EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of December
15, 1999, by and among PHOENIX HEALTHCARE CORPORATION, a Delaware corporation
("Purchaser"), XXXXXX X. XXXX ("Xxxx") and CAREKEEPER SOFTWARE, INC., a Georgia
corporation ("CareKeeper") (Xxxx and CareKeeper are hereinafter referred to
collectively as "Sellers").
RECITALS:
WHEREAS, Sellers collectively own one hundred percent (100%) of the
issued and outstanding shares of the capital stock (the "Shares") of Healthcare
Information Technologies, Inc., a Delaware corporation (the "Company");
WHEREAS, Xxxx owns ninety-five percent (95%) of the Shares and is the
sole director and President of the company;
WHEREAS, CareKeeper owns five percent (5%) of the Shares and is a
passive investor exercising no control or authority over the Company;
WHEREAS, the Company is engaged in the business of managing data, media
and communications systems (the "Business"); and
WHEREAS, Sellers desires to sell the Shares to Purchaser, and Purchaser
desires to purchase the Shares from Sellers, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and conditions herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
SALE AND TRANSFER OF SHARES
1.1 PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Sellers shall sell, convey, transfer and deliver to Purchaser at the
Closing (as hereinafter defined), and Purchaser shall purchase and accept, all
of the Shares, free and clear of all security interests, liens, charges,
pledges, claims, demands or encumbrances (collectively, "Encumbrances"). Sellers
shall deliver to Purchaser at the Closing stock certificates representing the
Shares duly endorsed by Sellers for transfer to Purchaser as of the Closing
Date.
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1.2 PURCHASE PRICE. The purchase price for the Shares (the "Purchase
Price") shall be an aggregate of six million five hundred thirteen thousand one
hundred fifty-eight (6,513,158) shares of Purchaser Common Stock, $.001 par
value, payable to each Seller as follows:
(a) Xxxx: six million one hundred eighty-seven thousand five
hundred (6,187,500) shares; and
(b) CareKeeper: three hundred twenty-five thousand six
hundred fifty-eight (325,658) shares.
1.3 CLOSING. The closing hereunder (the "Closing") shall take place at
0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx, on December 15, 1999 (the "Closing
Date"), or at such later date as mutually agreed to by the parties.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to execute this Agreement and to enter
into the transactions contemplated by this Agreement, Xxxx (and CareKeeper as
expressly indicated herein) represents and warrants to Purchaser that:
2.1 ORGANIZATION, GOOD STANDING AND AUTHORITY OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has full authority and
power to carry on its business as it is now conducted, and to own, lease and
operate the assets owned, leased or operated by it. The Company is qualified to
do business and is in good standing and has all required and appropriate
licenses in each jurisdiction in which its failure to obtain or maintain such
qualification, good standing or licensure would have a material and adverse
impact on the condition (financial or otherwise), assets, properties or
prospects of the Business.
2.2 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the fulfillment of the terms hereof will not violate or result in a
breach of any of the terms or provisions of, or constitute a default (or any
event which, with notice or the passage of time, or both, would constitute a
default) under, or conflict with or result in the termination of, or accelerate
the performance required by, (i) any agreement, indenture or other instrument to
which the Company or a Seller is a party or by which it is bound, (ii) the
Certificate of Incorporation, Bylaws or similar organizational documents of the
Company or CareKeeper, (iii) any judgment, decree, order or award of any court,
governmental body or arbitrator by which the Company, Xxxx or
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CareKeeper is bound, or (iii) any law, rule or regulation applicable to the
Company, Xxxx or CareKeeper.
2.3 NO LEGAL BAR. Neither Xxxx nor CareKeeper are prohibited by any
order, writ, injunction or decree of any body of competent jurisdiction from
consummating the transactions contemplated by this Agreement and all other
agreements referenced herein, and no action or proceeding is pending against
Xxxx or CareKeeper which questions the validity of this Agreement or any such
other agreements, any of the transactions contemplated hereby or thereby or any
action which has been taken by any of the parties in connection herewith or
therewith or in connection with any of the transactions contemplated hereby or
thereby.
2.4 TITLE; POSSESSION. Xxxx and CareKeeper have good and marketable
title to the Shares being transferred hereby and there are no Encumbrances
whatsoever with respect thereto.
2.5 AUTHORIZATION. Xxxx and CareKeeper have full capacity, power and
authority to enter into this Agreement and all other agreements referenced
herein, and Xxxx and CareKeeper have been duly authorized to execute, endorse
and deliver the stock certificates representing the Shares. This Agreement and
each other agreement and instrument to be executed by Xxxx and CareKeeper in
connection herewith have been (or upon execution will have been) duly executed
and delivered by Xxxx and CareKeeper, have been (or upon execution will have
been) effectively authorized by all necessary corporate action on behalf of
CareKeeper and constitute (or upon execution will constitute) legal, valid and
binding obligations of Xxxx and CareKeeper, enforceable against each of them in
accordance with their respective terms.
2.6 CAPITALIZATION. The authorized equity securities of the Company
consist of one thousand (1,000) shares of Common Stock, par value $1.00, of
which one hundred (100) shares are issued and outstanding and constitute the
Shares. Xxxxxx X. Xxxx owns ninety-five (95) shares and CareKeeper owns five (5)
shares. There is no agreement, contract, obligation, promise or undertaking
(whether written or oral, expressed or implied) relating to the issuance, sale
or transfer of any equity securities or other securities of the Company.
2.7 FINANCIAL STATEMENTS. Except as disclosed on Schedule 2.7 attached
hereto, the unaudited financial statements of the Company (the "Financial
Statements") are substantially complete and correct in all material respects as
of the respective dates and for the respective periods.
2.8 ABSENCE OF CERTAIN CHANGES. EXCEPT AS DISCLOSED ON SCHEDULE 2.8
attached hereto or as otherwise provided for or contemplated in this Agreement,
since the date of the most recent Financial Statements, there has not been any
(i) transaction or occurrence relating to the
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Company or the Business other than in the ordinary course of business, (ii) sale
or disposition of any assets or property of the Company other than in the
ordinary course of business, or (iii) event or condition of any character which
could have or has had a material and adverse effect on the condition (financial
or otherwise), assets, properties, customer or employee relations or prospects
of the Company.
2.9 PERSONAL PROPERTY. The Company owns or has the right to use, free
and clear of any Encumbrance, all of the tangible and intangible personal
property now used by it in the operation of the Business or the use of which is
necessary for the performance of any contract or proposal to which the Company
is a party, including, but not limited to, the End User Software License
Agreement No. PD2393 between the Company, as licensee, and CareKeeper, as
licensor, computer software and programs, software in progress, computer
operating systems and applications, United States and foreign patents, patent
applications, trade names, trademarks, trade name and trademark registrations,
copyright registrations and applications for any of the foregoing and all
licenses or similar agreements or arrangements to which the Company is a party
either as licensee or licensor for each such item of intangible personal
property. The Company owns or has the right to use, free and clear of any
Encumbrance, such intangible personal property.
2.10 TAXES. Except as disclosed on Schedule 2.10 Attached hereto:
(a) Within the times and in the manner prescribed by law,
the Company has filed all federal, state and local tax returns (including
information returns) and all tax returns for foreign countries, provinces and
other governmental bodies having jurisdiction to levy taxes upon the Company,
and has paid all taxes shown to be due to any taxing authority with respect to
all periods ending prior to the Closing Date;
(b) All tax returns filed by the Company through the Closing
Date constitute complete and accurate representations of the tax liabilities of
the Company as appropriate for such years and accurately sets forth all items
(to the extent required to be included or reflected in such returns) relevant to
its future tax liabilities, including the tax bases of its properties and
assets; and
(c) All deposits and payments of taxes required to be made
have been fully paid and deposited in a timely manner.
As used in this Section 2.10, the term "taxes" shall include all
federal, state, local, foreign or other income, gross profits, payroll, workers'
compensation, unemployment, withholding,
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excise, sales, use, property, ad valorem or other taxes of any kind or nature
whatsoever, together with any penalties or interest applicable thereto.
2.11 LITIGATION. Except as disclosed on SCHEDULE 2.11 Attached hereto,
there is no action, suit, proceeding or investigation to which the Sellers or
the Company is a party (either as plaintiff or defendant) presently pending
(which, in the case of Sellers, might result, directly or indirectly, in any
loss, claim, liability, obligation, expense or other damage to Purchaser), nor
has any such action, suit, proceeding or investigation been pending at any time
since January 1, 1998, before any court or governmental agency, authority or
body or arbitrator; to the best knowledge of Sellers, there is no action, suit,
proceeding or investigation threatened against the Sellers and to the best
knowledge of Xxxx, there is no action, suit, proceeding or investigation
threatened against the Company and there is no basis for any such action, suit,
proceeding or investigation with respect to the Sellers or the Company.
2.12 COMPLIANCE WITH LAWS. The Company is in and always has been in
compliance in all material respects with all applicable federal, state and local
laws, regulations and rules, ordinances and administrative orders (collectively,
"Laws"), including such Laws affecting the conduct of the Business and ownership
of the Company's assets or properties.
2.13 NO UNDISCLOSED LIABILITIES. Except as and only to the extent
specifically reflected or reserved against in the Financial Statements, and
except for ongoing operating expenses incurred in the ordinary course of the
Business, to the best knowledge of Xxxx, the Company has no obligations of a
material nature, whether absolute, accrued, contingent or otherwise, or whether
due or to become due (including, without limitation, any liability for taxes,
interest, penalties or other charges payable with respect to any such
liability), except as specifically set forth elsewhere in this Agreement or in
the Schedules attached hereto.
2.14 SELLERS' INVESTIGATION AND EXPERIENCE. Sellers acknowledge that
Purchaser is making no representations or warranties whatsoever with respect to
the value of the Purchase Price or the rights provided by the Purchase Price to
a holder thereof. Sellers further acknowledge that prior to the Closing
Purchaser has made available to Sellers an adequate opportunity to ask questions
and receive answers from any person authorized to act on behalf of Purchaser
regarding Purchaser, its operations, business, financial condition and
prospects, and that all documents, records, books and other information
pertaining to Purchaser and the value of the Purchase Price requested by the
Sellers have been made available or delivered to Sellers to the extent Purchaser
possesses such documents, records, books and other information pertaining to
Purchaser or can acquire such without unreasonable expense or effort. Sellers
have
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undertaken any and all investigation with respect to Purchaser and the Purchase
Price which Sellers deem necessary or desirable with respect to the transactions
contemplated herein and is relying solely on their investigation as to the value
of the Purchase Price and the risks of ownership thereof. Sellers have
substantial experience in investments comparable to an investment in the
Purchase Price, have the resources necessary and appropriate to assume the risks
of an investment in the Purchase Price and to protect their interests therein,
and have been advised by legal counsel with respect to the transactions
contemplated herein.
2.15 INVESTMENT INTENT. Sellers are receiving the Purchase Price for
their own account and not on behalf of any other person. Sellers are receiving
the Purchase Price for investment and not with a view to distribution or with
the intent to divide its participation with others by reselling or otherwise
distributing the Purchase Price. Sellers understand that the Purchase Price is
being transferred hereunder without registration under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws, by
reason of its issuance in a transaction exempt from the registration
requirements of the 1933 Act and such state laws, and that it must be held for
at least one (1) year unless it is subsequently registered under the 1933 Act
and such state laws, or such subsequent disposition thereof is exempt from
registration. Each Seller is an "accredited investor" within the meaning of Rule
501, promulgated under the 0000 Xxx.
2.16 LEGEND. Each certificate representing the Purchase Price shall
bear the following legend, or a similar legend reasonably deemed by the
Purchaser to constitute an appropriate notice of the provisions hereof and the
applicable securities laws (any such certificate not having such legend shall be
surrendered upon demand by the Purchaser and so endorsed):
On the face of the certificate:
TRANSFER OF THIS STOCK IS RESTRICTED IN ACCORDANCE WITH
CONDITIONS PRINTED ON THE REVERSE OF THIS CERTIFICATE.
On the reverse of the certificate:
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED BY THE HOLDER FOR INVESTMENT PURPOSES ONLY AND NOT FOR
RESALE, TRANSFER OR DISTRIBUTION, HAVE BEEN ISSUED PURSUANT TO
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF APPLICABLE
STATE AND FEDERAL SECURITIES LAWS, AND MAY NOT BE OFFERED FOR
SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO EFFECTIVE
REGISTRATION UNDER SUCH LAWS, OR IN TRANSACTIONS OTHERWISE IN
COMPLIANCE WITH OR EXEMPT FROM SUCH LAWS, AND UPON EVIDENCE
REASONABLY SATISFACTORY TO THE
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COMPANY OF COMPLIANCE WITH OR EXEMPTION FROM SUCH LAWS, AS TO
WHICH THE COMPANY MAY RELY UPON AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY.
2.17 NO BROKERAGE FEES. Sellers have not dealt with, nor are
obligated to make any payment to, any finder, broker, investment banker or
financial advisor in connection with any of the transactions contemplated by
this Agreement and all other agreements referenced herein, or the negotiations
looking toward the consummation of such transactions contemplated hereby or
thereby.
2.18 NO MISSTATEMENTS OR OMISSIONS. To the best of Xxxx'x and
CareKeeper's knowledge no representation, warranty or disclosure made by Xxxx or
CareKeeper, as applicable, to Purchaser or Purchaser's representatives is or
will be false or misleading as to any material fact or omits or will omit to
state a material fact necessary to make the statements contained therein not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Sellers to execute this Agreement and to enter into
the transactions contemplated by this Agreement, Purchaser represents and
warrants to Sellers that:
3.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has full authority and power to carry on
its business as it is now conducted, and to own, lease and operate the assets
owned, leased or operated by it. The Agreement has been duly authorized,
executed and delivered by Purchaser and constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms.
3.2 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the fulfillment of the terms hereof will not violate or result in a
breach of any of the terms or provisions of, or constitute a default (or any
event which, with notice or the passage of time, or both, would constitute a
default) under, or conflict with or result in the termination of, or accelerate
the performance required by, (i) any agreement, indenture or other instrument to
which Purchaser is a party or by which it is bound, (ii) the Certificate of
Incorporation, Bylaws or similar organizational documents of Purchaser, (iii)
any judgment, decree, order or award of any court, governmental body or
arbitrator by which Purchaser is bound, or (iv) any law, rule or regulation
applicable to Purchaser.
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3.3 NO LEGAL BAR. Purchaser is not prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from consummating the
transactions contemplated by this Agreement and all other agreements referenced
herein, and no action or proceeding is pending against Purchaser which questions
the validity of this Agreement or any such other agreements, any of the
transactions contemplated hereby or thereby or any action which has been taken
by any of the parties in connection herewith or therewith or in connection with
any of the transactions contemplated hereby or thereby.
3.4 CAPITALIZATION. The authorized capital stock of Purchaser
consists of (i) 50,000,000 shares of Purchaser Common Stock, $.001 par value, of
which, as of September 30, 1999, 27,440,337 shares are issued and outstanding,
and (ii) 5,000,000 shares of Purchaser Preferred Stock, $.001 par value, of
which, as of the Closing Date, 533,333 Series A shares and 100,000 Series B
shares are issued and outstanding. All of the issued and outstanding shares of
Purchaser's capital stock are, and all shares comprising the Purchaser Price
shall be, validly issued, fully paid and non-assessable.
3.5 NO BROKERAGE FEES. Purchaser has not dealt with, nor is
obligated to make any payment to, any finder, broker, investment banker or
financial advisor in connection with any of the transactions contemplated by
this Agreement and all other agreements referenced herein, or the negotiations
looking toward the consummation of such transactions contemplated hereby or
thereby.
3.6 NO MISSTATEMENTS OR OMISSIONS. To the best of Purchaser's
knowledge, no representation, warranty or disclosure made by Purchaser to
Sellers or Sellers' representatives is or will be false or misleading as to any
material fact or omits or will omit to state a material fact necessary to make
the statements contained therein not misleading.
ARTICLE IV
INDEMNIFICATION
4.1 INDEMNIFICATION BY XXXX. Xxxx hereby agrees to indemnify and
hold Purchaser, its officers, directors, controlling persons and agents,
harmless from and against any claim, liability, obligation, loss or other damage
(including, without limitation, reasonable attorneys' fees and expenses)
asserted against, imposed upon or incurred by Purchaser, its officers,
directors, controlling persons and agents, arising out of any inaccuracy in or
breach of any of the representations and warranties set forth in Article II of
this Agreement.
4.2 INDEMNIFICATION BY PURCHASER. Purchaser hereby agrees to
indemnify and hold Sellers harmless from and against any claim, liability,
obligation, loss or other damage
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(including, without limitation, reasonable attorneys' fees and expenses)
asserted against, imposed upon or incurred by a Seller arising out of any
inaccuracy in or breach of any of Purchaser's representations and warranties set
forth in Article III of this Agreement.
4.3 CLAIMS PROCESS. As soon as is reasonably practicable after
Purchaser or a Seller becomes aware of any claim that it has which is covered
under this Article IV, Purchaser or the Seller, as the case may be ("Indemnified
Party") shall notify the other party ("Indemnifying Party") in writing, which
notice shall describe the claim in reasonable detail, and shall indicate the
amount (estimated, if necessary to the extent feasible) of the claim. In the
event of a third party claim which is subject to indemnification under this
Article IV, the Indemnifying Party shall promptly defend such claim by counsel
of its own choosing, subject to the approval of the Indemnified Party, which
approval shall not unreasonably be withheld or delayed, and the Indemnified
Party shall cooperate with the Indemnifying Party in the defense of such claim,
including the settlement of the matter on the basis stipulated by the
Indemnifying Party (with the Indemnifying Party being responsible for all costs
and expenses of such settlement). Any such settlement shall include a complete
and unconditional release of the Indemnified Party from the claim.
4.4 SURVIVAL; CLAIMS. The representations and warranties set forth
in Articles II and III above, and the indemnification rights set forth in this
Article IV, shall survive for a period of one (1) year after the date hereof. No
party shall have any liability for any breach of any representation or warranty
set forth herein unless the other party shall have given it written notice of
such breach promptly upon becoming aware of same and prior to the first
anniversary of the date of this Agreement. Such notice shall identify the
applicable Section of this Agreement, the alleged breach and the amounts for
which the indemnitor is alleged to be liable in detail. The indemnitor shall be
entitled to assume the defense of any third-party claim, provided that it admits
in writing its obligation to indemnify the indemnitee for such claim.
ARTICLE V
MISCELLANEOUS
5.1 EXPENSES. Each party hereto shall bear and pay all costs and
expenses incurred by it in connection with the transactions contemplated by this
Agreement including, without limitation, fees, costs and expenses of its own
financial CONSULTANTS, accountants and counsel.
5.2 ATTORNEYS' FEES. In the event any party brings an action to
enforce this Agreement, the prevailing party or parties in such action shall be
entitled to recover reasonable costs incurred in connection therewith, including
reasonable attorneys' fees.
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5.3 ENTIRE AGREEMENT. This Agreement (including all Exhibits hereto)
supersedes any and all other agreements, oral or written, between the parties
hereto with respect to the subject matter hereof, and contains the entire
agreement between such parties with respect to the transactions contemplated
hereby. No party to this Agreement shall be entitled to rely on any
representation, warranty or agreement not set forth in this Agreement.
5.4 AMENDMENTS. This Agreement shall not be modified or amended
except by an instrument in writing signed by or on behalf of all of the parties
hereto.
5.5 SUCCESSORS; ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted transferees and assignees. Neither
this Agreement nor any interest herein may directly or indirectly be transferred
or assigned by any party, in whole or in part, without the written consent of
the other parties, which consent shall not be unreasonably withheld.
5.6 NOTICES. Any notice, demand or request required or permitted to
be given under the provisions of this Agreement shall be in writing and shall be
deemed to have been duly given on the earlier of (a) the date actually received
by the party in question, by whatever means and however addressed, or (b) the
date sent by telecopy, or on the date of personal delivery, if delivered by
hand, or on the date signed for if sent, prepaid, by Federal Express or similar
nationally-recognized overnight delivery service, to the following addresses, or
to such other addresses as either party may request, in the case of Seller, by
notifying Purchaser, and in the case of Purchaser, by notifying Seller:
If to Purchaser: Phoenix Healthcare Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000 Xxxxxx,
XX 00000
Attn: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copies to: Xxxx Xxxxx Xxxx & XxXxxx LLP
0000 X Xxxxxx, X.X.
Xxxxx 0000 - Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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If to Xxxxxx X. Xxxx: Xxxxxx X. Xxxx
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to CareKeeper: CareKeeper Software, Inc.
Xxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copies to: Xxxxxx, Xxxxxxx & Xxxxxx, P.C.
0000 Xxxxxx Xxxxx Xxxx, XX
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxx Xxxx
Telephone: (000) 000-0000
5.7 WAIVER. No waiver hereunder shall be valid unless set forth in
writing.
5.8 SEVERABILITY. In the event that any term or provision of this
Agreement or any application thereof shall be held by a tribunal of competent
jurisdiction to be unlawful or unenforceable, the remainder of this Agreement
and any other application of such term or provision shall continue in full force
and effect and the parties shall endeavor to replace the unlawful or
unenforceable provision with one that is lawful and enforceable and which gives
the fullest effect to the intent of the parties as expressed herein.
5.9 NO THIRD PARTY BENEFICIARY. This Agreement is for the benefit
of, and may be enforced only by, Seller and Purchaser, and their respective
successors and permitted transferees and assignees, and is not for the benefit
of, and may not be enforced by, any third party.
5.10 APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with, the laws of the State of Texas,
without regard to the conflicts of laws provisions thereof.
5.11 CONSTRUCTION. The titles and headings to sections herein are
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The parties
acknowledge that each party and its counsel have reviewed and revised this
Agreement and that consequently any rule of construction to the effect
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that any ambiguities are to be resolved against the drafting party is not
applicable in the interpretation of this Agreement or any exhibits or schedules
hereto.
5.12 REFERENCES TO BEST KNOWLEDGE. All references in this Agreement
to the best knowledge of Sellers shall mean the knowledge or awareness of the
Sellers. Each such individual shall be deemed to have "knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter.
5.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Stock Purchase
Agreement to be duly executed as of the date and year first above written.
PHOENIX HEALTHCARE CORPORATION:
BY: /s/
-------------------------------------
Name: Xxxxxx X. Xxxx
Its: Chairman and Chief Executive Officer
XXXXXX X. XXXX:
/s/
-------------------------------------
CAREKEEPER SOFTWARE, INC.:
BY: /s/
-------------------------------------
Name: Xxxx Xxxx
Its: President
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SCHEDULES
2.7 Financial Statements
2.8 Changes in Business
2.10 Taxes
2.11 Litigation
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PHOENIX HEALTHCARE CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1999
(Unaudited)
Previously Pro Forma Pro Forma
Reported Adjustments Restated
----------- ----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 148,712 (45,601) 103,111
Accounts receivable, net 6,188,210 (6,188,210) --
Inventory 2,662,852 (2,662,852) --
Prepaid expenses and other
current assets 71,712 (70,724) 988
----------- ----------- -----------
Total current assets 9,071,486 (8,967,387) 104,099
PROPERTY AND EQUIPMENT, net 1,057,661 (1,057,661) --
OTHER ASSETS
Intangible assets, net 2,442,353 (2,042,353) 400,000
----------- ----------- -----------
TOTAL ASSETS 12,571,500 (12,067,401) 504,099
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable, banks and other 4,564,137 (4,564,137) --
Accounts payable 4,458,802 (3,413,065) 1,045,737
Due to Stockholder 1,059,539 -- 1,059,539
Accrued expenses and other
current liabilities 4,973,858 (4,556,868) 416,990
Net current liabilities of
discontinued operations 6,837,513 66,669 6,904,182
----------- ----------- -----------
Total current liabilities 21,893,849 (12,467,401) 9,426,448
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, $.001 par value,
5,000,000 shares authorized:
Series A, 533,333 shares issued
and outstanding 533 -- 533
Series B, 100,000 shares issued
and outstanding 100 -- 100
Common Stock, $.001 par value,
50,000,000 shares authorized 27,440 6,513 33,953
Additional Paid In Capital 37,327,182 393,487 37,720,669
Accumulated Deficit (46,677,604) -- (46,677,604)
----------- ----------- -----------
(9,322,349) 400,000 (8,922,349)
=========== =========== ===========
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) 12,571,500 (12,067,401) 504,099
=========== =========== ===========
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PHOENIX HEALTHCARE CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1999
(Unaudited)
Previously Proforma Proforma
Reported Adjustments Restated
----------- ----------- -----------
Operating revenue 9,188,301 (9,188,301) --
Operating expenses:
Ancillary services 10,990,592 (10,990,592) --
General and administrative 1,325,314 -- 1,325,314
Interest expense 802,698 (747,936) 54,762
Property lease expense 268,061 (268,061) --
Depreciation and amortization
expense 518,558 (518,558) --
----------- ----------- -----------
13,905,223 (12,525,147) 1,380,076
----------- ----------- -----------
Income (loss) from continuing
operations before other
income (expense) and
discontinued operations (4,716,922) 3,336,846 (1,380,076)
Other income (expense)
Interest income and other
income (expense) (28,985) (171,300) (200,285)
----------- ----------- -----------
Income (loss) from continuing
operations before
discontinued operations (4,745,907) 3,165,546 (1,580,361)
Discontinued operations:
Income (loss) from
discontinued operations 180,277 (3,165,546) (2,985,269)
Net gain on disposition of
property interests and
settlement of corporate
obligations 1,471,828 -- 1,471,828
----------- ----------- -----------
1,652,105 (3,165,546) (1,513,441)
----------- ----------- -----------
NET LOSS (3,093,802) (3,093,802)
=========== ===========
Basic and diluted loss per share
Continuing operations (0.20) (0.07)
Discontinued operations 0.07 (0.06)
----------- ----------- -----------
Loss per Common Share (0.13) -- (0.13)
=========== ----------- ===========
Weighted average number of shares
of common stock and equivalents
outstanding 24,564,613 24,564,613
=========== ===========
-20-
PHOENIX HEALTHCARE CORPORATION7
NOTES TO PRO FORMA FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
The accompanying financial statements have been adjusted to reflect the pro
forma effect of the disposition of OHI Corporation ("OHI") effective on August
10, 1999; the disposition of Southland Medical Supply, Inc. ("Southland")
effective on November 24, 1999; the disposition of Trinity Rehab, Inc.
("Trinity") on November 24, 1999; and the acquisition of Healthcare Information
Technologies, Inc. ("HIT") on December 15, 1999. The disposition of OHI was
previously reported as discontinued operations for the period ended September
30, 1999. The accompanying pro forma adjustments have been made to the
consolidated financial statements previously filed by the Registrant for the
period ended September 30, 1999 and reported on Form 10Q. The principal
components of the pro forma adjustments are as follows.
CONSOLIDATED BALANCE SHEET
Current assets are reduced by $8,967,387 representing accounts associated with
Southland and Trinity in the amounts of $6,136,164 and $2,331,223, respectively,
as well as residual accounts receivable associated with OHI in the amount of
$500,000. The principal components of Southland accounts include accounts
receivable and inventory in the amounts of $3,373,987 and $2,662,852,
respectively. Trinity accounts include accounts receivable in the amount of
$2,331,223. Substantially all accounts receivable and inventory is being
liquidated to satisfy secured creditor obligations of Southland and Trinity.
Property and equipment is being reduced by furniture, fixtures and equipment
associated with Southland in the amount of $1,057,661. These assets are being
liquidated to satisfy secured creditor obligations of Southland.
Intangible assets associated with Southland and Trinity in the aggregate net
amount of $2,442,353 are written off in connection with discontinuing related
business operations.
Current liabilities are reduced by $12,467,401 representing the related accounts
associated with Southland and Trinity. Notes payable, banks and other totaling
$4,564,137 include accounts associated with Southland and Trinity in the amounts
of $3,046,817 and $1,517,320 respectively. Accounts payable totaling $3,413,065
include accounts associated with Southland and Trinity in the amounts of
$2,943,751 and $469,314, respectively. Accrued expenses and other current
liabilities totaling $4,556,868 associated with Southland and Trinity include
$1,761,868 and 2,795,000, respectively. The net current liabilities of all
discontinued operations reported on a pro forma basis at September 30, 1999
total $6,904,182.
-21-
PHOENIX HEALTHCARE CORPORATION
NOTES TO PRO FORMA FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
CONSOLIDATED BALANCE SHEET - CONTINUED
Stockholders' equity is increased by $400,000 representing the intangible asset
valuation of license rights resulting from the acquisition of HIT. This reflects
the valuation attributable to the issue of 6,513,158 shares of common stock on
December 15, 1999 in connection with this purchase transaction.
CONSOLIDATED STATEMENT OF OPERATIONS
Operating revenue is reduced by $9,188,301 representing operating revenue of
Southland and Trinity for the nine-month period in the amounts of $6,421,155 and
$2,767,146, respectively. Associated operating expenses for the period total
$10,990,592 and is comprised of accounts associated with Southland and Trinity
in the amounts of $7,239,240 and $3,751,352, respectively.
Interest expense adjustments in the amount of $747,936 include Southland and
Trinity amounts of $670,924 and $77,012, respectively. Property lease expense of
$268,061 is attributable exclusively to Southland operations. Depreciation and
amortization expense totaling $518,558 includes Southland and Trinity amounts of
$319,630 and $198,928, respectively. Other income reported in the amount of
$171,300 is attributable exclusively to Southland operations.
The aggregate operating loss from discontinued operations reported on a pro
forma basis at September 30, 1999 totals $2,985,269.
COMMON STOCK OUTSTANDING
The pro forma number of common stock shares outstanding at September 30, 1999 is
reported as increased by 6,513,158 representing the common stock issue
associated with the HIT purchase acquisition transaction. Such shares are
excluded from the weighted average number of shares at September 30, 1999 as the
common stock issue date was subsequently effected on December 15, 1999.
-22-
PHOENIX HEALTHCARE CORPORATION
NOTES TO PRO FORMA FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
The financial statements and descriptive disclosures of the acquisitions of
Trinity and Southland were included in the Registrant's filings of Form 10Q for
the quarters ended March 31, 1999 and June 30, 1999, respectively. In light of
these business operations having been subsequently discontinued during 1999,
separate financial statements are not provided.
HIT was incorporated in December 1998 and had no substantive business operations
during 1999. The initial capitalization of HIT is reflected in the accompanying
pro forma financial statements.
-23-
