Document:

Exhibit 10.2

 

[COMPANY LETTERHEAD]

 

September 9, 2016

 

To: Daniel Dosoretz

Re:  Letter Agreement

 

Dear Danny:

 

This letter agreement (this “Letter Agreement”) will confirm our understanding with respect to the amendment of certain agreements with 21st Century Oncology Investments, LLC and 21st Century Oncology Holdings, Inc. (the “Company”).

 

1.              Transition to Physician.   Effective September 9, 2016 you hereby acknowledge that you will no longer be an officer (or hold any similar position) of 21st Century Oncology Investments, LLC and any direct or indirect subsidiary thereof, effective as of and contingent upon the “Closing” as defined in the Subscription Agreement, to be dated on or around September 9, 2016, by and among 21st Century Oncology Investments, LLC, the Company, 21st Century Oncology, Inc., Canada Pension Plan Investment Board (“CPPIB”). Without limiting the foregoing, you also hereby agree to take all reasonably necessary and/or desirable actions as directed by 21st Century Oncology Investments, LLC, the Company or any of their respective subsidiaries to give effect to the action contemplated by the immediately preceding sentence.  For the avoidance of doubt, such action shall apply to your position as Chief Executive Officer of the Company, and, following the date hereof, you will continue to be employed by the Company pursuant to your Second Amended and Restated Executive Employment Agreement dated May 6, 2014, as amended on September 25, 2014 (the “Employment Agreement”), as amended herein to reflect your transition from Chief Executive Officer to senior physician.  You also hereby consent to  (x) the elimination of your right to serve as a director of the Company and any of its subsidiaries and/or related entities pursuant to the first clause of Section 2.1(a)(v) of the Second Amended and Restated Securityholders Agreement, dated as of September 24, 2014, by and among the Company and the other parties thereto, notwithstanding the fact that the conditions for loss of that right specified in Section 2.1(n) of the Second Amended and Restated Securityholders Agreement may or may not have been satisfied and (y) the elimination of all of your duties, authorities and responsibilities as Chief Executive Officer as set forth in the Employment Agreement (including on Exhibit A thereto).  Notwithstanding the foregoing, you shall be designated as an independent Board member and, so long as you are employed by the Company, you shall have the honorary title “Founder”.  In addition, as a condition to entering into this Letter Agreement, the parties agree to waive now and forever their respective rights set forth in Section 5.1 and 5.2 of that certain Management Stock Contribution and Unit Subscription Agreement, as well as any other put or call rights that the parties might have with respect to equity currently held by the Executive in the Company, 21st Century Oncology Investments, LLC, or any of their respective affiliates. Moreover, you agree that you will undertake to facilitate the Company’s negotiation with Theriac Management Investments, LLC (“Theriac”) regarding the Company’s desire to (i) modify the terms of existing leases between the Company and its affiliates and Theriac to be consistent with the duration and economic terms

 

 

contemplated by the CPPIB term sheet, and (ii) eliminate or reduce the Company’s obligations with respect to leases between the Company and its affiliates and Theriac that relate to centers and other locations that are not currently utilized or underutilized by the Company and its affiliates, including subletting such locations, it being understood by the Company that you will not be making any decisions on behalf of Theriac with respect to such since you have a conflict of interest.

 

2.              Amendment of Employment Agreement.  The Employment Agreement is hereby amended as follows:

 

(a)   All references in the Employment Agreement to “Executive” shall be replaced with “Physician”.

 

(b)    Section 1 of the Employment Agreement, as well as Exhibits A and B, shall be deleted in its entirety and replaced with the following: “Physician shall be employed by the Company as a senior physician providing radiation oncology services at the Company’s and its subsidiaries’ radiation therapy centers including 21st Century Oncology, LLC (“21st Century”).”

 

(c)     Section 2 of the Employment Agreement shall be deleted in its entirety and replaced with the following “Following the date of this Agreement, (the “Effective Date”), the Physician’s employment hereunder shall be entirely “at will” and may be terminated by either party with thirty (30) days’ written notice.

 

(d)    Section 3 of the Employment Agreement shall be deleted in its entirety and replaced with the following:

 

“(a)                           21st Century agrees to pay Physician for the services provided hereunder an amount equal to Ten Dollars ($10.00) per RVU generated by Physician per year, to include professional RVUs, or technical RVUs, or global RVUs or any other form of payment related to his provider number, but in no case shall an RVU be double counted (“Base Salary”).   21st Century shall advance Physician Base Salary in bi-weekly installments, based on an annualized rate of Seven Hundred Thousand Dollars ($700,000) (“Advanced Compensation”).  Advanced Compensation shall be subject to required withholding and deductions, in accordance with 21st Century’s payroll policies.  21st Century shall provide Physician a monthly report showing the RVUs generated and the RVU reimbursement received each month.

 

(b)                                 21st Century shall reconcile the Advanced Compensation with the actual amount of Base Salary Physician should have received pursuant to Section 3(a) following each three (3) month calendar quarter and, if applicable, the Termination Date (defined below).  In the event that the Base Salary due to Physician exceeds the Advanced Compensation paid to Physician, 21st Century shall pay Physician an amount equal to such excess amount within thirty (30) days following the end of each such quarter (or Termination Date).  In the event that the Advanced Compensation paid to Physician exceeds the Base Salary due to Physician, 21st Century shall deduct such overpayment from the Advanced Compensation next paid to Physician.

 

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(c)                                  For the purpose of Section 3(a), RVUs shall be calculated based upon Physician’s CPT coding used for billing purposes.  RVUs shall be assigned to each CPT code based upon tables published by the Center for Medicare & Medicaid Services (“CMS”).  In the case of multiple procedures, RVUs will be assigned consistent with the methodology utilized by CMS for the Medicare Program.  With respect to any procedure or service not covered by existing CPT codes or where the applicable CPT code does not list RVUs (for example where a procedure is listed “By Report” without an applicable RVU applied), 21st Century shall determine the appropriate RVU value.

 

(d)                                 During the term of this Agreement, should any billed codes later be adjusted by the applicable third-party payor, a retrospective adjustment shall be made to Physician’s RVUs to reflect the revised coding.  In the event 21st Century is required to repay or refund any amounts to a patient or applicable third party payor (as a result of audit or otherwise), Physician shall be responsible for any such repayment (including related interest and penalties, if any).  21st Century shall give Physician written notice of any such repayment obligation.  If such repayment occurs during the term hereof, such amount may be offset against the Advanced Compensation next paid to Physician.  If such repayment occurs following the expiration or termination of this Agreement, or exceeds the amounts otherwise due hereunder, Physician shall be responsible to promptly repay such amounts to 21st Century within thirty (30) days of receipt of such notice.  Physician’s obligations hereunder shall expressly survive any termination or expiration of this Agreement.

 

(e)                                  During the term of this Agreement, Physician and eligible family members may participate in all 21st Century sponsored group health and welfare benefit plans, subject to plan eligibility requirements and Physician’s completion of related deduction authorization forms.  Coverage under such plans is available to the extent obtainable, with coverage amounts as 21st Century shall in its sole discretion determine and subject to the limitations and restrictions of 21st Century’s group plans as they may exist from time to time during the term hereof.

 

(f)                                   21st Century shall pay all medical malpractice premiums related to Physician’s employment, including “tail” coverage after termination or expiration of this Agreement.

 

(g)                                  Any services by Physician over and above customary services as a radiation oncologist or board member will be as agreed to in writing and compensated as agreed in advance of such services.

 

(e)    Section 4 of the Employment Agreement shall be deleted in its entirety and replaced with the following:

 

“(a)                           21st Century shall reimburse the Physician (without duplication) for the reasonable costs and expenses incurred by Physician in connection with the provision of services hereunder, provided that such reimbursement shall be subject to the terms, conditions, and limitations set forth in 21st Century’s Expense Reimbursement Policy as it 

 

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may exist and be modified from time to time.  Should Physician agree to travel on behalf of 21st Century, at the request of the President and CEO, he shall be permitted to travel first class with all travel booked through 21st Century.

 

(b)                                 21st Century shall pay for occupational licenses, dues to professional societies and associations and fees which are necessary to permit Physician to render services hereunder, or which, though not necessary, are reasonable and desirable and are approved by 21st Century.  In addition, 21st Century shall pay or reimburse Physician for medical journal and related subscriptions up to One Thousand Dollars ($1,000) per year.

 

(c)                                  Physician shall be entitled to leaves of absence for vacation and professional conventions, seminars, and continuing professional education, with reasonable expenses incurred for such professional education to be paid for by 21st Century in accordance with 21st Century’s policies concerning same, at Physician’s discretion; provided, however, such leaves of absence shall be scheduled and taken with reasonable prior notice to 21st Century to allow for appropriate patient scheduling and coverage.”

 

(f) Sections 5(a) through 5(e) of the Employment Agreement shall be deleted in their entirety and replaced with the following:

 

(a) Severance Payments. If the Physician’s employment is terminated for any or no reason by either party, the Company shall be obligated to pay to Physician (i) the amounts accrued and unpaid (or underpaid, as applicable) under Section 3 through the date of termination (the “Termination Date”), provided, for the avoidance of doubt, that Physician shall be responsible for paying back the Company the excess between any Advanced Compensation already paid and the value of any RVUs actually accumulated   and (ii) an aggregate amount of $3,666,666.66 in equal monthly payments of $152,777.78 for a period of twenty-four (24) months; provided, further, that the first monthly payment of the amount set forth in (ii) shall be made on the first payroll period after the sixtieth (60th) day following the Termination Date and shall include payment of any amounts that would otherwise be due prior thereto. Physician shall also be permitted, to the extent permitted under applicable law, to continue to participate at the Company’s expense in all benefit and insurance plans, coverage and programs in which he was participating immediately prior to the Termination Date, for a period of one (1) year from the Termination Date (Physician will reasonably cooperate with the Company to facilitate the continuation of such benefits, including, without limitation, electing “COBRA” coverage as required by the Company);  provided, for the avoidance of doubt, that the Company may modify the continuation coverage contemplated by this Section 5(a) to the extent reasonably necessary to avoid the imposition of any excise taxes on the Company for failure to comply with the nondiscrimination requirements of the Patient Protection and Affordable Care Act of 2010, as amended, and the Health Care and Education Reconciliation Act of 2010, as amended (to the extent applicable) including instead making cash payments to the Physician over the same period in monthly installments in an amount equal to the Company’s portion of the monthly cost of providing such benefits 

 

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for such period.  Physician shall not be required to mitigate the amount of any payment or benefit contemplated by this paragraph.

 

(g)     Section 5(h) is hereby deleted in its entirety.

 

(h)    With respect to Section 9 of the Employment Agreement, the references to “Section 5(b)” shall be deleted and replaced with “Section 5(a)” and the following new sentence shall be added at the end of Section 9 of the Employment Agreement: “In the event any of the payments required under Section 5(a) are not made by the Company to the Physician within 90 days after written demand by the Physician, this Section 9 will automatically terminate and be of no force and effect and notwithstanding this Section 9 being of no force or effect the Company shall still be obligated to make the payments to Physician required under Section 5(a).”

 

3.              Reimbursement of Attorneys’ Fees.  The Company shall reimburse you for your reasonable, out-of-pocket legal fees and expenses up to a maximum of $15,000 in connection with the negotiation and execution of this Letter Agreement.

 

4.              Governing Law.  This Letter Agreement will be governed by, and construed under and in accordance with, the internal laws of the State of Florida, without regard to the choice of law rules thereof.

 

5.              Entire Agreement.  Except as otherwise expressly provided herein, this Letter Agreement and the Employment Agreement, as amended herein, constitute the entire agreement between you and the Company with respect to the subject matter hereof and supersede any and all prior agreements or understandings between you and the Company with respect to the subject matter hereof, whether written or oral.  This Letter Agreement will bind the heirs, personal representatives, successors and permitted assigns of both you and the Company, and will inure to the benefit of both you and the Company and their respective heirs, successors and permitted assigns, provided that you may not assign your rights or obligations hereunder.  This Letter Agreement may be amended or modified only by a written instrument executed by you and the Company. This Letter Agreement may be executed in two (2) counterparts and by facsimile or other electronic transmission, each of which shall be considered an original.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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If this Letter Agreement accurately reflects your understanding as to the terms and conditions of your transition and termination of employment with the Company, please sign and date one copy of this Letter Agreement in the space provided below and return the same to me for the Company’s records.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
21ST CENTURY ONCOLOGY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   LeAnne M. Stewart
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
LeAnne   M. Stewart
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
21ST CENTURY ONCOLOGY INVESTMENTS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James L. Elrod, Jr.
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
James   L. Elrod, Jr.
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
President
    

 

The above terms and conditions accurately reflect our understanding regarding the terms and conditions of my transition from Chief Executive Officer to senior physician, and I hereby confirm my agreement to the same.

 

	
Dated:   September 9, 2016
    	
/s/   Daniel Dosoretz
    
	
 
    	
Daniel DosoretzEXHIBIT 10.3

 

Execution Copy

	
 
    

 

SUBSCRIPTION AGREEMENT

 

by and among

 

21st Century Oncology Investments, LLC,

 

21st Century Oncology Holdings, Inc.,

 

21st Century Oncology, Inc., and

 

Canada Pension Plan Investment Board

 

Dated as of September 9, 2016

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I
    	
 
    
	
PURCHASE AND SALE
    	
 
    
	
1.1
    	
Sale and Issuance of   the Shares
    	
1
    
	
1.2
    	
Closing
    	
1
    
	
1.3
    	
Closing Deliveries
    	
1
    
	
 
    
	
ARTICLE II
    
	
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE   COMPANY
    
	
2.1
    	
Organization and Good   Standing
    	
2
    
	
2.2
    	
Authority; No Conflict
    	
2
    
	
2.3
    	
Capitalization;   Issuance of Shares
    	
4
    
	
2.4
    	
Taxes
    	
5
    
	
2.5
    	
[Intentionally Omitted]
    	
5
    
	
2.6
    	
Compliance with Legal   Requirements; Governmental Authorizations
    	
5
    
	
2.7
    	
[Intentionally Omitted]
    	
8
    
	
 
    	
 
    
	
ARTICLE III
    	
 
    
	
REPRESENTATIONS AND WARRANTIES OF PURCHASER
    	
 
    
	
3.1
    	
Organization
    	
8
    
	
3.2
    	
Authority; No Conflict
    	
8
    
	
3.3
    	
Investment   Representations
    	
9
    
	
3.4
    	
Brokers or Finders
    	
10
    
	
 
    	
 
    
	
ARTICLE IV
    	
 
    
	
INDEMNIFICATION
    	
 
    
	
4.1
    	
Parent and Company   Indemnification
    	
10
    
	
4.2
    	
Purchaser   Indemnification
    	
10
    
	
4.3
    	
Indemnification   Procedures
    	
10
    
	
4.4
    	
Exclusion of Other   Remedies
    	
11
    
	
4.5
    	
Investigation and   Waivers
    	
11
    
	
4.6
    	
Tax Treatment of   Indemnity Payments
    	
12
    
	
 
    	
 
    
	
ARTICLE V
    	
 
    
	
MISCELLANEOUS
    	
 
    
	
5.1
    	
Survival
    	
12
    
	
5.2
    	
Public Announcements
    	
12
    
	
5.3
    	
Certain Post-Closing   Covenants
    	
12
    
	
5.4
    	
Governmental Filings
    	
13
    
	
5.5
    	
Waiver
    	
13
    
	
5.6
    	
Notices
    	
14
    
	
5.7
    	
Consent to Jurisdiction
    	
15
    
	
5.8
    	
Further Assurances
    	
15
    
	
5.9
    	
Entire Agreement and Modification
    	
15
    

 

i

 

	
5.10
    	
Specific Performance
    	
16
    
	
5.11
    	
Construction
    	
16
    
	
5.12
    	
Severability
    	
16
    
	
5.13
    	
Binding Effect;   Assignment; No Third-Party Beneficiaries
    	
16
    
	
5.14
    	
Restricted Information
    	
16
    
	
5.15
    	
Governing Law
    	
17
    
	
5.16
    	
Waiver of Jury Trial
    	
17
    
	
5.17
    	
Execution of Agreement;   Counterparts
    	
17
    
	
5.18
    	
Currency
    	
17
    
	
5.19
    	
No Personal Liability   of Directors, Officers, Owners, Etc.
    	
17
    
	
5.20
    	
30%   Rule Compliance
    	
18
    

 

ii

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (the “Agreement”), dated as of September 9, 2016, is by and among 21st Century Oncology Investments, LLC, a Delaware limited liability company (“Parent”), 21st Century Oncology Holdings, Inc., a Delaware corporation (the “Company”), 21st Century Oncology, Inc., a Florida corporation (“Opco”), and Canada Pension Plan Investment Board, a Canadian federal Crown corporation (“Purchaser”; each of Company and Purchaser, a “Party”).  All capitalized terms not otherwise defined herein shall have the meanings given such terms in Annex A of this Agreement.

 

Recitals

 

WHEREAS, the Purchaser purchased 385,000 shares of Series A Convertible Preferred Stock from the Company pursuant to that certain Subscription Agreement, dated as of September 26, 2014 (the “Initial Subscription Agreement”), by and among Parent, the Company, Opco and Purchaser.

 

WHEREAS, the Purchaser desires to purchase from the Company, and the Company desires to issue and sell to the Purchaser, additional shares of the Company’s Series A Convertible Preferred Stock, on the terms and conditions set forth herein (the “Purchase Transaction”).

 

Agreement

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, the parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

PURCHASE AND SALE

 

1.1                               Sale and Issuance of the Shares.  The Purchaser shall purchase from the Company, for an aggregate purchase price equal to the Subscription Price, and the Company shall issue and sell to Purchaser, in each case, upon the terms and subject to the conditions of this Agreement, 25,000 shares of Series A Convertible Preferred Stock (such shares of Series A Convertible Preferred Stock issued to the Purchaser pursuant to this Section 1.1 are referred to herein as the “Shares”).

 

1.2                               Closing.  The closing of the purchase and issuance of the Shares (the “Closing”) contemplated by this Agreement shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, NY 10022, or at such other place as the Purchaser and the Company may mutually agree (such date of Closing, the “Closing Date”).

 

1.3                               Closing Deliveries. At the Closing:

 

(a)                                 Purchaser shall pay to the Company the amount payable pursuant to Section 1.1 by wire transfer of immediately available funds to an account which shall have been designated by the Company at least two (2) Business Days prior to the anticipated Closing Date.

 

 

(b)                                 The Company shall deliver to Purchaser one or more certificates representing the Shares against payment to the Company of the amount payable pursuant to Section 1.1.

 

(c)                                  Each of the parties thereto shall execute the Eighth Amended and Restated Limited Liability Company Agreement of 21st Century Oncology Investments LLC, in the form attached here to as Exhibit A (the “LLC Agreement”).

 

(d)                                 Each of the parties thereto shall execute the Third Amended and Restated Securityholders Agreement of 21st Century Oncology Investments LLC, in the form attached here to as Exhibit B (the “Securityholders Agreement”).

 

(e)                                  The Certificate of Designations will be filed with the Secretary of State of the State of Delaware.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PARENT AND THE COMPANY

 

Parent and the Company, jointly and severally, represent and warrant to Purchaser that, except as may be set forth in the schedules hereto, or, other than for purposes of Section 2.1, 2.2 or 2.3, as may be expressly disclosed in the Commission Documents:

 

2.1                               Organization and Good Standing.

 

(a)                                 The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Parent and each of the Company’s subsidiaries is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, except where the failure to be so organized, existing or in good standing would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries, taken as a whole. Each of Parent, the Company and its subsidiaries is duly qualified or licensed to do business in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes qualification or licensing necessary, except for such failures to be so qualified or licensed that would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries, taken as a whole.  Each of Parent, the Company and its subsidiaries has the requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, in each case, in all material respects.

 

(b)                                 True and correct copies of the Organization Documents of Parent, the Company and its subsidiaries have been made available to Purchaser.

 

2.2                               Authority; No Conflict.

 

(a)                                 The execution, delivery and performance of the Transaction Agreements and the consummation of the transactions contemplated thereby (together, including, without limitation, the issuance and conversion of equity or debt thereunder, the “Contemplated Transactions”), are within the Company’s (and, as applicable, Parent’s and Opco’s) corporate or limited liability company powers and have been duly authorized by all necessary action on the part of the Company (and, as applicable, Parent and Opco) and their respective equityholders, and no other

 

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corporate or limited liability company action will be required on the part of the Company (or, as applicable, Parent and Opco) or otherwise that is necessary to authorize the execution, delivery and performance by the Company (or Parent or Opco) of the Transaction Agreements or the consummation of the Contemplated Transactions.  The Transaction Agreements are, assuming due authorization, execution and delivery by the Purchaser and the other parties thereto, the legal, valid and binding obligation of the Company (or, as applicable, Parent), enforceable against the Company (or, as applicable, Parent and Opco) in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights, and to general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(b)                                 The execution and delivery of the Transaction Agreements by the Company (and, as applicable, Parent or Opco) the consummation of the Contemplated Transactions do not, and the performance by the Company (and, as applicable, Parent and Opco) of their respective obligations hereunder will not, (i) violate any provision of the Organization Documents of Parent, the Company or any subsidiary of the Company, (ii) violate any Legal Requirement applicable to Parent, the Company or any of its subsidiaries or by which any property or asset of Parent, the Company or any of its subsidiaries is bound or affected or (iii) require any Consent under, result in any breach of or any loss of any benefit under, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others (including, without limitation, any employees or directors of the Company or any of its subsidiaries) any right of payment under, termination, recapture, vesting, amendment, acceleration or cancellation of, or result in the creation of an Encumbrance (except for liens contemplated by the Loan Agreements) on any property or asset of Parent, the Company or any of its subsidiaries pursuant to, any Contract to which Parent, the Company or any of its subsidiaries is a party, or Governmental Authorization held by Parent, the Company or any of its subsidiaries, except, with respect to clauses (ii) and (iii), for any such violations, requirements, Consents, breaches, defaults, Encumbrances or other occurrences which would not, individually or in the aggregate, be materially adverse to Company and its subsidiaries, taken as a whole, or have a material adverse effect on the consummation of the Contemplated Transactions.

 

(c)                                  The execution and delivery of the Transaction Agreements by the Company (and, as applicable, Parent and Opco) do not, and the performance of the Transaction Agreements and of the Contemplated Transactions by the Company (and, as applicable, Parent and Opco) will not, assuming the accuracy of the information provided by Purchaser to Company with respect thereto, (i) require any Consent of, filing with, or notification to, any Person other than a Governmental Body, by Parent, the Company or any of its subsidiaries, or (ii) require any Consent of, filing with, or notification to, any Governmental Body by Parent, the Company or any subsidiary of the Company, except for such Consents, filings and/or notifications required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if any, except, with respect to clauses (i) and (ii), where failure to obtain such Consent or make such filing or notification would not, individually or in the aggregate, be materially adverse to Company and its subsidiaries, taken as a whole, or have a material adverse effect on the consummation of the Contemplated Transactions.

 

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2.3                               Capitalization; Issuance of Shares.

 

(a)                                 Parent has not conducted and does not conduct any activities other than those incident to its ownership of all of the issued and outstanding shares of Common Stock of the Company.  Schedule 2.3(a) lists all of the record holders of interests (or rights to acquire interests) in Parent and the number of interests held.  Parent owns no equity securities in any Person other than the Company.

 

(b)                                 Except as disclosed in the Initial Subscription Agreement, the Commission Documents or to the Audit Committee since the Initial Closing Date, the Company conducts no material activities other than those incident to its ownership of its subsidiaries.  The authorized capital stock of the Company consists of 1,000,000 shares of Common Stock, of which 1,059 shares shall be issued and outstanding, and 3,500,000 shares of preferred stock of the Company, par value $0.001 per share (the “Preferred Stock”), of which 385,000 shares are issued and outstanding.  Parent is the holder of all of the issued and outstanding shares of Common Stock of the Company, and Purchaser is the holder of all of the issued and outstanding shares of Preferred Stock of the Company.

 

(c)                                  Other than as set forth on Schedule 2.3(c) or pursuant to the Contemplated Transactions, there are no securities, options, warrants, calls, rights or other Contracts to which Parent, the Company or any of its subsidiaries is a party, or by which the Parent, Company or any of its subsidiaries is bound, obligating Parent, the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of, or other equity or voting securities or interests in, or securities convertible into, or exchangeable or exercisable for, shares of Common Stock, or other equity or voting securities or interests in, Parent, the Company or any of its subsidiaries or obligating Parent, the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right or Contract.

 

(d)                                 Other than as set forth on Schedule 2.3(d), there are no Contracts between Parent or the Company or any of its subsidiaries, on the one hand, and any Person, on the other hand, granting such Person the right to require Parent, the Company or any of its subsidiaries to file a registration statement under the Securities Act with respect to any securities owned or to be owned by such Person or to require the Company or any of its subsidiaries to include such securities in the securities registered pursuant to this Agreement (or in any securities being registered pursuant to any other registration statement filed by the Company or any of its subsidiaries under the Securities Act).

 

(e)                                  Schedule 2.3(e) sets forth all authorized and issued and outstanding equity securities and other securities convertible or exchangeable for equity securities of each direct or indirect subsidiary of the Company and the ownership thereof.  The outstanding equity securities of each such subsidiary that are owned directly or indirectly by the Company or one or more subsidiaries of the Company are owned free and clear of all Encumbrances other than Encumbrances granted under the terms of or in connection with the Loan Agreements.  All of the outstanding equity securities of the Company and each of its subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable.  All of the outstanding equity securities and other securities convertible or exchangeable for equity securities of the Company or any of its subsidiaries were validly issued in compliance with the Securities Act, the

 

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Exchange Act and any other applicable Legal Requirement, except for immaterial failures to comply with any such other Legal Requirements.  Other than as set forth on Schedule 2.3(e) hereto, neither the Company nor any of its subsidiaries owns, or has any Contract to acquire, any equity securities of any Person (other than a subsidiary of the Company) or any direct or indirect equity or ownership interest in any other business.

 

(f)                                   The issuance of the Shares issuable pursuant to the Transaction Agreements have been duly authorized and, upon issuance in accordance with the terms of this Agreement and the other applicable Transaction Agreements, the Shares will be validly issued, fully paid and non-assessable and free from all Encumbrances other than Encumbrances created by Purchaser.

 

2.4                               Taxes.  Except as disclosed in the Initial Subscription Agreement, the Commission Documents or to the Audit Committee since the Initial Closing Date:

 

(a)           Each of the Company and its subsidiaries has timely filed all material United States federal, state, local and foreign Tax Returns required to be filed through the date hereof, and all such Tax Returns are complete and accurate in all material respects, and has timely paid all material Taxes due within the applicable statute of limitations.  There are no Encumbrances for such Taxes upon any asset of the Company or any of its subsidiaries (other than Encumbrances for Taxes not yet due and payable or for taxes that the taxpayer is contesting in good faith and for which appropriate reserves are maintained under GAAP).  No material Tax deficiency (i) has been claimed in writing or, to the knowledge of the Company, otherwise (and there is no current audit, assessment, dispute or claim concerning any material Tax liability of the Company or any of its subsidiaries); or (ii) has been determined adversely to the Company or any of its subsidiaries nor does the Company or any of its subsidiaries have any knowledge of any potential material Tax deficiency.  All material Taxes required to be withheld, collected or deposited by or with respect to the Company and each of its subsidiaries have been timely withheld, collected or deposited as the case may be and, to the extent required, have been timely paid to the relevant taxing authority.

 

(b)                                 No closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any taxing authority with respect to the Company or any of its subsidiaries.

 

(c)                                  None of the Company or any of its subsidiaries has directly or indirectly participated in a “listed transaction” within the meaning of Section 6707A(c)(2) of the Code.

 

(d)                                 The Company has not been a “distributing corporation” or a “controlled corporation” in any distribution occurring during the last two years intended to qualify under Section 355 of the Code.

 

2.5                               [Intentionally Omitted].

 

2.6                               Compliance with Legal Requirements; Governmental Authorizations. Except as disclosed in the Initial Subscription Agreement, the Commission Documents or to the Audit Committee since the Initial Closing Date:

 

(a)                                 The businesses of the Company and its subsidiaries are not being, and, have not

 

5

 

been since the Initial Closing Date, conducted in violation of any Legal Requirement, except where such violations would not be materially adverse to the Company and its subsidiaries, taken as a whole.

 

(b)                                 The Company and its subsidiaries, and each applicable employee of each of them, are in possession of all material Governmental Authorizations necessary to be held by the Company or any of its subsidiaries, or any of their respective employees, for the Company or any of its subsidiaries to lease and/or operate the property and to carry on the businesses of the Company and its subsidiaries as it is being conducted, except where the failure to possess the same would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries, taken as a whole; and all such Governmental Authorizations are valid, and in full force and effect, in all material respects, except where the failure to be so valid and in full force and effect, would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries, taken as a whole.  Since the Initial Closing Date, neither the Company nor any of its subsidiaries has received any written notice or other written communication from any Governmental Body regarding any material (i) actual or alleged violation of or failure to comply with any term or requirement of any such Governmental Authorization or (ii) actual or proposed revocation, withdrawal, suspension, cancellation, termination of or modification to any such Governmental Authorization, in each case except where such violation, failure, revocation, withdrawal, suspension, cancellation, termination or modification would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries, taken as a whole.

 

(c)                                  Without limiting the generality of Section 2.6(a) or Section 2.6(b), except as would not reasonably be expected to result in a material liability to the Company or any subsidiary, none of Parent, the Company or its subsidiaries, nor their respective Affiliates or partners, nor, to the knowledge of the Company, any Persons who provide professional services under agreements with any of the foregoing for the benefit of Parent, the Company or any of its subsidiaries, Affiliates or partners, nor, to the knowledge of the Company, any Persons whose business is managed or administered under agreements with the Company or any of its subsidiaries, Affiliates or partners, has engaged in any activities which are prohibited by (i) the federal civil and criminal false claims statutes and regulations, (ii) the Medicare and Medicaid statutes, regulations, billing guidelines and related compliance guidance, including, but not limited to, the federal Anti-Kickback Statute (42 U.S.C. Section 1320a-7a-7b), (iii) the federal Stark law governing physician self-referrals (42 USC. Section 1395nn et seq.) and regulations, (iv) the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), including the privacy and anti-fraud provisions thereof, (v) the Health Information Technology for Economic and Clinical Health Act (“HITECH”), (vi) any laws or regulation regarding the corporate practice of medicine and physician fee-splitting prohibitions, (vii) any comparable state or international statute or regulation, or, (viii) to the knowledge of the Company, any Legal Requirement or rule relating to the regulation of the medical or worker’s compensation industry.

 

(d)                                 Without limiting the generality of Section 2.6(a) or Section 2.6(b), none of Parent, the Company or its subsidiaries, nor their respective Affiliates or partners, nor, to the knowledge of the Company, any Persons who provide professional services under agreements with any of the foregoing for the benefit of Parent, the Company or any of its subsidiaries, Affiliates or partners, nor, to the knowledge of the Company, any Persons whose business is managed or administered under agreements with the Company or any of its subsidiaries, Affiliates or

 

6

 

partners, (i) has been debarred, disqualified, suspended or excluded from participation under any private, commercial or governmental programs; (ii) has been convicted or charged with (or, to the knowledge of the Company, investigated for) any criminal offenses under any Law relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other criminal offense or other misconduct in connection with the delivery of an item or service or with respect to any act or omission under any private, commercial or governmental programs; (iii) has been subject to any order of, or any criminal, civil or administrative fine or penalty imposed by, any Governmental Body; or (iv) is a party to or is bound by an individual integrity agreement, corporate integrity agreement, deferred prosecution agreement, or other formal or informal agreement with any Governmental Body concerning compliance with any Law.

 

(e)                                  Without limiting the generality of Section 2.6(a) or Section 2.6(b), except as would not reasonably be expected to result in a material liability to the Company or any subsidiary, (i) each of Parent, the Company and its subsidiaries, and their respective Affiliates and partners, complies with HIPAA (including its implementing regulations, as amended by the regulations promulgated pursuant to HITECH) and all applicable Legal Requirements related to the privacy, security, and transmission of health information (collectively, “Health Information Laws”), (ii) each of Parent, the Company and its subsidiaries, and their respective Affiliates and partners, has business associate or confidentiality agreements in effect as required by the Health Information Laws; (iii) each Parent, the Company and its subsidiaries, and their respective Affiliates and partners, is currently submitting, receiving and handling or capable of submitting, receiving and handling the transactions that have been standardized pursuant to the TCS Standards of HIPAA at 45 CFR Parts 160 and 162, and is in material compliance with the TCS Standards, (iv)  none of Parent, the Company and its subsidiaries, nor their respective Affiliates or partners, nor, to the knowledge of the Company, any Persons who provide professional services under agreements with any of the foregoing for the benefit of Parent, the Company and its subsidiaries, has either (A) received any notice from any Person, including any Governmental Body, regarding its or any of its agents’, employees’ or contractors’ uses or disclosures of, or security or privacy practices regarding, individually identifiable health information in violation of any applicable Health Information Law or (B) breached a business associate or confidentiality agreement pertaining to individually identifiable health information. None of Parent, the Company and its subsidiaries, nor their respective Affiliates and partners, has had any impermissible use or disclosure, breach, or security incident (each as determined by reference to the Standards for Privacy of Individually Identifiable Health Information (45 C.F.R. Parts 160 and 164, Subparts A and E), the Breach Notification Rule (45 C.F.R. Part 164, Subpart D), the Security Standards for the Protection of Electronic Protected Health Information (45 C.F.R. Part 164, Subparts A and C) or state Legal Requirements, as applicable) involving individually identifiable health information, including electronic individually identifiable health information, held by Parent, the Company or its subsidiaries, Affiliates, partners, agents, employees or contractors.

 

(f)                                   Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or other person acting on behalf of the Company or any of its subsidiaries has (in the case of directors, officers, employees or other persons, in connection with activities undertaken on behalf of the Company or any of its subsidiaries), (i) used any corporate funds for any contribution, gift, entertainment or other expense relating to political activity; (ii) made any direct or, to the knowledge of the Company,

 

7

 

indirect payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other similar payment, in each case of clauses (i), (ii) and (iv) above, in violation of applicable Legal Requirements.

 

(g)                                  The operations of the Company and its subsidiaries are and have been conducted in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the anti-money laundering statutes of all jurisdictions to which the Company or its subsidiaries are subject, and the rules and regulations thereunder (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any Governmental Body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is, to the knowledge of the Company, pending or threatened.

 

(h)                                 None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or controlled affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not use the proceeds of the Purchase Transaction, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person or entity, for the purpose of financing the activities of any Person that, at the time of such activities, is subject to any U.S. sanctions administered by OFAC.

 

(i)                                     The Company and, to the knowledge of the Company, the Company’s directors and officers (in their capacities as such) are, in compliance in all material respects with any applicable provision of the U.S. Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith.

 

(j)                                    The Company and its subsidiaries have at all times acted in compliance in all material respects with any applicable provision of the Worker Adjustment and Retraining Notification Act (WARN) of 1988 and the rules and regulations promulgated in connection therewith.

 

2.7                               [Intentionally Omitted].

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser makes the following representations and warranties to the Company as of the date hereof:

 

3.1                               Organization.  Purchaser is a Canadian federal Crown corporation.

 

3.2                               Authority; No Conflict.

 

(a)                                 The Purchaser has all requisite power and capacity to execute, deliver and perform the Transaction Agreements to which it is a party and to consummate the transactions

 

8

 

contemplated hereby and thereby, and the Purchaser has taken all necessary action to authorize the execution and delivery by Purchaser of the Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby.  The Transaction Agreements to which the Purchaser is a party are, assuming due authorization, execution and delivery by the Company and the other parties thereto, the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights, and to general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(b)                                 The execution and delivery by the Purchaser of the Transaction Agreements to which it is a party do not, and the performance by the Purchaser of its obligations hereunder and thereunder will not, (i) violate any provision of the Organization Documents of the Purchaser, (ii) violate any Legal Requirement applicable to the Purchaser or by which any property or asset of the Purchaser is bound or affected or (iii) result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of termination, recapture, amendment, acceleration or cancellation of, or result in the creation of an Encumbrance on any property or assets of the Purchaser pursuant to, any Contract to which the Purchaser is a party, or other instrument or obligation of or Government Authorization held by the Purchaser, except, with respect to clauses (ii) and (iii), for any such violations, breaches, defaults, Encumbrances or other occurrences which would not, individually or in the aggregate, have a Purchaser Material Adverse Effect.

 

(c)                                  The execution and delivery by the Purchaser of the Transaction Agreements to which it is a party do not, and the performance of such Transaction Agreements and of the Contemplated Transactions by the Purchaser will not, require any Consent of, or filing with, or notification to, any Governmental Body or any other Person, except where failure to obtain such Consents, or to make such filings or notifications, would not, individually or in the aggregate, have a Purchaser Material Adverse Effect.

 

3.3                               Investment Representations.

 

(a)                                 The Purchaser is not a “U.S. person” within the meaning of Regulation S under the Securities Act or acting for the account or benefit of U.S. persons.

 

(b)                                 The Purchaser acknowledges that it is acquiring the Shares outside the United States in an “offshore transaction” (as defined in Rule 902(h) under Regulation S) in compliance with Regulation S.

 

(c)                                  The Purchaser was offered the Shares in, and is resident in, the Province of Ontario.  The Purchaser is an accredited investor as defined in National Instrument 45-106 — Prospectus and Registration Exemptions (“NI 45-106”), is not relying on subparagraph (m) of that definition and is eligible to purchase the Shares pursuant to an exemption from the prospectus requirements in NI 45-106.  The Purchaser confirms that it has not received any

 

9

 

“offering memorandum” (within the meaning of the Ontario Securities Act regarding the Company in connection with its subscription.)

 

3.4                               Brokers or Finders. Purchaser is not liable for any finder’s fee or other commission or compensation in respect of the transactions contemplated hereby, other than fees or other compensation that will be paid by Purchaser.

 

ARTICLE IV

INDEMNIFICATION

 

4.1                               Parent and Company Indemnification.  From and after the Closing, Parent, the Company and Opco, jointly and severally, shall indemnify, defend and hold harmless the Purchaser and its officers, directors and Affiliates (including any director, officer, employee, agent and controlling person of any of the foregoing) (each, a “Purchaser Indemnified Person”) from and against all Damages sustained or incurred by a Purchaser Indemnified Person arising from, relating to or resulting from (i) the breach of the representations and warranties made by Parent and the Company in this Agreement (in each case without giving effect to any materiality, materially adverse or similar qualification contained therein), or (ii)  the breach of any covenant, obligation or agreement made by the Company in the Certificate of Designations.  “Damages” means all losses, costs, claims, damages, liabilities, expenses (including reasonable attorneys’ and accountants’ fees, costs of investigation, costs of suit and costs of appeal), fines and penalties (other than speculative, remote, treble, exemplary and punitive damages).

 

4.2                               Purchaser Indemnification.  From and after the Closing, the Purchaser shall indemnify, defend and hold harmless the Company and its officers, directors and Affiliates (including any director, officer, employee, agent and controlling person of any of the foregoing) (each, a “Company Indemnified Person”) from and against all Damages sustained or incurred by a Company Indemnified Person arising from, relating to or resulting from (i) the breach of the representations and warranties made by the Purchaser in this Agreement (in each case without giving effect to any materiality or materially adverse event qualifier contained therein) or (ii) the breach of any covenant, obligation or agreement made by the Purchaser in this Agreement.

 

4.3                               Indemnification Procedures.  A party entitled to indemnification hereunder (each, an “Indemnified Party”) shall give written notice to the party indemnifying it (the “Indemnifying Party”) of any claim with respect to which it seeks indemnification promptly after the discovery by such Indemnified Party of any matters giving rise to a claim for indemnification, provided that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Article IV unless and to the extent that the Indemnifying Party shall have been actually prejudiced by the failure of such Indemnified Party to so notify such party.  Such notice shall describe in reasonable detail such claim and shall include (if then known, and if not then known, a reasonable and good faith estimate of) the amount or the method of computation of the amount of such claim and reference to the provision(s) of this Agreement on which such claim is based. In case any such action, suit, claim or proceeding is brought against an Indemnified Party, the Indemnified Party shall be entitled to hire, at its own expense, separate counsel and participate in the defense thereof; provided, however, the Indemnifying Party shall be entitled to assume and conduct the defense thereof, unless the counsel to the Indemnified Party advises such Indemnifying Party in writing

 

10

 

that such claim involves a conflict of interest (other than one of a monetary nature) that would reasonably be expected to make it inappropriate for the same counsel to represent both the Indemnifying Party and the Indemnified Party, in which case the Indemnified Party shall be entitled to retain its own counsel at the cost and expense of the Indemnifying Party (except that the Indemnifying Party shall only be liable for the legal fees and expenses of one law firm for all Indemnified Parties, taken together with respect to any single action or group of related actions). If the Indemnifying Party assumes the defense of any claim, all Indemnified Parties shall thereafter deliver to the Indemnifying Party copies of all notices and documents (including court papers) received by the Indemnified Party relating to the claim, and each Indemnified Party shall cooperate in the defense or prosecution of such claim. Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information that are reasonably relevant to such claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Indemnifying Party shall not be liable for any settlement of any action, suit, claim or proceeding effected without its written consent; provided, however, the Indemnifying Party shall not unreasonably withhold, condition or delay its consent. The Indemnifying Party further agrees that it will not, without the Indemnified Party’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), settle or compromise any claim or consent to entry of any judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in respect of which indemnification has been sought hereunder unless such settlement or compromise (i) includes an unconditional release of such Indemnified Party from all liability arising out of such action, suit, claim or proceeding, (ii) does not impose injunctive or other equitable relief against the Indemnified Party and (iii) does not require the Indemnified Party to make a statement or admission of fault, culpability or failure to act. If an offer is made to settle a pending or threatened action, suit, claim or proceeding, which offer the Indemnifying Party is permitted to settle under this Section 4.3 only upon the prior written consent of the Indemnified Party, and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party will give prompt written notice to the Indemnified Party to that effect.  If the Indemnified Party fails to consent to such firm offer within twenty (20) calendar days after its receipt of such notice, the Indemnified Party may continue to contest or defend such claim and, in such event, the maximum liability of the Indemnifying Party as to such claim will not exceed the amount of such settlement offer, plus costs and expenses paid or incurred by the Indemnified Party through the date such settlement offer is given to the Indemnified Party and which amount is otherwise indemnifiable hereunder.

 

4.4                               Exclusion of Other Remedies.  The parties agree that from and after the Closing the indemnification or reimbursement obligations of the parties set forth in this Article IV shall constitute the sole and exclusive remedies of the parties for any Damages based upon, arising out of or otherwise in respect of the matters set forth in this Agreement.  The provisions of this Section 4.4 will not, however, prevent or limit a cause of action (a) on account of fraud (but not constructive fraud) or (b) under Section 5.10.

 

4.5                               Investigation and Waivers.  The respective representations and warranties of Purchaser and the Company contained in this Agreement or in any certificate or other document delivered by any party hereto prior to the Closing and the rights to indemnification set forth in this Article IV shall not be deemed waived or otherwise affected by any investigation made by a

 

11

 

party and each party shall be entitled to rely on the representations and warranties of the other party despite such investigation or any knowledge that such party may otherwise have.

 

4.6                               Tax Treatment of Indemnity Payments.  All indemnification payments under this Article IV shall be treated as adjustments to the Subscription Price for tax purposes, except as otherwise required by applicable Law.

 

ARTICLE V

MISCELLANEOUS

 

5.1                               Survival.

 

(a)                                 The representations and warranties of the Company set forth in Article II shall survive the Closing indefinitely, or until the 30th day following the earlier expiration of any applicable statute of limitations relating to the subject matter of such representation.

 

(b)                                 The covenants and agreements of the Company and the Purchaser contained in this Agreement shall, subject to the express terms thereof, survive the Closing indefinitely, or such shorter period as may be expressly stated therein.

 

5.2                               Public Announcements.  The Company and the Purchaser shall cooperate with each other in relaying to third parties information concerning this Agreement and the transactions contemplated herein, and shall discuss drafts of all press releases and other releases of information for dissemination to the public pertaining hereto.  However, nothing in this Section 5.2 shall prevent the Company or the Purchaser from furnishing or filing any information to or with any Governmental Body or regulatory authority, insofar as is required by this Agreement or any Legal Requirement, provided that a party which proposes to make such a public disclosure shall, to the extent reasonably possible, provide the other party with a draft of such information in sufficiently in advance of its release to enable such other party to review such draft and advise that party of any comments it may have with respect thereto.  In particular, the Company agrees that it shall, except as required by any applicable Legal Requirement, obtain consent of the Purchaser to the disclosure of any information regarding the Purchaser to be contained in any news release or other document furnished or filed to or with any Governmental Body, authorized authority or disclosed to the public.

 

12

 

5.3                               Certain Post-Closing Covenants.

 

(a)                                 The Company shall, and shall cause its applicable subsidiaries to, use their respective reasonable best efforts to (a) ground any aircraft utilized by the Company, its subsidiaries or any of their respective employees (the “Aircraft”), (b) minimize the costs associated with the Aircraft and (c) enter into a sublease or similar agreement with a third party (the “Aircraft Sublease”) that is not in violation of the existing lease or similar agreement governing the lease and/or use of the Aircraft by the Company and/or its subsidiaries, as applicable (the “Aircraft Lease”), which Aircraft Sublease will (i) provide for, among other things, the assumption and assignment of certain rights and obligations of the Company and/or its Subsidiaries, as applicable, under the Aircraft Lease by such third party and (ii) be reasonably satisfactory to the Purchaser.

 

(b)                                 The Company shall, and shall cause its applicable subsidiaries to, use their respective reasonable best efforts to negotiate amendments with applicable counterparties to those real property leases pursuant to which the Company or its subsidiaries is a lessee and the lessor is or is beneficially owned by one or more current or former officers, directors, managers or equityholders of the Company or any of its subsidiaries (the “Related Real Property Leases”) such that the terms of the Related Real Property Leases (a) provide for terms of no greater than five (5) years from the date hereof, (b) reflect fair market rental rates and other terms and conditions as would appear in an arms’-length transaction and (c) provide an option for the Company or its subsidiary, as applicable, to purchase the underlying real property for fair market value.

 

(c)                                  The Company shall, and shall cause its applicable subsidiaries to, use their respective reasonable best efforts to execute upon all of the cost savings identified in the cost reduction plan provided to CPPIB prior to the date hereof and set forth on Schedule 5.3(c).

 

5.4                               Governmental Filings.  Each party shall use its reasonable best efforts to obtain all Consents of any Governmental Body required to be obtained in connection with the consummation of the Purchase Transaction, provided that the reasonable and documented out-of-pocket costs of obtaining any such Consents shall be borne by the Company.  To the extent permitted by applicable Legal Requirements, each party shall promptly notify the other party of any communications such party or its Affiliates receive from any Governmental Body related to the matters that are subject to this Agreement.  The Company shall timely file any post-Closing notifications required by any Governmental Body, including complying with Medicare enrollment requirements.

 

5.5                               Waiver.  Any party hereto may extend the time for the performance of any of the obligations or other acts required hereunder, waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and waive compliance with any of the agreements or conditions contained herein.  Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby or as otherwise contemplated herein.  No failure or delay on the part of any party hereto in the exercise of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor will any single or partial exercise of any such right preclude any other (or further) exercise thereof or of any other right.

 

13

 

5.6                               Notices.  All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile with confirmation of transmission by the transmitting equipment, (c) received by the addressee, if sent by certified mail, return receipt requested or (d) received by the addressee, if sent by a nationally recognized overnight delivery service, return receipt requested, in each case to the appropriate addresses or facsimile numbers set forth below (or to such other addresses, e-mail addresses or facsimile numbers as a party may designate by notice to the other parties):

 

(a)                                 If to Purchaser:

 

	
Canada Pension Plan Investment Board
    
	
One Queen Street East
    
	
Suite 2500
    
	
Toronto, ON
    
	
Canada
    
	
M5C 2W5
    	
 
    
	
Facsimile:
    	
(416)   868-8690
    
	
Attention:
    	
Managing   Director, Head of Relationship Investments
    
	
 
    	
 
    
	
and to:
    	
 
    
	
 
    	
 
    
	
Canada Pension Plan Investment Board
    
	
One Queen Street East
    
	
Suite 2500
    
	
Toronto, ON
    
	
Canada
    
	
M5C 2W5
    	
 
    
	
Facsimile:
    	
(416)   868-4760
    
	
Attention:
    	
General   Counsel
    
	
 
    	
 
    
	
with a copy (which shall not constitute notice)   to:
    
	
 
    
	
Debevoise & Plimpton LLP
    
	
919 Third Avenue
    
	
New York, NY 10022
    
	
Facsimile:
    	
(212)   909-6836
    
	
Attention:
    	
Kevin   M. Schmidt
    

 

(b)                                 If to Parent, the Company or Opco:

 

	
c/o Vestar   Capital Partners
    
	
245 Park Avenue,   41st Floor,
    
	
New York, NY   10167
    
	
Facsimile:
    	
(212) 880-4922
    
	
Attention:
    	
General Counsel
    

 

14

 

	
and to:
    
	
 
    
	
21st Century   Oncology
    
	
2270 Colonial   Boulevard
    
	
Fort Myers, FL   33907
    
	
Facsimile:
    	
(516) 301-5778
    
	
Attention:
    	
General Counsel
    
	
 
    
	
with a copy   (which shall not constitute notice) to:
    
	
 
    
	
Kirkland &   Ellis LLP
    
	
601 Lexington   Avenue
    
	
New York, NY   10022
    
	
Facsimile:
    	
(212) 446-6460
    
	
Attention:
    	
Michael Movsovich, P.C.
    
	
 
    	
Constantine Skarvelis
    

 

5.7                               Consent to Jurisdiction.  In any action or proceeding between the parties arising out of or relating to this Agreement or any of the transactions contemplated hereby, each party (1) hereby irrevocably and unconditionally consents and submits to the exclusive jurisdiction of the courts of the State of New York and the United States of America, in each case located in the County of New York (and each party agrees not to commence any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby except in such courts), (2) agrees that any service of any process, summons, notice or document by United States registered mail to the address of such party as set forth in Section 5.6 hereof shall be effective service of process for any action or proceeding brought against any party in the courts set forth above, and (3) hereby irrevocably and unconditionally waives any objection to the laying of venue in the courts of the State of New York and the United States of America, in each case located in the County of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing in this section, however, shall affect the right of any party to serve legal process in any other manner permitted by law.

 

5.8                               Further Assurances.  The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other parties may reasonably request, for the purpose of carrying out the provisions of this Agreement.

 

5.9                               Entire Agreement and Modification.  This Agreement, together with the schedules and annexes hereto, supersedes all prior agreements between the parties solely with respect to its subject matter , and constitutes (along with the documents to be delivered at Closing pursuant to this Agreement) a complete and exclusive statement of the terms of the agreement between the parties solely with respect to its subject matter.  This Agreement may not be amended except by a written agreement executed by Purchaser and the Company.  The parties hereto make no representations or warranties, express or implied, with respect to the transactions

 

15

 

contemplated by this Agreement except for the express representations and warranties of such party contained in this Agreement.

 

5.10                        Specific Performance.  The parties hereto agree that irreparable damage would occur in the event that the provisions contained in this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages would not be sufficient.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions, without the posting of any bond, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any such party may be entitled pursuant to the terms of this Agreement.

 

5.11                        Construction.  The headings of Articles and Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.  All annexes and schedules to this Agreement are incorporated into and constitute an integral part of this Agreement as if fully set forth herein.  All words used in this Agreement will be construed to be of such gender or number as the context requires.  The word “including” shall be read as “including but not limited to” and otherwise shall be considered illustrative and non-limiting.  The language used in the Agreement will be construed, in all cases, according to its fair meaning, and not for or against any party hereto.  The parties acknowledge that each party has reviewed this Agreement and that rules of construction, to the effect that any ambiguities are to be resolved against the drafting party, will not be available in the interpretation of this Agreement.

 

5.12                        Severability.  If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any Legal Requirement or public policy, all other terms and provisions of this Agreement shall remain in full force and effect.  Upon such determination that any term or provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to amend or otherwise modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner such that that transactions contemplated hereby are fulfilled to the extent possible.

 

5.13                        Binding Effect; Assignment; No Third-Party Beneficiaries.  All or any portion of the rights and obligations of the Purchaser hereunder may be transferred by the Purchaser to any Affiliate or to any transferee of Shares without the consent of the Company; provided that the Purchaser shall notify the Company in writing prior to any such transfer.  No portion of the rights or obligations of the Purchaser hereunder may be transferred by the Purchaser to a non-Affiliate without the prior written consent of the Company, provided that such consent shall not be required for assignment of the rights and obligations under the Ancillary Agreements.  Subject to the foregoing, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties.  Except as set forth in Article IV, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person not a party to this Agreement.

 

5.14                        Restricted Information.  Notwithstanding anything to the contrary, to the extent the Company is permitted to withhold information due to privilege, contractual limitation, Legal Requirement or otherwise, the Company shall use commercially reasonable efforts to seek to provide to the Purchaser, the Purchaser Director or Purchaser’s representatives, as applicable,

 

16

 

such information in a manner that does not violate such limitations or restrictions to the extent possible.

 

5.15                        Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of New York without regard to any conflicts of law principles (whether of the State of New York or any other jurisdiction) that would require the application of the law of any other jurisdiction.

 

5.16                        Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LEGAL REQUIREMENT THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT NEITHER WILL ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER NOW OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.  ANY PARTY MAY FILE A COPY OF THIS SECTION 5.16 WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT BETWEEN THE PARTIES TO IRREVOCABLY WAIVE TRIAL BY JURY, AND THAT ANY PROCEEDING OR ACTION WHATSOEVER BETWEEN THE PARTIES RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

5.17                        Execution of Agreement; Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.  The exchange of copies of this Agreement and of signature pages by facsimile, or by .pdf or similar imaging transmission, will constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes.  Signatures of the parties transmitted by facsimile, or by .pdf or similar imaging transmission, will be deemed to be their original signatures for any purpose whatsoever and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

 

5.18                        Currency.  All references to currency, monetary value and dollars set forth herein mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars.

 

5.19                        No Personal Liability of Directors, Officers, Owners, Etc.  No director, officer, employee, incorporator, stockholder, controlling Person, manager, member, general partner, limited partner, principal or other agent of any of the Purchaser or Parent, the Company or Opco shall have any liability for any obligations of the Purchaser or Parent, the Company or Opco, as applicable, under this Agreement or for any claim based on, in respect of, or by reason of, the respective obligations of the Purchaser or Parent, the Company or Opco, as applicable, under this Agreement.  Each of parties hereto hereby waives and releases all liability described in the immediately preceding sentence.  This waiver and release is a material inducement to each party’s entry into this Agreement.

 

17

 

5.20                        30% Rule Compliance.

 

(a)                                 Notwithstanding any other provision of this Agreement, no CPPIB Entity (each an “Applicable Entity”) will be required or permitted to make any investment in any Group Entity that would be reasonably expected to cause any such Applicable Entity to be in breach of or to contravene the 30% Rule (as supported by the written opinion of external legal counsel to such Applicable Entity at its own cost).

 

(b)                                 The Group Entities will co-operate with the relevant Applicable Entities (to the extent commercially reasonable and provided that one or more of the Applicable Entities agree to reimburse the Group Entities for all reasonable out-of-pocket costs or expenses incurred by them, if any, in respect of any such cooperation, excluding the cost of acquiring any securities) to assist the Applicable Entities to comply with the 30% Rule in relation to their investment in any Group Entity. In furtherance of the foregoing, each Group Entity agrees to take any action or step reasonably requested by any Applicable Entity, including, without limitation, a change in the authorized capital of a Group Entity, that is necessary to avoid any breach or potential breach of the 30% Rule, or any amendment or replacement of that rule, including, without limitation, any breach or potential breach arising in connection with the potential exercise of any rights of first refusal or first offer, any pre-emptive rights, any right or obligation to transfer or exchange securities (including in connection with but prior to the completion of any Public Offering (including a Qualified IPO) or the issuance of equity securities in any merger or other business combination (including a Qualified Merger), or any option, warrant or other right or obligation to purchase or acquire securities (including upon conversion of the Series A Convertible Preferred Stock purchased hereunder), in each case existing or arising under this Agreement or otherwise in relation to any Group Entity.  In addition, each Group Entity agrees that it shall not, without CPPIB’s prior written consent, issue any new securities or otherwise alter its capital structure in any way that would affect or adjust any securityholder’s proportionate interest in the voting rights to appoint and remove directors of the Group Entity or would otherwise change the authorized or issued share capital of the Group Entity or the rights attaching thereto if such change would result in a breach of the 30% Rule.

 

(c)                                  The Group Entities agree that they will co-operate with any Applicable Entity (including, for greater certainty, following the completion of an initial Public Offering by the Company (including a Qualified IPO)) and use reasonable efforts to provide such information or certifications as may reasonably be required by the Applicable Entities in the event the Applicable Entities make an application to the Ontario Securities Commission for a discretionary order providing a prospectus exemption from applicable Canadian securities laws to facilitate the resale of Registrable Securities or any securities issued in any merger or other business combination involving the Company (including a Qualified Merger).

 

[Remainder of this page intentionally left blank]

 

18

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

 

	
 
    	
Canada Pension Plan Investment Board
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric Wetlaufer
    
	
 
    	
Name:
    	
Eric Wetlaufer
    
	
 
    	
Title:
    	
Senior Managing Director & Global Head of Public Market   Investments
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ R. Scott Lawrence
    
	
 
    	
Name:
    	
R. Scott Lawrence
    
	
 
    	
Title:
    	
Managing Director, Head of Relationship Investments
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
21st Century Oncology Investments, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James L. Elrod, Jr.
    
	
 
    	
Name:
    	
James L. Elrod, Jr.
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
21st Century Oncology Holdings, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ LeAnne M. Stewart
    
	
 
    	
Name:
    	
LeAnne M. Stewart
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
21st Century Oncology, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ LeAnne M. Stewart
    
	
 
    	
Name:
    	
LeAnne M. Stewart
    
	
 
    	
Title:
    	
Chief Financial Officer
    

 

 

Annex A

 

Defined Terms

 

For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)                                 “30% Rule” means those restrictions set out in section 13 of the Canada Pension Plan Investment Board Regulations, SOR/99-190, that prohibit CPPIB from investing directly or indirectly in the securities of a corporation to which are attached more than 30% of the votes that may be cast to elect the directors of that corporation.

 

(b)                                 “Acquisition” means (a) any acquisition of equity interests in another Person or (b) any acquisition of assets constituting all or substantially all of the business (or a line of business or business unit) of any Person.

 

(c)                                  “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person, it being understood, for the avoidance of doubt, that any officer or director of any Person and his or her immediate family members or their Affiliates shall be deemed Affiliates of such Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

 

(d)                                 “Ancillary Agreements” means the Certificate of Designations, the LLC Agreement and the Securityholders Agreement.

 

(e)                                  “Audit Committee” means the Audit and Compliance Committee of the board of directors of the Company.

 

(f)                                   “Business Day” means any day on which banks are not required or authorized to close in New York City.

 

(g)                                  “Certificate of Designations” means the Amended and Restated Certificate of Designations of the powers, preferences and other special rights of the Series A Convertible Preferred Stock, in the form attached as Exhibit C hereto.

 

(h)                                 “Code” means the Internal Revenue Code of 1986, as amended, and rules and regulations issued pursuant to the Code.

 

(i)                                     “Commission” means the U.S. Securities and Exchange Commission and each successor agency.

 

(j)                                    “Commission Documents” means all Filed Documents, but excluding any forward-looking disclosure set forth in any risk factor section, any disclosures in any section relating to forward-looking statements and any other disclosures included therein to the extent they are predictive or forward-looking in nature.

 

 

(k)                                 “Common Stock” means share of the Company’s common stock, par value $0.01 per share.

 

(l)                                     “Consent” means any approval, consent, waiver or other authorization (including any Governmental Authorization).

 

(m)                             “Contract” means, with respect to a Person, any agreement, contract, lease, commitment, promise, indenture, or undertaking, to which such Person is legally bound or to which any of such Person’s properties or assets is subject.

 

(n)                                 “CPPIB” means the Canada Pension Plan Investment Board established under the Canada Pension Plan Investment Board Act, S.C. 1997, c. 40.

 

(o)                                 “CPPIB Entity” means CPPIB and any subsidiary thereof, as that term is defined in the Canada Pension Plan Investment Board Act.

 

(p)                                 “Employee Plan” means all employee welfare benefit plans (as defined in Section 3(1) of ERISA), employee pension benefit plans (as defined in Section 3(2) of ERISA) and all other material employment, compensation, consulting, bonus, stock option, restricted stock grant, stock purchase, other cash or stock-based incentive, profit sharing, savings, retirement, disability, insurance, severance, deferred compensation and other similar fringe or employee benefit plans, programs, agreements or arrangements sponsored, maintained, contributed to or required to be contributed to, or entered into by Parent, the Company or any of its subsidiaries for the benefit of, or relating to, any current or former employee, director or other independent contractor of, or consultant to, Parent, the Company or any of its subsidiaries in respect of which Parent, the Company or any of its subsidiaries has any liability.

 

(q)                                 “Encumbrance” means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal or similar restriction (other than restrictions on transfer imposed by applicable securities laws).  For the avoidance of doubt, “Encumbrance” shall not be deemed to include any non-exclusive out-license of intellectual property rights in the ordinary course of business.

 

(r)                                    “Environmental Claim” means any written claim, action, cause of action, formal investigation or written notice by any Person alleging potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (a) the presence, or release into the environment, of any Hazardous Material at any location, whether or not owned or operated by such Person or any of its subsidiaries or (b) circumstances forming the basis of any violation of any Environmental Law.

 

(s)                                   “Environmental Laws” means all applicable Legal Requirements in effect on the date of this Agreement relating to human health and safety (with respect to Hazardous Materials) or pollution or protection of the environment, including laws relating to releases or threatened releases of Hazardous Materials or otherwise relating to

 

A-2

 

the  manufacture, processing, distribution, use, treatment, storage, transport or handling of Hazardous Materials.

 

(t)                                    “Environmental Permits” means any permit, approval, identification number, license and other authorization required under any applicable Environmental Law.

 

(u)                                 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any rules or regulations pursuant to ERISA.

 

(v)                                 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

(w)                               “Filed Documents” means the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and all other reports, schedules, forms, prospectuses, proxy statements and other documents filed or furnished by the Company with the Commission since November 24, 2011.

 

(x)                                 “GAAP” means the United States generally accepted accounting principles.

 

(y)                                 “Governmental Authorization” means any approval, accreditation, consent, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any applicable Legal Requirement.

 

(z)                                  “Governmental Body” means any federal, state, local, municipal, foreign or other governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal), multi-national organization or body, or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, including any antitrust authority.

 

(aa)                          “Group Entity” means Parent, the Company and each of their respective subsidiaries.

 

(bb)                          “Hazardous Materials” means (a) any petroleum, petroleum products, byproducts or breakdown products, radioactive materials, asbestos-containing materials or polychlorinated biphenyls or (b) any chemical, material, waste or other substance defined or regulated because of its harmful, toxic or hazardous characteristics under any applicable Environmental Law.

 

(cc)                            “Indebtedness” means with respect to the Company and its subsidiaries, (a) all obligations of any such Person for borrowed money or in respect of loans, advances, or interest rate derivative or hedging transactions (including any unpaid principal, premium and accrued and unpaid interest), (b) indebtedness evidenced by any note, bond, debenture or other debt security, to the extent not included in clause (a), (c)

 

A-3

 

letters of credit, issued for the account of any such Person, (d) obligations under leases required in accordance with GAAP to be recorded as a capital lease.

 

(dd)                          “Initial Closing Date” means the “Closing Date” of the Initial Subscription Agreement (as defined therein).

 

(ee)                            “knowledge”, when applied to the Company, means the actual knowledge, after due inquiry, of Daniel Dosoretz, Joe Biscardi, Gary Delanois, Betta Sherman, LeAnne M. Stewart and Kimberly Commins-Tzoumakas.

 

(ff)                              “Legal Requirement” means any federal, state, local, municipal, foreign, international, multinational or other administrative Order, constitution, law, principle of equity, ordinance, principle of common law, regulation, statute or treaty.

 

(gg)                            “Loan Agreements” means the following (as they may be amended, supplemented, modified or replaced from time to time):

 

(i)                                     Credit Agreement, dated as of April 30, 2015, among 21st Century Oncology Holdings, Inc., 21st Century Oncology, Inc., the lenders party thereto from time to time, and Morgan Stanley Senior Funding, Inc., as administrative agent;

 

(ii)                                  Indenture, dated as of April 30, 2015, among 21st Century Oncology, Inc., the Person set forth as “Guarantors” therein and Wilmington Trust, National Association, in connection with the issuance by Opco of the 11.00% Senior Notes due 2023, together with all instruments and other agreements entered into by Opco and such Persons in connection therewith; and

 

(iii)                               the Amended and Restated Indenture entered into by OnCure Holdings, Inc. and certain of its subsidiaries dated as of October 25, 2013, by and between Wilmington Trust, National Association, as trustee, OnCure Holdings, Inc. and the Persons set forth as “Guarantors” therein, in connection with the issuance by OnCure Holdings, Inc. of the 11-3/4% Senior Secured Notes due 2017, together with all instruments and other agreements entered into by Opco or such Persons in connection therewith.

 

(hh)                          “Ontario Securities Commission” means the Ontario Securities Commission and each successor agency.

 

(ii)                                  “Order” means any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by any court, administrative agency or other Governmental Body or by any arbitrator.

 

(jj)                                “Organization Documents” means, with respect to a Person, the articles or certificate of incorporation and the bylaws or any equivalent organizational documents of such Person.

 

A-4

 

(kk)                          “Person” means any individual, partnership, limited partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, estate, unincorporated association, joint venture or other entity.

 

(ll)                                  “Public Offering” has the meaning ascribed to it in the Securityholders Agreement.

 

(mm)                  “Purchaser Material Adverse Effect” means any change, event, development, state of facts or effect that has had, or would reasonably be expected to have, a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

 

(nn)                          “Qualified IPO” has the meaning ascribed to it in the Certificate of Designations.

 

(oo)                          “Qualified Merger” has the meaning ascribed to it in the Certificate of Designations.

 

(pp)                          “Registrable Securities” has the meaning ascribed to it in the Securityholders Agreement.

 

(qq)                          “Securities Act” means the U.S. Securities Act of 1933, as amended.

 

(rr)                                “Series A Convertible Preferred Stock” has the meaning set forth in the Certificate of Designations.

 

(ss)                              “Subscription Price” means $25,000,000.

 

(tt)                                “Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

 

(uu)                          “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

(vv)                          “Transaction Agreements” means this Agreement, the Certificate of Designations, the LLC Agreement and the Securityholders Agreement.

 

Terms that are not defined in this Annex A above have the meanings set forth in the Section set forth opposite such term:

 

	
Term
    	
 
    	
Section
    
	
Aircraft
    	
 
    	
5.3(a)
    

 

A-5

 

	
Aircraft Lease
    	
 
    	
5.3(a)
    
	
Aircraft Sublease
    	
 
    	
5.3(a)
    
	
Agreement
    	
 
    	
Preamble
    
	
Anti-Money Laundering Laws
    	
 
    	
2.6(g)
    
	
Applicable Entity
    	
 
    	
5.20(a)
    
	
Closing
    	
 
    	
1.2
    
	
Closing Date
    	
 
    	
1.2
    
	
Company
    	
 
    	
Preamble
    
	
Company Indemnified Person
    	
 
    	
4.2
    
	
Contemplated Transactions
    	
 
    	
2.2(a)
    
	
Damages
    	
 
    	
4.1
    
	
Health Information Laws
    	
 
    	
2.6(e)
    
	
HIPAA
    	
 
    	
2.6(c)
    
	
HITECH
    	
 
    	
2.6(c)
    
	
Indemnified Party
    	
 
    	
4.3
    
	
Indemnifying Party
    	
 
    	
4.3
    
	
Initial Subscription Agreement
    	
 
    	
Recitals
    
	
LLC Agreement
    	
 
    	
1.3(d)
    
	
NI 45-106
    	
 
    	
3.3(c)
    
	
OFAC
    	
 
    	
2.6(h)
    
	
Opco
    	
 
    	
Preamble
    
	
Parent
    	
 
    	
Preamble
    
	
Party
    	
 
    	
Preamble
    
	
Preferred Stock
    	
 
    	
2.3(b)
    
	
Purchase Transaction
    	
 
    	
Recitals
    
	
Purchaser
    	
 
    	
Preamble
    
	
Purchaser Indemnified Person
    	
 
    	
4.1
    
	
Related Real Property Leases
    	
 
    	
5.3(b)
    
	
Securityholders Agreement
    	
 
    	
1.3(e)
    
	
Shares
    	
 
    	
1.1
    

 

A-6

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