Shareholders”),
upon such Shareholders becoming licensed to practice medicine in the State, and
provided that each or all, as applicable, execute an agreement in substantially
the same form as this Agreement.


 


E.                 The Current Shareholder
desires to pledge the Shares to secure the covenants made in this Agreement,
and Management Services desires to accept such security interest.


 


NOW, THEREFORE, for and in
consideration of the mutual agreements, terms, covenants and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:


 


1.         Definitions.


 


1.1. “Shareholder Event of
Transfer” means any one or more of the following events:


 


(a)           The transfer of any Shares
by any Shareholder, including any sale, assignment, conveyance, gift or any
other form of disposition or transfer, voluntary or involuntary, including
transfers by bequest or inheritance, without the approval by Management
Services;


 


(b)           Loss of a Shareholder’s
license to practice radiation therapy in the State for any reason;


 


(c)           A Shareholder is adjudicated
incompetent by any court of law;


 


(d)           A Shareholder becomes
insolvent by reason of an inability to pay debts as they mature; files a
petition in bankruptcy, reorganization or similar proceeding under the
bankruptcy laws of the United States or has such a petition filed against a
Shareholder which is not discharged within thirty (30) days; has a receiver or
other custodian, permanent or temporary, appointed for the business, assets or property
of a Shareholder; has bank accounts, property or accounts of a Shareholder’s
attached; has execution levied against business or property of a Shareholder;
makes an assignment for the benefit of creditors; or a Shareholder has any
Shares attached or levied upon for the payment of debts;


 


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(e)           Any representation or
covenant contained in this Agreement is breached by a Shareholder; or


 


(f)            For any reason a Shareholder
no longer meets the qualifications to be a shareholder of a professional
corporation in the State.


 


provided, however, that the
non-breaching Shareholders may cure a Shareholder Event of Transfer by
purchasing all of the Shares of a Shareholder who has caused any of such
Shareholder Events of Transfer to occur, within thirty (30) days of such Event.


 


1.2             “PC Event of Transfer” means
any one of the following events:


 


(a) There
is a Default (as hereinafter defined) under the ASA by the PC which is not
cured within any applicable cure periods stated in the ASA; or


 


(b) Any
representation or covenant contained in this Agreement is breached by the PC.


 


1.3.            “Transferee” means a
physician licensed to practice radiation therapy in the State, or a
professional corporation qualified to practice radiation therapy in the State,
chosen by Management Services.


 


2.         Grant of Security Interest.
Each Shareholder grants to Management Services a security interest in the
Shares to secure the Shareholder’s obligations set forth in Section 3.


 


3.         General Restriction on
Transfer. No Shareholder shall sell, transfer, encumber, pledge, will, or
otherwise dispose of such Shareholder’s Shares, or allow such Shareholder’s
Shares to pass under the intestate laws or by operation of law, except as
provided in this Agreement. If any Shares or any rights therein are transferred
contrary to this Agreement, Management Services retains a security interest in
such Shares and in the proceeds of such disposition.


 


4.         Conditional Agreement to
Transfer Stock. Except where the non-breaching Shareholders cure a Shareholder
Event of Transfer as provided in Section 1.1 above, all Shareholders shall
immediately transfer the Shares as set forth in this Agreement for the Purchase
Price set forth in Section 7 below upon the occurrence of a PC Event of
Transfer or upon the occurrence of a Shareholder Event of Transfer.


 


5.         Transfers by Shareholders.
If a Shareholder Event of Transfer occurs, then the PC and any Shareholder
aware of such Shareholder Event of Transfer, the Shareholder’s legal representative
or a lien creditor of the Shareholder exercising its remedies with respect to
such Shareholder (in any case, the “Transferring Shareholder”) shall give the
PC, Management Services and each of the other Shareholders written notice
thereof (the “Notice”).


 


5.1           During the period commencing
on the date the Notice is given and ending thirty (30) days thereafter (the “Shareholders’
Option Period”), the Shareholders other than the Transferring Shareholder
shall, in relative proportion to the respective ownership of Shares of such
Shareholders who desire to exercise their option, have the exclusive right (but
not the obligation) to acquire all or a portion of the Transferring Shareholder’s
Shares at the pro rata Purchase Price determined pursuant to Section 7
hereof. Said Shareholders may exercise this option by delivering, within the
Shareholders’ Option Period, to the Transferring Shareholder, Management
Services and the PC a writing stating that said Shareholders have elected to
acquire all or such specified number or proportion of the Transferring
Shareholder’s Shares not later than ninety (90) days after the date of the
Notice. If not all Shareholders (other than the Transferring Shareholder) elect
to acquire the Transferring Shareholder’s Shares, the Shareholders that have
elected to acquire the Transferring Shareholder’s Shares may acquire the
Transferring Shareholder’s Shares in relative proportion to their respective
ownership of Shares (not counting Shares held by the Transferring Shareholder
or by Shareholders who have not elected to acquire the Transferring Shareholder’s
Shares).


 


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5.2           If the Shareholder’s Option
Period shall have expired without the election by any of the Shareholders to
acquire any and all of the Transferring Shareholder’s Shares, then, for a
period of thirty (30) days commencing thirty-one (31) days after the date of
the Notice (the “PC Option Period”), the PC shall have the exclusive right (but
not the obligation) to acquire all or a portion the Transferring Shareholder’s
Shares at the pro rata Purchase Price. The PC may exercise its option by
delivering, within the PC Option Period, to each of the Shareholders and
Management Services a writing stating that the PC has elected to acquire all or
such specified number or proportion of the Transferring Shareholder’s Shares no
later than ninety (90) days after the date of the Notice.


 


5.3           If, but only if, the
Shareholder’s Option Period and the PC Option Period shall have expired without
the election by any of the Shareholders other than the Transferring Shareholder
or the PC to acquire all of a Transferring Shareholder’s Shares, then
Management Services shall designate a Transferee to purchase the Shares which
are not being purchased pursuant to Sections 5.1 and 5.2 above.


 


6.         Transfer on PC Event of
Transfer. If a PC Event of Transfer occurs, Management Services shall designate
a Transferee to purchase all of the Shares of the PC within thirty (30) days of
Management Service’s discovery of the occurrence of a PC Event of Transfer.


 


7.         Payment of Purchase Price.
The purchase price for any transfer of the Shares (the “Purchase Price”) shall
be an amount equal to the fair market value of the Shares as of the date of the
transfer, determined by the accounting firm of Ernst & Young, LLP (or
any successor thereto) acting through the personnel at its office in Tampa,
Florida, if that firm is willing to make the determination; or, if not, any
nationally recognized firm of independent certified public accountants agreed
to by Management Services and the PC. Any determination of the fair market
value of the Shares by such firm shall be deemed a final determination of the
fair market value as of the determination date and shall be conclusive upon all
parties for purposes of this Agreement as a commercially reasonable price. The
Purchase Price shall be payable in cash, by cashier’s check, or by a promissory
note within thirty (30) days after receipt of the accounting firm’s Purchase
Price determination. If payment is made by a promissory note, such note shall
be payable over three (3) years in equal monthly installments of principal
and interest and shall bear interest at the rate of eight percent (8%) per
annum.


 


8.         Commercially Reasonable
Disposition. The parties acknowledge that it would be impossible to realize a
commercially reasonable price in the event of the disposition of the pledged
stock by public sale and very difficult to do so by private sale, except on the
terms and conditions set forth herein. Therefore, the parties acknowledge that
a disposition of the Shares pursuant to the terms of this Agreement is a
commercially reasonable disposition. The parties further acknowledge and agree
that the determination of the Purchase Price under Section 7 is a
commercially reasonable method of determining the Purchase Price and that they
will be bound by such Purchase Price determination.


 


9.         Term. This Agreement shall
continue for as long as the ASA and any renewals thereof are in effect.


 


10.       Representations and
Warranties. PC and each of the Shareholders represent and warrant the
following:


 


10.1.        No Contravention. There is
no provision of any agreement to which PC or any Shareholder is a party or of
any law that would be contravened by the execution, delivery, or performance of
this Agreement. The PC and each Shareholder’s name and the information
contained in the Recitals hereto are correct. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
the PC to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There is no litigation nor are there any proceedings by any
public body, agency, or authority presently pending or threatened against the
PC or any Shareholder, the outcome of which might materially and adversely
affect the continued operations of the PC.


 


10.2.        Shares. Each Shareholder has
good title, free and clear of all claims, charges, liens, encumbrances,
restrictions, options, calls and defects of any kind or nature whatsoever,
except for the security interest granted hereby; no other person, entity, or
governmental authority has or claims any lien or other interest in


 


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the Shares; no adverse
financing statements are on file; and there is no litigation nor are there any
proceedings by any public body, agency, or authority presently pending or
threatened against any Shareholder, the outcome of which might materially and
adversely affect the Collateral.


 


10.3.        Survival of Representations
and Warranties. All representations and warranties shall survive the execution
and delivery of this Agreement.


 


11.       Affirmative Covenants.


 


11.1.        Application to Future
Shares. This Agreement shall apply to all Shares now owned or hereafter
acquired whether such acquisition be the result of purchase, stock dividend,
split-up, recapitalization or issuance by the PC of additional shares of
capital stock.


 


11.2.        No Agency and Defense
Against Claims. Nothing in this Agreement shall make any Shareholder an agent
of Management Services for any purpose whatsoever. Each Shareholder shall
defend the Shares against all claims, demands, and defenses affecting
Management Service’s security interest, regardless of merit, and shall hold
Management Services harmless therefrom, including, without limitation, holding
Management Services harmless from all attorneys’ fees and other litigation
expenses arising out of any such claims, demands, or defenses.


 


11.3.        Disposition and Issuances of
the PC’s Common Stock. The PC shall not, and during the term of this Agreement
each Shareholder shall not cause the PC to issue, sell or otherwise cause to be
outstanding any additional capital stock, except for (a) safes of such
stock made to approved Shareholders; (b) the transfer without
consideration of any of the Shares to a revocable trust created by a
Shareholder, provided that any and all trustees of such trust first agrees in
writing to hold Shares so transferred subject to this Agreement; and (c) the
transfer of Shares to the Transferee as provided herein.


 


12.       Custody and Handling of
Collateral and Records.


 


12.1.        Protection of Secured Party’s
Security Interest. Upon execution of this Agreement, each Shareholder shall
give Management Services the certificate(s) representing such Shareholder’s
Shares duly endorsed in blank or, if not endorsed in blank, each Shareholder
shall give Management Services a duly executed stock power in blank.


 


12.2.        Restrictive Legend. Each
certificate representing Shares of the PC shall be marked with a legend
substantially in the following form:


 


The right to sell, transfer
or encumber the shares represented by this certificate is restricted under the
terms of Transition Agreement and Stock Pledge dated September 3, 2003, to
which the PC is a party. The PC will mail a copy of said Agreement to any
shareholder without charge within five (5) days after receipt of written
request therefore.


 


13.       Default and Remedies.


 


13.1.        Remedies Upon Default. Upon
the occurrence of any breach of any covenant or warranty contained in this
Agreement (“Default”) by the PC or any or all of the Shareholders and
continuously thereafter until waived in writing, any of the parties hereto not
in breach of this Agreement shall have the right and option to immediately send
notice to all parties hereto of a Shareholder Event of Transfer or a PC Event
of Transfer, as applicable, to cause a transfer of Shares pursuant to Section 5
or Section 6 hereof, subject to a subsequent determination of the Purchase
Price. In the event of a Default, Management Services may exercise any other
remedy available to Management Services as a secured party under law or equity.
Management Services shall be entitled upon any breach or threatened breach of
this Agreement to the granting of a temporary restraining order, a temporary or
permanent injunction, or any other equitable remedy which may then be available
without further notice.


 


13.2.        Construction of Rights and Remedies
and Waiver of Notice and Consent.


 


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(a)           This Section 13 applies
to all rights and remedies provided by this Agreement or at law or in equity.


 


(b)           No forbearance in exercising
any right or remedy shall operate as a waiver thereof; no forbearance in
exercising any right or remedy on any one or more occasions shall operate as a
waiver thereof on any future occasion; and no single or partial exercise of any
right or remedy shall preclude any other exercise thereof or the exercise of
any other right or remedy.


 


14.       Miscellaneous.


 


14.1.          Notices. If at any time
after the execution of this Agreement, it shall become necessary or convenient
for one of the parties to serve any notice, demand or communication upon the
other parties, such notice, demand, or communication shall be in writing and
shall be served personally, by nationally recognized overnight courier which
provides confirmation of delivery, or by depositing the same in the United
States mail, registered or certified, return receipt requested, postage prepaid
and to such address as each party may have furnished to the other parties in
writing as the place for the service of notice. Any notice so mailed shall be
deemed to have been given three (3) days after the same has been deposited
in the United States mail; when delivered if the same has been given
personally; or the next business day if the same has been delivered to a
nationally recognized overnight courier service.


 


14.2.          Governing Law. This Agreement
shall be construed and interpreted under the laws of the state of Florida.


 


14.3.          Binding Effect. This
Agreement shall be binding upon the PC, each Shareholder, the Shareholders’
personal representatives, heirs, successors, and assigns, as the case may be,
and shall be binding upon and inure to the benefit of Management Services and
its successors and assigns. Neither the PC nor any Shareholder may assign this
Agreement.


 


14.4.          Amendment. This Agreement
may be amended, but only by a written amendment signed by all parties hereto.


 


14.5.          Severability. If any
provision of this Agreement or the application of any provision to any party or
circumstance shall be adjudged invalid or unenforceable to any extent, the
remainder of this Agreement and the application of the provision to any other
party or circumstance shall not be affected thereby. Each provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by
law.


 


14.6.          Headings. The headings in
this Agreement are for convenience of reference only and shall not be used in
interpreting this Agreement.


 


14.7.          Number; Gender. Where
appropriate, the number of all words in this Agreement shall be both singular
and plural and the gender of all pronouns shall be masculine, feminine, neuter,
or any combination thereof.


 


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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first set forth above.


 


 


	
   

  	
  “PC”



  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION, a California professional corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Katin

  
	
   

  	
  Name:

  	
  Michael J. Katin, M.D.

  
	
   

  	
  Title:

  	
   President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “Management Services”



  CALIFORNIA RADIATION
  THERAPY MANAGEMENT SERVICES, INC., a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
  Name:

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “Current Shareholder”

  
	
   

  	
   

  
	
   

  	
  /s/ Michael J. Katin

  
	
   

  	
  Michael J. Katin, M.D.

  
				



 


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