Exhibit 10.4
PLAN AND
AGREEMENT OF MERGER
RX MEDICAL SERVICES CORP.
AND
CONSOLIDATED HEALTH CORPORATION OF
MISSISSIPPI, INC.
July 7, 1995
Table of Contents
ARTICLE 1 MERGER 1
1.1 Merger of Acquisition Corp into CHC. 1
1.2 Conversion of Shares into Cash and/or Securities. 2
1.3Rights of CHC's Stockholders Pending and Upon Surrender of Certifi
xxxxx.
3
1.4 Exchange of Certificates 3
1.5 Transfer Books. 3
1.6 Transfer of Certificates. 3
1.7 Other Transactions at the Closing. 4
1.8 Closing and Effective Date of Merger. 5
1.9 Further Assurances. 5
1.10 Dissenting Stockholders of CHC. 5
1.11 Legend. 5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF CHC 6
2.1 Organization, Corporate Power and Qualification. 6
2.2 Capitalization of CHC. 6
2.3 Subsidiaries, Affiliates, Affiliated Companies and Joint Venture.
7
2.4 Financial Statements. 7
2.5 Absence of Undisclosed Liabilities. 8
2.6 Letters of Credit. 8
2.7 Absence of Certain Recent Changes. 8
2.8 Assets. 10
2.9 Title to Assets. 10
2.10 Contracts. 11
2.11 Insider Contracts. 11
2.12 Inventory. 11
2.13 Accounts Receivable. 11
2.14 Books and Records. 11
2.15 Defaults. 12
2.16 Patents, Trademarks and Copyrights. 12
2.17 Powers of Attorney. 12
2.18 Guarantees. 12
2.19 Permits and Licenses. 12
2.20 Litigation, etc. 13
2.21 Compliance. 13
2.22. Obligations; Authorizations. 13
2.23 Court Orders, Decrees and Laws. 13
2.24 Taxes. 14
2.25 Insurance; Malpractice. 14
2.26 Labor Matters. 14
2.27 Benefit Plans. 15
2.28 Environmental Matters. 15
2.29 Third-Party Payment Contracts, Cost Reports. 16
2.30 Patients. 17
2.31 Questionable Payments. 17
2.32 Certain Representations With Respect to Xxxxx County Hospital.
17
2.33 No Finders or Brokers. 18
2.34 Minute Books. 18
2.35 Competitive Interests. 18
2.36 Authority; Binding Effect. 18
2.37 Misleading Statements. 18
2.38 Representations and Warranties Deemed to be Repeated at
Effective
Date of Merger. 19
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF RX MEDICAL AND
ACQUISITION CORP 19
3.1 Organization and Standing of Rx Medical and Acquisition Corp.
19
3.2 Financial Statements. 19
3.3 Capitalization. 19
3.4 Subsidiaries. 20
3.5 Absence of Certain Changes. 20
3.6 Authority; Binding Effect. 20
3.7 No Finders or Brokers. 20
3.8 Defaults. 20
3.9 Pending Litigation. 21
3.10 Court Orders, Decrees and Laws. 21
3.11 Taxes. 21
3.12 Labor Matters. 22
3.13 Exchange Act Reports. 22
3.14 Potential Liability under Xxxxx Act. 22
3.15 Disclosure. 23
3.16 Representations and Warranties Deemed to be Repeated at Time of
Merger. 23
ARTICLE 4 COVENANTS OF RX MEDICAL 23
4.1 Acquisition Corp. 23
4.2 Listing. 23
4.3 Optional Registration of Rx Medical Common Stock. 24
4.4 Mandatory Registration of Rx Medical Common Stock. 25
4.5 Prospectus Concerning Registration. 25
4.6 Best Efforts to Secure Consents. 25
4.7 Information. 25
4.8 Corporate Action. 25
4.9 Handling of Documents. 25
ARTICLE 5 COVENANTS OF CHC 26
5.1 Access and Information. 26
5.2 Conduct of Business. 26
5.3 Compliance with Agreement. 27
5.4 Best Efforts to Secure Consents. 27
5.5 Unusual Events. 27
5.6 Interim Financial Statements. 27
5.7 Departmental Violations. 27
ARTICLE 6 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CHC 28
6.1 Representations and Warranties True. 28
6.2 Authority. 28
6.3 No Obstructive Proceeding. 28
6.4 Delivery of Certain Certified Documents. 28
6.5 Approval by Stockholders of CHC. 29
6.6 Proceedings and Documents Satisfactory. 29
6.7 No Agency Proceedings. 29
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF RX
MEDICAL AND ACQUISITION CORP 29
7.1 Representations and Warranties True; Right of Offset. 29
7.2 No Obstructive Proceeding. 30
7.3 Proceedings and Documents Satisfactory. 30
7.4 No Adverse Change. 30
7.5 Approval by Stockholders of CHC. 30
7.6 Delivery of Certain Documents. 30
7.7 Estoppel Certificates. 30
7.8 Required Consents. 31
ARTICLE 8 TERMINATION 31
8.1 Optional Termination. 31
8.2 Notice of Abandonment. 31
8.3 Mandatory Termination. 31
8.4 Termination. 31
ARTICLE 9 INDEMNIFICATION 32
9.1 By CHC. 32
9.2 By Rx Medical and Acquisition Corp. 32
9.3 Survival. 32
9.4 Limitations. 32
9.5 Defense. 33
ARTICLE 10 MISCELLANEOUS 33
10.1 Expenses. 33
10.2 Notices. 33
10.3 Entire Agreement. 34
10.4 Governing Law. 34
10.5 Legal Fees and Costs. 34
10.6 CON Disclaimer. 34
10.7 Time. 35
10.8 Section Headings. 35
10.9 Waiver. 35
10.10 Nature and Survival of Representations. 35
10.11 Exhibits. 35
10.12 Assignment. 35
10.13 Binding on Successors and Assigns. 35
10.14 Parties in Interest. 35
10.15 Amendments. 36
10.16 Drafting Party. 36
10.17 Counterparts. 36
10.18 Press Releases. 36
PLAN AND AGREEMENT OF MERGER
Plan and Agreement of Merger
("Agreement"), dated as of July 7, 1995, among Rx Medical
Services Corp., a Nevada corporation ("Rx Medical"), CHC
Acquisition Corporation, a Mississippi corporation and a
wholly-owned subsidiary of Rx Medical ("Acquisition Corp") and
Consolidated Health Corporation of Mississippi, Inc., a
Mississippi corporation ("CHC").
The parties hereby agree as
follows:
ARTICLE 1 MERGER
1.1 Merger of Acquisition Corp into CHC. Acquisition Corp
shall be merged with and into CHC on the Effective Date (as
defined in 1.8 hereof) in accordance with the applicable laws
of the State of Mississippi as provided in a Plan of Merger to be
set forth in Articles of Merger, certain provisions of which
shall be as follows:
(a) Surviving Corporation. CHC shall be the surviving
corporation (the "Surviving Corporation") from and
after the Effective Date, and the name of the
Surviving Corporation shall be Consolidated Health
Corporation of Mississippi, Inc. On the Effective
Date, the separate existence of Acquisition Corp shall
cease, and the Surviving Corporation shall, without
other transfer, succeed to all the rights and property,
subject to all debts and liabilities, of CHC and
Acquisition Corp in the same manner as if the Surviving
Corporation itself had incurred them.
(b) Articles of Incorporation. From and after the
Effective Date, the Articles of Incorporation of CHC as amended
to be consistent with the principal provisions of the Articles of
Incorporation of Acquisition Corp shall be the Articles of
Incorporation of the Surviving Corporation until further amended
as provided by law.
(c) By-Laws. From and after the Effective Date, the
by-laws of Acquisition Corp as they exist on the date hereof
shall be the by-laws of the Surviving Corporation until altered
amended or repealed in accordance with the provisions thereof,
the Restated Articles of Incorporation or applicable law.
(d) Directors and Officers. The directors and officers of
Acquisition Corp immediately prior to the Effective Date shall be
the officers and directors, respectively, of the Surviving
Corporation, to serve, in both cases, until their successors
shall have been elected and shall qualify or until otherwise
provided by law and the Articles of Incorporation and by-laws of
the Surviving Corporation.
1.2 Conversion of Shares into Cash and/or Securities. The
manner and basis of exchanging and converting the shares of
common stock of the Acquisition Corp and CHC on the Effective
Date shall be as follows:
(a) Common Stock of Acquisition Corp. By virtue of the
Merger and without any action of the holder thereof each share of
common stock of Acquisition Corp outstanding on the Effective
Date shall remain outstanding and unchanged as a share of the
common stock of the Surviving Corporation.
(b) Common and Preferred Stock of CHC. By virtue of
the Merger and without any action of the holder thereof, on the
Effective Date:
(i) Each then outstanding share of common stock of CHC, par
value $ .01 per share ("CHC Common Stock"), excluding any shares
of CHC Common Stock as to which a stockholder of CHC has
perfected his rights as a dissenting stockholder in accordance
with the Mississippi Business Corporations Act, shall, by virtue
of the Merger, and without any action on the part of the holder
thereof, be converted into (A) 158.103 shares of Rx Medical,
$5.00 par value, 8% Convertible Preferred Stock having the
attributes set forth in Appendix 1.2 hereto ("Rx Preferred
Stock") and (B) 98.815 shares of Rx Medical Common Stock, par
value $.002 per share ("Rx Common Stock") and (C) cash in the
amount of $69.1725.
(ii) Each then outstanding share of CHC preferred stock, par
value $100 per share ("CHC Preferred Stock"), excluding any share
of CHC Preferred Stock as to which a stockholder of CHC has
perfected his rights as a dissenting stockholder in accordance
with the Mississippi Business Corporations Act, shall, by virtue
of the Merger, and without any action on the part of the holder
thereof, be converted into 83.794 shares of Rx Preferred Stock
and cash in the amount of $20
As a result of 1.2 and 1.7(a), the stockholders will receive
the following:
Rx Extra Rx
Prefer Rx Rx Rx Prefer Rx Rx
red Cash Common Cash red Cash Cash
Stockh Stock for for for Stock for for
older for XXX XXX XXX xxx XXX XXX
XXX Common Common Common CHC Prefer Notes
Common Prefer red (1.7(
red a))
Xxxxx 319,36 $139,7 199,60 $0 0 $0 $0
8 28 6
Muse 64,822 28,361 40,514 0 0 0 0
Xxxxxx 15,810 6,917 9,882 0 0 0 0
g
Church 474,30 207,51 - $296,4 125,96 30,000 $291,0
ill 9 8 30 1 47
874,30 $382,5 250,00 $296,4 125,96 30,000 $291,0
Totals 9 24 2 30 1 47
By virtue of the Merger, on the Effective Date, each
share of the CHC Common Stock and CHC Preferred Stock shall cease
to exist, all certificates for such stock shall be canceled and
no shares of the Surviving Corporation shall be exchanged
therefor. All treasury shares of CHC or shares of CHC Common
Stock and CHC Preferred Stock owned by any of the subsidiaries of
CHC shall also be canceled.
1.3 Rights of CHC's Stockholders Pending and Upon Surrender
of Certificates. From and after the Effective Date, except as
provided in the Mississippi Business Corporation Act with respect
to rights of dissenting stockholders, each holder of a
certificate representing shares of CHC Common Stock shall be
entitled, upon surrender thereof to the Surviving Corporation, to
receive in exchange therefor the consideration to which such
holder would otherwise be entitled on the basis provided for in
1.2(b) of this Agreement.
1.4 Exchange of Certificates On the Effective Date,
the holders of certificates for shares of CHC Stock and/or CHC
Preferred Stock shall cease to have any rights as stockholders of
CHC (except such rights, if any, as they may have as dissenting
stockholders under the Mississippi Business Corporations Act).
Each holder of a stock certificate or certificates representing
outstanding shares of CHC Common Stock or CHC Preferred Stock, as
the case may be, immediately prior to the Effective Date shall,
upon surrender of such certificate or certificates to the
Surviving Corporation after the Effective Date, be entitled to
receive a stock certificate or certificates representing the
number of shares of Rx Preferred Stock into which such shares of
CHC Common Stock or CHC Preferred Stock, as the case may be, have
been converted as provided by 1.2(b), (i) and (ii) above plus
the accompanying cash component with respect thereto as provided
therein. Until so surrendered, each stock certificate which,
prior to the Effective Date, represented shares of CHC Common
Stock or CHC Preferred Stock, as the case may be, shall be deemed
for all purposes to evidence ownership of the number of shares of
Rx Preferred Stock into which those shares of CHC Common Stock
and CHC Preferred Stock have been converted.
1.5 Transfer Books. At the close of business on the
business day immediately preceding the Effective Date, the stock
transfer books for shares of CHC Common Stock and/or CHC
Preferred Stock shall be closed, and no transfer or assignment of
any shares of CHC Common Stock and CHC Preferred Stock shall
thereafter be registered on the transfer books.
1.6 Transfer of Certificates. If any certificate
representing Rx Preferred Stock is to be issued in a name other
than that in which the certificate theretofore representing CHC
Common Stock or CHC Preferred Stock, as the case may be,
surrendered is registered, it shall be a condition of such
issuance that the certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the
person requesting such issuance shall either pay to the Surviving
Corporation or its transfer agents any transfer or other taxes
required by reason of the issuance of certificates representing
Rx Preferred Stock in a name other than that of the registered
holder of the
certificate surrendered, or establish to the
satisfaction of the Surviving Corporation or its transfer agents
that such tax has been paid or is not applicable
1.7 Other Transactions at the Closing.
(a) Simultaneously with the Closing, Rx Medical shall
purchase from Xxxxxxxxx Technologies, Inc., a Colorado
corporation ("Xxxxxxxxx") (i) a 9% note of CHC in the principal
amount of $425,000, (ii) a 6% note of CHC in the principal amount
of $100,000, and (iii) a 9% note of Xxxxxx Medical Center
(assumed by CHC) in the principal amount of $120,000
(collectively, the "CHC Notes"), (iv) and the Rx Common Stock
issued to Xxxxxxxxx as a result of the Merger, and Xxxxxxxxx
shall sell the CHC Notes and Rx Common Stock to Rx Medical for a
payment of $587,477 payable by wire transfer at the Closing.
(b) In exchange for their options, holders of options to
purchase CHC Common Stock shall receive (i) 155.25 shares of Rx
Preferred Stock for each share of CHC Common Stock purchasable
upon exercise of the option (the "Option Shares") plus (ii) the
number of shares of Rx Common Stock equal to the quotient
obtained by (x) dividing the Market Value of Rx Common Stock into
(y) the difference obtained by (1) subtracting the aggregate
exercise price of the Option Shares from (2) the product of
$308.75 and the Option Shares. For the purposes of this
clause (b), "Market Value of Rx Common Stock" shall mean the
average closing price of Rx Common Stock on the American Stock
Exchange for the 10 trading days immediately prior to the
Closing.
Assuming a Market Value of $1.50 for the Rx Common Stock, the CHC
Optionees will receive the following:
(a) (b) Rx Rx
Exer Prefe Commo
Optionee Opti cise rred n
ons Pric Stock Stock
e *
Xxx 100 $50 15,52 17,25
Xxxxx 5 0
Xxxx 50 50 7,763
Black 8,625
Xxxx 42 100 6,521 2,923
Xxxxx
Xxxxxx 50 50 7,763
Olters 8,625
Xxxxxx 42 100 6,521 2,923
Xxxxxx
Xxxx 50 50 7,763
Xxxxxxx 8,625
Xxxx 42 100 6,521 2,923
Xxxxxxx
Xxxxxxx 126 100 19,56 17,53
Xxxxxxx 2 5
Xxx 84 100 13,04 11,69
Xxxxxxx 1 0
_____________________
* The formula is [155.25 x (a)];
the formula is [[[308.75 x(a)]-[(a)x(b)]]/MV]
(c) In addition to the foregoing, in the event that
the Surviving Corporation consummates the acquisition
of a hospital subsequent to the Closing, the Surviving
Corporation shall pay Xxx X. Xxxxx a fee in the amount
of $100,000 in connection with services rendered in
connection therewith. Said fee shall become due and
payable within ten (10) days after the closing of the
aforesaid acquisition.
1.8 Closing and Effective Date of Merger. At the closing
(the "Closing"), which shall be held on July 7, 1995 (or at such
later date as shall be agreeable to CHC and Rx Medical but in no
event later than August 7, 1995) (the "Closing Date") at the
offices of Rx Medical in Ft. Lauderdale, Florida. The parties
shall exchange the respective schedules, Exhibits, certificates
and instruments of conveyance, in form and substance reasonably
acceptable to the respective parties, within thirty (30) days of
the Closing. In addition to other actions contemplated
hereunder, CHC and Acquisition Corp shall within thirty (30) days
of the Closing, use their respective best efforts to cause to be
executed in accordance with the Mississippi Business Corporation
Act, and shall cause to be filed and recorded with the
appropriate offices under the laws of the State of Mississippi,
copies of Articles of Merger and such officers' certificates and
other documents as may be necessary or appropriate in the opinion
of counsel to Rx Medical to cause the Merger to become effective
under the laws of the State of Mississippi. The Merger shall
become effective at the time the Secretary of the State of
Mississippi issues a Certificate of Merger in response to the
aforesaid filing of the Articles of Merger (the "Effective
Date").
1.9 Further Assurances. The Surviving Corporation, through
its appropriate officers and directors, is hereby authorized, in
the name of the Rx Medical or Acquisition Corp, CHC or itself,
to execute, acknowledge and deliver all instruments of further
assurance and to do all such acts and things as it may, at any
time, deem necessary or desirable to vest in the Surviving
Corporation any property or rights of CHC or Rx Medical or
Acquisition Corp, or to carry out any of the purposes expressed
in this Agreement.
1.10 Dissenting Stockholders of CHC. Each stockholder of
CHC, if any, who becomes entitled, pursuant to Article 13 of the
Mississippi Business Corporation Act, to payment of the fair
value of his CHC Common Stock or CHC Preferred Stock, as the
case may be, (a "Dissenting Stockholder") shall receive payment
therefor from the Surviving Corporation but only after the value
thereof shall have been agreed upon or finally determined
pursuant to such provisions. CHC shall not, except with the
prior written consent of Rx Medical, voluntarily make any payment
with respect to or settle or offer to settle any demand for such
payment. Shares of CHC Common Stock and CHC Preferred Stock
acquired by CHC or the Surviving Corporation from Dissenting
Stockholders shall be canceled.
1.11 Legend. The certificates representing the Rx Common
and Rx Preferred Stock issued to the former stockholders of CHC
as the result of the merger shall bear the following legend:
"TRANSFER RESTRICTED: The Shares represented by this
certificate have not been registered under the Securities Act of
1933, as amended. Such shares have been acquired subject to the
restrictions as set forth by the Plan and Agreement of Merger
dated as of July 7, 1995 among the issuer, Consolidated Health
Corporation of Mississippi, Inc., and CHC Acquisition
Corporation. Such shares will be held for investment only and
have not been acquired with a view toward their distribution.
They may not be offered for sale, sold, transferred, pledged,
hypothecated or otherwise disposed of except on the terms set
forth in the aforementioned Plan and Agreement of Merger, a copy
of which is on file in the Office of the Corporate Secretary of
the issuer."
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF CHC
CHC hereby represents and warrants to Rx Medical and
Acquisition Corp as follows:
2.1 Organization, Corporate Power and Qualification. CHC
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Mississippi and has full
corporate power and authority and all authorizations, licenses
and permits necessary to own, lease and operate its properties
and assets and to carry on its business as and where it is now
being conducted, to enter into this Agreement, and to consummate
the transactions contemplated hereby. CHC is duly qualified to
do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or the
nature of the business transacted by it makes such qualification
necessary.
2.2 Capitalization of CHC. The authorized capital stock of
CHC consists of 10,000 shares of $.01 par value common stock, and
1,500 shares of $100 par value preferred stock, of which as of
the date hereof, 5,530 shares of CHC Common Stock and 1,500
shares of CHC Preferred Stock have been duly authorized by all
necessary corporate action on the part of CHC, are validly issued
and outstanding, fully paid and nonassessable. No assessments
have been made with respect to such stock which have not been
fully satisfied. Except as set forth in Exhibit 2.2 of the
Exhibit Volume, there are no other authorized or outstanding or
authorized equity securities of CHC of any class, kind or
character, and there are no outstanding rights, contracts, rights
to subscribe, conversion rights, exchange rights, warrants,
options, calls, puts or other agreements or commitments of any
character relating to the capital stock of CHC or any securities
convertible or exchangeable or exercisable for any shares of
stock of any class of capital stock of CHC. CHC has no treasury
stock that has not been canceled as of the date hereof. Except
for the transactions contemplated by this Agreement, there are
not any agreements or understandings among CHC's stockholders
with respect to the voting of shares of the CHC Stock on any
matter. No shares of the capital stock of CHC are reserved for
any purpose; there are no preemptive or similar rights with
respect to the issuance, sale or other transfer (whether present,
past or future) of the capital stock of CHC and there are no
agreements or other obligations (contingent or otherwise) which
may require
CHC to issue, repurchase or otherwise acquire any
shares of its capital stock or any other securities. There are
no outstanding or authorized stock appreciation/phantom stock or
similar rights with respect to CHC. There are no voting trusts,
proxies, or any other agreements or understandings with respect
to the voting stock of CHC.
2.3 Subsidiaries, Affiliates, Affiliated Companies and
Joint Venture. CHC has no direct or indirect ownership interest
in, by way of stock ownership or otherwise, any corporation,
association or business enterprise except for the subsidiary
company or companies listed in Exhibit 2.3A of the Exhibit
Volume, all of which are wholly-owned subsidiaries of CHC.
Exhibit 2.3A shall also set forth the authorized capital stock of
each such subsidiary corporation, the number of shares of such
capital stock validly issued and outstanding and the number of
such shares owned by CHC. Each of the organizations listed in
Exhibit 2.3A and identified therein as a consolidated subsidiary
(CHC's "subsidiaries") is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation, as listed in Exhibit 2.3A, has full corporate
power to own, lease and operate its properties and assets and to
carry on its business as and where it is now conducted, is duly
qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or
leased by it or the nature of the business transacted by it make
such qualification necessary, and is qualified to do business in
the jurisdictions listed in Exhibit 2.3A. Copies of the Articles
of Incorporation and by-laws of each CHC subsidiary are included
as Exhibit 2.3B of the Exhibit Volume and are true, accurate and
complete as of the date hereof. CHC owns beneficially and of
record all shares of capital stock of any CHC subsidiary which is
set forth as being owned by CHC in Exhibit 2.3A (except for
directors' qualifying shares), free and clear of all claims,
liens, charges and encumbrances of any nature whatsoever, and
none of such shares are subject to any covenant or other
contractual restriction preventing or limiting the right to
transfer such shares. There are not any agreements or understand
ings to which CHC or any CHC subsidiary is a party with respect
to the voting of shares of capital stock of any CHC subsidiary;
and neither CHC nor any of its subsidiaries has outstanding any
options, calls, rights of conversion or other commitments to
purchase or sell any authorized or issued shares of capital stock
of any CHC subsidiary.
2.4 Financial Statements. Exhibit 2.4 of the Exhibit
Volume consists of the following financial statements of CHC:
consolidated balance sheet of CHC and its subsidiaries at
February 28, 1994, and the related consolidated statement of
operations, stockholders' equity and cash flow for the years then
ended, together with the opinion thereon of Xxxxxxxx, Xxxxxx &
Co., certified public accountants; and the unaudited consolidated
balance sheet of CHC and its subsidiaries as of February 28, 1995
and unaudited consolidated statement of operations of CHC and its
subsidiaries for the twelve months then ended (the audited and
unaudited financial statements and the related notes being herein
called "CHC Financial Statements").
The CHC Financial Statements have been prepared
based upon information contained in the books and records of CHC
and its subsidiaries and present fairly the assets, liabilities
and financial condition of CHC and its subsidiaries as at the
respective dates thereof and the results of their operations for
the periods ended at the respective dates thereof, in each case
prepared in conformity with generally accepted accounting
principles applied on a consisitent basis throughout the periods
involved and with the prior periods, except that in the unaudited
portion of the CHC Financial Statements (i) are subject to cost
report and other year-end audit adjustments, (ii) do not contain
footnotes, (iii) were prepared without physical inventories, and
(iv) do not contain an unaudited statement of cash flow, and (v)
are not restated for subsequent events. The CHC Financial
Statements do not contain any material inaccuracy and do not
suffer from any material omissions.
2.5 Absence of Undisclosed Liabilities. Except as and to
the extent reflected or reserved against in the CHC Financial
Statements and except for commitments and obligations incurred in
the ordinary course of business accruing after February 28, 1995,
to the best knowledge of CHC, CHC and its subsidiaries as of
February 28, 1995, had, or will have at Closing, no material
liabilities, claims or obligations (whether accrued, absolute,
contingent, unliquidated or otherwise, whether due to become
payable and regardless of when or by whom asserted). The
liabilities reflected in the CHC Financial Statements consist
solely of accrued obligations and liabilities incurred by CHC to
persons or entities not affiliated with CHC, except as set forth
in Exhibit 2.5 of the Exhibit Volume.
2.6 Letters of Credit. Except as disclosed in Exhibit 2.6
of the Exhibit Volume, there are no outstanding letters of credit
issued at the request of CHC to any suppliers or obligees of CHC
with respect to the operations of CHC.
2.7 Absence of Certain Recent Changes. Except as expressly
provided in this Agreement or as set forth on Exhibit 2.7 of the
Exhibit Volume in alphabetical order corresponding to the
following subsections since February 28, 1995, and through the
Closing Date, CHC and its subsidiaries have not been and will not
have:
(a) except in the usual and ordinary course of their
businesses, consistent with past practice, and in an amount which
is usual and normal, incurred, both individually or in the
aggregate, any indebtedness or other liabilities (whether
accrued, absolute, contingent or otherwise), guaranteed any
indebtedness or sold any of their assets;
(b) suffered any damage, destruction or loss, whether or
not covered by insurance, in excess of $10,000;
(c) suffered the resignation or other termination of
any management personnel of CHC, or the loss of or
other termination of a business relationship with any
material customers or suppliers of CHC's business or
been engaged in a material dispute with any material
customer or supplier which could threaten such business
relationship;
(d) increased the regular rate of compensation payable by
them to any employee, stockholder, or any physician other than
normal merit and cost of living increases granted in the ordinary
course of business; or increased such compensation by bonus,
percentage, compensation service award or similar arrangement
theretofore in effect for the benefit of any of their employees,
and no such increase is required;
(e) established or agreed to establish, amended or
terminated any pension, retirement or welfare plan or arrangement
for the benefit of their employees not theretofore in effect;
(f) had any change in the capitalization of the CHC and its
subsidiaries, including, without limitation, the grant or
issuance by the CHC or any of its subsidiaries of any shares of
stock of any class, any subscriptions, options, warrants,
convertible securities, rights, calls, agreements, commitments or
rights affecting or relating in any manner whatsoever to any
equitable interests in CHC or any of its subsidiaries;
(g) declared or paid any dividend or other distribution, in
any form whatsoever, on any class of its capital stock or
purchased or redeemed any of its capital stock;
(h) made any direct or indirect purchase, redemption or
other acquisition by CHC or any of its subsidiaries, or entered
into any commitment, plan or agreement by CHC or any of its
subsidiaries to purchase, redeem or otherwise acquire any shares
of their capital stock or other equitable interests;
(i) experienced any labor organizational efforts, strikes
or complaints, other than grievance procedures in the ordinary
course of business, or entered into any collective bar\gaining
agreements with any union;
(j) made any single capital expenditure which exceeded
$10,000 or made aggregate capital expenditures which exceeded
$25,000;
(k) except with respect to liens or encumbrances arising by
operation of law, permitted or allowed any of their assets (real,
personal or mixed, tangible or intangible) to be subjected to any
mortgage, pledge, lien, security interest, encumbrance,
restriction or charge of any kind;
(l) paid, discharged or satisfied any claims, liabilities
or obligations (absolute, accrued, contingent or otherwise) other
than in the usual and ordinary course of business;
(m) suffered any extraordinary losses, canceled any debts
or waived any claims or rights of substantial value, whether or
not in the usual and ordinary course of business;
(n) paid, lent or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or
mixed, tangible or intangible) to, or entered into any agreement
or arrangement with, any stockholder of CHC or any of the
officers or directors of CHC or any of its subsidiaries or of any
"affiliate" or "associate" of any of their officers or directors
(as such terms are defined in the rules and regulations of the
Securities and Exchange Commission under the Securities Act of
1933, as amended), except for reimbursement of ordinary and
reasonable business expenses related to the business of CHC and
its subsidiaries and compensation to officers at rates not
exceeding the rates of compensation at February 28, 1995;
(o) amended, terminated or otherwise altered (whether by
action or inaction) any contract, agreement or license of
significant value to which CHC or any of its subsidiaries is a
party, except in the ordinary course of business;
(p) entered into a material transaction, contract or
commitment other than in the ordinary course of business or made
any change in any method of accounting or accounting practice;
(q) canceled, or failed to continue, insurance coverages;
(r) agreed, whether in writing or otherwise, to take any
action described in this 2.7;
(s) suffered any material adverse change in its business,
properties, assets, liabilities, net worth, earnings or financial
condition; or
(t) done any act or thing which under the terms and
conditions of this Agreement would be in violation of any of the
covenants, stipulations or agreements of CHC hereunder, or which
would make any representation or warranty of CHC hereunder
inaccurate or untrue as of the Closing Date.
2.8 Assets To the best knowledge of CHC: (i) all of
the assets owned by, or leased to CHC and used or usable in
connection with its business and operations are in good working
order, ordinary wear and tear excepted, have been maintained in
accordance with good industry practice, are suitable for the
purposes for which they are being used and are sufficient in the
aggregate for the operation and maintenance of its business; and
(ii) CHC has good and marketable title to the assets reflected in
the balance sheet included in the CHC Financial Statements and
will hold good and marketable title to such assets and any assets
acquired prior to the Closing Date, except for assets disposed of
in the ordinary course of business and except for such mortgages,
liens and other charges as are disclosed in the CHC Financial
Statements.
2.9 Title to Assets. CHC does not own any real estate,
and leases only offices in Nashville, TN and Xxxxxx, MS. Its
wholly owned subsidiary , CHC Management, Inc. ("CHC
Management"), leases and operates Xxxxx County Hospital in
Raleigh, MS. CHC believes it and CHC Management have valid and
subsisting leaseholds for such properties. Exhibit 2.9 of the
Exhibit Volume is a copy of a Uniform Commercial Code search as
of a recent date duly obtained by CHC showing security interests
of record relating to non real estate assets of CHC and its
subsidiaries.
2.10 Contracts. Exhibit 2.10 of the Exhibit Volume contains
a copy of each contract, lease, agreement and other instrument
to which CHC or any of its subsidiaries is a party or is bound
which involves an unperformed commitment or obligation
(contingent or otherwise) of more than $25,000 in the aggregate
and with which CHC and each of its Subsidiaries are in material
compliance.
2.11 Insider Contracts. There are no contracts, agreements,
purchase orders, commitments, leases, understandings or
arrangements, including loan arrangements, between CHC and its
stockholders or any affiliate thereof not otherwise disclosed
herein or in the Exhibits contained in the Exhibit Volume and
none shall be entered into by CHC from the date hereof through
the Closing Date without the prior written consent of Rx Medical.
2.12 Inventory. To the best knowledge of CHC, the inventory
reflected on CHC's balance sheet at February 28, 1995 was (i) in
good and marketable condition, (ii) in an amount consistent with
the hospital business, (iii) saleable in the normal course of
CHC's business as currently conducted, at current applicable
prices and within normal inventory "turn" experience except for
items which are obsolete, damaged or slow moving which do not
materially exceed historical amounts for such categories of
items, and (iv) is carried in CHC's Financial Statements on the
basis disclosed in the notes thereto.
2.13 Accounts Receivable. Except for immaterial
amounts, CHC's accounts receivable: (i) arose in the ordinary
course of business for goods or services delivered or rendered;
(ii) constitute only valid, undisputed claims; and (iii) are not
subject to counterclaims or set-offs. To the best knowledge of
CHC, all credits due to third parties, including third party
payors, are reflected in CHC's Financial Statements and 100% of
the aggregate recorded amounts of CHC's accounts receivable net
of reserves have been or will be collected in the ordinary course
of business without resort to litigation.
2.14 Books and Records. To CHC's best knowledge and belief:
the books of account of CHC reflect all items of income, gain,
loss, and expense and all assets and liabilities of CHC subject
to customary month-end and year-end adjustments and are accurate
and complete in all material respects; all of the other records
of CHC, including, without limitation, all of its payroll and
customer records, are accurate and complete in all material
respects. CHC shall cooperate in providing access to the books
and records of CHC on a reasonable basis in the event an audit of
such books and records is deemed necessary by counsel for Rx
Medical in order to comply with any federal or state securities
laws or regulations.
2.15 Defaults. To CHC's knowledge, neither CHC nor any of
its subsidiaries is in default under, nor has any event occurred
which, with the lapse of time or action by a third party, could
result in a default under, give rise to a right to accelerate or
terminate any provision thereof, or give rise to any lien, claim,
encumbrance or restriction on any of the assets or properties of
CHC or any of its subsidiaries, any outstanding indenture,
mortgage, contract, lease, instrument or agreement to which CHC
or any of its subsidiaries is a party or by which CHC or any of
its subsidiaries may be bound or under any provision of the
Articles of Incorporation or by-laws of CHC or any of its
subsidiaries. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
by this Agreement will not violate any provision of, or result
in the breach of, or constitute a default under, any law the
violation of which would result in a significant liability to CHC
or any of its subsidiaries, or any order, writ, injunction or
decree of any court, governmental agency or arbitration tribunal;
constitute a violation of or a default under, or a conflict with,
any term or provision of the Articles of Incorporation or by-laws
of CHC or any of its subsidiaries or any contract, commitment,
indenture, lease, instrument or other agreement, or any other
restriction of any kind to which CHC or any of its subsidiaries
is a party or is bound; or cause, or give any party grounds to
cause (with or without notice, the passage of time or both) the
maturity of any liability or obligation of CHC or any of its
subsidiaries, to be accelerated, or increase any such liability
or obligation.
2.16 Patents, Trademarks and Copyrights. CHC does not own
any trademarks, service marks, trade names, brands, copyrights or
patents and has not filed any applications for registration of
any such trademarks, copyrights or patents.
2.17 Powers of Attorney. Exhibit 2.17 in the Exhibit
Volume lists any outstanding powers of attorney related to CHC
and a summary statement of the terms thereof.
2.18 Guarantees. Included as Exhibit 2.18 in the Exhibit
Volume is a list and brief description of all guarantees, matters
of suretyship and contingent liabilities of CHC and its
subsidiaries.
2.19 Permits and Licenses. Included as Exhibit 2.19 in the
Exhibit Volume is a schedule of all material permits and licenses
held by CHC and its subsidiaries. To the best knowledge of CHC:
(i) all of the licenses are, and as of the Closing Date will be,
valid and in good standing with applicable governmental
authorities or agencies; (ii) there is no pending or threatened
action by any governmental authority or agency or third party to
suspend, revoke, terminate or challenge any of such licenses;
(iii) none of such licenses are currently subject to or operating
under any agreement encumbering any of such licenses or any
waiver by governmental authorities of otherwise applicable rules
and regulations; (iv) no other material licenses, permits,
certifications, authorizations, accreditations, orders or
approvals are required in connection with the ownership or
operation of CHC's business as currently owned and operated.
2.20 Litigation, etc. Except as set forth in Exhibit 2.20
in the Exhibit Volume, to CHC's knowledge, there is no
litigation, arbitration, governmental claim, investigation or
proceeding pending or threatened against CHC or any of its
subsidiaries at law or in equity, before any court, arbitral
tribunal or governmental agency.
2.21 Compliance. To the best of CHC's knowledge: (i) CHC's
operations, as and where presently conducted and CHC's assets and
their uses, comply with all applicable federal, state and
municipal laws, rules, regulations and other requirements of any
court or governmental body, court or arbitrator material to the
conduct thereof (collectively, the "Laws"), in all cases where
noncompliance therewith, singly or in the aggregate, would have a
material adverse effect on the business, assets, liabilities,
properties, operations or condition (financial or other) of CHC;
and (ii) CHC has all permits and licenses required for its
operations from all applicable jurisdictions.
2.22 Obligations; Authorizations. To the best knowledge of
CHC: (i) CHC is not in violation of any judgment, injunction,
award or decree which is binding on CHC or any of its assets,
properties, operations, securities or business or which would
affect the consummation of the transactions contemplated hereby;
(ii) CHC has in all material respects performed all obligations
required to be performed by it under, is not in default in any
material respect under, in violation in any material respect of,
aware of any material default or violation by any other party to,
and has not breached any material representation or incurred any
contingent liability contained in, any of the oral and written
contracts and agreements to which CHC is a party or by which CHC
is bound (the "CHC Agreements"); (iii) there is no pending or, to
the best knowledge of CHC, threatened claim
that operations pursuant to any of the CHC Agreements
have been improperly conducted or maintained or which would
lessen the rights of CHC thereunder; and, to the best knowledge
of CHC, no event has occurred and no condition exists that would
increase the obligations or costs of CHC thereunder in any manner
or amount that would be material to such CHC Agreements standing
alone; (iv) all material licenses, permits and other governmental
authorizations that are required for the ownership, operation and
maintenance of the CHC's business as now owned, operated and
maintained have been obtained and are valid and sufficient for
such ownership, operation, maintenance and location and are in
full force and effect; (v) and CHC has not taken any action, or
failed to take any action, or permitted or allowed to exist any
condition, which, with notice or lapse of time, or both, would
result in the termination, cancellation or forfeiture of, or
cause a default under, any such license, permit or other
governmental authorization.
2.23 Court Orders, Decrees and Laws. To CHC's knowledge:
there is not outstanding or threatened any order, writ,
injunction or decree of any court, governmental agency or
arbitration tribunal against or affecting CHC or any of its
subsidiaries or any of their assets which would significantly
interfere with their ability to conduct their businesses; no
governmental authorities are presently conducting proceedings
against CHC or any of its subsidiaries; and no such investigation
or proceeding is pending or being threatened.
2.24 Taxes. To CHC's knowledge: all federal, state and
other tax returns of CHC and its subsidiaries required by law to
be filed have been timely filed; CHC and its subsidiaries have
paid or provided for all taxes (including taxes on properties,
income, franchises, licenses, sales and payrolls) which have
become due pursuant to such returns or pursuant to any
assessment, except for any taxes and assessments of which the
amount, applicability or validity is currently being contested in
good faith by appropriate proceedings and with respect to which
CHC or its subsidiary, as the case may be, has set aside on its
books adequate reserves; all such tax returns have been prepared
in compliance with all applicable laws and regulations; the
amounts set up as provisions for taxes (including provision for
deferred income taxes) on CHC Financial Statements have been
reserved in accordance with generally accepted accounting
principles for the payment of all unpaid federal, state, county
and local taxes accrued for or applicable to all periods (or
portions thereof) ending on or before the Closing Date; there
are no tax liens on any of the property of CHC or any of its
subsidiaries except those with respect to taxes not yet due and
payable and except for any taxes and assessments of which the
amount, applicability or validity is currently being contested in
good faith by appropriate proceedings and with respect to which
CHC or its subsidiary, as the case may be, has set aside on its
books adequate reserves; there are no pending tax examinations
nor has CHC or any of its subsidiaries received a revenue agent's
report asserting a tax deficiency. Copies of CHC's last two
federal state and local income tax returns are included as
Exhibit 2.24 of the Exhibit Volume.
2.25 Insurance; Malpractice. Exhibit 2.25 of the
Exhibit Volume is a list and brief description of all policies of
fire, general liability, professional liability, product
liability, environmental impairment liability, worker's
compensation, health and other forms of insurance policies or
binders currently in force insuring against risks of CHC. CHC
has no reason to believe that such insurance policies are not
valid, binding and enforceable policies in full force and effect,
and CHC believes that is has paid all premiums due and payable
thereon. To the best knowledge of CHC: (i) there are no gaps in
CHC' insurance coverage; (ii) CHC is not in default with respect
to any provisions contained in any such insurance policy nor has
it failed to give any material notice or present any material
claim under any such insurance policy in due and timely fashion
in each case where such default or failure to give notice or to
present a claim could reasonably be expected to lead to a denial
of coverage; and (iii) no insurer under any such insurance
policies has refused, or threatened to refuse, to pay any claim
currently pending under any of such insurance policies with
respect to its business. CHC shall maintain insurance coverage of
similar kinds and amounts and shall pay premiums for such
coverage through the Closing Date.
2.26 Labor Matters. There are no collective bargaining
agreements with any labor union to which CHC or any of its
subsidiaries is a party or by which CHC or any of its
subsidiaries is bound, and none of them are currently negotiating
with a labor union. There is no unfair labor practice complaint
against CHC or any of its subsidiaries pending before the
National Labor Relations Board. There is no labor strike,
dispute, slowdown or stoppage actually pending or, to its
knowledge, threatened against or affecting CHC or any of its
subsidiaries or the Hospital. No grievance which might have a
material adverse effect on CHC or any of its subsidiaries or the
conduct of their businesses nor any such arbitration proceeding
arising out of or under collective bargaining agreements is
pending and no claim therefor exists. Neither CHC nor any of its
subsidiaries has experienced any employee strikes during the last
three years. CHC will advise Rx Medical of any such labor
dispute, petition for representative election or negotiations
with any labor union which shall arise before the Closing Date.
Exhibit 2.26 of the Exhibit Volume lists all of the present
employees of CHC receiving compensation in excess of $100,000 per
annum, their titles, the date on which they became employees of
CHC, and their present rate of compensation. CHC has made no
commitment, oral or written and whether or not enforceable, which
would bind or purport to bind Rx Medical, concerning the future
employment or compensation of any of such employees. Except as
set forth in Exhibit 2.26, there are no termination benefits or
amounts due and owing under the terms of any employment agreement
as a result of a change in control of CHC as a result of the
transactions contemplated by this Agreement.
2.27 Benefit Plans. Except as set forth in Exhibit 2.27 of
the Exhibit Volume, CHC has not established, maintained or
contributed to, or maintain or contribute to, or proposed to
establish, maintain or contribute to, any employee benefit plan
as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Except as set forth
in Exhibit 2.27, CHC has no other plan, trust agreement or
arrangement for any bonus, severance,
hospitalization, vacation, deferred compensation, pension or
profit-sharing, retirement, payroll savings, stock option, group
insurance, self-insurance, death benefit, fringe benefit, welfare
or any other employee benefit plan or fringe benefit arrangement
of any nature whatsoever, including those benefiting former
employees (collectively, the "Employee Benefit Plans"). CHC is
and shall remain, both before and after the Closing, in
compliance with those provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985 that relate to continued
coverage under the Employee Benefit Plans.
2.28 Environmental Matters. To the best knowledge of CHC:
(i) CHC has not produced, used, handled disposed of, in
connection with the operation of its business, any hazardous
substances or hazardous wastes nor has CHC dumped, buried or
otherwise disposed of or stored any such substances or wastes on
the property on which its operations are is located, in each case
except in accordance with the Environmental Requirements (as
defined below); (ii) CHC is in compliance with all requirements
relating to its operations under federal, state, or local laws
relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic
substances, materials or wastes into ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or hazardous
or toxic substances, materials or wastes (collectively,
"Environmental Requirements"); (iii) CHC is not required under
applicable requirements of federal, state or local laws, rules or
regulations to register any products or materials, including
underground storage tanks; and (iv) no investigation,
administrative order, consent order, lien, super lien or
agreement, litigation or settlement with respect to any hazardous
substance of any kind located on or under all or any portion of
any premises which have been leased or owned by CHC exists, is
pending or, is proposed or threatened in writing with respect to
any premises leased or owned by CHC. For the purpose of this
Section, "hazardous substances", "hazardous materials" and
"hazardous waste" refer to such terms as defined in the
Comprehensive Environmental Response Compensation and Liability
Act, as amended, 42 U.S.C. Section 9601 et seq., and regulations
thereunder, the Resource Conservation and Recovery Act; and
applicable federal, state and local laws pertaining to
environmental regulations.
2.29 Third-Party Payment Contracts, Cost Reports.
(a) CHC has filed on a timely basis all claims, cost reports
or annual filings required to be filed to secure payment under
Medicare and Medicaid Programs. To the best knowledge of CHC: (i)
all services provided by CHC have been provided pursuant to valid
physician orders; (ii) all xxxxxxxx by CHC to third-party payors,
including, but not limited to, those under the Medicare Amendments
to the Social Security Act, as amended, and the regulations
promulgated pursuant thereto, Medicaid Programs and private
insurance companies, are true and correct in all material respects
and are in compliance in all material respects with all applicable
laws and regulations and the policies of such third-party payors;
and (iii) there are no outstanding, pending or threatened negative
adjustments, recoupments or deficiencies pertaining to the cost
reports or claims of CHC and there are no existing Medicare or
Medicaid compliance deficiencies otherwise with respect of the
conduct of CHC's business such as, but not limited to, licensing,
audit, and quality assurance requirements.
(b) To the best knowledge of CHC, none of the officers,
directors, employees or agents of CHC, on behalf of or for the
benefit of CHC, directly or indirectly, has: (i) offered or paid
any amount to, or made any financial arrangement with any of the
past or present customers or potential customers of CHC in order
to obtain business from such customers other than standard pricing
or discount arrangements consistent with proper business practices
and consistent with all applicable laws; (ii) given, or agreed to
give, or is aware that there has been made, or that there is an
agreement to make any gift or gratuitous payment of any kind,
nature or description (whether in money, property or services) to
any past or present customer, supplier, source of financing,
landlord, sub-tenant, licensee or anyone else at any time which
was not legal under applicable law; (iii) made, or has agreed to
make, or is aware that there is any agreement to make any
political payments not legal under applicable law or gifts of
their respective funds or property to or for the private use of
any governmental official, employee or agent where either the
payment or the purpose of such contribution, payment or xxxx
relates to the business of CHC and is illegal under the laws of
the United States, any state thereof or any other jurisdiction
(foreign or domestic); or (iv) made, or has agreed to make, or is
aware that there have been, or that there is any agreement to
make, any payments to any person with the intention or
understanding that any part of such payment was to be used
directly or indirectly for the benefit of any past or present
customer, employee, supplier or landlord of CHC, or for any
purpose other than that reflected in the documents supporting the
payments and was not legal under applicable law when made.
2.30 Patients. CHC has no reason to believe that its
patients for whom reimbursement has been received from Medicare,
Medicaid or other third party payors did meet the applicable
eligibility standards. To its best knowledge, CHC has filed all
financial and medical documentation required to be filed therefor
and such records are, as of the date hereof, and will be, as of
the Closing Date, true, accurate, complete and current in all
material respects.
2.31 Questionable Payments. To the best knowledge of CHC,
neither CHC nor any of CHC's current or former stockholders,
directors, officers, agents, employees or other persons associated
with or active on behalf of CHC, has on behalf of CHC or in
connection with its business, (i) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful
expense related to political activity, (ii) made any direct or
indirect unlawful payments to foreign or domestic government
officials or employees from corporate funds, (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, (iv)
established or maintained any unlawful or unrecorded fund of
corporate monies or other assets, (v) made any false or fictitious
entries on the books and records of CHC, or made any unlawful
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment of any nature, or (vi) offered, paid, solicited
or received any remuneration in violation of Medicare or Medicaid
Programs including, without limitation, the Medicare and Medicaid
Anti-Kickback Act.
2.32 Certain Representations With Respect to Xxxxx County
Hospital.
(a) Xxxxx County Hospital (the "Hospital"), leased by CHC
Management, is licensed by the Mississippi Department of Health
as an acute hospital authorized to operate 30 beds in its existing
facilities located in Raleigh, MS. To CHC's knowledge, except as
set forth in Exhibit 2.32(a)-1 of the Exhibit Volume, the Hospital
is presently in compliance with all the terms, conditions and
provisions of such license. Exhibit 2.32(a)-2 of the Exhibit
Volume is a copy of such license.
(b) The Hospital has current contractual arrangements with
Blue Cross. A copy of its existing Blue Cross contract is
included as Exhibit 2.32(b) of the Exhibit Volume; and to CHC's
knowledge, the Hospital is presently in com\pliance with all of
the terms, conditions and provisions of such contract.
(c) The Hospittal is qualified for participation in the
Medicare Program. A copy of its existing Medicare contract is
included as Exhibit 2.32(c) of the Exhibit Volume; and to CHC's
knowledge, the Hospital is presently in compliance with all of the
terms, conditions and provisions of such contract.
(d) The Hospital is qualified for participation in the
Medicaid program. A copy of its existing Medicaid
contract is included as Exhibit 2.32(d) of the Exhibit
Volume; and to CHC's knowledge, the Hospital is
presently in compliance with all the terms, conditions
and provisions of such contract.
(e) Except as set forth in Exhibit 2.32(f) of the Exhibit
Volume, CHC has received no written notification that the
Hospital is in violation of local building codes, ordinances or
zoning laws.
(f) Included as Exhibit 2.32(f) to the Exhibit Volume is a
copy of the surveys of the Hospital by the Tennessee Department of
Health after January 1, 1994.
(g) Included as Exhibit 2.32(g) of the Exhibit Volume are
the by-laws of the Medical Staff of the Hospital.
2.33 No Finders or Brokers. Neither CHC or any of its
subsidiaries nor any officer or director of CHC or any of its
subsidiaries has engaged any finder or broker in connection with
the transactions contemplated hereunder.
2.34 Minute Books. The minute books of CHC, as previously
made available to Rx Medical, contain complete and accurate
records of all meetings and accurately reflect all other corporate
action of the respective stockholders and board of directors of
CHC.
2.35 Competitive Interests. To the best knowledge of CHC,
none of its stockholders and no affiliate of any stockholder has
any direct or indirect interest of any kind in any business which
is competitive with or engages in any actual or potential business
transactions with CHC.
2.36 Authority; Binding Effect. CHC has full power and
authority to enter into this Agreement and, subject to the
convening of a stockholders' meeting and the approval of
stockholders as required by Mississippi law, to carry out the
transactions contemplated hereby. The Board of Directors of CHC
has taken all action required by law and by CHC's Articles of
Incorporation and by-laws, or otherwise, to authorize the
execution and delivery of this Agreement and the transactions
contemplated hereby. The execution, delivery, and performance of
this Agreement constitutes the valid and binding agreement of CHC
enforceable in accordance with its terms (except as the same may
be restricted, limited or delayed by applicable bankruptcy or
other laws affecting creditors' rights generally and equitable
principles generally).
2.37 Misleading Statements. To the best knowledge of CHC,
none of the information concerning CHC contained in this Agreement
(including, without limitation, the preamble hereto), the
Financial Statements, the Exhibits in the Exhibit Volume or in the
documents to be delivered by
CHC at or prior to Closing contains or will, when delivered,
contain any untrue or misleading statements of material fact or
omits or will, when delivered, omit any material fact or statement
necessary to make the other facts or statements set forth herein
or therein not material misleading. There is no fact known to CHC
which has not been disclosed to Rx Medical which has, or so far as
CHC can now reasonably foresee, will have a material adverse
effect on CHC, its operations, assets, prospects or Financial
Statements.
2.38 Representations and Warranties Deemed to be Repeated at
Effective Date of Merger. CHC's representations and warranties
contained in this Agreement shall be deemed to have been made
again at and as of the Effective Date and shall then be true,
accurate and complete in all material respects.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF RX MEDICAL AND
ACQUISITION CORP
Rx Medical and Acquisition Corp hereby represent and
warrant as follows:
3.1 Organization and Standing of Rx Medical and Acquisition
Corp. Rx Medical and Acquisition Corp are corporations duly
organized, validly existing and in good standing under the laws of
the states of Nevada and Mississippi, respectively; have full
corporate power and authority to conduct their businesses as now
being conducted; and are duly qualified to do business in each
jurisdiction in which the nature of the property owned or leased
or the nature of the businesses conducted by them requires such
qualification.
3.2 Financial Statements. Rx Medical has delivered to CHC a
copy of its Form 10-K to the Securities and Exchange Commission
("SEC") for the year ended December 31, 1994, containing the
consolidated balance sheets of Rx Medical and its subsidiaries at
December 31, 1994, December 31, 1993 and December 31, 1992, and
the related consolidated statement of operations, stockholders'
equity and cash flows for the year then ended, together with the
opinion thereon of Xxxxx Xxxxxxxx (with respect to December 31,
1993 and 1994) and Ernst & Young (with respect to December 31,
1992), certified public accountants; and a copy of its Form 10-Qs
filed with the SEC for the quarter ended March 31, 1995 containing
the unaudited consolidated balance sheets of Rx Medical and its
subsidiaries as of March 31, 1995 and 1994 and unaudited
consolidated statement of operations for the three months then
ended on each such date, accompanied by Management's Discussion
and Analysis of the Quarterly Consolidated Statements of Earnings
(the audited and unaudited financial statements and the related
notes being herein called "Rx Medical Financial Statements"). The
Rx Medical Financial Statements are true, complete and accurate
and present fairly the assets, liabilities and financial condition
of Rx Medical and its subsidiaries as at the respective dates
thereof and the results of their operations for the periods ended
at the respective dates thereof prepared in conformity
with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as stated
in the unaudited portion of the Rx Medical Financial Statements.
3.3 Capitalization. As of the date hereof, the
authorized capital stock of Rx Medical consists of (i) 25,000,000
shares of Rx Common Stock, of which 8,779,511 shares are issued
and outstanding, and 5,710,339 shares are reserved for issuance
upon the exercise of stock options held by current and former
directors, officers, employees and consultants, exercise of
warrants and conversion of series of Rx preferred stock other than
the Rx Preferred Stock, (ii) 20,000,000 shares of Rx preferred
stock other than the Rx Preferred Stock, of which 1,890,767 shares
are issued and outstanding, and (iii) 1,100,000 shares of Rx
Preferred Stock, of which no shares are issued and outstanding.
Except as set forth above, there are (A) no shares of capital
stock or other equity securities of Rx Medical outstanding, (B) no
other outstanding options, warrants or rights to purchase or
acquire, or securities or rights convertible into or exchangeable
for, shares of capital stock of Rx Medical and (C) no contracts,
commitments, understandings or arrangements by which Rx Medical is
obligated to issue additional shares of its capital stock or
options, warrants or rights to purchase or acquire any additional
shares of its capital stock. The shares of Rx Preferred Stock and
Rx Common Stock to be issued or transferred in connection with the
consummation of the transactions contemplated hereby have been
duly authorized and, upon the issue or transfer in accordance with
the terms of this Agreement, will be validly issued, fully paid
and nonassessable.
3.4 Subsidiaries. Except as set forth on Exhibit 3.4 to the
Exhibit Volume, Rx Medical does not own, directly or indirectly,
any capital stock or other equity participation in or of any
corporation, association, joint venture or other legal entity.
Exhibit 3.4 to the Exhibit Volume sets forth Rx Medical's
ownership and voting interest in each such entity.
3.5 Absence of Certain Changes. Since March 31, 1995, there
has not been any change in the assets, liabilities or financial
condition of Rx Medical and its subsidiaries other than changes
which, in the aggregate, have not been materially adverse; any
material adverse change in the business of Rx Medical and its
subsidiaries; or any damage, destruction, casualty or loss
materially and adversely affecting the business or property of Rx
Medical and its subsidiaries.
3.6 Authority; Binding Effect. Rx Medical and Acquisition
Corp have corporate power to execute and deliver this Agreement
and consummate the transactions contemplated hereby and have taken
(or by the Closing Date will have taken) all action required by
law, their Articles of Incorporation, by-laws or otherwise to
authorize such execution and delivery and the consummation of the
transactions contemplated hereby. The execution, delivery, and
performance of this Agreement constitutes the valid and binding
agreement of Rx Medical and Acquisition Corp enforceable in
accordance with its terms (except as the same may be restricted,
limited or delayed by applicable bankruptcy or other laws
affecting creditors' rights generally and except as to the remedy
of specific performance which may not be available under the laws
of various jurisdictions).
3.7 No Finders or Brokers. Neither Rx Medical nor
Acquisition Corp nor any officer or director thereof has engaged
any finder or broker in connection with the transactions
contemplated hereunder.
3.8 Defaults. Except as set forth in Exhibit 3.8 to the
Exhibit Volume, to Rx Medical's knowledge, neither Rx Medical nor
any of its subsidiaries is in default under, nor has any event
occurred which, with the lapse of time or action by a third party,
could result in a default under, any outstanding material
indenture, mortgage, contract or agreement to which Rx Medical or
any of its subsidiaries is a party or by which Rx Medical or any
of its subsidiaries may be bound or under any provision of the
Articles of Incorporation or by-laws of Rx Medical or any of its
subsidiaries. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement will not violate any provision of, or result in
the breach of, or constitute a default under, any law the
violation of which would result in a material liability to Rx
Medical and its subsidiaries considered as a whole, or any order,
writ, injunction or decree of any court, governmental agency or
arbitration tribunal; constitute a violation of or a default
under, or a conflict with, any term or provision of the Articles
of Incorporation or by-laws of Rx Medical or any of its
subsidiaries or any material contract, commitment, indenture,
lease or other agreement, or any other restriction of any kind to
which Rx Medical or any of its subsidiaries is a party or by which
it is bound; or cause, or give any party grounds to cause (with or
without notice, the passage of time or both) the maturity of any
material liability or obligation of Rx Medical or any of its
subsidiaries to be accelerated, or increase any such liability or
obligation.
3.9 Pending Litigation. Except as set forth in Exhibit 3.9
and more fully described in Rx Medical's Form 10-K for the year
ended December 31, 1994, and its Form 10-Q for the three months
ended March 31, 1995, there are no proceedings pending or, to the
knowledge of Rx Medical, threatened, against or affecting Rx
Medical or any of its subsidiaries in any court or before any
governmental authority or arbitration board or tribunal which
involve the possibility of materially and adversely affecting the
properties, business, prospects, profits or condition (financial
or otherwise) of Rx Medical or any of its subsidiaries considered
as a whole. Rx Medical shall promptly notify CHC of any material
lawsuits, claims, proceedings or investigations which are
commenced against either it or Acquisition Corp or any Affiliate
thereof between the date of this Agreement and the Closing Date.
3.10 Court Orders, Decrees and Laws. Except as set forth in
Exhibit 3.10 and more fully described in Rx Medical's Form 10-K
for the year ended December 31, 1994, and its Form 10-Q for the
three months ended March 31, 1995: (i) there is not outstanding
or, to Rx Medical's knowledge, threatened any order, writ,
injunction or decree of any court, governmental agency or
arbitration tribunal against or affecting Rx Medical or any of its
subsidiaries or any of their assets which would significantly
interfere with their ability to conduct their businesses; (ii) to
Rx Medical's knowledge, Rx Medical and its subsidiaries are in
compliance with all applicable federal, state and local laws,
regulations and administrative orders which are material the
business of Rx Medical and its subsidiaries; (iii) no governmental
authorities are presently conducting any investigation or
proceeding against Rx Medical or any of its subsidiaries and (iv)
to Rx Medical's knowledge, no such investigation or proceeding is
pending or being threatened.
3.11 Taxes. Except as set forth in Exhibit 3.11, all
federal, state and other tax returns of Rx Medical and its
subsidiaries required by law to be filed have been timely filed,
and Rx Medical and its subsidiaries have paid or provided for all
taxes (including taxes on properties, income, franchises,
licenses, sales and payrolls) which have become due pursuant to
such returns or pursuant to any assessment, except for any taxes
and assessments of which the amount, applicability or validity is
currently being contested in good faith by appropriate proceedings
and with respect to which Rx Medical and its subsidiaries have set
aside on its books reserves deemed to be adequate. The amounts
set up as provisions for taxes on the Rx Medical Financial
Statements are sufficient for the payment of all unpaid federal,
state, county and local taxes accrued for or applicable to the
period then ended and all periods prior thereto for which Rx
Medical or any of its subsidiaries may be liable, except for any
taxes and assessments of which the amount, applicability or
validity is currently being contested in good faith by appropriate
proceedings and with respect to which Rx Medical or its
subsidiary, as the case may be, has set aside on its books
reserves deemed to be adequate. There are no tax liens on any of
the property of Rx Medical or any of its subsidiaries except those
with respect to taxes not yet due and payable and except for any
taxes and assessments of which the amount, applicability or
validity is currently being contested in good faith by appropriate
proceedings and with respect to which Rx Medical or its
subsidiary, as the case may be, has set aside on its books
reserves deemed to be adequate. Rx Medical and its subsidiaries
have withheld from each payment made to employees the amount of
all taxes (including, but not limited to, federal, state and local
income taxes and Federal Insurance Contribution Act taxes)
required to be withheld therefrom and all amounts customarily
withheld therefrom, and have set aside all other employee
contributions or payments customarily set aside with respect to
such wages and have paid or will pay the same to, or have
deposited or will deposit such payment with, the proper tax
receiving officers or other appropriate authorities.
3.12 Labor Matters. To Rx Medical's knowledge, Rx Medical and
its subsidiaries are in compliance with all applicable laws and
agreements respecting employment and employment practices, terms
and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice. There is no labor strike,
dispute, slowdown or stoppage actually pending or, to Rx Medical's
knowledge, threatened against or affecting Rx Medical or any of
its subsidiaries which materially adversely affects the business
of Rx Medical and its subsidiaries taken as a whole. No grievance
which might have a material adverse effect on Rx Medical and its
subsidiaries or the conduct of their businesses considered as a
whole is pending.
3.13 Exchange Act ReportsExcept as set forth in Exhibit
3.13, Rx Medical has timely filed all reports required to be filed
by 13 or 15(d) of the 1934 Act for the 12 months preceding the
date hereof. As of their respective dates, each report or other
statement required to be filed thereunder complied in all material
respects with the rules and regulations promulgated by the
Securities and Exchange Commission and none of such reports
contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
3.14 Potential Liability under Xxxxx Act. The potential
liabilities of Rx Medical are disclosed in the opinion of auditors
contained in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994. Rx Medical does not meet the
$75 million stockholders' equity requirement of the OBRA 1993
amendments to the Xxxxx Act which, if met, would generally allow
physician/shareholders to refer patients, and it is unlikely that
Rx Medical will meet this threshold in the foreseeable future.
Since January 1, 1995 and continuing through the present,
physicians who hold investment interests in Rx Medical have made
referrals to facilities owned by Rx Medical and its subsidiaries.
Only a relatively small number of physicians who refer Medicare or
Medicaid business to Rx Medical also own common stock of Rx
Medical, and the volume of business represented by these referring
physician/shareholders accounts for less than 7% of total
revenues. That notwithstanding, management of Rx Medical believes
that Rx Medical's failure to qualify for the Xxxxx Act exception
may have a material adverse impact on the business, financial
condition, cash flows and results of operations of Rx Medical. Rx
Medical is taking steps to notify physician/shareholders of the
requirements of the Xxxxx Act and to monitor its operations so
that physician/shareholder referrals are no longer accepted.
However, there can be no assurance that Rx Medical will, in all
instances, be able to prevent the referral of Medicare or Medicaid
business to facilities owned by Rx Medical by
physician/shareholders.
3.15 Disclosure. No representations and warranties by Rx
Medical in this Agreement and no statement in this Agreement or
any document or certificate furnished or to be furnished to CHC
pursuant hereto contains or will contain any untrue statement or
omits or will omit to state a fact necessary in order to make the
statements contained therein not misleading. Rx Medical has
disclosed to CHC all facts known to Rx Medical material to the
assets, liabilities, business operations and property of Rx
Medical and its subsidiaries. There are no facts known to Rx
Medical not yet disclosed which would materially adversely affect
the future operations of Rx Medical and its subsidiaries.
3.16 Representations and Warranties Deemed to be Repeated at
Time of Merger. Rx Medical's representations and warranties
contained in this Agreement shall be deemed to have been made
again at and as of the Effective Date and shall then be true,
accurate and complete in all material respects.
ARTICLE COVENANTS OF RX MEDICAL
Rx Medical hereby covenants and agrees as follows:
4.1 Acquisition Corp. Prior to the Closing Date, Rx Medical
shall provide Acquisition Corp with a sufficient number of shares
of Rx Medical Common and Preferred Stock and cash for distribution
to the Shareholders in accordance with this Agreement.
4.2 Listing
(a) Common Stock. As soon as practicable after the
Closing, and in any event within 180 days after the Closing, Rx
Medical shall take all steps necessary to list on the American
Stock Exchange the 250,002 shares of Rx Medical Common Stock which
Rx Medical is required to issue as contemplated by Section 1.2(b)
of this Agreement and shall have caused the issuance of the Rx
Medical Common Stock Rx Medical is obligated to issue under this
Agreement. In the event Rx Medical shall not have complied with
this 4.2(a), Rx Medical shall pay, the following amounts to the
former minority shareholders of CHC:
Section 4.2 (a) Common Stock
CHC Shareholder/Optioneee Amount
Xxx X. Xxxxx, Xx. $425,087
X.X. Xxxxxxx 37,299
Xxxxxxxx Xxxx 81,028
Xxxx Xxxxx 17,322
Xxxxxx Xxxxxx 17,322
Xxxx Xxxxxxx 17,322
Xxxxxxx Xxxxxxx 26,303
$621,683
(b) Preferred Stock Conversion Shares. Within 365 days
after the Closing, Rx Medical shall take all steps necessary to
list on the American Stock Exchange the Rx Medical Common Stock
which is issuable upon conversion of the Rx Preferred Stock. In
the event Rx Medical shall not have complied with this 4.2(b),
Rx
Medical shall pay, immediately after such 365th day
against surrender of the Rx Preferred Stock, the
following amounts to the former shareholders and
optionees of CHC:
CHC Amount
Shareholder/Optionee
Xxx X. Xxxxx, Xx. $1,674,465
X. X. Xxxxxxx 144,255
Xxxxxxxx Xxxx 324,110
Xxxxxxxxx 3,001,350
Technologies, Inc.
Xxxx Xxxxx 71,420
Xxxxxx Xxxxxx 71,420
Xxxx Xxxxxxx 71,420
Xxxxxxx Xxxxxxx
97,810
Total $
5,456,250
4.3 Optional Registration of Rx Medical Common Stock. If at
any time Rx Medical intends to file a registration statement with
the SEC under the Securities Act of 1933, as amended (the
"Securities Act") relating to the offer and sale of shares of Rx
Common Stock (other than a registration statement that relates
exclusively to the registration of securities under an employee
stock option, bonus, retirement or other compensation plan or
solely to the issuance of securities in connection with a business
acquisition or combination), Rx Medical shall so notify the
stockholders of CHC listed on the signature page hereto (the
"Shareholders") or their transferees in writing of its intention
at least 30 days prior to the filing of such registration
statement. If any such Shareholder or its transferee gives
written notice to Rx Medical, within ten days of delivery of such
notice from Rx Medical, of his, her or its desire to have any Rx
Medical Shares included in such registration statement, such Rx
Medical Shares shall be so included. All legal, accounting and
printing costs and all other expenses of Rx Medical in connection
with the foregoing registration shall be paid by Rx Medical.
4.4 Mandatory Registration of Rx Medical Common Stock.
During the first three months of any calendar year after the
Closing Date, any Shareholder or its transferee shall be entitled,
upon demand in writing, to require that Rx Medical file a
registration statement under the Securities Act to register all or
any of the shares of Rx Common Stock held by such Shareholder or
its transferee or into which any shares of Rx Preferred Stock held
by such person is convertible, provided that the aggregate market
value of all such shares with respect to which such Shareholder
and other
Shareholders demand registration shall be at least
$1,000,000. Upon receipt of such demand, Rx Medical shall use
commercially reasonable efforts to diligently prepare, file and
process to effectiveness a registration statement under the
Securities Act and thereafter to maintain the effectiveness of
such registration statement until the earlier of (i) the date on
which the last of the shares of Rx Medical Common Stock covered by
the registration statement have been sold and (ii) the second
anniversary of the effective date of such registration.
4.5 Prospectus Concerning Registration. Rx Medical, at
its sole cost and expense, will furnish to the Shareholders or the
transferees of such Shareholders requesting such registration a
prospectus (in such reasonable quantities as shall be requested)
containing such financial statements and other information as may
be necessary to meet the requirements of the Act and the rules and
regulations thereunder and relating to the Rx Medical Common
Stock.
4.6 Best Efforts to Secure Consents. Rx Medical shall use
its best efforts to secure before the Closing all necessary
consents and approvals needed to satisfy all the conditions
precedent to the obligations of CHC hereunder.
4.7 Information. Rx Medical shall promptly provide to CHC
upon reasonable request any information or documents reasonably
necessary for CHC or its stockholders to make an informed judgment
as to the advisability of consummating the transactions
contemplated hereby or to verify the representations and
warranties of Acquisition Corp herein. Until the Closing Date Rx
Medical shall notify CHC of any matter which may be materially
adverse to Rx Medical and its subsidiaries considered as a whole
and shall keep CHC fully informed of such events.
4.8 Corporate Action. Rx Medical and Acquisition Corp will
take all necessary corporate and other action and use its best
efforts to obtain all consents, approvals and amendments of
agreements required of them to carry out the transactions
contemplated by this Agreement and to satisfy the conditions
specified herein.
4.9 Handling of Documents. With respect to information
provided by CHC pursuant to this Agreement prior to the Closing,
Rx Medical and Acquisition Corp shall keep all such information
confidential which is not in the public domain, except to the
extent that such information (i) becomes generally available to
the public other than as a result of a disclosure directly or
indirectly by Rx Medical, (ii) was known by Rx Medical on a non-
confidential basis prior to disclosure to Rx Medical by CHC
pursuant to this Agreement or (iii) becomes available to Rx
Medical on a non-confidential basis from a source (other than CHC)
which is entitled to disclose the same, and to exercise the same
care in handling such information as they would exercise with
similar information of their own.
ARTICLE 5 COVENANTS OF CHC
CHC hereby covenants and agrees as follows:
5.1 Access and Information. Between the date of this
Agreement and the Effective Date; CHC will: (i) provide to Rx
Medical and its officers, attorneys, accountants and other
representatives, during normal business hours, or otherwise if Rx
Medical deems necessary, free and full access to all of the
properties, assets, agreements, commitments, books, records,
accounts, tax returns, and documents of CHC and its subsidiaries
and permit them to make copies thereof; (ii) furnish Rx Medical
and its representatives with all information concerning the
business, properties and affairs of CHC and its subsidiaries as Rx
Medical requests and certified by the officers, if requested;
(iii) cause the independent public accountants of CHC and its
subsidiaries to make available to Rx Medical and its
representatives all financial information relating to CHC and its
subsidiaries requested, including all working papers pertaining to
audits and reviews made heretofore by such auditors; (iv) furnish
Rx Medical true and complete copies of all financial and operating
statements of CHC and its subsidiaries; (v) permit access to
customers and suppliers for consultation or verification of any
information obtained by Rx Medical and use their best efforts to
cause such customers and suppliers to cooperate with Rx Medical in
such consultation and in verifying such information; and (vi)
cause their employees, accountants and attorneys to make
disclosure of all material facts known to them affecting the
financial condition and business operations of CHC and its
subsidiaries and to cooperate fully with any audit, review,
investigation or examination made by Rx Medical and its
representatives, including, without limitation, with respect to:
(a) The books and records of CHC and its subsidiaries;
(b) The reports of state and federal regulatory
examinations;
(c) Leases, contracts and commitments between CHC or any of
its subsidiaries and any other person;
(d) Physical examination of the Real Property; and
(e) Physical examination of the Equipment and Furnishings.
5.2 Conduct of Business. Between the date hereof and the
Effective Date, except as otherwise expressly approved in writing
by Rx Medical, CHC and its subsidiaries shall conduct their
businesses only in the ordinary course thereof consistent with
past practice and in such a manner that the representations and
warranties contained in Article 2 of this Agreement shall be true
and correct at and as of the Effective Date (except for changes
contemplated, permitted or required by this Agreement) and so that
the conditions to be satisfied by CHC at the Closing shall have
been
satisfied. CHC will, consistent with conducting its business
in accordance with reasonable business judgment, preserve the
business of CHC intact; use its best efforts to keep available to
Rx Medical and Acquisition Corp the services of the present
employees of CHC (except those dismissed for cause or those who
voluntarily discontinue their employment) and preserve for Rx
Medical and Acquisition Corp the goodwill of the suppliers,
patients and others having business relations with CHC.
5.3 Compliance with Agreement. CHC shall not undertake any
course of action inconsistent with satisfaction of the conditions
applicable to it set forth in this Agreement, and shall do all
such acts and take all such measures as may be reasonably
necessary to comply with the representations, agreements,
conditions and other provisions of this Agreement. CHC shall give
Rx Medical prompt written notice of any change in any information
contained in the representations and warranties made in Article 2
hereof and on the Exhibits referred to therein (provided, however,
that such notice shall not limit Rx Medical's rights under 7.1
hereof) and of any condition or event which constitutes a default
of any covenant or agreement made in Article 5 or in any other
section hereof.
5.4 Best Efforts to Secure Consents. CHC shall take the
necessary corporate and other action and shall use its best
efforts to secure before the Closing Date all necessary consents
and approvals required to carry out the transactions contemplated
by the Agreement and to satisfy all other conditions precedent to
the obligations of Rx Medical and Acquisition Corp and CHC.
5.5 Unusual Events. Until the Effective Date, CHC shall
supplement or amend all relevant Exhibits in the Exhibit Volume
with respect to any matter thereafter arising or discovered which,
if existing or known at the date of this Agreement, would have
been required to be set forth or described in such Exhibits.
5.6 Interim Financial Statements. Within 30 days after the
end of each calendar month subsequent to the date of this
Agreement and prior to the Effective Date, CHC shall deliver to Rx
Medical an unaudited consolidated balance sheet of CHC and its
subsidiaries as at the end of such calendar month together with
the related consolidated statement of operations. All such
financial statements shall fairly present the financial position,
results of operations and changes in financial periods indicated,
in accordance with generally accepted accounting principles
consistently applied, except that note information may be omitted
in such statements, subject to normal year-end audit adjustments,
but only if such adjustments are of a normal, recurring type and
are not material in the aggregate.
5.7 Departmental Violations. All notes or notices of
violations of law or municipal ordinances, orders or requirements
noted in or issued by the Departments of Buildings, Fire, Labor,
Health, or any other State or Municipal Department having
jurisdiction against or affecting the
business, property or assets of CHC shall be complied with
prior to the Closing Date. All such notes or notices, after the
date hereof and prior to the Closing Date, shall be complied with
by CHC prior to the Closing Date. Upon written request, CHC shall
furnish Rx Medical and Acquisition Corp with an authorization to
make the necessary searches for such notes or notices.
ARTICLE 6 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CHC
All obligations of CHC which are to be discharged under
this Agreement at the Closing are subject to the performance, at
or prior to the Closing, of all covenants and agreements contained
herein which are to be performed by Rx Medical and Acquisition
Corp at or prior to the Closing and to the fulfillment at, or
prior to, the Closing, of each of the following conditions (unless
expressly waived in writing by CHC at any time at or prior to the
Closing):
6.1 Representations and Warranties True. All of the
representations and warranties made by Rx Medical and Acquisition
Corp contained in Article 3 of this Agreement shall be true as of
the date of this Agreement, shall be deemed to have been made
again at and as of the date of Closing, and shall be true at and
as of the date of Closing in all material respects; Rx Medical and
Acquisition Corp shall have performed and complied in all material
respects with all covenants and conditions required by this
Agreement to be performed or complied with by them prior to or at
the Closing; and CHC shall have been furnished with a certificate
of the President or any Vice President of Rx Medical and
Acquisition Corp, dated the Closing Date, in such officer's
capacity, certifying to the truth of such representations and
warranties as of the Closing and to the fulfillment of such
covenants and conditions.
6.2 Authority. All action required to be taken by or on the
part of Rx Medical and Acquisition Corp to authorize the
execution, delivery and performance of this Agreement by Rx
Medical and Acquisition Corp and the Articles of Merger by
Acquisition Corp and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by the
Board of Directors of Rx Medical and Acquisition Corp.
6.3 No Obstructive Proceeding. No action or proceedings
shall have been instituted against, and no order, decree or
judgment of any court, agency, commission or governmental
authority shall be subsisting against CHC, or the officers or
directors of CHC, which seeks to, or would, render it unlawful as
of the Closing to effect the transactions contemplated hereby in
accordance with the terms hereof, and no such action shall seek
damages in a material amount by reason of the transactions
contemplated hereby. Also, no substantive legal objection to the
transactions contemplated by this Agreement shall have been
received from or threatened by any governmental department or
agency.
6.4 Delivery of Certain Certified Documents. At the Closing,
Rx Medical shall deliver to CHC copies of the Articles of
Incorporation of Rx Medical and Acquisition Corp certified (not
more than 30 days prior to the Closing Date) by the appropriate
governmental authorities and copies of resolutions of the Boards
of Directors of Rx Medical and Acquisition Corp and the consent of
Rx Medical as the sole stockholder of Acquisition Corp, certified
by the secretary or assistant secretary of Rx Medical and
Acquisition Corp approving and authorizing the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby.
6.5 Approval by Stockholders of CHC. The stockholders of CHC
shall have approved the Merger in accordance with the Mississippi
Business Corporation Act.
6.6 Proceedings and Documents Satisfactory. All proceedings
in connection with the transactions contemplated hereby and all
certificates and documents delivered to CHC pursuant to this
Agreement shall be satisfactory in form and substance to CHC and
its counsel acting reasonably and in good faith.
6.7 No Agency Proceedings. There shall not be pending or, to
the knowledge of Rx Medical, threatened, any claim, suit, action
or other proceeding brought by a governmental agency before any
court or governmental agency, seeking to prohibit or restrain the
transactions contemplated by this Agreement or material damages in
connection therewith.
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF RX
MEDICAL AND ACQUISITION CORP
All obligations of Rx Medical and Acquisition Corp which
are to be discharged under this Agreement at the Closing are
subject to the performance, at or prior to the Closing, of all
covenants and agreements contained herein which are to be
performed by CHC at or prior to the Closing and to the fulfillment
at or prior to the Closing of each of the following conditions
(unless expressly waived in writing by Rx Medical and Acquisition
Corp at any time at or prior to the Closing):
7.1 Representations and Warranties True; Right of Offset.
(a) All of the representations and warranties of CHC
contained in Article 2 of this Agreement shall be true and correct
as of the date of this Agreement, shall be deemed to have been
made again at and as of the Closing, and shall be true and correct
at and as of the date of Closing (without taking into account any
disclosures made by CHC to Rx Medical and Acquisition Corp
pursuant to 5.5 hereof). CHC shall have performed or complied
in all material respects with all covenants and conditions
required by this Agreement to be performed or complied with by it
prior to or at the Closing. Rx Medical and Acquisition Corp shall
be furnished with a certificate of the President or any Vice
President of CHC, dated the Closing Date, in such person's
corporate capacity,
certifying to the truth and accuracy of CHC's representaions
and warranties as of the time of the Closing and to the
fulfillment of such covenants and conditions. For the purposes of
this 7.1 only, CHC shall have breached its representations and
warranties hereunder (and shall be deemed not to have complied
with the covenants and conditions to be performed or complied with
by CHC hereunder) if such breach results in undisclosed
liabilities, claims, obligations, causes of action, losses,
damages or expenses (collectively, the "Losses"), determined
within six (6) months after the Effective Date, in excess of
$500,000.
(b) Rx Medical shall have a right of offset in the
amount of the Losses against the shares of Common Stock underlying
the Preferred Stock. The amount of the offset shall be determined
by (i) dividing the amount of the Losses by the Market Value per
share of the Common Stock (as defined in Appendix 1.2 attached
hereto on the date immediately preceding the date on which this
right of offset shall be effected), and (ii) reducing the number
of shares of Common Stock issuable upon conversion of the
Preferred Stock by the resulting number of shares of Common Stock
derived in (i) hereof.
7.2 No Obstructive Proceeding. No action or proceedings
shall have been instituted against, and no order, decree or
judgment of any court, agency, commission or governmental
authority shall be subsisting against Rx Medical, Acquisition Corp
or the officers or directors of Rx Medical or Acquisition Corp
which seeks to restrain, or would render it unlawful as of the
Closing to effect, the transactions contemplated hereby in
accordance with the terms hereof, and no such action shall seek
damages in a material amount by reason of the transaction
contemplated hereby. Also, no substantive legal objection to the
transactions contemplated by this Agreement shall have been
received from or threatened by any governmental department or
agency.
7.3 Proceedings and Documents Satisfactory. All proceedings
in connection with the transactions contemplated hereby and all
certificates and documents delivered to Rx Medical and Acquisition
Corp pursuant to this Agreement shall be satisfactory in form and
substance to Rx Medical and its counsel acting reasonably and in
good faith.
7.4 No Adverse Change. From the date of this Agreement until
the Closing, the operations of CHC and its subsidiaries shall have
been conducted in the ordinary course of business consistent with
past practice and from the date of the CHC Financial Statements
until the Closing; no event shall have occurred or have been
threatened which has or would have a material and adverse affect
upon the financial condition, assets, liabilities, operations, net
worth, prospects or business of CHC or any of its subsidiaries;
and CHC and its subsidiaries shall have not sustained any loss or
damage to their assets, whether or not insured, or union activity
that affects materially and adversely their ability to conduct
their businesses.
7.5 Approval by Stockholders of CHC. The stockholders
of CHC shall have approved the Merger in accordance with the
Mississippi Business Corporation Act.
7.6 Delivery of Certain Documents. At the Closing, CHC shall
have delivered to Rx Medical copies of the Articles of
Incorporation of CHC and its subsidiaries certified (not more than
30 days prior to the Closing Date) by the appropriate governmental
authorities and copies of resolutions of the stockholders of CHC
and of the Board of Directors of CHC, certified by the secretary
of CHC, approving and authorizing the execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby.
7.7 Estoppel Certificates. Rx Medical shall have such
estoppel certificates as it may deem necessary from the owners of
the managed facilities which are subject to all management
agreements held by CHC which reflect that such management
agreements are valid and enforceable, not in default, and
otherwise free of any material adverse contingency and from the
lessor of the Xxxxx County Hospital to the effect that the lease
is valid and subsisting, not in default and otherwise free of any
material adverse contingency.
7.8 Required Consents. Rx Medical shall have received all
consents necessary to its performance of this Agreement.
ARTICLE 8 TERMINATION
8.1 Optional Termination. This Agreement may be terminated
and the transactions contemplated hereby abandoned at any time
prior to the Effective Date, notwithstanding stockholder approval
as follows:
(a) By the mutual consent of Rx Medical and CHC; or
(b) By CHC, if any of the conditions set forth in Article 6
shall not have been met by July 7, 1995; provided that CHC shall
not be entitled to terminate this Agreement pursuant to this
8.1(b) if CHC's willful breach of this Agreement has prevented the
consummation of the transactions contemplated hereby; or
(c) By Rx Medical, if any of the conditions provided in
Article 7 hereof have not been met by July 7, 1995; provided that
Rx Medical shall not be entitled to terminate this Agreement
pursuant to this 8.1(c) if Rx Medical's willful breach of this
Agreement has prevented the consummation of the transactions
contemplated hereby.
8.2 Notice of Abandonment. In the event of such termination
by either Rx Medical or CHC pursuant to 8.1 above, written
notice shall forthwith be given to the other party hereto.
8.3 Mandatory Termination. If the Closing has not occurred
by July 7, 1995, this Agreement shall automatically terminate and
no longer be of any force or effect.
8.4 Termination. In the event this Agreement is terminated
as provided above, Rx Medical and Acquisition Corp shall deliver
to CHC all documents (and copies thereof in its possession)
concerning CHC and its subsidiaries previously delivered by CHC to
Rx Medical and Acquisition Corp; and none of the parties nor any
of their respective partners, stockholders, directors, or officers
shall have any liability to the other party for costs, expenses,
loss of anticipated profits, consequential damages, or otherwise,
except for any deliberate breach of any of the provisions of this
Agreement.
ARTICLE 9 INDEMNIFICATION
9.1 By CHC. CHC shall indemnify, defend, protect and hold
harmless Rx Medical, Acquisition Corp, and their affiliates,
promptly upon demand at any time and from time to time, against
any and all losses, liabilities, claims, actions, damages, and
expenses, including, without limitation, reasonable attorneys'
fees and disbursements incurred by Rx Medical and Acquisition Corp
or their affiliates, arising out of or in connection with any of
the following: (a) any misrepresentation or breach of any warranty
made by CHC in any document, certificate or instrument delivered
by CHC hereunder ("CHC Documents"); (b) any breach or
nonfulfillment of any covenant or agreement made by CHC in any of
CHC Documents; (c) the claims of any broker or finder engaged by
CHC; and (d) without in any manner limiting the foregoing, any
liabilities or obligations of, or claims or causes of action
against, CHC which arose prior to the Closing Date except those
which are set forth or reserved against in the CHC Financial
Statements or are set forth in an Exhibit in the Exhibit Volume,
or were incurred in the ordinary course of business as heretofore
conducted and are not materially adverse to the operations or
prospects of CHC's business.
9.2 By Rx Medical and Acquisition Corp. Rx Medical and
Acquisition Corp shall indemnify, defend, protect and hold
harmless CHC and its affiliates, promptly upon demand at any time
and from time to time, against any and all losses, liabilities,
claims, actions, damages, and expenses, including, without
limitation, reasonable attorneys' fees and disbursements incurred
by CHC or its affiliates, arising out of or in connection with any
of the following: (a) any misrepresentation or breach of any
warranty made by Rx Medical or Acquisition Corp in any document,
certificate or instrument delivered by RX Medical or Acquisition
Corp hereunder ("Rx Medical Documents"); (b) any breach or
nonfulfillment of any covenant or agreement made by Rx Medical or
Acquisition Corp in any of the Rx Medical Documents; (c) the
claims of any broker or finder engaged by Rx Medical or
Acquisition Corp; and (d) without in any manner limiting the
foregoing, any liabilities or obligations of, or claims or causes
of action against, Rx Medical or Acquisition Corp which arose
prior to the Closing Date except those which are set forth or
reserved against in the Rx Medical Financial Statements or are set
forth in an Exhibit in the Exhibit Volume,
or were incurred in the ordinary course of business as
heretofore conducted and are not materially adverse to the
operations or prospects of Rx Medical's or Acquisition Corp's
business.
9.3 Survival. All representations, warranties, indemnities,
covenants, and agreements made by CHC, Rx Medical and Acquisition
Corp in CHC's or Rx Medical's and Acquisition Corp's Documents
shall survive the closing hereof, notwithstanding any examination
or investigation made by or for any party.
9.4 Limitations. Notwithstanding the foregoing, CHC, on the
one hand, and Rx Medical and Acquisition Corp on the other (CHC,
on the one hand, and Rx Medical and Acquisition Corp on the other,
are each sometimes hereinafter referred to in this 9.4 as a
"party") shall only be entitled to indemnification for Losses
arising out of matters referred to in this Article 9 if it shall
have given written notice to the other party, setting forth its
claim for indemnification in reasonable detail, within the earlier
of three years after the date hereof or one year after the
discovery by it of its claim for indemnification.
9.5 Defense An indemnified party shall promptly give written
notice to the indemnifying party after the indemnified party has
knowledge that any legal proceeding has been instituted or any
claim has been asserted, in respect of which, indemnification may
be sought under the provisions of Article 9, provided that failure
to give such notice shall not preclude indemnification with
respect to such proceeding or claim except to the extent of any
additional or increased Losses directly caused by such failure.
If the indemnifying party, within ten days after the indemnified
party has given such notice (or within such shorter period of time
as an answer or other responsive motion may be required), shall
have acknowledged in writing its obligation to indemnify and shall
have furnished to the indemnified party a bond, letter of credit,
escrow or similar arrangement in an amount equal to the total
amount demanded in such claim or proceeding, then the indemnifying
party shall have the right to control the defense of such claim or
proceeding, and the indemnified party shall not settle or
compromise such claim or proceeding without the written consent of
the indemnifying party, which consent shall not unreasonably be
withheld or delayed.
ARTICLE 10 MISCELLANEOUS
10.1 Expenses. All expenses of the preparation of this
Agreement and of the transactions contemplated hereby, including,
without limitation, counsel fees, accounting fees, investment
adviser's fees and disbursements, shall be borne by the respective
parties incurring such expense, whether or not such transactions
are consummated.
10.2 Notices. All notices, demands and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if delivered in person or mailed by certified mail or
registered mail (postage prepaid) or sent by reputable overnight
courier service (charges prepaid):
To CHC: Consolidated Health Corporation of
Mississippi, Inc.
0000 Xxxxxxxx Xx.
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxx, Xx., CEO
with a copy to: H. Xxxxxxxxx Xxxxxxxxx
Boult, Cummings, Xxxxxxx & Xxxxx
000 Xxxxx Xx., Xxxxx 0000
Xxxxxxxxx, XX 00000
and a copy to: Xxxxxxxxx Technology, Inc.
000 Xxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
and a copy to: Boult, Cummings, Xxxxxxx & Xxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
To Rx Medical and Rx Medical Services Corp.
Acquisition Corp 000 Xxxx Xxx Xxxx Xxxx., Xxxxx
000
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
and a copy to: Proskauer Xxxx Xxxxx & Xxxxxxxxxx
0000 Xxxxxx Xxxx, Xxxxx 000 Xxxx
Xxxx Xxxxx, Xx 00000
Attention: Xxxxxxxxx X. Xxxxxx
or to such other address as either CHC or Rx Medical may
designate by notice to the other.
10.3 Entire Agreement. pursuant hereto constitute the entire
contract between the parties hereto pertaining to the subject
matter hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether
written or oral, of the parties, and there are no representations,
warranties or other agreements between the parties in connection
with the subject matter hereof, except as specifically set forth
herein. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the parties to be
bound thereby.
10.4 Governing Law. THE VALIDITY AND CONSTRUCTION OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MISSISSIPPI WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS
THEREOF.
10.5 Legal Fees and Costs. In the event either party elects
to incur legal expenses to enforce or interpret any provision of
this Agreement, the prevailing party will be entitled to recover
such legal expenses, including, without limitation, reasonable
attorneys' fees, costs and necessary disbursements, in addition to
any other relief to which such party shall be entitled.
10.6 CON Disclaimer. This Agreement shall not be deemed to
be an acquisition or obligation of a capital expenditure or of
funds within the meaning of the certificate of need law of any
state, until the appropriate governmental agencies shall have
granted a certificate of need or other appropriate approval or
ruled that no certificate of need or other appropriate approval
is required.
10.7 Time. Time is of the essence for purposes of each and
every provision of this Agreement.
10.8 Section Headings. The Section headings are for
reference only and shall not limit or control the meaning of any
provision of this Agreement.
10.9 Waiver. No delay or omission on the part of any party
hereto in exercising any right hereunder shall operate as a waiver
of such right or any other right under this Agreement.
10.10 Nature and Survival of Representations. All
representations and warranties contained in any certificate or
other instrument delivered pursuant hereto by or on behalf of CHC
or by or on behalf of Rx Medical, shall be deemed to be
representations and warranties made pursuant to this Agreement by
the delivering party. All representations or warranties made by
the parties shall survive until December 31, 1996.
10.11 Exhibits. All Exhibits, Appendices, schedules and
documents referred to in or attached to this Agreement are
integral parts of this Agreement as if fully set forth herein and
all statements appearing therein shall be deemed to be
representations. All items disclosed hereunder shall be deemed
disclosed only in connection with the specific representaion to
which they are explicitly referenced.
10.12 Assignment. No party hereto shall assign this
Agreement without first obtaining the written consent of the other
party.
10.13 Binding on Successors and Assigns. Subject to 10.12,
this Agreement shall inure to the benefit of and bind the
respective heirs, administrators, successors and assigns of the
parties hereto. Nothing expressed or referred to in this
Agreement is intended or shall be construed to give
any person other than the parties to this Agreement or their
respective successors or permitted assigns any legal or equitable
right, remedy or claim under or in respect of this Agreement or
any provision contained herein, it being the intention of the
parties to this Agreement that this Agreement shall be for the
sole and exclusive benefit of such parties or such successors and
assigns and not for the benefit of any other person.
10.14 Parties in Interest. Nothing in this Agreement is
intended to confer any right on any person other than the parties
to it and their respective successors and assigns, nor is anything
in this Agreement intended to modify or discharge the obligation
or liability of any third person to any party to this Agreement,
nor shall any provision give any third person any right of
subrogation or action over against any party to this Agreement.
10.15 Amendments. This Agreement may be amended, but only in
writing, signed by the parties hereto, at any time prior to the
Closing, before or after approval hereof by the stockholders of
CHC, with respect to any of the terms contained herein, but after
such stockholder approval, no amendment shall be made which
reduces the consideration per share paid each such stockholder
without the further approval of such stockholders.
10.16 Drafting Party. The provisions of this Agreement, and
the documents and instruments referred to herein, have been
examined, negotiated, drafted and revised by counsel for each
party hereto and no implication shall be drawn nor made against
any party hereto by virtue of the drafting of this Agreement.
10.17 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but
all of which together shall comprise one and the same instrument.
10.18 Press Releases. Rx Medical, Acquisition Corp and
CHC shall cooperate with each other in releasing information
concerning this Agreement and the transactions contemplated
hereby. Where practicable, each of the parties to this Agreement
shall furnish to the others drafts of all releases prior to
publicaion. Nothing contained in this Agreement shall prevent any
party to this Agreement at any time from furnishing any
information to any governmental body or agency.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above
written.
RX MEDICAL SERVICES CORP.
By
Its
Name
CHC ACQUISITION CORPORATION
By
Its
Name
CONSOLIDATED HEALTH CORPORATION OF MISSISSIPPI, INC.
By
Its
Name
AGREEMENT OF STOCKHOLDERS
Each of the undersigned
stockholders of CHC hereby:
1. Severally joins in
the representations of CHC contained in the above Agreement for
Statutory Merger (the "Agreement") and agrees to be liable up to
the extent of any consideration received by such stockholder
pursuant to 1.2 of the Agreement for any breach of such
representation which such stockholder knew to be false;
2. Certifies that (i) such stockholder is
acquiring the Rx Preferred Stock and/or Common Stock for his or
her own account, with the intent of holding such securities for
investment, and without the intent of participating, directly or
indirectly, in a distribution of such securities in any manner
which would violate federal or applicable state securities laws;
(ii) such stockholder by reason of such stockholder's or
financial
experience, has the capacity to protect his or her interests in
connection with the purchase of such securities; (iii) upon
receipt of such securities, such stockholder will be the
respective sole beneficial owner thereof and (iv) such
stockholder
acknowledges that the offer and sale of such securities have not
been and will not be accomplished or accompanied by the means of
any form of general or public solicitations or advertisements.
3. Hereby waives all rights such stockholder
has under Article 13 of the Mississippi Business Corporation Act
to receive payment of fair value for CHC Common or Preferred
Stock
held by such stockholder; and
4. Hereby agrees to vote all shares
held by such stockholder in favor of the merger
contemplated by the Agreement.
IN WITNESS WHEREOF, we have executed this Agreement of
Stockholders as of this 23rd day of June, 1995.
Xxx X. Xxxxx, Xx. Xxxxxxxx Xxxx
2,020 Shares of Common Stock 410 Shares of Common
Stock
Xxxxxxxxx Technologies,
Inc.
Xxx Xxxxxxx
100 Shares of Common Stock
By
Name:
Title
3,000 Shares of Common
Stock
1,500 Shares of Preferred
Stock
LIST OF APPENDICES
Number Description
1.2 Attributes of Rx Medical
Preferred Stock
LIST OF EXHIBITS
Number Description
2.2 Equity Securities of CHC
in addition to its capital stock
2.3A List of subsidiaries of CHC
2.3B Articles of Incorporation and Bylaws of each
subsidiary of CHC
2.4 CHC Financial Statements
2.5 CHC liabilities to insiders
2.6 Letters of Credit
2.7 Exceptions to Absence of Recent Changes
Representation
2.9A Recent title report respecting CHC's real
property
2.9B Recent UCC report on CHC's other assets
2.10 Copies of Contracts of CHC and its
subsidiaries
2.17 Powers of Attorney
2.18 Guarantees
2.19 Permits and licenses
2.20 Litigation
2.24 Last two federal and state income tax returns
of CHC
2.25 List of Insurance coverages
2.26 List of highly compensated CHC employees
2.27 List of CHC ERISA plans
2.32(a)-1 Exceptions to License Compliance Representation
2.32(a)-2 Copy of Hospital License
2.32(b) Blue Cross Contract
2.32(c) Medicare contract
2.32(d) Medicaid contract
2.32(f) Notices of zoning and other violations
2.32(g) Health Department Surveys
2.32(h) Medical Staff Bylaws
3.4 List of Rx Medical Subsidiaries
3.8 Rx Medical defaults
3.9 Rx Medical litigation
3.10 Rx Medical court orders etc.
3.11 Exceptions to Rx Medical tax representation
3.13 Exception to Rx Medical SEC compliance
representation
