-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BVWXgMDu8jDbYasWhQ2EFFUC2u0fz6pn5N3jk6TNn3njJiWuI1+VShK+Qt36Ajoc im8egifvAhOAZRR2mJr/5g== 0000950135-96-001107.txt : 19960227 0000950135-96-001107.hdr.sgml : 19960227 ACCESSION NUMBER: 0000950135-96-001107 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960209 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960223 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTHSOURCE INC CENTRAL INDEX KEY: 0000855587 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 020387748 STATE OF INCORPORATION: NH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11538 FILM NUMBER: 96524881 BUSINESS ADDRESS: STREET 1: 2 COLLEGE PARK DRIVE CITY: HOOKSETT STATE: NH ZIP: 03302-2041 BUSINESS PHONE: 6032687000 8-K 1 HEALTHSOURCE, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT: February 9, 1996 (Date of the Earliest Event Reported) HEALTHSOURCE, INC. (Exact name of Registrant as specified in its charter) New Hampshire 1-11538 02-0387748 (State or other (Commission File (I.R.S. Employer jurisdiction of Number) Identification Number) incorporation) Two College Park Drive Hooksett, New Hampshire 03106 (Address of principal executive offices) (Zip Code) 603/268-7000 (Registrant's Telephone Number, including area code) 2 Items 1-4. Not applicable. Item 5. Other Events. On February 9, 1996, Healthsource, Inc. (the "Company") announced that it had closed its previously-announced agreement to acquire the HMO business of Central Massachusetts Health Care, Inc. ("CMHC"), a not-for-profit HMO based in Worcester, Massachusetts, for $46.5 million in cash, subject to certain post-closing adjustments. The purchase price is based on a closing net worth of approximately $7.2 million after adjustments. The purchase price was derived from the Company's line of credit with Chase Manhattan Bank and a syndicate of other banks. Under the terms of the agreement, the operating assets of CMHC were acquired by a new wholly-owned subsidiary of the Company which was licensed as an HMO in Massachusetts, named Healthsource CMHC, which also assumed CMHC's HMO contracts. As of the closing, CMHC had 83,400 members and operated in central Massachusetts. Item 6. Not Applicable. Item 7. Financial Statements and Exhibits. (a) Not applicable. (b) Not applicable. (c) Exhibits. 4.1 Asset Purchase Agreement dated as of April 10, 1995 by and between Central Massachusetts Health Care, Inc. and Healthsource Massachusetts, Inc. (Incorporated by reference to Exhibit 10.2 to Form 10-Q dated May 9, 1995 for the Quarterly Period ended March 31, 1995.) 4.2 First Amendment to Asset Purchase Agreement dated November 9, 1995 between Central Massachusetts Health Care, Inc. and Healthsource Massachusetts, Inc. 4.3 Second Amendment to Asset Purchase Agreement dated December 11, 1995 between Central Massachusetts Health Care, Inc. and Healthsource Massachusetts, Inc. 2 3 Item 8. Not applicable. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HEALTHSOURCE, INC. Dated: February 23, 1996 By: /s/ Thomas M. Congoran ---------------------------- Thomas M. Congoran Chief Financial Officer 3 EX-4.2 2 FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT 1 FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT dated November 9, 1995 ("First Amendment") by and between CENTRAL MASSACHUSETTS HEALTH CARE, INC., a not-for- profit corporation organized under the laws of the Commonwealth of Massachusetts with a principal address at 100 Front Street, Suite 300, Worcester, Massachusetts 01608 (the "Seller") and HEALTHSOURCE MASSACHUSETTS, INC., a corporation organized under the laws of the Commonwealth of Massachusetts with a principal office at c/o Healthsource, Inc., Two College Park Drive, Hooksett, New Hampshire 03106 (the "Buyer"). WHEREAS, Seller and Buyer entered into a certain Asset Purchase Agreement dated April 10, 1995 ("Agreement") with respect to the sale by Seller to Buyer of certain of the assets of Seller to Buyer as more specifically defined in the Agreement; and WHEREAS, the Agreement contains certain conditions to Buyer's obligations to close the transactions contemplated in the Agreement including without limitation the negotiation and entering into a hospital provider contract with Medical Center of Central Massachusetts on terms specified in the Agreement; and WHEREAS, Seller has not been able to fulfill such condition; and WHEREAS, Seller has distributed to its participating physicians monies previously withheld with respect to 1994 services, in an amount of $5,825,000; and WHEREAS, Seller and Buyer desire to further clarify other issues pertaining to the status of the charitable foundation which will ultimately succeed to all of the rights, obligations and liabilities of the Seller pursuant to the Agreement and other agreements contemplated therein, issues pertaining to the Seller's accounting for physician withholds for the year 1995 and certain other issues; and WHEREAS, Seller and Buyer desire to record their agreement in this First Amendment. NOW, THEREFORE, in consideration of the mutual provisions herein set forth, and 1 2 subject to the terms and conditions hereof, the parties agree as follows: 1. PURCHASE PRICE: The Base Purchase Price as stated in SECTION 3.01 of the Agreement is hereby changed for all purposes from $62,500,000 to $57,500,000. 2. HOSPITAL CONTRACT CONDITION: The condition regarding the negotiation and entering into a hospital provider agreement with MCCM as specified in SECTION 10.15, SECTION 1(g) and EXHIBIT J of the Agreement is hereby acknowledged by Seller and Buyer to be met and fulfilled and otherwise waived by Buyer. Buyer shall not be obligated to assume any contract or agreement between Seller and MCCM, but may do so if it wishes. 3. WORCESTER SURGICAL CENTER: Buyer agrees to negotiate in good faith with Worcester Surgical Center, Inc. after Closing towards establishing a mutually satisfactory provider relationship. Any long term agreement must be subject to both parties' best interests. 4. 1995 ACCOUNTING: In addition to deducting the Physician Withholds (as defined in SECTION 5 below) from Seller's "Risk Fund" line item of the Estimated and Final Balance Sheets as required in SECTION 4.01 of the Agreement, for all purposes in preparation of Seller's 1995 financial statements (and for any interim period during 1995 as required by SECTION 10.09 of the Agreement) and for purposes of preparation of the Estimated Balance Sheet and the Final Balance Sheet, all liability to participating physicians for return of 1995 Physician Withholds (as defined in SECTION 5 below) shall be recorded as a liability of Seller on the aforementioned financial statements. 5. PHYSICIAN WITHHOLD AND FEE DISTRIBUTION: Seller and Buyer agree that SECTION 2.09 of the Agreement is hereby amended to read as follows: "Seller has paid the fees withheld from its participating physicians for the calendar year 1994 (the "Physician Withholds") in the amount of $5,825,000 to its participating physicians and shall provide Buyer with proof of such payments at Closing. After Closing, Buyer shall pay to participating physicians of Seller ("Physicians") all amounts withheld (or to be withheld) from Physicians for the calendar year 1995 (the "1995 Physician Withholds"). Buyer shall provide Seller with proof of payment of the 1995 Physician Withholds promptly after such amounts are paid. Buyer shall assume no liability whatsoever for the payment of physician withholds for any 2 3 period before the calendar year 1995, the Physician Withholds, or for payment of any amounts to physicians beyond the amount of the 1995 Physician Withholds. 6. 1995 LOSSES OFFSET: SECTION 4.01(B) is deleted in its entirety. 7. SUCCESSOR TO SELLER: Seller and Buyer agree and acknowledge that after Closing of the transactions contemplated in the Agreement, Seller shall not transfer any material portion of its assets or capital (including without limitation the Purchase Price paid by Buyer), except for transfer of some or all of the Seller's assets or capital (including the Purchase Price paid by Buyer) to a charitable foundation to be established by Seller or to another appropriate charitable successor to Seller upon terms approved in advance by the Attorney General of the Commonwealth of Massachusetts ("Attorney General"). Prior to and as a condition precedent to any such transfer, any such foundation or successor of Seller shall have (i) specifically assumed in a writing acceptable to Buyer all rights and obligations of Seller (including without limitation indemnification obligations, duties, covenants and liabilities) pursuant to the Agreement and this First Amendment and other agreements referred to herein or delivered by or on behalf of Seller at Closing (including without limitation joining in the Non-Competition Agreement referred to in SECTION 10.13 and in the form of EXHIBIT D of the Agreement); and (ii) given reasonable assurance to Buyer in a writing acceptable to Buyer that transfer of any material part of such foundation's or successor's assets or capital (including the Purchase Price) will not occur. In addition to all other rights and remedies of Buyer for breach of this SECTION 7, and notwithstanding anything to the contrary, if any, contained in the Agreement, Buyer shall be entitled to preliminary and permanent injunctive relief restraining Seller from doing or continuing to do any act in violation of this SECTION 7 and ordering Seller to cause its successor to assume fully the obligations of Seller pursuant to the Agreement and this Amendment as required in this SECTION 7 without showing or proving any actual damage sustained by Buyer, it being acknowledged and agreed by the parties that a breach of this SECTION 7 by Seller will cause irreparable injury to Buyer for which money damages will not provide a total and adequate remedy. 8. APPROVAL AND CONFIRMATION BY MASSACHUSETTS ATTORNEY GENERAL. As a 3 4 condition to Closing Seller shall have received and delivered to Buyer a written approval and confirmation by the Attorney General (and any court of competent jurisdiction otherwise approving the transactions contemplated in the Agreement) to the provisions of this First Amendment (including without limitation SECTION 7 hereof), which approval and confirmation shall also confirm that all of Buyer's rights under the Agreement against Seller shall be enforceable fully against Seller and any successor of Seller, including without limitation that Seller or any such successor of Seller shall be and shall remain liable to Buyer for all retained liabilities and all indemnification obligations of Seller to Buyer pursuant to the Agreement. 9. TERMINATION: The termination date as stated in SECTION 18 part (ii) and (iii) of the Agreement is hereby changed from September 30, 1995 to December 31, 1995 with the parties to make a good faith effort to close effective as of November 30, 1995. 10. EFFECT OF AMENDMENT: Except as otherwise amended by this First Amendment, all terms, conditions and provisions of the Agreement shall remain unchanged and continue to be effective and binding upon the parties hereto. 11. NO WAIVERS: Seller and Buyer agree that any actions taken in anticipation of or in connection with the Closing, and the execution of this First Amendment will in no way be considered as a waiver or modification of any of the terms of the Asset Purchase Agreement or other material agreements executed by the parties or any rights of the parties pursuant thereto, except as otherwise set forth in this First Amendment. 12. TERMS OF AGREEMENT: Except as specifically amended in this First Amendment, all terms and provisions of the Agreement shall remain unchanged and continue to be effective and binding upon the parties hereto. 4 5 IN WITNESS WHEREOF, the parties have executed this First Amendment to Asset Purchase Agreement as of the date first written above. WITNESS: CENTRAL MASSACHUSETTS HEALTH CARE, INC. ("SELLER") /s/ Emily J. KellY By: /s/ John M. Powell - ------------------------ ---------------------------- Duly Authorized HEALTHSOURCE MASSACHUSETTS, INC. /s/ Daniel N. Gregoire By: /s/ Norman C. Payson - ------------------------ ---------------------------- Norman C. Payson, M.D. 5 EX-4.3 3 SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT 1 SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT dated December 11, 1995 ("Second Amendment") by and between CENTRAL MASSACHUSETTS HEALTH CARE, INC., a not-for-profit corporation organized under the laws of the Commonwealth of Massachusetts with a principal address at 100 Front Street, Suite 300, Worcester, Massachusetts 01608 (the "Seller") and HEALTHSOURCE MASSACHUSETTS, INC., a corporation organized under the laws of the Commonwealth of Massachusetts with a principal office at c/o Healthsource, Inc., Two College Park Drive, Hooksett, New Hampshire 03106 (the "Buyer"). WHEREAS, Seller and Buyer entered into a certain Asset Purchase Agreement dated April 10, 1995 and amended by the First Amendment to Asset Purchase Agreement dated November 9, 1995 ("First Amendment") (hereinafter such Asset Purchase Agreement and First Amendment, shall be collectively referred to as the "Agreement") with respect to the sale by Seller to Buyer of certain of the assets of Seller to Buyer as more specifically defined in the Agreement; and WHEREAS, Seller and Buyer desire to amend the Agreement. NOW, THEREFORE, in consideration of the mutual provisions herein set forth, and subject to the terms and conditions hereof, the parties agree as follows: 1. SUCCESSORS TO SELLER/TRANSFER OF PURCHASE PRICE. Seller and Buyer agree that SECTIONS 7 AND 8 of the First Amendment shall be deleted in their entirety and the following is hereby agreed upon: Seller and Buyer agree and acknowledge that after Closing of the transactions contemplated in the Agreement, Seller shall not under any circumstances transfer any of its assets or capital (including without limitation the Purchase Price paid by Buyer), for a period of not less than one (1) year from the Closing Date, and after such period Seller may only transfer some or all of the Seller's assets or capital (including the Purchase Price paid by Buyer) 2 to a charitable foundation to be established by Seller or to another appropriate charitable successor to Seller upon terms and approved in advance by the Attorney General of the Commonwealth of Massachusetts ("Attorney General"). Prior to and as a condition precedent to any such transfer, EITHER: (i) any such foundation or successor of Seller shall have (a) specifically assumed in a writing acceptable to Buyer all rights and obligations of Seller (including without limitation indemnification obligations, duties, covenants, liabilities not assumed by Buyer and other liabilities) pursuant to the Agreement and this Second Amendment and other agreements referred to herein or delivered by or on behalf of Seller at Closing (including without limitation joining in the Non-Competition Agreement referred to in SECTION 10.13 and in the form of EXHIBIT D of the Agreement), and (b) given reasonable assurance to Buyer in a writing acceptable to Buyer that transfer of any material part of such foundation's or successor's assets or capital (including the Purchase Price) will not occur; OR (ii) Seller shall have procured and paid for insurance covering the above-mentioned obligations and liabilities of Seller in a form and amount and from an insurer acceptable to Buyer. In addition to all other rights and remedies of Buyer for breach of this SECTION 1, and notwithstanding anything to the contrary, if any, contained in the Agreement, Buyer shall be entitled to preliminary and permanent injunctive relief restraining Seller from doing or continuing to do any act in violation of this SECTION 1 and ordering Seller to cause its successor to assume fully the obligations of Seller pursuant to the Agreement and this Amendment as required in this SECTION 1 without showing or proving any actual damage sustained by Buyer, it being acknowledged and agreed by the parties that a breach of this SECTION 1 by Seller will cause irreparable injury to Buyer for which money damages will not provide a total and adequate remedy. As a condition to Closing Seller shall have received and delivered to Buyer a written order of a court of competent jurisdiction in a form acceptable to Buyer approving the transactions contemplated in and the provisions of the Agreement and this Second Amendment. 2. SPECIAL INDEMNIFICATION: Seller hereby indemnifies and holds Buyer harmless from any and all loss, damage, claims, actions, suits, proceedings or expenses (including without 2 3 limitation legal, accounting and other expenses) relating to any challenge by any party to the transactions contemplated in the Agreement, as amended (the "Transaction"), either before or at any time after Closing. Buyer shall also have the right to rescind entirely the Transaction either before or after Closing in the event any final non-appealable order of a court of competent jurisdiction or other regulatory authority orders a material change in the terms of the Transaction or requires any change in the Purchase Price to be paid by Buyer. 3. SECTION 4 of the First Amendment is deleted in its entirety and replaced with the following: "1995 ACCOUNTING: In addition to deducting the Physician Withholds (as defined in SECTION 5 below) from Seller's "Risk Fund" line item of the Estimated and Final Balance Sheets as required in SECTION 4.01 of the Agreement, for all purposes in preparation of Seller's 1995 financial statements (and for any interim period during 1995 as required by SECTION 10.09 of the Agreement) and for purposes of preparation of the Estimated Balance Sheet and the Final Balance Sheet, a liability to participating physicians for return of 1995 Physician Withholds (as defined in SECTION 5 below) in the amount of $3.2 million shall be recorded as a liability of Seller on the aforementioned 1995 financial statements, Estimated Balance Sheet and Final Balance Sheet. Recording of this liability shall have the effect of reducing the tangible net worth of Seller by $3.2 million and shall cause a corresponding $3.2 million reduction in the purchase price to be paid by Buyer." 4. SECTION 5 of the First Amendment is deleted in its entirety and replaced with the following: "PHYSICIAN WITHHOLD AND FEE DISTRIBUTION: Seller and Buyer agree that SECTION 2.09 of the Agreement is hereby amended to read as follows: 'Seller has paid the fees withheld from its participating physicians for the calendar year 1994 (the "Physician Withholds") in the amount of $5,825,000 to its participating physicians and shall provide Buyer with proof of such payments at Closing. After 3 4 Closing, Buyer shall pay to participating physicians of Seller ("Physicians") $3.2 million of the amount withheld (or to be withheld) from Physicians for the calendar year 1995 (such $3.2 million amount is referred to as the "1995 Physician Withholds"). Seller and Buyer agree that the definition of all "Assets" of Seller to be conveyed to Buyer shall include all cash and Acceptable Financial Assets (as defined in SECTION 2.06 of the Agreement) of Seller including but not limited to cash and investment assets sufficient to pay the $3.2 million 1995 Physician Withholds. Buyer shall provide Seller with proof of payment of the $3.2 million 1995 Physician Withholds promptly after such amounts are paid. Buyer shall assume no liability whatsoever for the payment of physician withholds for any period before the calendar year 1995, the Physician Withholds, or for payment of any amounts to physicians beyond the $3.2 million 1995 Physician Withholds.'" 5. TERMINATION: The termination date as stated in SECTION 18, Part (ii) and (iii) of the Agreement and in SECTION 9 of the First Amendment is hereby changed to February 28, 1996. 6. EFFECT OF AMENDMENT: Except as otherwise amended by this Second Amendment, all terms, conditions and provisions of the Agreement shall remain unchanged and continue to be effective and binding upon the parties hereto. 7. NO WAIVERS: Seller and Buyer agree that any actions taken in anticipation of or in connection with the Closing, and the execution of this Second Amendment will in no way be considered as a waiver or modification of any of the terms of the Asset Purchase Agreement or other material agreements executed by the parties or any rights of the parties pursuant thereto, except as otherwise set forth in this Second Amendment. 8. TERMS OF AGREEMENT: Except as specifically amended in this Second Amendment, all terms and provisions of the Agreement shall remain unchanged and continue to be effective and binding upon the parties hereto. 4 -----END PRIVACY-ENHANCED MESSAGE-----