AGREEMENT AND PLAN OF MERGER
among
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP II L.P.,
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP IV L.P.,
TEXAS ESWL/LASER LITHOTRIPTER, LTD.
and
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VII, L.P.
September 4, 1998
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TABLE OF CONTENTS
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ARTICLE I
PLAN OF MERGER
Section 1.01. Merger.......................................................1
Section 1.02. Filing.......................................................3
Section 1.03. Effective Date...............................................3
Section 1.04. Effect of Merger.............................................3
Section 1.05. Further Assurances...........................................3
Section 1.06. Closing......................................................3
ARTICLE II
REPRESENTATIONS AND WARRANTIES CONCERNING MERGING PARTNERSHIPS
Section 2.01. Effect of Agreement..........................................4
Section 2.02. Organization.................................................4
Section 2.03. Capitalization...............................................5
Section 2.04. Financial Statements.........................................5
Section 2.05. Absence of Certain Changes...................................5
Section 2.06. Litigation...................................................5
Section 2.07. Property; Title..............................................5
Section 2.08. Records and Permits. .......................................6
Section 2.09. Contracts and Leases.........................................6
Section 2.10 Receivables..................................................6
Section 2.11 Insurance....................................................6
Section 2.12 Employees; Benefits..........................................6
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TEXAS VII
Section 3.01. Organization; Good Standing; Power...........................7
Section 3.02. Authority Relative to Agreement..............................7
Section 3.03. Effect of Agreement..........................................7
Section 3.04. No Other Representations.....................................7
ARTICLE IV
CERTAIN COVENANTS
Section 4.01. Conduct of Business..........................................8
Section 4.02. Access to Books, Records, and Properties.....................8
Section 4.03. Confidentiality..............................................8
Section 4.04. Maintenance of Insurance.....................................8
ARTICLE V
NATURE AND SURVIVAL OF COVENANTS, REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
Section 5.01. Survival of Representations..................................9
Section 5.02. Indemnification by Merging Partnerships......................9
Section 5.03. Indemnification by Texas VII.................................9
Section 5.04. Notice of Claim..............................................9
Section 5.05. Limits of Indemnification...................................10
ARTICLE VI
CONDITIONS PRECEDENT TO THE CONSUMMATION OF THE MERGER
Section 6.01. Accuracy of Representations and Warranties..................10
Section 6.02. Performance of Agreements...................................10
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Section 6.03. Partnership Approval............................................10
ARTICLE VII
TERMINATION OF AGREEMENT
Section 7.01. Conditions for Termination.....................................10
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Expenses......................................................11
Section 8.02. Governing Law.................................................11
Section 8.03. Entire Agreement..............................................11
Section 8.04. Amendments and Modifications..................................11
Section 8.05. Assignment....................................................11
Section 8.06. Captions......................................................11
Section 8.07. Execution in Counterparts.....................................11
Section 8.08. Number and Gender.............................................11
Section 8.09. Notices.......................................................12
Section 8.10. Successors and Assigns........................................12
SCHEDULES
Schedule 2.01 - Defaults & Consents
Schedule 2.02 - Qualifications and Licenses
Schedule 2.03 - Capitalization
Schedule 2.05 - Absence of Certain Changes
Schedule 2.06 - Litigation
Schedule 2.07 - Property; Title
Schedule 2.09 - Contracts and Leases
Schedule 2.11 - Insurance
Schedule 2.12 - Employees; Benefits
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (together with all Schedules and
Exhibits hereto, the "Agreement"), made and entered into as of the 4th day
of September, 1998, by and among Texas Lithotripsy Limited Partnership VII,
L.P., a recently organized Texas limited partnership ("Texas VII" or the
"Surviving Partnership"), Texas Lithotripsy Limited Partnership II L.P., a
Texas limited partnership ("Texas II"), Texas Lithotripsy Limited
Partnership IV L.P., a Texas limited partnership ("Texas IV"), Texas
ESWL/Laser Lithotripter, Ltd., a Texas limited partnership ("ESWL"),
Lithotripters, Inc., a North Carolina corporation and the sole general
partner of Texas II and Texas IV ("Litho") and Texas Litho, Inc., a
Delaware corporation and the sole general partner of ESWL ("Texas Litho").
ESWL, Texas II and Texas IV are sometimes referred to herein individually
as a "Merging Partnership" and collectively as the "Merging Partnerships."
The Surviving Partnership and the Merging Partnerships are also sometimes
referred to herein collectively as the "Constituent Partnerships."
RECITAL:
Each of the Constituent Partnerships deems it advisable that the
Merging Partnerships merge with and into the Surviving Partnership on the
terms and conditions set forth herein (the "Merger"), subject to the
approval of this Agreement by the partners of each of the Merging
Partnerships in the manner set forth in their respective limited
partnership agreements.
THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto do hereby agree as follows:
ARTICLE I
PLAN OF MERGER
Section 1.01. Merger. This Section 1.01 shall constitute the "plan of
merger" within the meaning of the Texas Revised Limited Partnership Act
(the "Act").
(A) The names of the limited partnerships proposing to merge are Texas
Lithotripsy Limited Partnership II L.P., a Texas limited partnership
("Texas II"), Texas Lithotripsy Limited Partnership IV L.P., a Texas
limited partnership ("Texas IV") and Texas ESWL/Laser Lithotripter, Ltd., a
Texas limited partnership ("ESWL") (each, a "Merging Partnership" and
collectively the "Merging Partnerships"). The name of the limited
partnership into which the Merging Partnerships propose to merge (the
"Merger") is Texas Lithotripsy Limited Partnership VII, L.P., a Texas
limited partnership (the "Surviving Partnership" or "Texas VII"). The
Merging Partnerships and the Surviving Partnership are hereinafter referred
to collectively as the "Constituent Partnerships."
(B) Until the effective time of the Merger (the "Effective Time"),
each of the Constituent Partnerships shall continue to conduct its business
without material change and shall not make any distribution or other
disposition of any material assets, capital or surplus, except in the
ordinary course of business or with the consent of the other Constituent
Partnerships.
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(C) As of the Effective Time, the Merging Partnerships' liabilities
and assets of every nature shall become those of the Surviving Partnership
by operation of law, without reversion or impairment, without further act
or deed, and without any transfer or assignment having occurred.
(D)(1) At the Effective Time, by virtue of the Merger and without any
action on the part of the general partner or the limited partner of the
Surviving Partnership, the sole general partner partnership interest in the
Surviving Partnership shall be cancelled and the entire limited partner
partnership interest of the sole initial limited partner of the Surviving
Partnership shall be canceled.
(2) At the Effective Time, by virtue of the Merger and without any
action on the part of the general partner or the limited partners of Texas
II, the sole general partner partnership interest in Texas II shall be
converted into and shall represent the right to receive an 11.507% general
partner partnership interest in the Surviving Partnership and each
outstanding 1% limited partner partnership interest in Texas II shall be
converted into and represent the right to receive a 0.514% limited partner
partnership interest in the Surviving Partnership (proportionately adjusted
for fractional percentage interests).
(3) At the Effective Time, by virtue of the Merger and without any
action on the part of the general partner or the limited partners of Texas
IV, the sole general partner partnership interest in Texas IV shall be
converted into and shall represent the right to receive a 4.120% general
partner partnership interest in the Surviving Partnership and each
outstanding 1% limited partner partnership interest in Texas IV shall be
converted into and represent the right to receive a 0.206% limited partner
partnership interest in the Surviving Partnership (proportionately adjusted
for fractional percentage interests).
(4) At the Effective Time, by virtue of the Merger and without any
action on the part of the general partner or the limited partners of ESWL,
the sole general partner partnership interest in ESWL shall be converted
into and shall represent the right to receive a 5.181% general partner
partnership interest in the Surviving Partnership and each outstanding 1%
limited partner partnership interest in ESWL shall be converted into and
represent the right to receive a 0.279% limited partner partnership
interest in the Surviving Partnership (proportionately adjusted for
fractional percentage interests).
(5) Promptly after the Effective Time, the general partner of the
Surviving Partnership shall prepare and execute an amendment to the
Surviving Partnership's Agreement of Limited Partnership providing for the
general and limited partner partnership interests herein contemplated and
deliver a copy of such amendment to each person who was a general or
limited partner of any of the Merging Partnerships.
(6) After the Effective Time, no transfer of partnership interests
shall be made on the transfer books of the Merging Partnerships.
(E) The Texas VII limited partnership agreement shall, as amended in
the manner contemplated in Section 1.01(D)(5) above, continue as the
Surviving Partnership's agreement of limited partnership.
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(G) The Effective Time shall be 11:59:59 p.m. on the day the
Certificate of Merger is filed with the Texas Secretary of State.
Section 1.02. Filing. Upon fulfillment or waiver of the conditions
specified in ARTICLE VI and provided that this Agreement has not been
terminated pursuant to ARTICLE VII, the Constituent Partnerships will cause
a Certificate of Merger reflecting the terms of the Merger in the form
prescribed by law to be executed and filed with the Secretary of State of
the State of Texas.
Section 1.03. Effective Date. The Merger shall be effective at the
Effective Time.
Section 1.04. Effect of Merger. From and after the Effective Time, the
separate existence of the Merging Partnerships shall cease, and the
Surviving Partnership shall thereupon and thereafter, to the extent
consistent with its Certificate of Limited Partnership, possess all the
rights, privileges, immunities and franchises, of a public as well as of a
private nature, of each of the Constituent Partnerships; and all property,
real, personal and mixed, and all debts due on whatever account, and all
other choses in action, and all and every other interest, of or belonging
to or due to each of the Constituent Partnerships shall vest in the
Surviving Partnership without further act or deed and without any transfer
or assignment having occurred; and the title to any property or interest
therein, vested in any of the Constituent Partnerships shall not revert or
be in any way impaired by reason of the Merger. The Surviving Partnership
shall thenceforth be responsible and liable for all the liabilities,
obligations and penalties of each of the Constituent Partnerships; and any
claim existing or action or proceeding, civil or criminal, pending by or
against any of the Constituent Partnerships may be prosecuted as if the
Merger had not taken place, or the Surviving Partnership may be substituted
in its place; and any judgment rendered against any of the Constituent
Partnerships may be enforced against the Surviving Partnership. Neither the
rights of creditors nor any liens upon the property of any of the
Constituent Partnerships shall be impaired by reason of the Merger.
Section 1.05. Further Assurances. If, at any time after the Effective
Time, the Surviving Partnership shall consider or be advised that any
further deeds, assignments or assurances in law or any other actions are
necessary, desirable or proper to vest, perfect or confirm of record or
otherwise, in it, the title to any property or rights of the Constituent
Partnerships acquired or to be acquired by reason of, or as a result of,
the Merger, the Constituent Partnerships agree that such Constituent
Partnerships, acting through their respective general partners by their
proper officers and directors, shall and will execute and deliver all such
proper deeds, assignments and assurances in law and do all things
necessary, desirable or proper to vest, perfect or confirm title to such
property or rights in the Surviving Partnership and otherwise to carry out
the purpose of this Agreement, and that the Surviving Partnership's general
partner is fully authorized and directed in the name of the Constituent
Partnerships or otherwise to take any and all such actions.
Section 1.06. Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Texas
VII, 0000 Xxxxxxx xx Xxxxx Xxxxxxx, Xxxxx X-000, Xxxxxx, Xxxxx 00000 at
9:00 A.M., Central time on the business day following the satisfaction of
the conditions to Closing set forth in ARTICLE VI (the "Closing Date")
unless the parties hereto agree upon a different time, date or place. The
Closing shall not be deemed to have occurred until all actions necessary to
complete the Closing have occurred.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES CONCERNING MERGING PARTNERSHIPS
Subject to the limitations and qualifications set forth in this
Agreement, including the Disclosure Schedule attached hereto and
incorporated herein by reference, each Merging Partnership severally (and
only to the extent any representation or warranty pertains to itself) and
not jointly, represents and warrants, to each other Constituent Partnership
as follows:
Section 2.01. Effect of Agreement. This Agreement is a legal, valid
and binding obligation of the Merging Partnership and is enforceable
against it in accordance with the terms hereof, except that such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by principles
of equity regarding the availability of remedies. The Merging Partnership
has the requisite limited partnership power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby and,
assuming receipt of the approvals described in Section 6.03 below, the
execution, delivery and performance of this Agreement will have been duly
and validly authorized by all necessary limited partnership action on the
part of such Merging Partnership. Except as set forth on Schedule 2.01 of
the Disclosure Schedule or to the extent the following would not reasonably
be expected to have a material adverse effect on the business of the
Merging Partnership ("Material Adverse Effect"), the execution, delivery
and performance of this Agreement by the Merging Partnership and the
consummation of the transactions contemplated hereby will not (i) require
the consent, approval or authorization of any person (other than its
partners), corporation, partnership, joint venture or other business
association or public authority; (ii) violate, with or without the giving
of notice or the passage of time, or both, any provisions of law applicable
to the Merging Partnership; (iii) with or without the giving of notice or
the passage of time, or both, conflict with or result in a breach or
termination of any provision of, or constitute a default under, or result
in the creation of any lien, charge or encumbrance upon any of the
properties or assets of the Merging Partnership pursuant to any agreement
of limited partnership or limited partnership certificate or material
indenture, note, bond, pledge, mortgage, deed of trust, lease, license,
contract, agreement, commitment or other instrument, or obligation, or any
order, judgment, award, decree, statute, ordinance, regulation or any other
restriction of any kind or character, to which such Merging Partnership is
a party or by which it or any of its assets or properties may be bound; or
(iv) result in the acceleration of any indebtedness or increase the rate of
interest payable by the Merging Partnership with respect to any
indebtedness. Except to the extent disclosed in the Texas VII Confidential
Private Placement Memorandum dated as of even date herewith, as hereafter
amended and supplemented (the "Offering Memorandum"), the Merging
Partnership is in material compliance with all applicable laws, rules and
regulations.
Section 2.02. Organization. The Merging Partnership is a limited
partnership formed in accordance with, validly existing and in good
standing under the laws of the State of Texas, with all requisite limited
partnership power and authority to own, operate and lease its properties
and to carry on its business as now being conducted. The Merging
Partnership neither owns nor has the right to acquire an equity interest in
any corporation, partnership or other organization. As of the date of this
Agreement, the Merging Partnership is qualified to conduct business and
holds licenses as provided on Schedule 2.02 of the Disclosure Schedule.
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Section 2.03. Capitalization. Schedule 2.03 of the Disclosure Schedule
sets forth the names and respective partnership interests of each general
and limited partner of record in the Merging Partnership. Except as
provided on such Schedule 2.03 or pursuant to the terms of its Agreement of
Limited Partnership, to the knowledge of the Merging Partnership there are
no outstanding or authorized subscriptions, options, warrants, calls,
rights, commitments or any other agreements of any character obligating the
Merging Partnership to issue any additional capital partner interests or
any securities convertible into or evidencing the right to subscribe for,
purchase or acquire any capital partner interests, nor are there any voting
trusts or any other agreements or understandings with respect to the voting
of its general and limited partner interests.
Section 2.04. Financial Statements. Complete copies of the internally
prepared or audited financial statements, as the case may be, of the
Merging Partnership for the three-year period ended December 31, 1997 and
the six-month period ended June 30, 1998 have previously been provided to
Litho or Texas Litho, as the case may be. Such financial statements present
fairly in all material respects the financial position and results of
operation of the Merging Partnership as of such dates and for the periods
then ended, subject to year end adjustments in the case of interim
financial statements; provided, that any unaudited statements (including
interim statements) may not contain footnotes. The balance sheet of the
Merging Partnership at June 30, 1998 is referred to herein as the "Balance
Sheet" and June 30, 1998 is referred to herein as the "Balance Sheet Date."
Section 2.05. Absence of Certain Changes. Except as set forth on
Schedule 2.05 of the Disclosure Schedule or otherwise contemplated by the
terms of this Agreement, since the Balance Sheet Date, no material adverse
change has occurred to the Merging Partnership or its business, properties,
financial condition or prospects.
Section 2.06. Litigation. Except as set forth on Schedule 2.06 of the
Disclosure Schedule or the Section of the Offering Memorandum entitled
"Regulation", there is no claim, action, suit, proceeding (legal,
administrative or otherwise), investigation or inquiry (by an
administrative agency, governmental body or otherwise) pending or, to the
knowledge of the Merging Partnership threatened by or against, or otherwise
affecting, the Merging Partnership, its properties or assets or the
transactions contemplated hereby, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission,
board, agency, instrumentality or authority, domestic or foreign.
Section 2.07. Property; Title. Schedule 2.07 of the Disclosure
Schedule describes each material item of machinery, equipment, furniture,
supplies, materials, vehicles and other items of tangible personal property
of every kind owned by the Merging Partnership (the "Partnership Assets").
The Merging Partnership has good and marketable title to its Partnership
Assets, free and clear of all liens except as disclosed on Schedule 2.07.
The Merging Partnership does not own an interest in any real property. The
Partnership Assets constitute all of the assets of the Merging Partnership
required to operate its business in the manner presently conducted (except
to the extent a necessary asset may be leased as disclosed on Schedule 2.09
of the Disclosure Schedule) and are in good operating order and condition,
ordinary wear and tear excepted and are suitable for their intended use
subject to periodic maintenance.
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Section 2.08. Records and Permits. The books and records of the
Merging Partnership are true, accurate and complete in all material
respects. The Merging Partnership has obtained all permits, certificates
and licenses required for the conduct of its business and the ownership of
its Partnership Assets the failure of which to obtain or maintain could
reasonably be expected to have a Material Adverse Effect (the "Necessary
Permits"). The Merging Partnership is not in violation of any Necessary
Permit and no proceedings are pending, or to the knowledge of the Merging
Partnership, threatened, to revoke or limit any Necessary Permit.
Section 2.09. Contracts and Leases. Schedule 2.09 of the Disclosure
Schedule lists all contracts, commitments, agreements (including agreements
for the borrowing of money or the extension of credit), leases, licenses,
understandings and obligations, whether written or oral, to which the
Merging Partnership is party or by which it or any of its Partnership
Assets is bound or affected, that are material to the operation of its
business or which impose a material obligation on the Merging Partnership
(the "Contracts"). Each of the Contracts is valid, binding and enforceable
in accordance with its terms except that such enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by principles of equity regarding the
availability of remedies. Each Contract is in full force and effect. Except
as set forth on Schedule 2.01 of the Disclosure Schedule, there are no
existing defaults, and no events or circumstances have occurred which, with
or without notice or lapse of time or both, would constitute defaults,
under any of the Contracts by the Merging Partnership or, to its knowledge,
any other party thereto.
Section 2.10 Receivables. All accounts receivable due to the Merging
Partnership are, and will be at the Effective Time, legal, valid and
binding obligations, created in the ordinary course of business of the
Merging Partnership.
Section 2.11 Insurance. Schedule 2.11 of the Disclosure Schedule
describes all insurance policies maintained by the Merging Partnership with
respect to its business and Partnership Assets. Such policies are valid,
binding and enforceable in accordance with their terms except that such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by principles
of equity regarding the availability of remedies, are in full force and
effect, and all premiums due thereon have been paid and will be paid
through the Effective Time.
Section 2.12 Employees; Benefits. Schedule 2.12 of the Disclosure
Schedule sets forth a list of the name and position of each person who is
employed by the Merging Partnership or associated with its business in any
capacity, as well as each other person to whom the Merging Partnership has
a policy, practice or obligation to pay or provide retirement, health,
welfare or other benefits of any kind, together with a description of such
benefits (other than salary information). Except as set forth on Schedule
2.12, there are no Plans, as defined below, contributed to, maintained or
sponsored by the Merging Partnership, to which the Merging Partnership is
obligated to contribute or with respect to which the Merging Partnership
has any liability or potential liability, whether direct or indirect,
including all Plans contributed to, maintained or sponsored by each member
of the controlled group of companies, within the meaning of Sections
414(b), 414(c), and 414(m) of the Internal Revenue Code of 1986, as
amended, of which the Merging Partnership is a member to the extent the
Merging Partnership has any potential liability with respect to such Plans.
For purposes of this Agreement, the term "Plans" shall mean: (a) employee
benefit plans as defined in Section 3(3) of the Employee
6
Retirement Income Security Act of 1974, as amended ("ERISA"), whether
or not funded and whether or not terminated, (b) employment agreements and
(c) personnel policies or fringe benefit plans, policies, programs and
arrangements, whether or not subject to ERISA, whether or not funded, and
whether or not terminated, including without limitation, stock bonus,
deferred compensation, pension, severance, bonus, vacation, travel,
incentive, and health, disability and welfare plans. There is no unfair
labor practice complaint, labor organizational effort, strike, slowdown or
similar labor matter pending or, to the knowledge of the Merging
Partnership, threatened against it or affecting its business.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TEXAS VII
Subject to the limitations and qualifications set forth in this
Agreement, Texas VII represents and warrants to each Merging Partnership as
follows:
Section 3.01. Organization; Good Standing; Power. Texas VII is a
limited partnership formed in accordance with, validly existing and in good
standing under the laws of the State of Texas and has all requisite limited
partnership power and authority to own, lease and operate its prop erties,
to carry on its business as now being conducted and to enter into this
Agreement and perform its obligations hereunder.
Section 3.02. Authority Relative to Agreement. The execution,
delivery and per formance of this Agreement have been duly and effectively
authorized by all necessary limited partnership action on the part of Texas
VII, and this Agreement is a valid, legally binding and en forceable
obligation of Texas VII, except that enforceability hereof may be limited
by bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by principles of equity regarding the
availability of remedies.
Section 3.03. Effect of Agreement. The execution, delivery and
performance of this Agreement by Texas VII and the consummation of the
transactions contemplated hereby will not (i) require the consent, approval
or authorization of any person, corporation, partnership, joint venture or
other business association or public authority; (ii) violate, with or
without the giving of notice or the passage of time, or both, any provision
of law now applicable to Texas VII; (iii) with or without the giving of
notice or the passage of time, or both, conflict with or result in a breach
or termination of any provision of, or constitute a default under, or
result in the creation of any lien, charge or encumbrance upon any of the
property or assets of Texas VII pursuant to any agreement of limited
partnership or limited partnership certificate, indenture, note, bond,
pledge, mortgage, deed of trust, lease, license, contract, agreement,
commitment or other instrument or obligation or any order, judgment, award,
decree, statute, ordinance, regulation, or any other restriction of any
kind or character, to which Texas VII is a party, or by which Texas VII or
any of its assets or properties are bound; or (iv) result in the
acceleration of any indebtedness of Texas VII or increase the rate of
interest payable by Texas VII with respect to any indebtedness.
Section 3.04. No Other Representations. The proposed business of Texas
VII is accurately described in the Offering Memorandum (subject to the
limitations, assumptions and conditions therein provided and the accuracy
and completeness of the representations and warranties
7
made herein by the Merging Partnerships) and Texas VII has no material
assets or liabilities except as described therein. No representation is
made as to the projected financial or other results of its proposed
operations.
ARTICLE IV
CERTAIN COVENANTS
Section 4.01. Conduct of Business. Between the date hereof and the
Effective Time, each Merging Partnership and the Surviving Partnership
(solely with respect to themselves) covenants and agrees that except as set
forth herein or in the Offering Memorandum, (i) the business of such person
will be conducted in a manner not materially different from its past
practice and only in the ordinary course, and (ii) it will refrain from
incurring any material debt, liability or obligation, contingent or
otherwise absent the consent of the other Constituent Partnerships.
Section 4.02. Access to Books, Records, and Properties. Subject to
Section 4.03 below, each Party has previously and shall continue to afford
to each other party and its representatives reasonable access to their
respective properties, books and records at reasonable times.
Section 4.03. Confidentiality. In recognition of the confidential
nature of certain of the information which has been or will be provided to
each party and its affiliates by the other parties hereto, each party
agrees to retain in confidence (except that it may disclose the information
herein described to its agents, advisors and lenders after making them
aware of the limitations on disclosure herein set forth and obtaining their
agreement to abide by them), information transmitted or disclosed to it by
any other party and further agrees that it will not use for its own benefit
or for the benefit of any of its affiliates and will not use or disclose to
any other third party, or permit the use or disclosure to any other third
party of, any information so obtained or revealed. Notwithstanding anything
to the contrary in the foregoing provisions, such information may be
disclosed (a) where it is required by court order or decree or applicable
law (including to the extent reasonably necessary to prepare the Offering
Memorandum and provide adequate disclosure in connection with the votes
described in Section 6.03 below), (b) if it is ascertainable or obtained
from public or published information, (c) if the recipient can demonstrate
that such information was properly in its possession prior to disclosure
thereof and (d) following successful consummation of the Closing to the
extent required in connection with the operation of Texas VII's business.
If any recipient of information shall be required to make disclosure of any
such information by court order or decree or applicable law, such person
shall give the affected party or parties prior notice of the making of such
disclosure and shall use all efforts to afford them an opportunity to
contest the making of such disclosure. The restrictions under this Section
shall survive Closing; provided further, that in the event this Agreement
is terminated prior to Closing, the restrictions under this Section shall
survive such termination notwithstanding anything contained herein to the
contrary.
Section 4.04. Maintenance of Insurance. Texas VII covenants that for a
period of not less than the longer of (i) three years or (ii) the
expiration of any applicable statute of limitations or repose, to maintain
in full force and effect one or more policies of insurance issued by
reputable carriers providing coverage against services furnished by the
Merging Partnerships prior to the Effective Time, in amounts and with
deductibles consistent with good and standard industry practices.
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ARTICLE V
NATURE AND SURVIVAL OF COVENANTS, REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
Section 5.01. Survival of Representations. Except as otherwise
expressly provided herein, all representations, warranties, indemnities,
covenants and agreements made in this Agreement and the remedies of the
parties with respect thereto, shall, except to the extent notice is given
prior to the expiration of the applicable period, survive the Effective
Time hereunder for a period of one year. Any claim for indemnification
hereunder which shall have been asserted during the survival period shall
continue in effect with respect to such particular claims until such claim
shall have been finally resolved or settled. It is expressly understood and
agreed that each covenant and agreement which by its nature survives
Closing shall survive for an indefinite period except to the extent limited
by the express terms thereof.
Section 5.02. Indemnification by Merging Partnerships. Subject to the
period of survival set forth in Section 5.01 and the limitations contained
in Section 5.05 below, Litho and Texas Litho, severally and not jointly,
shall indemnify, defend and hold harmless Texas VII and its affiliates,
partners, agents and employees (collectively, the "Surviving Indemnitees")
from, against and with respect to any and all losses, damages, claims,
obligations, liabilities, costs and expenses of any kind or character (a
"Loss") arising out of or in connection with any of the following:
(a) any breach of any of the representations or warranties of any
Merging Partnership of which such person is the general partner contained
in or made pursuant to this Agreement; and
(b) any failure by any Merging Partnership of which such person is the
general partner to perform or observe, in full, any covenant, agreement or
condition to be performed or observed by it pursuant to this Agreement.
Section 5.03. Indemnification by Texas VII. Subject to the period of
survival set forth in Section 5.01 and the limitations contained in
Section 5.05 below, Texas VII shall indemnify, defend and hold harmless
each partner in the Merging Partnerships from, against and with respect to
any Loss arising out of or in connection with any of the following:
(a) any breach of any of the representations and warranties of Texas
VII contained in or made pursuant to this Agreement; and
(b) any failure by Texas VII to perform or observe, in full, any
covenant, agreement or condition to be performed or observed by it pursuant
to this Agreement.
Section 5.04. Notice of Claim. Any party seeking to be indemnified
hereunder (the "Indemnified Party") shall, within 15 days following
discovery of the matters giving rise to a Loss, notify the party from whom
indemnity is sought (the "Indemnity Obligor") in writing of any claim for
recovery, specifying in reasonable detail the nature of the Loss and the
amount of the liability estimated to arise therefrom. Failure to give such
notice shall constitute a waiver of the Loss attributable to such
9
matters only to the extent the indemnitor is actually damaged thereby
or such delay causes an additional expense.
Section 5.05. Limits of Indemnification. The amount payable with respect to any
Loss by any Indemnified Party (i) shall be reduced by the amount of any
insurance proceeds received with respect to the Loss, and each of the parties
hereby agrees to use its reasonable best efforts to collect any and all
insurance proceeds to which it may be entitled in respect of any Loss;
(ii) shall be net of any federal, state or local tax benefit derived by the
Indemnified Party by reason of the Loss and (iii) shall not include any amounts
related to special, incidental, indirect, cover, exemplary or consequential
damages.
ARTICLE VI
CONDITIONS PRECEDENT TO THE CONSUMMATION OF THE MERGER
The obligations of each party under this Agreement are subject to the
satisfaction at or prior to the Closing Date (including satisfaction
thereof simultaneously with the Closing, it being agreed that no action to
be taken at the Closing shall be deemed consummated until all actions to be
taken at the Closing shall be deemed consummated) of each of the following
conditions:
Section 6.01. Accuracy of Representations and Warranties. The
representations and warranties of each other party herein contained shall
be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the Closing
Date, except as affected by transactions contemplated hereby.
Section 6.02. Performance of Agreements. Each other party shall have
complied with the covenants set forth in Sections 4.01 and 4.02.
Section 6.03. Partnership Approval. The partners of each Merging
Partnership shall have approved the Merger in the manner required in their
respective Agreements of Limited Partnership.
ARTICLE VII
TERMINATION OF AGREEMENT
Section 7.01. Conditions for Termination. Notwithstanding anything to
the contrary herein, this Agreement may be terminated and the transactions
hereby may be abandoned:
(A) by the mutual consent of Litho and Texas Litho at any time prior
to the Effective Time;
(B) by action of any Merging Partnership if the Merger has not been
consummated or any other party shall have failed to satisfy the conditions
to Closing to be satisfied by such party on or before December 31, 1998;
10
(C) by action of any Merging Partnership if there exists a material
breach of any representation, warranty or covenant made by any other
Merging Partnership or by Texas VII following notice thereof and failure by
such party to cure such breach with 15 days thereafter.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Expenses. Except as otherwise expressly provided herein
or as provided in the section of the Offering Memorandum entitled "Sources
and Applications of Funds," each party will bear its own expenses in
connection with the accounting, legal, investment banking and professional
services required in the negotiation and preparation of this Agreement and
the consummation of the transactions provided for in this Agreement.
Section 8.02. Governing Law. This Agreement and the transactions
contemplated herein shall be governed by, interpreted, construed and
enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be performed entirely within the State of Texas.
Section 8.03. Entire Agreement. This Agreement (including the
Schedules and any subsidiary agreements incorporated herein as Exhibits)
contains the entire agreement of the parties with respect to the subject
matter hereof and supersedes any prior agreement between or among the
parties hereto.
Section 8.04. Amendments and Modifications. This Agreement shall not
be modified, amended or changed in any respect except in writing duly
signed by the parties hereto and each party hereby waives any right to
amend this Agreement in any other way.
Section 8.05. Assignment. This Agreement may not be assigned by any
of the parties hereto. Notwithstanding the foregoing, it is expressly
agreed that prior to or concurrent with the Effective Time, Texas Litho may
merge with Litho or otherwise convey its interests in ESWL to Litho and
Litho shall succeed to the rights and obligations of Texas Litho hereunder.
Section 8.06. Captions. Captions in this Agreement are solely for
purposes of identification and shall not in any manner alter or vary the
interpretation or construction of this Agreement.
Section 8.07. Execution in Counterparts. This Agreement may be
executed in more than one counterpart, each of which shall be deemed to be
an original, but all of which shall be deemed to constitute one instrument.
It shall not be necessary for all parties to have signed the same
counterpart provided that all parties have signed at least one counterpart.
Section 8.08. Number and Gender. Throughout this Agreement, wherever
the context so requires, the singular shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and vice
versa.
11
Section 8.09. Notices. All notices or other communications that are
required or permitted hereunder shall be given in writing and shall be
given either by personal delivery, by Federal Express or other overnight
courier or by telecopy, shall be deemed to have been given when personally
delivered, when deposited with charges prepaid with Federal Express or
other nationally recognized overnight courier service, or when transmitted
to telecopy machine, addressed to the respective parties as follows:
Texas Lithotripsy Limited Partnership II L.P.
c/o Lithotripters, Inc
0000 Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx Xxxxxxx, M.D.
Texas Lithotripsy Limited Partnership IV L.P.
c/o Lithotripters, Inc
0000 Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx Xxxxxxx, M.D.
Texas ESWL/Laser Lithotripter, Ltd.
c/o Texas Litho, Inc.
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
Texas Lithotripsy Limited Partnership VII, L.P.
c/o Lithotripters, Inc
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
Any party may by notice change the address to which notice or other
communications to such party are to be delivered or mailed.
Section 8.10. Successors and Assigns. All of the terms and provisions
of this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and to the extent
12
permitted herein, their successors and assigns. No third parties are
intended to benefit, however, from the terms and provisions hereof or from
any representation, warranty, covenant or obligation set forth herein or in
any schedule, exhibit or other writing delivered pursuant hereto.
[The remainder of this page has been left blank intentionally.]
13
IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed
this Agreement on the day and year first above written.
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP
II L.P.
By: Lithotripters, Inc., sole general partner
By: ________________________________________
________________________________________
(Type Name and Title)
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP
IV L.P.
By: Lithotripters, Inc., sole general partner
By: ________________________________________
________________________________________
(Type Name and Title)
TEXAS ESWL/LASER LITHOTRIPTER, LTD
By: Texas Litho, Inc., sole general partner
By: ________________________________________
________________________________________
(Type Name and Title)
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP
VII, L.P.
By: Lithotripters, Inc. sole general partner
By: ________________________________________
________________________________________
(Type Name and Title)
[SIGNATURES CONTINUED ON FOLLOWING PAGE.]
14
LITHOTRIPTERS, INC.
By: ________________________________________
________________________________________
(Type Name and Title)
TEXAS LITHO, INC.
By: ________________________________________
________________________________________
(Type Name and Title)
15
SCHEDULES
Relating to the
AGREEMENT AND PLAN OF MERGER
among
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP II L.P.,
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP IV L.P.,
TEXAS ESWL/LASER LITHOTRIPTER, LTD.
and
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VII, L.P.
September 4, 1998
ANY FACT OR MATTER DISCLOSED IN ONE OR MORE SCHEDULES SHALL BE DEEMED DISCLOSED
FOR PURPOSES OF ALL SCHEDULES, WHETHER OR NOT SPECIFICALLY CROSS-REFERENCED.
CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED HAVE THE SAME MEANING AS
IN THE AGREEMENT TO WHICH THESE SCHEDULES ARE ATTACHED AND INCORPORATED BY
REFERENCE.
TABLE OF CONTENTS
Page
SCHEDULE 2.01 - Defaults and Consents..........................................1
SCHEDULE 2.02 - Qualifications and Licenses....................................3
SCHEDULE 2.03 - Capitalization.................................................4
SCHEDULE 2.05 - Absence of Certain Changes....................................10
SCHEDULE 2.06 - Litigation....................................................11
SCHEDULE 2.07 - Property; Title...............................................12
SCHEDULE 2.09 - Contracts and Leases..........................................16
SCHEDULE 2.11 - Insurance.....................................................22
SCHEDULE 2.12 - Employees; Benefits...........................................26
i
SCHEDULE 2.01
Defaults and Consents
1. The vote of a prescribed portion of the outstanding limited partner interests
in each Merging Partnership is necessary to authorize the Merger. Litho and
Texas Litho interpret the agreement of limited partnership for ESWL to require
the vote of two-thirds in interest of the ESWL limited partners. Such
interpretation is reasonable in the opinion of Litho and Texas Litho, but an
argument can be made that a greater voting requirement applies. As of the date
of this Agreement, no such claims are pending or, to the knowledge of Litho and
Texas Litho, threatened.
2. Consents must be obtained under the following lithotripsy services agreements
in connection with the Merger:
a. Texas II
i. Services Agreement by and among Texas II and Xxxxxx Methodist
Fort Worth, Xxxxxx Methodist Southwest and Xxxxxx Methodist H-E-B
dated May 1, 1997.
ii. Services Agreement by and between Texas II and Hillcrest
Baptist Medical Center dates April 1, 1992.
iii. Services Agreement by and between Texas II and Irving
Hospital Authority d/b/a Irving Healthcare System dated August 9,
1991.
iv. Services Agreement by and between Texas II and Health Trust,
Inc.-The Hospital Company with respect to Northeast Community Hospital
dated April 25, 1991.
v. Services Agreement by and between Texas II and Providence
Health Center dated July 9, 1991.
b. Texas IV
i. None
c. ESWL
i. Lithotripsy Services Agreement between ESWL and Xxxxxx
Community Hospital dated July 8, 1992, as amended by that certain
Amendment No. 1
1
to the Lithotripsy Services Agreement regarding billing and user
fees between ESWL and Xxxxxx Community Hospital dated January 1, 1995.
3. Consent must be obtained under the following lease in connection with
the Merger:
a. Vehicle Lease Service Agreement between PACCAR Leasing
Corporation and ESWL for 1996 Peterbilt 379 truck dated October 9,
1995.
2
SCHEDULE 2.02
Qualifications and Licenses
1. Texas II
a. Texas II was organized and conducts business in Texas.
b. Texas II operates its lithotripter equipment in Texas under a
Certificate of Registration for Industrial Services issued to its
general partner, Lithotripters, Inc., by the Texas Department of
Health Bureau of Radiation Control which will expire on May 31, 2000.
2. Texas IV
a. Texas IV was organized and conducts business in Texas.
b. Texas IV operates its lithotripter equipment in Texas under a
Certificate of Registration for Industrial Services issued to its
general partner, Lithotripters, Inc., by the Texas Department of
Health Bureau of Radiation Control which will expire on May 31, 2000.
Texas IV currently conducts no active operations in Oklahoma and
therefore has allowed its license for the use of its lithotripter
equipment to lapse.
3. ESWL
a. ESWL was organized and conducts business in Texas. ESWL is
qualified to conduct business in Oklahoma and Arkansas.
b. ESWL operates its lithotripter equipment in Texas under a
Certificate of Registration for Industrial Services issued to it by
the Texas Department of Health Bureau of Radiation Control which will
expire on May 31, 2001. ESWL operates its lithotripter equipment in
Oklahoma under a permit issued to it by the Oklahoma State Department
of Health which will expire on January 27, 1999. ESWL currently
conducts no active operations in Arkansas and therefore has allowed
its license for the use of its lithotripter equipment to lapse.
3
SCHEDULE 2.03
Capitalization
1. Please see attachments.
4
SCHEDULE 2.03
Texas II
PARTNERS AND PERCENTAGE INTERESTS
Percentage
General Partner Interest
Lithotripters, Inc. 22.38810000%
Limited Partners
Xxxxxx Xxxxxx 2.23880000
Xxxxxxx Xxxxxxxxx 2.98550000
Xxxx Xxxxxxx 4.47760000
Xxxxxx Xxxxxxx .74660000
Xxxxx Xxxxxxx 1.11940000
Xxxx Xxxx Xxxxxxxxxxxx Xxxxxxx 1.11940000
Xxxxxx X. Xxxxxxx .74660000
Xxxxx X. Hey 1.49220000
Xxx X. Xxxxxxxxx 3.35820000
Xxx Xxxxxxx 2.79850000
Xxxx Xxxxxxx 1.11940000
Xxx Xxxxx 0.00000000
Xxxx Xxxxxxxxxx 2.23880000
Xxxxxx Xxx 2.23880000
Lithotripters, Inc. 29.10460000
Xxxx Xxxxx or Assignee 2.98550000
Xxxxxx Xxxxx .74660000
Xxxx Xxxxx or Assignee 1.11940000
Xxxxxxx Xxxxxx Xxxxxxxx 1.11940000
Xxxxxx X. Xxxx 1.11940000
Xxxxx Xxxxxxxxx 1.49220000
Xxxxxx Xxxxxxx 2.98550000
Xxxx Xxxxx 3.91790000
Xxxxxx Xxxxxx .74660000
Xxxxxxx Xxxxxxx 2.23880000
Xxxxxxx Xxxxxx 1.11940000
5
SCHEDULE 2.03
Texas IV
PARTNERS AND PERCENTAGE INTERESTS
Percentage
General Partner Interest
Lithotripters, Inc 20%
Limited Partners
Xxxxxx Xxxxxx 2%
Xxxx Xxxxx 1%
Xxxxxxx Xxxxxxxxx 1%
Xxxxx Xxxxx 1%
Xxxxxxxx Xxxxx 1%
J. Xxxxxxx Xxxxxx 1%
Xxxxxxx Xxxxxx 1%
Xxxxxxxxxxx Xxxxxx 4%
Xxxxx Xxxxx 1%
Xxxxxx Xxxxxxx 4%
Xxxxxxx Xxxxxxxx 4%
Xxxxxx Xxxxxxx 1%
Xxxxxxx Xxxxx 1%
J. Xxxxx Xxxxxxx 2%
Xxxxxx Xxxxxxx 1%
Xxxxxx Xxxxxx 1%
Xxxxxxx Xxxxxx 1%
Xxxxx Xxxxxx 1%
Xxxxx Xxxxxxxxx 1%
Xxxxxxx Xxxxxx 3%
Lithotripters, Inc. 32%
Xxxxxx XxXxx 3%
Xxxxxx Xxxxxx 1%
Xxxxxxx Xxxxx 1%
Xxx Xxxxx 1%
Estate of Xxxxxxx Xxxxxxxx 1%
Xxxxxxx Xxxx 1%
Estate of H. Xxxxxx Xxxxxx 1%
Xxxxx Xxxxxxxxx 1%
6
Xxxxxx Xxxxxxx 3%
Xxxxx Xxxxxx 1%
W. Xxxx Xxxxx 1%
7
SCHEDULE 2.03
ESWL
PARTNERS AND PERCENTAGE INTERESTS
Percentage
Interest
General Partner
Texas Litho, Inc. 18.50533808%
Limited Partners
Xxxxx Xxxxx 1.06761566
Xxxx X. Xxxxxxx, III 1.06761566
Xxxxx Xxxxxxx 4.62633452
Xxxxxx X. Xxxx 1.06761566
Xxxxxxx Xxxxxx 1.06761566
Xxxxx Xxxxxxxxxx 1.06761566
Fifth Street Corp. 6.40569395
Xxxx Xxxxxxx 1.06761566
Xxxx X. Xxxxxxxxx 1.06761566
X. Xxxxx Holden 1.06761566
X.X. Xxxx 1.06761566
X. X. XxXxxxx, XXX 0.00000000
Xxxxxx Xxxxxx 1.06761566
Xxxxxxx Xxxxxxxx 1.06761566
Xxxxxxx X. Xxxxxxx 1.06761566
Xxxxx X. Xxxxxx 1.06761566
Paris Urology Associates Pension Plan 2.13523132
Xxxxx Xxxxxxx 1.06761566
Xxxxxxx Xxxxx 2.13523132
Xxxx X. Xxxx 1.06761566
Xxxxxxx Risk 5.33807829
Southwest Lithotripter Partners, Ltd. 28.82562278
Xxxx Xxxxx Xxxxx 1.06761566
Agif Syed 1.06761566
Texas Litho Inc. 1.06761566
Xxxxxx Xxxxxxxx 6.40569395
Xxxxxx Xxxx 2.13523132
R.D. West 0.71174377
8
Xxxxxxx X. Xxxxxxxxxx 0.71174377
Xxxxxx X. Xxxxxxxxxx 0.71174377
Xxxxx Xxxxxxx 1.06761566
9
SCHEDULE 2.05
Absence of Certain Changes
1. Since July 1998, the Lithotripsy Services Agreement between
Xxxxxxxx Medical Center in Abilene, Texas and ESWL has continued
in effect on a month-to-month basis. While no assurance can be
given that such efforts will be successful, Xxxxxxxx Medical
Center and ESWL are currently in negotiations to enter into a new
lithotripsy services agreement for a new two-year term effective
September 1, 1998.
10
SCHEDULE 2.06
Litigation
1. None
11
SCHEDULE 2.07
Property; Title
1. Please see the attached lists of the Partnership Assets for
each Merging Partnership.
2. Liens against each Merging Partnership.
a. Texas II
i. The Certificate of Title for the 1991 Calumet Coach
still shows a lien held by Siemens Credit Corporation
against the vehicle dated August 8, 1991. However, the
obligation underlying the lien has been satisfied and the
lien has been released. Proper documentation has not yet
been obtained and Texas II is endeavoring to clear the lien
from the Certificate of Title.
b. Texas IV
i. None
c. ESWL
i. A UCC Financing Statement was filed with the County
Clerk of Oklahoma County, Oklahoma on December 31, 1991.
This financing statement covers both a Pulsolith Laser
Lithotripter and 1991 Ford E150 Custom Lift Van and
Accessories and any proceeds of those items. A continuation
was filed at this location on October 17, 1996 which remains
in effect. However, ESWL no longer owns the underlying
property upon which the security interest is attached. ESWL
is endeavoring to have the financing statement terminated by
Xxxxxx Financial, Inc., the secured party.
12
SCHEDULE 2.07
Texas II
PARTNERSHIP ASSETS
1. 1991 Calumet Coach
2. Siemens LithostarTM
3. Sensimeter/380 Densitometer
4. 'C' Shock Tube
5. Miscellaneous Equipment related to the provision of lithotripsy
services
SCHEDULE 2.07
Texas IV
PARTNERSHIP ASSETS
1. 1981 Calumet Coach
2. Siemens LithostarTM
3. Dinamap Plus E CSA
4. 'C' Shock Tube
5. Ohmeda Excel 110 Anesthesia System
14
SCHEDULE 2.07
ESWL
PARTNERSHIP ASSETS
1. 1993 Calumet Trailer
2. 1998 Mercury Mystique
3. 1996 Ford Taurus
4. Dornier MFL 5000 Lithotripter
5. Ohmeda Excel Anesthesia System
6. X-Ray Processor.
7. Sogevac Vacuum Pump
8. Critikon 1846 Dinamap NIBP (automated blood pressure cuff) monitor
9. M310 ECG Simulator
10. Miscellaneous computer and office equipment
15
SCHEDULE 2.09
Contracts and Leases
I. Contracts
a. Texas II
1. Services Agreement by and between Texas II and Arlington Memorial
Hospital dated November 21, 1993. Letter Agreement amending original
agreement by and between Texas II and Arlington Memorial Hospital
dated January 9, 1998.
2. Services Agreement by and among Texas II and Xxxxxx Methodist Fort
Worth, Xxxxxx Methodist Southwest and Xxxxxx Methodist H-E-B dated May
1, 1997.
3. Services Agreement by and between Texas II and HCA South Arlington
Hospital dated August 14, 1991.
4. Services Agreement by and between Texas II and Hillcrest Baptist
Medical Center dates April 1, 1992.
5. Services Agreement by and between Texas II and Irving Hospital
Authority d/b/a Irving Healthcare System dated August 9, 1991.
6. Services Agreement by and between Texas II and Metroplex Surgicare
dated June 6, 1995.
7. Services Agreement by and between Texas II and Health Trust ,
Inc.-The Hospital Company with respect to Northeast Community Hospital
dated April 25, 1991.
8. Services Agreement by and between Texas II and Providence Health
Center dated July 9, 1991.
b. Texas IV
1. Services Agreement by and between Texas IV and Xxxxx County
Memorial Hospital dated January 1, 1993 .
16
2. Services Agreement by and between Texas IV and Texas Surgery
Center, Ltd. dated May 20, 1998.
3. Services Agreement by and between Texas IV and Baylor University
Medical Center dated May 20, 1998.
4. Services Agreement by and between Texas IV and Bethania Regional
Hospital Care Center dated November 9, 1992.
5. Services Agreement by and between Texas IV and Columbia Medical
Center of Plano dated July 19, 1996.
6. Services Agreement by and between Texas IV and Xxxxxxxx County
Hospital Association d/b/a Xxxxxxxx Memorial Hospital dated January
26, 1996.
7. Services Agreement by and between Texas IV and HCA Xxxxxx Community
Hospital dated June 23, 1992 .
8. Services Agreement by and between Texas IV and HMA Durant d/b/a
Medical Center of Southeastern Oklahoma dated March 16, 1994. Addendum
to the Services Agreement by and between Texas IV and HMA Durant d/b/a
Medical Center of Southeastern Oklahoma amending termination
provisions of the Services Agreement (not dated).
9. Services Agreement by and between Texas IV and Medical Plaza
Hospital dated July 17, 1992.
10. Services Agreement by and between Texas IV and Methodist Hospital
of Dallas d/b/a Methodist Medical Center dated December 3, 1992.
11. Services Agreement by and between Texas IV and North Texas Medical
Center dated July 1, 1992.
12. Services Agreement by and between Texas IV and Presbyterian
Hospital of Plano dated [September] 1, 1993. Addendum I to the
Services Agreement by and between Texas IV and Presbyterian Hospital
of Plano regarding personnel records of employees dated April 8, 1994.
Addendum II to the Services Agreement by and between Texas IV and
Presbyterian Hospital of Plano regarding contract services dated April
8, 1994.
17
13. Services Agreement by and between Texas IV and Xxxxxxxxxx Hospital
Authority d/b/a Richardson Medical Center dated July 1, 1992. Addendum
to the Services Agreement by and between Texas IV and Richardson
Hospital Authority d/b/a Richardson Medical Center regarding
inspection, maintenance and proper licensure of the lithotripter coach
by Texas IV (not dated).
14. Services Agreement by and between Texas IV and St. Xxxx Medical
Center dated October 15, 1992. First Amendment to the Services
Agreement by and between Texas IV and St. Xxxx Medical Center
regarding payments to Texas IV dated July 1, 1993.
c. ESWL
1. Lithotripsy Services Agreement between Columbia Medical Center of
Plano and ESWL dated December 27, 1996.
2. Lithotripsy Services Agreement between Walls Regional Hospital and
ESWL dated September 18, 1995. Addendum to the Lithotripsy Services
Agreement between Walls Regional Hospital and ESWL regarding
maintenance and monitoring of quality improvement programs dated
September 19, 1995.
3. Lithotripsy Services Agreement between Columbia Medical Center at
Lewisville and ESWL dated December 16, 1996.
4. Lithotripsy Services Agreement between Xxxxx Health System
Hospitals Dallas, Inc. d/b/a RHD Memorial Medical Center and Trinity
Medical Center and ESWL dated October 1, 1996. Addendum to the
Lithotripsy Services Agreement between Xxxxx Health System Hospitals
Dallas, Inc. d/b/a RHD Memorial Medical Center and Trinity Medical
Center and ESWL providing for a new effective date of February 1, 1998
and a new one-year term dated March 6, 1998.
5. Agreement for Mobile Laser Lithotripsy Services between ESWL and
Xxxxxx X. Xxxxx Hospital dated June 1, 1993.
6. Agreement for Mobile Lithotripsy Services between Maxum Health
Corp. And Wichita General Hospital dated June 15, 1990. Pricing
Addendum for Mobile Lithotripsy Services between Maxum Health Corp.
and Wichita General Hospital dated May 11, 1994. Assignment Agreement
between Maxum Health Corp. and Wichita General Hospital assigning all
rights,
18
duties and obligations of Maxum Health Corp. to ESWL dated
September 1, 1991.
7. Agreement for Mobile Laser Lithotripsy Services between ESWL and
Waco Surgical Center, Ltd. dated January 14, 1993.
8. Lithotripsy Services Agreement between Valley View Surgery Center
and ESWL dated May 10, 1996.
9. Agreement for Mobile Lithotripsy Services between ESWL and NME
Hospitals, Inc. d/b/a Trinity Medical Center dated June 7, 1994.
10. Agreement for Mobile Lithotripsy Services (Revision #2) between
ESWL and Texoma Medical Center dated June 1, 1993. Letter Agreement
between ESWL and Texoma Medical Center amending Schedule A regarding
user fees dated June 6, 1997.
11. Lithotripsy Services Agreement between Xxxxxxx Community Hospital,
Inc. d/b/a Columbia Medical Center at Xxxxxxx and ESWL dated March 18,
1997.
12. Agreement for Mobile Lithotripsy Services between ESWL and St.
Joseph's Hospital and Health Center dated January 14, 1993. Pricing
Addendum for Mobile Lithotripsy Services between ESWL and St. Joseph's
Hospital and Health Center dated May 11, 1994.
13. Lithotripsy Services Agreement between Presbyterian Hospital of
Xxxxxxx and ESWL dated February 22, 1996.
14. Lithotripsy Services Agreement between Xxxx Xxxxxxxx Episcopal
Memorial Medical Center and ESWL dated July 1, 1996.
15. Agreement for Mobile Lithotripsy Equipment between VHA Southwest
Litho I, Ltd. and Memorial Hospital and Medical Center f/k/a Midland
Memorial Hospital dated March 1, 1988. Assignment Agreement between
Memorial Hospital and ESWL assigning VHA Southwest Litho I, Ltd.'s
rights under the original agreement to ESWL dated September 1, 1991.
Addendum to Agreement for Mobile Lithotripsy Services between Memorial
Hospital and ESWL dated April 16, 1998. Notice of termination of this
agreement was received by ESWL on April 16, 1998 to be effective
December 9, 1998. While no assurance can be given that such efforts
will be successful, ESWL
19
is presently attempting to renegotiate a renewal or new agreement with
Memorial Hospital and Medical Center.
16. Lithotripsy Use Agreement between Memorial Hospital (Palestine,
Texas) and ESWL dated November 30, 1995.
17. Lithotripsy Services Agreement between XxXxxxxxxx Regional Medical
Center and ESWL dated August 13, 1996.
18. Lithotripsy Services Agreement between Xxxxxxxx Medical Center and
ESWL dated June13, 1996.
19. Lithotripsy Services Agreement between Columbia North Hills and
ESWL dated April 8, 1996. First Amendment to Lithotripsy Services
Agreement regarding user fees and a new term between HCA Health
Services of Texas, Inc. d/b/a North Hill Hospital and ESWL dated
February 1, 1997. Amendment between Columbia North Hills and ESWL
regarding Medicare access, independent contractor status, insurance
coverage, quality standards and confidentiality dated December 1,
1997.
20. Agreement for Mobile Lithotripsy Services between ESWL and
Columbia HCA Xxxxxxx Regional Hospital dated April 1, 1995. Letter
amending original agreement between ESWL and Columbia HCA Xxxxxxx
Regional Hospital extending contract on a month-to-month basis dated
June 21, 1996. While no assurance can be given that such efforts will
be successful, ESWL is presently attempting to negotiate a new
agreement for an initial term of at least one year with Xxxxxxx
Regional.
21. Lithotripsy Services Agreement between Xxxxx Health System
Hospitals Dallas, Inc. d/b/a Doctors Hospital, Dallas and ESWL dated
April 1, 1997. Letter Agreement renewing the existing Lithotripsy
Services Agreement between Xxxxx Health System Hospitals Dallas, Inc.
d/b/a Doctors Hospital, Dallas and ESWL dated March 20, 1998.
22. Revised Agreement for Mobile Lithotripsy Services between ESWL and
Dallas-Fort Worth Medical Center dated June 1, 1993.
23. Lithotripsy Services Agreement between Columbia Medical
Center/Dallas Southwest and ESWL dated March 15, 1996. Amendment to
the Lithotripsy Services Agreement regarding Medicare access,
independent contractor
20
status, indemnification and assignment between Columbia Medical
Center/Dallas Southwest and ESWL dated March 15, 1996.
24. Agreement for Mobile Lithotripsy Services between ESWL and DeQueen
Health Services, Inc. d/b/a Community Hospital of DeQueen dated July
8, 1992. Pricing Addendum for Mobile Lithotripsy Services between ESWL
and DeQueen Health Services, Inc. d/b/a Community Hospital of DeQueen
dated May 11, 1994.
25. Lithotripsy Services Agreement between ESWL and Xxxxxx Community
Hospital dated July 8, 1992. Amendment No. 1 to the Lithotripsy
Services Agreement regarding billing and user fees between ESWL and
Xxxxxx Community Hospital dated January 1, 1995.
d. Each of the Merging Partnerships participates in reimbursement
arrangements pursuant to agreements the General Partner has with national
and local payors. See the section of the Offering Memorandum entitled
"Proposed Activities - Operations of Merging Partnerships - Service
Agreements - Reimbursement Agreements.
II. Leases
a. Texas II
1. None
b. Texas IV
1. None
c. ESWL
1. Vehicle Lease Service Agreement between PACCAR Leasing
Corporation and ESWL for 1996 Peterbilt 379 truck dated
October 9, 1995.
21
SCHEDULE 2.11
Insurance
1. Insurance policies for each Merging Partnership are maintained
through blanket insurance policies with Prime Medical Services, Inc. Prime
Medical Services, Inc. is the corporate parent of Litho, the sole general
partner of both Texas II and Texas IV, and Texas Litho, the sole general
partner of ESWL. See the attached list of insurance policies maintained by
Prime Medical Services, Inc. which insure the Merging Partnerships.
22
SCHEDULE 2.11
INSURANCE POLICIES
TYPE CARRIER POLICY TERM DEDUCTIBLE LIMITS PREMIUM
---- ------- ------ ---- ---------- ------ -------
NUMBER
------
Commercial Crime National Union Fire 000-00-00 10/30/96 $10,000 $1,000,000 [Unspecified]
Insurance Company of to
Pittsburgh, PA 10/30/97
Workers American Protection 3BR 011735-00 10/31/97 None Per Accident Limit - $1,000,000 $42,585 (est.)
Compensation and Insurance Company to Disease Each Employee Limit -
Employer's 10/31/98 $1,000,000
Liability Disease Per Policy Limit - $1,000,00
Business American Motorists F3R 028308-00 10/31/97 $1000 per Comprehensive - $30,000 $17,004 (est.)
Automobile Insurance Company to vehicle Collision - $30,000
10/31/98 Combined Liability - $1,000,000
Auto Medical Payments - $5,000
Uninsured/Underinsured Motorists -
$1,000,000
23
TYPE CARRIER POLICY TERM DEDUCTIBLE LIMITS PREMIUM
---- ------- ------ ---- ----------------- -------
NUMBER
------
Commercial Inland General Accident CIM 0448425-00 10/31/96 None Mobile Coaches, Vans & Trailers - $97,209
Marine Insurance Company to $59,011,500(est.)
of America 10/31/97 Fixed Site Litho Units & Medical
Equipment - $6,040,100
Business Interruption for all
Litho units - $12,322,000
Service Trucks & Tractors - $1,347,904
Off-Premises Utility Failure - $1,000,000
Personal Property of others - $500,000
EDP Media & Hardware - $310,000
Extra Expense - $250,000
Other Transit - $100,000
Real & Personal Property - $4,840,100
Commercial American Manufacturers 3AE 000 000-00 00/31/97 $25,000 per Mobile Equipment - $59,511,500 $96,637
Output Program Mutual Insurance to earthquake Buildings & Business Personal (est.)
Company 10/31/98 or flood Property - $10,880,200
occurrence Income - $12,572,000
$5,000 per Pollutant Clean-up and Removal -
vehicle $250,000
24 hrs. for Accounts Receivable - $250,000
utility Property in Transit - $100,000
interruption Valuable Papers & Records - $250,000
$25,000 for Utility interruption/property damage -
all other $1,000,000
covered perils Earthquake - $2,500,000
24
TYPE CARRIER POLICY TERM DEDUCTIBLE LIMITS PREMIUM
---- ------- ------ ---- ---------- ------ -------
NUMBER
------
Health Care Columbia Casualty HMH 1028627495-1 10/30/97 None Shown Professional Liability - $1,000,000 per $25,348
[Professional Company to person; $3,000,000 total limit (est.)
and General 10/30/98 General Liability - $1,000,000 per
Liability]Policy occurrence; $2,000,000 general aggregate
limit; $2,000,000 products/completed
operations aggregate; $50,000 damage
limit per fire; $1,000,000
personal/advertising injury limit
25
SCHEDULE 2.12
Employees; Benefits
1. Employee List
a. Texas II
Name Title
i. Carylane X. Xxxxx Radiologic Technician
ii. Xxxx X. Xxxxxxxxxxx Licensed Registered Nurse
iii. Xxxxx X. Xxxxx Registered Nurse
iv. Xxxxxxxxxxx X. Xxxxxx Radiologic Technician
b. Texas IV
Name Title
i. Xxxxx X. Xxxxxxxx Registered Nurse
ii. Xxxxx X. Xxxxxx Radiologic Technician
iii. Xxxx Xxx Xxxxx Radiologic Technician
iv. Xxxxx Xxx Xxxxxxxx Registered Nurse
c. ESWL
Name Title
i. Xxxxx X. Xxxxxxx Radiologic Technician
ii. Xxxxxxx X. Xxxxx, XX Driver
iii. Xxxxxxx X. Xxxxx Project Manager
iv. Xxxx X. Xxxx Driver
2. See the attached summary of employee benefits.
26
SCHEDULE 2.12
Summary of Employee Benefits
All active full-time employees of the Merging Partnerships are eligible to
participate in the benefit plans of Prime Medical Services, Inc. ("Prime"), the
parent company of the general partner of all of the Merging Partnerships. The
following is a brief summary of these benefit plans:
1. Insurance - Prime provides medical and dental insurance, long term
disability, accidental death and dismemberment, and life insurance. There is an
employee contribution for this benefit which varies depending upon the marital
status and number of dependents of the employee.
2. 125-Cafeteria Plan - Prime offers a 125-Cafeteria Plan to employees after six
months of employment, which includes dependent care, medical reimbursement and
insurance premiums.
3. 401(k) Retirement Plan - Prime offers employees an opportunity to contribute
to a 401(k) retirement plan after the completion of six months of employment.
Prime, in its sole discretion, makes a decision to contribute a matching portion
in Prime common stock at the end of each year.
4. Holidays - There are nine paid holidays per year.
5. Sick leave, vacation - The sick leave and vacation benefits vary depending
upon the work schedule of the employee. Certain employees have flexible
schedules which do not require them to work a consistent 5 day week and
therefore do not accumulate vacation and sick leave.
6. Bonus Plan - see attached memo.
In addition to the above, there are miscellaneous benefits such as bereavement,
military reserves, jury duty and an educational assistance plan.
27
