EXHIBIT 99.1
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into this 22nd
day of March, 2004, by and between CAMELOT SPECIALTY HOSPITAL OF CAMERON,
L.L.C., a Louisiana limited liability company, represented by its sole member,
Camelot Healthcare, L.L.C., represented by its duly authorized Chief Executive
Officer, Xxxxxx X. Xxxxx (hereinafter referred to as "Seller"), and PACER HEALTH
MANAGEMENT CORPORATION, a Louisiana corporation, represented by its duly
authorized Chief Executive Officer, Xxxxx X. Xxxxx (hereinafter referred to as
"Purchaser").
W I T N E S S E T H:
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WHEREAS, on March 28, 2000, the Lower Cameron Hospital Service District
d/b/a South Cameron Memorial Hospital (hereinafter referred to as "the
District"), a Louisiana hospital service district created by operation of law
and, in particular, La. R.S. 46:1051, et seq. and Seller entered into a Master
Cooperative Endeavor Agreement within the meaning of La. R.S. 46:1077 (the
"Master Agreement"); and
WHEREAS, pursuant to the Master Agreement, the District and Seller entered
into that certain Interim Cooperative Endeavor Management and Services Agreement
dated March 28, 2000 (the "Management Agreement"), that certain Cooperative
Endeavor Lease Agreement and Assignment of Third Party Leases dated March 28,
2000 (the "Original Lease"); that certain Assignment of Leases and Contracts
dated March 28, 2000 and that certain Assignment of Lease dated April 25, 2001
(collectively, the "Assignments") and Camelot Healthcare, L.L.C. executed that
certain Guaranty dated March 24, 2000 in favor of the District (the "Guaranty");
and
WHEREAS, prior to September 28, 2000, the District operated a hospital
known as South Cameron Memorial Hospital (the "Hospital") with a 34 bed acute
care main campus in Creole, Louisiana (the "Main Campus"), a 15 bed remote
campus in Lake Charles, Louisiana known as Calcasieu Oaks Geriatric Psychiatric
Unit (the "Lake Xxxxxxx Campus") and a clinic in Cameron, Louisiana, known as
the Cameron Rural Health Clinic (the "Cameron Campus"); and
WHEREAS, prior to September 28, 2000, the District, pursuant to contract,
leased various ambulances and provided ambulance service as a hospital
outpatient service, pursuant to agreements with the Lower Cameron Ambulance
Service District No. 1 and the Cameron Parish Ambulance Service District No. 2
(the "Ambulance Districts"); and
WHEREAS, the District owns a majority of the property forming the Main
Campus, leases a portion of the property forming the Main Campus, and leases the
Lake Xxxxxxx Campus, the Cameron Campus and the Ambulance Districts
(collectively, the "Facilities"); and
WHEREAS, effective February 18, 2000, the District engaged Seller on an
interim basis to manage the Facilities pursuant to the Management Agreement; and
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WHEREAS, effective September 28, 2000, the District leased the Facilities
to Seller pursuant to the Original Lease and assigned all leases and contracts
related to the Facilities to Seller pursuant to the Assignments; and
WHEREAS, Seller now operates the Hospital with a 25 bed acute care main
campus in Creole, Louisiana, a 24 bed remote campus in Lake Charles, Louisiana
known as Calcasieu Oaks Geriatric Psychiatric Unit and a rural health clinic in
Cameron, Louisiana, known as the Cameron Rural Health Clinic; and
WHEREAS, on October 20, 2003, the Original Lease was amended by the
District and Seller pursuant to that certain First Amendment to Cooperative
Endeavor Lease and Assignment of Third Party Leases with respect to certain
financial and non-financial matters (the "First Amendment"); and
WHEREAS, on January 12, 2004, the Original Lease, as amended by the First
Amendment, was amended by the District and Seller pursuant to that certain
Second Amendment to Cooperative Endeavor Lease and Assignment of Third Party
Leases with respect to the timing of Seller's obligation to pay rent and the
District's obligation regarding the Maintenance Tax (the "Second Amendment")
(the Original Lease, as amended by the First Amendment and the Second Amendment,
shall be referred to as the "Lease").
WHEREAS, following the execution of all of the aforementioned agreements,
Seller encountered certain financial difficulties in its operation of the
Facilities, and therefore sought out Purchaser in February, 2004 to financially
assist Seller in the operations of the Facilities; and
WHEREAS, effective February 2, 2004, the District, Seller, Purchaser and
Pacer Health Corporation, a Florida corporation, executed that certain
Supplemental Cooperative Endeavor Agreement (the "Supplemental Agreement");
WHEREAS, pursuant to the Supplemental Agreement and effective February 2,
2004, the District, Seller, and Purchaser executed that certain Lease Assignment
and Amendment Agreement (the "Lease Assignment"), and
WHEREAS, Seller and Purchaser executed that certain Management and
Acquisition Agreement also effective February 2, 2004 (the "Acquisition
Agreement").
WHEREAS, pursuant to the Acquisition Agreement, Purchaser agreed to
purchase certain assets used in connection with the operations of the Facilities
and to assume all of Seller's obligations under the Lease once Purchaser to
obtained a new hospital license issued by the Louisiana Department of Health and
Hospitals and a new Medicare provider number issued by the Centers for Medicare
& Medicaid Services for it to operate the Hospital as a new 49 bed acute care or
critical access hospital in the Facilities;
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WHEREAS, currently, DHH has a survey freeze in effect and therefore, it
will not be possible for Purchaser to receive a new hospital license or a new
Medicare provider number for the Hospital; and
WHEREAS, regardless of the inability to obtain a new hospital license or a
new Medicare provider number, Purchaser is still willing to purchase certain
assets used in connection with the operations of the Facilities and to assume
all of Seller's obligations under the Lease on the terms and conditions set
forth herein and in the Lease Assignment with the exception that the Lease
Assignment shall be effective on the Effective Date defined herein as opposed to
the Assignment Effective Date (as defined in the Lease Assignment) as more fully
described in that certain Amendment to the Lease Assignment;
WHEREAS, Seller is willing to sell certain assets used in connection with
the operations of the Facilities and to assign all of Seller's rights under the
Lease on the terms and conditions set forth herein and in that certain Lease
Assignment with the exception that the Lease Assignment shall be effective on
the Effective Date defined herein as opposed to the Assignment Effective Date
(as defined in the Lease Assignment) as more fully described in that certain
Amendment to the Lease Assignment.
NOW, THEREFORE, for and in consideration of the premises, and the
agreements, covenants, representations and warranties hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE I. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "ACCOUNTS PAYABLE" as of any date shall mean any of the trade accounts
payable of Seller with respect to the Purchased Assets or the Facility as of
such date in accordance with GAAP.
1.2 "ACCOUNTS RECEIVABLE" shall mean as of the Closing Date all accounts
receivable of Seller including, without limitation, those in connection with any
Third Party Payor Programs, copayments, deductibles and individual patients
through and as of such date, including all payments thereon and other proceeds
thereof.
1.3 "ACCREDITATION BODY" shall mean DHH, and all other Persons or
Governmental Authorities having jurisdiction over the accreditation,
certification, licensing, evaluation or operation of the Facility.
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1.4 "ACCRUED EXPENSES" shall mean as of the Closing Date accrued and unpaid
rents, insurance premiums, payroll and vested benefits (including, without
limitation, vacation pay) and other accrued and unpaid expenses of Seller as
would appear on a financial statement of Seller relating to the Facility as of
such date prepared in accordance with GAAP, including those described in
SCHEDULE 1.4.
1.5 "AFFILIATE" shall mean, as to the entity in question, any person or
entity that directly or indirectly controls, is controlled by, or is under
common control with, the entity in question and any successors or assigns of
such entities; and the term "control" means possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
an entity whether through ownership of voting securities, by contract or
otherwise.
1.6 "AGREEMENT" shall mean this Asset Purchase Agreement and all amendments
hereto, if any, made in accordance with Section 15.6 hereof.
1.7 "ANCILLARY AGREEMENTS" shall mean the general xxxx of sale and
assignment described in Section 5.2.1, the assignments of contracts and leases
described in Section 5.2.3, an amendment to the Lease Assignment described in
Section 5.2.4, and the power of attorney described in Section 5.2.5, and the
assumption agreement described in Section 5.3.1.
1.8 "ASSUMED LIABILITIES" shall have the meaning given to such term in
Section 4.2.
1.9 "FINANCIAL STATEMENTS" shall mean those financial statements that have
been prepared by letter in accordance with GAAP.
1.10 "BENEFIT PLAN" shall have the meaning given to such term in Section
6.18.
1.11 "BOOKS AND RECORDS" shall have the meaning given to such term in
Section 6.15.
1.12 "BUSINESS" shall mean the operation of the Facilities consisting of
inpatient and outpatient acute care and psychiatric services and any other
ancillary health care services delivered solely at or through the Facilities.
1.13 "CLOSING" shall have the meaning given to such term in Section 5.1.
1.14 "CLOSING DATE" shall have the meaning given to such term in Section
5.1.
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1.15 "CODE" shall mean the Internal Revenue Code of 1986, as it has or
hereinafter may be amended from time to time, and any successor thereto. Any
reference herein to specific section or sections of the Code shall be deemed to
include a reference to any corresponding provision of future law.
1.16 "CONTRACTS" shall mean, in each case to the extent Seller is a party
thereto or the owner thereof, as the case may be, all alliance agreements,
transfer agreements, other agreements, contracts, contract rights, commitments,
customer accounts, orders, leases, guarantees, warranties and representations,
franchises and books and records of account benefiting, or relating solely to
the Facilities or the ownership, construction, development, maintenance, repair,
management, use, occupancy, possession or operation thereof, or the operation of
any of the programs or services solely in conjunction with the Facilities and
all renewals, replacements and substitutions therefor, issued by any
Governmental Authority, Accreditation Body or Third Party Payor or maintained or
used by Seller with any third person, including but not limited to all Provider
Agreements; but excluding the Excluded Contracts.
1.17 "CURRENT LIABILITIES" shall mean all liabilities classified as current
liabilities in accordance with GAAP.
1.18 "DAMAGES" shall have the meaning given to such term in Section 14.2.
1.19 "DHH" shall mean the Louisiana Department of Health and Hospitals.
1.20 "DISCLOSURE SCHEDULE" shall mean the Schedules referred to in this
Agreement and delivered to Purchaser by Seller as more fully addressed in
Section 15.19.
1.21 "EFFECTIVE DATE" shall have the meaning given to such term in Section
5.1.
1.22 Intentionally Omitted.
1.23 "ENCUMBRANCE" shall mean any right to, or interest in, property, which
subsists in a third-party and which constitutes a claim, lien, charge or
liability attached to and binding upon the property that relates to matters or
events that arise prior to the Closing Date, including, but not limited to, a
mortgage, judgment lien, mechanic's lien, lease, security interest, easement and
right-of-way.
1.24 "ENVIRONMENTAL LAW" shall mean any federal statute [including but not
limited to the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 ET
SEQ.), the Toxic Substances Control Act (15 U.S.C. Sections 2601 ET SEQ.), the
Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601 ET
SEQ.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 ET
SEQ.), the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801 ET
SEQ.), and the Federal Insecticide Fungicide and Rodenticide Act (7 U.S.C.
Sections 136 ET SEQ.)], other Legal Requirements, any common law doctrine and
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any provision or condition of any permit, license or other operating
authorization relating to (i) the protection of the environment or the public
welfare from actual or potential exposure (or the effects of exposure) to any
actual or potential release, discharge, disposal or emission (whether past or
present) of any Regulated Substance or (ii) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Regulated Substance.
1.25 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.26 "ERISA PLANS" shall mean defined benefit pension plans and defined
contribution pension plans qualified under Section 401(a) of the Code.
1.27 Intentionally omitted.
1.28 Intentionally omitted.
1.29 "EXCLUDED ASSETS" shall mean those assets that are not included in the
sale contemplated hereby and as are further defined in Section 2.2.
1.30 "EXCLUDED CONTRACTS" shall have the meaning given to such term in
Section 2.2.
1.31 "FACILITIES" shall mean the facilities identified in the Recitals of
this Agreement.
1.32 Intentionally omitted.
1.33 "GAAP" shall mean generally accepted accounting principles in the
United States of America according to the Financial Accounting Standards Board
in effect as of the related date.
1.34 "GOVERNMENTAL AUTHORITIES" shall mean all agencies, including,
authorities, bodies, boards, commissions, courts, instrumentalities,
legislatures and offices of any nature whatsoever of any government,
quasi-governmental unit or political subdivision, whether a federal, state,
parish, county, district, municipality, city or otherwise.
1.35 Intentionally omitted.
1.36 "INDEMNIFYING PARTY" shall have the meaning given to such term in
Section 14.4.
1.37 "INDEMNIFIED PARTY" shall have the meaning given to such term in
Section 14.4.
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1.38 "INVENTORY" shall mean the aggregate inventory for and located at the
Facility owned by Seller, including, without limitation, dry storage goods,
janitorial supplies, food and beverage supplies, office supplies, medical
supplies and pharmaceutical supplies.
1.39 "INVESTIGATIONS" shall have the meaning given to such term in Section
10.12.
1.40 Intentionally Omitted.
1.41 "KNOWLEDGE" and words of similar import shall mean, with respect to
any Party, actual knowledge of a particular fact or other matter being possessed
by an individual. With regard to Seller, this phrase refers to the knowledge of
any agent, employee, representative, contractor, officer or director, including
but not limited to Xxxxxx X. Xxxxx.
1.42 "LEGAL REQUIREMENTS" shall mean all statutes, ordinances, bylaws,
codes, rules, regulations, restrictions, orders, judgments, decrees and
injunctions (including, without limitation, all applicable building, health
code, zoning, subdivision and other land use and health care licensing statutes,
ordinances, bylaws, codes, rules and regulations), promulgated or issued by any
Governmental Authority, Accreditation Body or Third Party Payor which is a
Governmental Authority. Without limiting the foregoing, the term Legal
Requirements includes all Environmental Laws and all Permits and Contracts
issued or entered by any Governmental Authority, any Accreditation Body and/or
any Third Party Payor which is a Governmental Authority and all Permitted
Encumbrances.
1.43 "MANAGED CARE PLANS" shall mean all health maintenance organizations,
preferred provider organizations, individual practice associations, competitive
medical plans and similar arrangements.
1.44 "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect upon
(i) the physical condition of the Purchased Assets, or (ii) the ownership of and
title to the Purchased Assets, or (iii) the present or future financial
condition or results of operations of the Facilities.
1.45 "MEDICAID" shall mean the medical assistance program established by
Title XIX of the Social Security Act (42 U.S.C. Sections 1396 ET SEQ.) and any
statute succeeding thereto.
1.46 "MEDICARE" shall mean the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act (42 U.S.C.
Sections 1395 ET SEQ.) and any statute succeeding thereto.
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1.47 "ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency) with respect to the Facilities.
1.48 "PARTY" shall mean either Seller or Purchaser, individually, as the
context so requires, and the term "Parties" shall mean Seller and Purchaser
together.
1.49 "PATIENT'S AGREEMENTS" shall mean copies of all contracts, agreements
and consents executed by or on behalf of any patient or other Person seeking
services at the Facility, including, without limitation, assignments of benefits
and guarantees, and such patient's related medical and/or other records.
1.50 "PERMITS AND LICENSES" shall mean all permits, licenses, certificates
of need, approvals, qualifications, rights, variances, permissive uses,
accreditations, certificates, certifications, consents, contracts, interim
licenses, permits and other authorizations of every nature whatsoever required
by, or issued to or on behalf of Seller under any Legal Requirements benefiting,
relating or effecting solely the Facility or the construction, development,
expansion, maintenance, management, use or operation thereof, or the operation
of any programs or services solely in conjunction with the Facility and all
renewals, replacements and substitutions therefor, now or hereafter required or
issued by any Governmental Authority, Accreditation Body or Third Party Payor
which is a Governmental Authority.
1.51 "PERMITTED ENCUMBRANCES" shall mean current ad valorem taxes not past
due, matters of public record, zoning and other laws or ordinances and those
other Encumbrances as specifically set forth on SCHEDULE 1.51 hereto.
1.52 "PERSON" shall mean any individual, corporation, company, limited
liability company, limited or general partnership, trust or estate, joint
venture, association or other entity.
1.53 "PREPAID EXPENSES" as of any date shall mean payments made by Seller
with respect to the Purchased Assets or the Facilities, which constitute prepaid
expenses in accordance with GAAP.
1.54 "PROPRIETARY RIGHTS" shall have the meaning given to such term in
Section 6.9.1.
1.55 "PROVIDER AGREEMENTS" shall mean all participation, provider and
reimbursement agreements for the benefit of Seller in connection with the
operation of the Facilities relating to any right to payment or other claim
arising out of or in connection with such Seller's participation in any Third
Party Payor Program.
1.56 "PTO" shall have the meaning given to such term in Section 4.2(c).
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1.57 "PURCHASE PRICE" shall have the meaning given to such term in Section
3.1.
1.58 "PURCHASED ASSETS" shall have the meaning given to such term in
Section 2.1.
1.59 "PURCHASER" shall have the meaning given to such term in the preamble
of this Agreement.
1.60 "REGULATED SUBSTANCE" shall mean petroleum, petroleum hydrocarbons or
petroleum products and any other chemical, material, substance or waste that is
identified (by listing or characteristic) and regulated (or the clean-up of
which can be required) by any Legal Requirement intended to protect the
environment or the public health or welfare, including but not limited to Legal
Requirements relating to clean air, clean water, hazardous and solid waste
disposal, safe drinking water, endangered species, occupational safety and
health, oil spill prevention, groundwater protection, and toxic substances
control.
1.61 "ASSUMED LIABILITIES" has the meaning given that term in Section 4.2.
1.62 "SECURITY RIGHT" means, with respect to any security, any option,
warrant, subscription right, preemptive right, other right, proxy, put, call,
demand, plan, commitment, agreement, understanding or arrangement of any kind
relating to such security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security. "Security Right"
includes any right relating to issuance, sale, assignment, transfer, purchase,
redemption, conversion, exchange, registration or voting and includes rights
conferred by statute, by the issuer's governing documents or by agreement.
1.63 "SELLER" shall have the meaning given to such term in the preamble of
this Agreement.
1.64 "SELLER'S COST REPORTS" shall have the meaning given to such term in
Section 14.8.
1.65 "TAXES" shall mean all taxes, duties, charges, fees, levies or other
assessments imposed by any Governmental Authority, including, without
limitation, income, gross receipts, value-added, excise, withholding, personal
property, real estate, sales, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties, alternative,
add-on minimum, estimated and franchise taxes (including any interest, penalties
or additions attributable to or imposed on or with respect to any such
assessment).
1.66 "TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to any Tax, including any schedule
or attachment thereto, and including any amendment thereof.
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1.67 "THIRD PARTY PAYOR PROGRAMS" shall mean all third party programs in
which Seller participates with regard to the Facility, including, without
limitation, Medicare, Medicaid, TRICARE, Blue Cross and/or Blue Shield, Managed
Care Plans, other private insurance plans and employee assistance programs.
1.68 "THIRD PARTY PAYORS" shall mean Medicare, Medicaid, TRICARE, Blue
Cross and/or Blue Shield, Managed Care Plans, private insurers and any other
Person that maintains Third Party Payor Programs.
1.69 "TRICARE" shall mean the program of medical benefits covering retirees
and dependents of members or former members of a uniformed service provided,
financed and supervised by the United States Department of Defense and
established by 10 U.S.C. Sections 1071 ET SEQ. formerly known as the Civilian
Health and Medical Program of the Uniformed Services or CHAMPUS.
ARTICLE II. TRANSFER OF ASSETS AND PROPERTIES
2.1 PURCHASED ASSETS. Subject to the terms and conditions of this
Agreement, Seller shall sell and convey to Purchaser, free and clear of all
Encumbrances whatsoever (other than Permitted Encumbrances and except as
expressly provided herein), and Purchaser shall purchase from Seller, all of
Seller's right, title and interest in and to the following assets, properties
and rights owned by Seller and used or useful in connection with the operation
of the Facilities (the "Purchased Assets") as the same shall exist on the
Closing (other than the Excluded Assets):
2.1.1 Intentionally Omitted;
2.1.2 CONTRACTS. All contracts relating to the operation of the
Facilities by Seller listed on SCHEDULE 2.1.2, but only to the extent such
agreements are transferable to Purchaser and relate solely to the operation
of the Facilities;
2.1.3 MARKETING MATERIALS AND MANUALS. All catalogs, brochures,
reference sources, suppliers' names, mailing lists, art work, photographs,
public relations and advertising materials used in the Facilities, whether
in electronic form or otherwise, including policy and procedure manuals at
the Facilities.
2.1.4 PERMITS AND LICENSES. To the extent assignable, all Permits and
Licenses relating to the operation of the Facilities listed in SCHEDULE
2.1.4 hereto, but only to the extent such Permits and Licenses are
transferable to Purchaser and relate solely to the operation of the
Facilities;
2.1.5 Intentionally Omitted;
2.1.6 Intentionally Omitted;
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2.1.7 GOODWILL. All goodwill incident to the Facilities, including but
not limited to the name "South Cameron Memorial Hospital", "Calcasieu Oaks
Geriatric Psychiatric Unit", and "Cameron Rural Health Clinic" and any
variation thereof and the value of such name associated with the Facilities
and the value of good customer relations;
2.1.8 THIRD PARTY CLAIMS. Any claims and rights against third parties
(including, without limitation, insurance carriers) relating to the
operation of the Facilities, but only to the extent they relate solely to
Assumed Liabilities that are assumed by Purchaser hereunder;
2.1.9 INVENTORY. All Inventory;
2.1.10 Intentionally Omitted;
2.1.11 RECORDS. Subject to applicable Legal Requirements, all patient
records of the Facilities, all medical staff records of the Facilities and
all personnel records of the Facilities (Seller shall have the right to
retain copies of such personnel records after the Closing);
2.1.12 DEPOSITS. All deposits relating to the operation of the
Facilities;
2.1.13 REFUNDS AND SETTLEMENTS FROM MEDICAID AND MEDICARE PROGRAMS,
ETC. All refunds or monies resulting from audits, cost settlements and
adjustments of Seller's Medicare and Medicaid Cost Reports and from any
other Third Party Payor Programs for the time period prior to the Effective
Date, including all Medicaid disproportionate share payments pertaining to
uncompensated costs of the Facilities, which payments are paid and
delivered by the applicable Governmental Authorities, from and after the
Effective Date, including any adjustments to such payments;
2.1.14 MEDICAID DISPROPORTIONATE SHARE PAYMENT. All Medicaid
disproportionate share payments for any state fiscal year prior to the
Effective Date paid to the Facilities after the Effective Date in order to
reimburse the Facility for the uncompensated costs incurred, or to be
incurred, during that period;
2.1.15 ACCOUNTS RECEIVABLE. All Accounts Receivable of Seller accruing
from health care services rendered after February 2, 2004 pursuant to that
certain Management and Acquisition Agreement executed between Purchaser and
Seller effective February 2, 2004 and all accounts receivable arising from
services provided before February 2, 2004, but billed and collected by
Purchaser on or after February 2, 2004 as a result of Purchaser's audit of
the books and records of the Facilities; and
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2.2.16 OTHER INCORPOREAL ASSETS. All other incorporeal assets
(including all causes of action, rights of action, contract rights and
warranty and product liability claims against third parties and all
warranties, guarantees, and covenants not to compete in favor of the
Seller) relating solely to the operation of the Facilities.
2.2 EXCLUDED ASSETS. Notwithstanding Sections 2.1, the following assets
(collectively, the "Excluded Assets") shall be excluded from this Agreement, and
shall not be assigned or transferred to Purchaser:
2.2.1 CONSIDERATION. The consideration paid to Seller pursuant to this
Agreement;
2.2.2 CASH. All restricted and unrestricted cash and cash equivalents
on hand or in bank accounts, including, without limitation, investments in
marketable securities, temporary investments, certificates of deposit, bank
accounts and proceeds;
2.2.3 BENEFIT PLANS. Assets of all Benefit Plans of Seller;
2.2.4 TAXES. Claims for refunds or refunds of Taxes and other charges
imposed by any Governmental Authority;
2.2.5 EXHAUSTED INVENTORY. All Inventory deposited or exhausted prior
to the Closing Date in the Ordinary Course of Business;
2.2.6 EXCLUDED CONTRACTS. All Contracts listed on SCHEDULE 2.2.6 (the
"Excluded Contracts");
2.2.7 FUNDED DEPRECIATION. Any funded depreciation;
2.2.8 COMPUTER HARDWARE. Any computer software or hardware owned by
third parties;
2.2.9 OTHER ASSETS. All leased vehicles except for those whose leases
are assumed under Section 2.1.2 and the other assets listed on SCHEDULE
2.2.9.
ARTICLE III. CONSIDERATION AND TERMS
3.1 PAYMENT FOR PURCHASED ASSETS. Subject to the terms and conditions
hereof, in reliance upon the representations and warranties of Seller herein set
forth and as consideration for the sale and purchase of the Purchased Assets as
herein contemplated, Purchaser shall assume the Assumed Liabilities as of the
Effective Date of Seller as more fully addressed in Article IV below. As
additional consideration, Seller has received fifty million (50,000,000) shares
of Pacer Health Corporation (the "Pacer Shares") issued to Butterscotch
Investments, L.L.C. at Seller's request valued at $1,100,000.00 as of February
4, 2004.
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The Pacer Shares will be part of the total consideration given to the
Seller as part of the purchase price. To assure that Seller has received fair
market value as determined by an independent evaluation ("Fair Value Opinion"),
(x) if the Fair Value Opinion determines a value higher than the total
consideration provided by the Buyer then Buyer has the option to increase the
Pacer Shares issued or to provide a cash payment prorated over a 36 month period
to make up the difference and (y) if the Fair Value Opinion determines a value
lower than the total consideration provided by the Buyer then the Buyer may
request the return of the excess Pacer Shares issued or allocate the excess
Pacer Shares issued to another transaction with the Seller.
3.2 PRORATION. Seller and Purchaser shall prorate, as of the Effective
Date, any amounts which (x) have been paid prior to the Effective Date for any
period on or after the Effective Date or (y) have not been paid prior to the
Effective Date for any period prior to the Effective Date and become due and
payable on or after the Effective Date with respect to (i) the Contracts
contemplated by Sections 2.1.2, (ii) ad valorem taxes for the current year, if
any, on the Purchased Assets, (iii) all utilities servicing any of the Purchased
Assets, including without limitation, water, sewer, telephone, electricity and
gas service; (iv) rents, license, easement, royalties and other fees with
respect to the Purchased Assets and (v) all other normal and customarily
proratable items; provided however, that, notwithstanding anything to the
contrary contained herein, all deposits on any Contracts assumed by Purchaser
pursuant to Sections 2.1.2 hereinabove shall be refunded to Seller as an
adjustment pursuant to this Section 3.2, to the extent that such deposits are
refundable under the terms of the applicable Contract. All ad valorem taxes with
respect to the Purchased Assets shall be prorated as of the Effective Date based
upon the amount of the most recent tax bills or, if available, the current
year's valuation or assessment and the last known millage rate. If such
proration proves to be incorrect based on the actual tax xxxx when received,
either Party, on demand, shall make such payment as may be required to correct
the prior, inaccurate apportionment. With respect to charges for utilities,
Seller shall pay all charges for utilities accrued prior to the Effective Date,
and Purchaser shall pay all charges for utilities accruing on and after the
Effective Date; provided, however, that if meter readings are not available as
of the Effective Date, the charges for such utility services shall be prorated
between Seller and Purchaser as of midnight of the day before the Effective
Date. Notwithstanding the foregoing, all sales and use taxes, transfer taxes,
and all other impositions of tax arising solely by reason of the transfers
contemplated by this Agreement shall be the responsibility of and shall be borne
by Seller.
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ARTICLE IV. ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS
4.1 GENERAL LIMITATION OF ASSUMPTION OF LIABILITIES. Except for Permitted
Encumbrances and the Assumed Liabilities, Seller shall transfer the Purchased
Assets to Purchaser free and clear of all Encumbrances. Except as provided in
this Article IV, Purchaser shall not, by virtue of its purchase of the Purchased
Assets, assume or become responsible for any liabilities or obligations of
Seller or any other Person. For purposes of this Section 4.1 the phrase
"liabilities and obligations" shall include, without limitation, any direct or
indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, secured
or unsecured.
4.2 ASSUMED LIABILITIES AND OBLIGATIONS OF SELLER. On the Effective Date,
Purchaser shall acquire the Purchased Assets subject only to, and shall
undertake, assume, perform and otherwise pay, satisfy and discharge the
following liabilities and obligations (collectively, the "Assumed Liabilities"):
(a) all obligations of Seller accruing on and after the Effective Date
under the Contracts contemplated by Sections 2.1.2 (except for any
Medicare and Medicaid overpayments or adjustments for services
rendered prior to the Effective Date) provided that the rights
thereunder have been duly and effectively assigned to Purchaser;
(b) all obligations of Seller accruing on and after the Effective Date
under the Permits and Licenses described in Sections 2.1.4, provided
that the rights thereunder have been duly and effectively assigned to
Purchaser; and
(c) accrued and vested vacation, personal, sick and/or other leave
entitlements ("PTO") for those Employees of Seller who were employed
by Purchaser as of February 4, 2004.
(d) any and all Medicare and Medicaid overpayments or adjustments for
services rendered prior to the Effective Date.
(e) all other liabilities listed in SCHEDULE 4.2(E).
Except for the Assumed Liabilities, Purchaser does not and shall not assume or
in any way undertake to pay, perform, satisfy or discharge any other liability
of Seller existing on the Effective Date or arising out of any transactions
entered into, or any state of facts existing, prior to the Effective Date (the
"Retained Liabilities"), and Seller agrees to pay and satisfy all of Seller's
Retained Liabilities.
4.3 Intentionally Omitted;
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4.4 VACATION, PERSONAL, SICK AND/OR OTHER LEAVE ENTITLEMENTS, WORKERS'
COMPENSATION AND DISABILITY CLAIMS. To the extent not assumed by Purchaser and
subject to Seller's right to contest its liability therefor, Seller shall remain
liable for all PTO obligations, workers' compensation, disability and
occupational diseases of or with respect to the Employees employed by Seller
attributable to entitlements, injuries, claims, conditions, events and
occurrences occurring prior to February 4, 2004 regardless of the date on which
the actual claim is made. At or prior to Closing, Seller shall calculate, and
make available for verification by Purchaser, the dollar amount of Seller's
liability through February 4, 2004 for PTO of all Employees employed by Seller
as of February 4, 2004 who were employed by Purchaser and whose PTO has been
assumed by Purchaser pursuant to Section 4.2(c). The Parties hereby agree that
the PTO shall assumed by Seller to Purchaser at Closing. After the Closing,
Purchaser shall be responsible to such Employees for such PTO.
ARTICLE V. CLOSING
5.1 TIME; LOCATION. Subject to the satisfaction or waiver by the
appropriate Party of all the conditions precedent to Closing specified in this
Article V, the consummation of the sale and purchase of the Purchased Assets and
the other transactions contemplated by and described in this Agreement (the
"Closing") shall take place at Xxxxxxxx, Xxxxxxx & Resor, 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxx, on or before March 19, 2004 or at such later
date and/or at such other location as the Parties may mutually designate in
writing (the "Closing Date"). The Closing shall be effective as of 12:01 a.m. on
the calendar day following the Closing Date or such other date and time as the
Parties may mutually designate in writing (the "Effective Date").
5.2 ACTIONS OF SELLER AT THE CLOSING. At the Closing and unless otherwise
waived in writing by Purchaser, Seller shall deliver to Purchaser the following:
5.2.1 A duly executed xxxx of sale and assignment from Seller
substantially in the form of SCHEDULE 5.2.1 hereto, transferring to
Purchaser good and merchantable title to all of the movable property
included in the Purchased Assets of Seller, in "as is" condition, subject
only to Permitted Encumbrances and the Assumed Liabilities.
5.2.1 Intentionally Omitted.
5.2.3 Duly executed assignments of leases and contracts from Seller
substantially in the form of SCHEDULE 5.2.3 hereto, assigning to Purchaser,
to the extent assignable, Seller's right, title and interest in each of the
Contracts and other agreements included in the Purchased Assets, together
with all consents of third parties that are obtained prior to Closing to
make each such assignment effective to such third parties.
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5.2.4 A duly executed Amendment to the Lease Assignment changing the
effect date of the assignment of the Lease from the Assignment Effective
Date (as defined in the Lease Assignment) to the Effective Date
substantially in the form of SCHEDULE 5.24.
5.2.5 A duly executed Power of Attorney substantially in the form of
SCHEDULE 5.2.5 in favor of Purchaser, regarding Seller's pharmacy permits
and controlled dangerous substance licenses.
5.2.6 Intentionally Omitted.
5.2.7 A certified copy of the resolutions duly adopted by the sole
member of Seller authorizing and approving Seller's performance of the
transactions contemplated hereby and Seller's execution, delivery and
performance of this Agreement and the documents described herein to which
Seller is a party, certified as true and of full force as of Closing by an
appropriate officer of Seller.
5.2.8 A certificate of Seller's Chief Executive Officer certifying
that, to such officer's Knowledge, each covenant and agreement of Seller to
be performed prior to or as of Closing pursuant to this Agreement has been
performed.
5.2.9 A certificate of Seller's Chief Executive Officer certifying
that, to such officer's Knowledge, each of the representations and
warranties of Seller set forth herein is true and correct in all material
respects as of the Closing Date or such other date applicable thereto.
5.2.10 Such additional instruments of conveyance and transfer
consistent with the terms hereof as Purchaser may reasonably require in
order to more effectively vest in Purchaser, and put Purchaser in
possession of, the Purchased Assets.
5.3 ACTIONS OF PURCHASER AT THE CLOSING. At the Closing and unless
otherwise waived in writing by Seller, Purchaser shall deliver to Seller the
following:
5.3.1 An assumption agreement executed by Purchaser substantially in
the form of SCHEDULE 5.3.1 hereto, pursuant to which Purchaser shall assume
the future payment and performance of the Assumed Liabilities as herein
provided.
5.3.2 A certified copy of the resolutions duly adopted by the Board of
Directors of Purchaser authorizing and approving its performance of the
transactions contemplated hereby and the execution, delivery and
performance of this Agreement and the documents described herein to which
it is a party, certified as true and of full force as of Closing by an
appropriate officer of Purchaser.
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5.3.3 A certificate of the President or a Vice President of Purchaser
certifying that, to such President or a Vice President's Knowledge, each
covenant and agreement of Purchaser to be performed prior to or as of
Closing pursuant to this Agreement has been performed.
5.4 REASONABLE STEPS. Seller shall make such efforts as may be appropriate
and necessary so that on the Closing Date, Purchaser shall be placed in actual
possession and control of all of the Purchased Assets.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Purchaser, that, to the best of Seller's Knowledge each of the following
representations and warranties is true and correct as of the date hereof or such
other date as specified below:
6.1 ORGANIZATION; GOOD STANDING; POWER. Seller is a Louisiana limited
liability company, duly organized and existing under the laws of the State of
Louisiana. Seller has the requisite power and authority to enter into this
Agreement, perform its obligations hereunder and to conduct its business as now
being conducted.
6.2 AUTHORIZATION OF AGREEMENT. Seller has taken all necessary action to
authorize the execution and delivery of this Agreement and will take as of the
Closing, all necessary action to authorize the execution and delivery of the
Ancillary Agreements to which it is a party, the performance by it of all terms
and conditions hereof and thereof to be performed by it and the consummation of
the transactions contemplated hereby and thereby.
6.3 ENFORCEABILITY. This Agreement constitutes, and the Ancillary
Agreements to which Seller is party, upon Seller's execution and delivery
thereof, will constitute the legal, valid and binding obligations of Seller,
enforceable in accordance with their terms except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws presently or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
6.4 NO VIOLATIONS; CONSENTS. Except as set forth on SCHEDULE 6.4, the
execution, delivery and performance by Seller of this Agreement and the
Ancillary Agreements to which Seller is a party, and the consummation of the
transactions contemplated hereby and thereby will not (with or without the
giving of notice or the lapse of time, or both) (i) violate any provision of the
Articles of Organization of Seller; (ii) violate or require any consent,
authorization or approval of, or exemption by, or filing under any provision of
any law, statute, rule or regulation to which Seller, the Facilities or the
Purchased Assets are subject; (iii) violate any judgment, order, writ or decree
of any court applicable to Seller, the Facilities or the Purchased Assets; (iv)
conflict with, result in a breach of, constitute a default under (or a default
that might, with the passage of time or the giving of notice or both, constitute
17
a default), or accelerate or permit the acceleration of the performance required
by, or require any consent, authorization or approval under any Contract or
other instrument, document or undertaking to which Seller is a party or any of
the Purchased Assets is bound or (v) result in the creation or imposition of any
Encumbrances upon the Purchased Assets; except with respect to clauses (ii),
(iii), (iv) or (v) where such violation, requirement, conflict, breach, default,
acceleration, creation or imposition will not have a Material Adverse Effect.
6.5 FINANCIAL STATEMENTS. Seller has delivered to Purchaser true and
complete copies of the (i) Financial Statements of Seller for fiscal years
ending November 30, 2003 and, and the related consolidated statements of income
and cash flows for said years, (ii) all unaudited monthly statements of profit
and loss available to date for calendar year 2004 with respect to the operation
of the Facilities. True and correct copies of such financial statements are
contained in SCHEDULE 6.5. The foregoing financial statements have been prepared
from the Books and Records of Seller, as the case may be, in accordance with
GAAP throughout the periods involved except as may be noted therein. Such
financial statements, including the related notes, are true and correct and
fairly present, in all material respects, the financial position of Seller, as
the case may be, at the dates indicated and the results of operations and cash
flows of Seller, as the case may be, for the periods then ended in accordance
with GAAP.
6.6 INVENTORY. The Inventory was or will be acquired and maintained in
accordance with the regular business practices of Seller, consists or will
consist of items of a quality and quantity Seller believes is usable or salable
in the Ordinary Course of Business, and is or will be valued by Seller in
accordance with GAAP.
6.7 Intentionally omitted.
6.8 Intentionally omitted.
6.9 Intentionally omitted.
6.10 CONTRACTS AND COMMITMENTS.
(a) Each of the material Contracts and other material instruments,
documents and undertakings listed on SCHEDULE 2.1.2 is valid and enforceable in
accordance with its terms (except to the extent that enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws presently or
hereafter in effect relating to or affecting the enforcement of creditors'
rights generally and by general principles of equity), the parties thereto are
in material compliance with the material provisions thereof, neither party is in
default in the performance, observance or fulfillment of any material
obligation, covenant or condition contained therein, and no event has occurred
that with or without the giving of notice or lapse of time, or both, would
constitute a material default thereunder.
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(b) Except as set forth on SCHEDULE 2.1.2, no advance payment has been
received by Seller by or on behalf of any party to any of the Contracts and
other instruments, documents and undertakings listed thereon for services to be
rendered or products to be delivered by such party after the Closing.
6.11 PERMITS AND LICENSES.
(a) Seller has as of the Closing, all Permits and Licenses and any
certificates of need that are required to operate the Hospital as a 25 bed
hospital with a 24 bed remote campus consistent with all Legal Requirements
(including without limitation those required under any Environmental Law) and
Seller is or will be in compliance with the terms and conditions of the Permits
and Licenses and the Provider Agreements except where the failure to have such
Permits and Licenses or to be in compliance therewith will not have a Material
Adverse Effect. SCHEDULE 2.1.4 hereto set forth a correct and complete list of
all Permits and Licenses, each one of which is in full force and effect. No
suspension or cancellation of any of the Permits and Licenses or Provider
Agreements is threatened and no cause exists for such suspension or
cancellation.
(b) Without limiting the generality of the foregoing, the facilities,
equipment and operations of the Facilities satisfy the applicable hospital
licensing requirements of the State of Louisiana and the requirements for
participation in the Medicare and Medicaid Programs.
6.12 COMPLIANCE WITH LAWS AND ACCREDITATION REQUIREMENTS. Except as
described in SCHEDULE 6.12 hereto, Seller has at all times, operated, and is
presently operating, the Facilities so as to comply in all material respects
with all Legal Requirements and all requirements of any Accreditation Body
applicable to the operation of the Facilities or the ownership or use of the
Purchased Assets except where the failure to comply will not have a Material
Adverse Effect.
6.13 LEGAL PROCEEDINGS. Except as described in SCHEDULE 6.13 hereto or
where the results thereof will not have a Material Adverse Effect, there is no
claim, action, suit, proceeding, investigation or inquiry pending before any
Governmental Authority or threatened against Seller with respect to the
operation of the Facilities or the Purchased Assets owned or used by it in
connection therewith, or relating to the transactions contemplated by this
Agreement, nor is there any valid basis for any such claim, action, suit,
proceeding, investigation, or inquiry. Except as set forth on SCHEDULE 6.13
hereto, Seller is not a party to or subject to the provisions of any judgment,
order, writ, injunction, decree or award of any court, arbitrator or
governmental, regulatory or administrative official, body or authority that
relates to the operation of the Facility or the Purchased Assets.
6.14 Intentionally Omitted.
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6.15 BOOKS AND RECORDS. All books of account and other financial records of
Seller directly relating to the Facility (the "Books and Records") are
materially complete and correct and have been made available to Purchaser. All
of the Books and Records have been prepared and maintained in accordance with
good business practices and, where applicable, in conformity with GAAP (except
as otherwise stated therein) and in compliance in all material respects with all
Legal Requirements.
6.16 Intentionally Omitted.
6.17 LABOR DISPUTES. Except as described in SCHEDULE 6.17 hereto or where
the results thereof will not have a Material Adverse Effect, there are no
material discrimination complaints nor any other kind of employment or labor
related disputes against Seller in connection with the operation of Facility
pending before or threatened before any federal, state or local court or agency,
and no material dispute respecting minimum wage or overtime claims or other
conditions or terms of employment exists. The Facility has not experienced any
material labor disputes or any material work stoppage due to labor disagreements
within the past three years. With respect to the Facility and except to the
extent set forth in SCHEDULE 6.17 or where the results thereof will not have a
Material Adverse Effect: (i) there is no unfair labor practice charge or
complaint against Seller pending or threatened before the National Labor
Relations Board; (ii) there is no labor strike, slow down or stoppage pending or
threatened against or affecting Seller; and (iii) no question concerning
representation has been raised within the past three years or is threatened
respecting the Employees.
6.18 BENEFIT PLANS. Seller has provided Purchaser with information and
documentation on each employee benefit plan (written and unwritten) subject to
ERISA and any other (written or unwritten) profit sharing, pension, savings,
deferred compensation, fringe benefit, insurance, medical, medical
reimbursement, life, disability, accident, post-retirement, health or welfare
benefit, stock option, stock purchase, sick pay, vacation, employment,
severance, termination or other plan or arrangement (each, a "Benefit Plan")
maintained by or with respect to which Seller has any liability or obligation,
whether actual or contingent, funded or unfunded, with respect to the Employees
or their respective beneficiaries.
6.19 NO FINDER. Seller has not taken any action that would give to any
Person a right to a finder's fee or any type of brokerage commission in relation
to, or in connection with, the transactions contemplated by this Agreement.
6.20 Intentionally Omitted.
6.21 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 6.21:
6.21.1 COMPLIANCE: NO LIABILITY. Seller has operated the Facilities in
material compliance with all applicable Environmental Laws. Seller is not
subject to any liability, penalty or expense (including legal fees), and
Purchaser will not suffer or incur any material loss, liability, penalty or
20
expense (including legal fees), by virtue of any violation of any
Environmental Law occurring prior to the Closing with respect to the
Facilities, any environmental activity conducted on or with respect to the
Facilities by Seller prior to the Closing or any environmental condition
existing on or with respect to the Facilities prior to the Closing, in each
case whether or not Seller permitted or participated in such act or
omission.
6.21.2 TREATMENT; CERCLA. Seller has not treated, stored, recycled or
disposed of any hazardous material, and, to the best of Seller's Knowledge,
no other Person has treated, stored, recycled or disposed of any hazardous
material in the vicinity of the Facilities except in compliance with
applicable Environmental Laws. To the best of Seller's Knowledge, there has
been no release of any hazardous material at, on or under or surrounding
the Facilities except in compliance with applicable Environmental Laws.
Seller has not transported any hazardous material or arranged for the
transportation of any hazardous material to any location that is listed or
proposed for listing on the National Priorities List pursuant to Superfund,
on CERCLA or any other location that is the subject of federal, state or
local enforcement action or other investigation that may lead to claims
against Seller for cleanup costs, remedial action, damages to natural
resources, to other property or for personal injury including claims under
Superfund. The Facilities are not listed, or proposed for listing on the
National Priorities List pursuant to Superfund, CERCLA or any state or
local list of sites requiring investigation or cleanup.
6.21.3 NOTICES; EXISTING CLAIMS; CERTAIN HAZARDOUS MATERIALS; STORAGE
Tanks. Seller has not received any request for information, notice of
claim, demand or other notification that it is or may be potentially
responsible with respect to any investigation, abatement or cleanup of any
threatened or actual release of any hazardous material with respect to the
Facilities. Seller is not required to place any notice or restriction
relating to the presence of any hazardous material in the vicinity of the
Facilities. There has been no past, and, to the best of Seller's Knowledge,
there is no pending or contemplated claim against Seller under any
Environmental Law or Legal Requirement based on actions of others that may
have impacted on the Facilities, and Seller has not entered into any
agreement with any Person regarding any remedial action or other
environmental liability or expense for violation of any Environmental Law
with respect to the Facilities, other than in the Ordinary Course of
Business. All storage tanks located on the Immovable Property upon which
the Facilities are located, whether underground or aboveground, are
disclosed on SCHEDULE 6.21 and all such tanks and associated piping are in
sound condition and, to the best of Seller's Knowledge, are not leaking and
have not leaked.
6.21.4 ASBESTOS. To Seller's knowledge, without investigation, none of
the Purchased Assets contain any asbestos in violation of any Environmental
Law.
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6.22 INSURANCE. SCHEDULE 6.22 sets forth a complete list of all insurance
policies maintained by Seller for the Facilities and policies with respect to
which Seller was the owner, insured or beneficiary for the past three years and
all insurance policies known by Seller to have been maintained by any other
Person which may provide any coverage for liabilities relating in any manner to
the operation of the Facilities. SCHEDULE 6.22 also sets forth a true and
correct summary of the loss experiences for the last three years under each such
policy. Seller will not have liability after the Closing for retrospective or
retroactive premium adjustments. Except as disclosed in SCHEDULE 6.22, all of
such insurance policies covering products liability and general liability have
been "occurrence" policies and not "claims made" policies.
6.23 NO SIGNIFICANT ITEMS EXCLUDED. Except for Excluded Assets, there are
no significant assets, properties, Contracts, Permits or other items of Seller
that are of material importance to the ongoing operation of the Facilities by
Purchaser in substantially the same manner in which the Facilities was operated
prior to the date of this Agreement which have been excluded from this
Agreement.
6.24 Intentionally Omitted.
6.25 TAX RETURNS. Seller has filed or caused to be filed, or will file or
cause to be filed, all Tax Returns that are required to be filed by them prior
to the Closing Date, pursuant to all Legal Requirements of each Governmental
Authority with taxing power over it. All such Tax Returns were or will be, as
the case may be, correct and complete in all material respects. Seller has paid
or will pay all Taxes that have or will become due as shown on such Tax Returns
or pursuant to any assessment received as an adjustment to such Tax Returns,
except (i) such Taxes, if any, as are being contested in good faith and
disclosed on SCHEDULE 6.25, (ii) such Taxes that are fully reserved against on
the financial statements of Seller previously provided to Purchaser and (iii)
Taxes accruing that are not yet due. Except as set forth on SCHEDULE 6.25,
Seller is not currently the beneficiary of any extension of time within which to
file any Tax Return. No claim has been made by any taxing authority of a
jurisdiction other than one in which the Facilities are located. Seller will
withhold and pay all Taxes required to have been withheld in connection with
amounts paid or owing to any Employee, independent contractor, creditor or other
third party.
6.26 Intentionally Omitted.
6.27 Intentionally Omitted.
6.28 COST REPORTS. Except as indicated on SCHEDULE 6.28 hereto, Medicare
and Medicaid cost reports required to be filed by Seller for the Facilities have
been filed by the required filing dates (as extended). There is no dispute
between the Facilities and any Governmental Authorities or the Medicare fiscal
intermediary regarding any of the Facilities' audited cost reports or regarding
their remaining unaudited cost reports. Except as indicated on SCHEDULE 6.28
hereto, there are no Medicare or Medicaid overpayments for the aforesaid cost
22
reporting periods and, to the best of Seller's Knowledge, for the cost reporting
periods for which cost reports are not yet required by applicable regulation to
be filed and which have not yet been filed, including the time period from the
end of the most recent cost reporting period and the Closing. True and correct
copies of all such reports which have been filed or which were required to be
filed for the four (4) most recent fiscal years of the Facilities have been made
available to Purchaser.
6.29 TITLE TO MOVABLE PROPERTY. Except as set forth on SCHEDULE 6.29,
Seller has good and valid title to and ownership of all movable property,
whether corporeal or incorporeal, making up all or any portion of the Purchased
Assets, except for movable property leased by Seller, for which Seller has good
and valid leasehold interests. Except as set forth in SCHEDULE 6.29, none of the
Purchased Assets that constitute movable property owned by Seller is subject to,
as of the Closing Date, any Encumbrance, other than the Permitted Encumbrances
and Assumed Liabilities. At Closing, Seller will convey to Purchaser, in "as is"
condition, good and valid title to the Purchased Assets that constitute movable
property, whether corporeal or incorporeal, free and clear of any Encumbrance,
other than the Permitted Encumbrances and Assumed Liabilities. At Closing,
Seller will convey to Purchaser good and valid leasehold interests in the
Purchased Assets that constitute movable property, whether corporeal or
incorporeal, that are subject to a lease which is assumed, free and clear of any
Encumbrance, other than Assumed Liabilities.
6.30 REGULATORY COMPLIANCE; IMPROPER PAYMENTS.
(a) Except as set forth in SCHEDULE 6.30 hereto, Seller has not received
any written notice from any Governmental Authority, that the Facilities are not
in compliance in all material respects with all applicable statutes, rules,
regulations and requirements of all Governmental Authorities having jurisdiction
over the Facilities and the operations of the Facilities. Seller has timely
filed all reports, data and other information required to be filed with such
commissions, boards, bureaus and agencies where a failure to file timely would
have a Material Adverse Effect. Seller is not in violation of, and has not
violated, any applicable provisions of any Legal Requirements, except for
violations which will not have, individually or in the aggregate, a Material
Adverse Effect. Seller has been and is in compliance with all permits, licenses,
franchises, variances, exceptions, orders, consents, approvals, authorizations
of and registrations with and under all federal, state, local and foreign laws,
and from all Governmental Authorities required by Seller to carry on its
business as currently conducted, except where the failure to have or be in
compliance with the permits, licenses, franchises, variances, exceptions,
orders, consents, approvals, authorizations or registrations will not have,
individually or in the aggregate, a Material Adverse Effect.
(b) Except to the extent permitted by applicable law, neither Seller nor
any partner, member, director, officer or employee of Seller, nor any agent
acting on behalf of or for the benefit of any of the foregoing, has directly or
indirectly: (i) offered, paid or received any remuneration, in cash or in kind,
to, or made any financial arrangements, with any past, present or potential
23
customers, past or present suppliers, patients, medical staff members,
contractors or third party payors of Seller in exchange for business or payments
from such persons; (ii) given or agreed to give, received or agreed to receive,
or is aware that there has been made or that there is any agreement to make, any
gift or gratuitous payment of any kind, nature or description (whether in money,
property or services) to any customer or potential customer, supplier or
potential supplier, contractor, third party payor or any other person in
exchange for business or payments except to the extent permitted by applicable
law or regulation; (iii) made or agreed to make, or is aware that there has been
made or that there is any agreement to make, any contribution, payment or gift
of funds or property to, or for the private use of, any governmental official,
employee or agent where either the contribution, payment or gift or the purpose
of such contribution, payment or gift is or was illegal under the laws of the
United States or under the laws of any state or local governmental entity having
jurisdiction over such payment, contribution or gift; (iv) established or
maintained any unrecorded fund or asset for any improper purpose or made any
misleading, false, or artificial entries on any of its books or records for any
reason; (v) made, or agreed to make, or is aware that there has been made or
that there is any agreement to make, any improper payment to any person; or (vi)
made any payment for or agreed to make any payment for any goods, services, or
property in excess of fair market value except to the extent permitted by
applicable law or regulation.
(c) Except as permitted by applicable law or regulation or listed as an
Excluded Contract, neither Seller nor any of its partners, members, directors,
officers or employees is a party to any contract, lease agreement or other
arrangement (including but not limited to any joint venture or consulting
agreement) related to Seller, the Facilities or the Purchased Assets with any
physician, physical or occupation therapist, health care facility, hospital,
nursing facility, home health agency or other person who is in a position to
make or influence referrals to or otherwise generate business for Seller with
respect to the Facilities or the Purchased Assets, to provide services, lease
space, lease equipment or engage in any other venture or activity.
6.31 MEDICAL STAFF MATTERS. SCHEDULE 6.31 includes true, correct, and
complete copies of the bylaws and rules and regulations of the medical staff of
the Facilities. With regard to the medical staff of the Facilitiers and except
as set forth on SCHEDULE 6.31 hereto, there are no pending or threatened
disputes with applicants, staff members or health professional affiliates and
all appeal periods in respect of any medical staff member or applicant against
whom an adverse action has been taken have expired. SCHEDULE 6.31 includes
written disclosure containing a brief general description of all adverse actions
taken in the six (6) months prior to the date hereof against medical staff
members or applicants which could result in claims or actions against Seller.
SCHEDULE 6.31 includes a list of the members of the Facilities' medical staff.
Except as listed on SCHEDULE 6.31, (i) no Employee or independent contractor of
the Facilities (whether an individual or entity), or any member of Facilities'
medical staff has been excluded from participating in any federal health care
program (as defined in 42 U.S.C. ss. 1320a-7b(f)) during the last five (5) years
and (ii) none of the officers, directors, agents or managing employees (as such
term is defined in 42 U.S.C. ss. 1320a-5(b)) of Seller, has been excluded from
24
Medicare or any federal health care program (as defined in 42 U.S.C. ss.
1320a-7b(f)) or been subject to sanction pursuant to 42 U.S.C. ss. 1320a-7a or
1320a-8 or been convicted of a crime described at 42 U.S.C. ss. 1320a-7b.
6.32 PARTICIPATION IN THIRD PARTY PAYOR PROGRAMS/ACCREDITATION. The
Facilities are certified for participation in the Third Party Payor Programs
where the failure to be so certified will have a Material Adverse Effect, and
has a current and valid Provider Agreements for participation in each of such
Third Party Payor Programs. The Facilities are is in compliance in all material
respects with the conditions of participation in such Third Party Payor Programs
and with the terms, conditions and provisions of the related Provider
Agreements. Seller has received all approvals or qualifications necessary for
capital reimbursement of the Facilities. There is no proceeding, investigation
or survey pending or threatened, involving any of the Medicare, Medicaid or
TRICARE programs, or any other material Third Party Payor Programs, and Seller
has no reason to believe that any such investigations or surveys are pending,
threatened, or imminent. Neither Seller nor any of its Employees, officers,
directors, or controlling partners or owners are excluded from participation in
the Third Party Payor Programs, nor is any such exclusion pending or threatened.
Neither Seller nor any of its Employees, officers, directors, or controlling
partners or owners have committed a violation of any Legal Requirement,
specifically including, but not limited to, Medicare and Medicaid fraud and
abuse provisions of the federal Social Security Act.
6.33 COMPLETENESS AND ACCURACY. All information set forth on any Schedule
hereto is true, correct and complete to the best of Seller's Knowledge. All
Contracts, Permits and Licenses and other documents and instruments furnished or
made available to Purchaser by Seller are or will be true, complete and accurate
originals or copies of originals and, to the best of Seller's Knowledge, include
all amendments, supplements, waivers and modifications thereto.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated hereby, Purchaser represents and warrants to
Seller, that each of the following representations and warranties is true and
correct as of the date hereof:
7.1 ORGANIZATION; GOOD STANDING; POWER. Purchaser is a Florida corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida and has all requisite power and authority to own and lease the
Purchaser Purchased Assets and to execute and deliver this Agreement and the
Ancillary Agreements to which Purchaser is a party, to consummate the
transactions contemplated hereby and thereby and to perform all the terms and
conditions hereof and thereof to be performed by it.
7.2 AUTHORIZATION OF AGREEMENT. Purchaser has taken all necessary action to
authorize the execution and delivery of this Agreement, and will take as of the
Closing, all necessary corporate action to authorize the execution and delivery
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of the Ancillary Agreements to which Purchaser is a party, the performance by it
of all terms and conditions hereof and thereof to be performed by it and the
consummation of the transactions contemplated hereby and thereby.
7.3 ENFORCEABILITY. This Agreement constitutes, and the Ancillary
Agreements to which Purchaser is a party, upon Purchaser's execution and
delivery thereof, will constitute, the legal, valid and binding obligations of
Purchaser, enforceable in accordance with their terms except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
presently or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
7.4 NO VIOLATIONS; CONSENTS. Except as set forth on SCHEDULE 7.4, the
execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements to which Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby will not (with or without the
giving of notice or the lapse of time, or both) (i) violate any provision of the
Articles of Incorporation or bylaws of Purchaser, (ii) except with respect to
notices and consents required to be given by Purchaser to any Accreditation Body
or Governmental Authority in connection with the sale and change of ownership of
the Purchased Assets and the Facilities, violate, or require any consent,
authorization or approval of, or exemption by, or filing under any provision of
any contract, law, statute, rule or regulation to which Purchaser is subject,
(iii) violate any judgment, order, writ or decree of any court applicable to
Purchaser, (vi) conflict with, result in a breach of, constitute a default under
(or a default that might, with the passage of time or the giving of notice or
both, constitute a default), or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval under
any agreement, contract, commitment, lease or other instrument, document or
undertaking to which Purchaser is a party or (v) result in the creation or
imposition of any Encumbrance upon its assets; except with respect to clauses
(ii), (iii), (iv) or (v) where such violation, requirement, conflict, breach,
default, acceleration, creation or imposition will not have a Material Adverse
Effect.
7.5 LEGAL PROCEEDINGS. There is no claim, action, suit, proceeding,
investigation or inquiry pending before any Governmental Authority or, to
Purchaser's Knowledge, threatened against Purchaser or any of Purchaser's
properties, assets, operations or facilities that might prevent or delay the
consummation of the transactions contemplated hereby. Purchaser is not a party
to or subject to the provisions of any judgment, order, writ, injunction, decree
or award of any court, arbitrator or governmental, regulatory or administrative
official, body or authority that might affect the transaction contemplated
hereby.
7.6 NO FINDER. Except as set forth on SCHEDULE 7.6, Purchaser has not taken
any action which would give to any Person a right to a finder's fee or any type
of brokerage commission in relation to, or in connection with, the transactions
contemplated by this Agreement.
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ARTICLE VIII. COVENANTS OF SELLER
PRIOR TO AND AFTER THE CLOSING DATE
8.1 REQUIRED ACTIONS. Between the Effective Date of this Agreement and the
completion date of the Disclosure Schedules as more fully addressed in Section
15.19 Seller covenants that it will, except as otherwise agreed by Purchaser in
writing:
8.1.1 ACCESS TO INFORMATION. Give to Purchaser and its counsel,
accountants, environmental consultants, engineers, architects and other
representatives, for the purpose of audit, review and copying, reasonable
access, during normal business hours, to such of the properties, books,
accounts and records of Seller as are relevant to the Purchased Assets and
the Facilities, and furnish or otherwise make available to Purchaser all
such information concerning the Purchased Assets and the Facilities as
Purchaser may reasonably request.
8.1.2 APPROVALS; CONSENTS. Seek to obtain in writing as promptly as
possible any approvals and consents required to be obtained by Seller in
order (i) to transfer the Facilities, and (ii) to effectively assign the
Contracts listed on SCHEDULE 2.1.2. Notwithstanding the foregoing,
Purchaser shall be responsible for the costs and expenses necessary to
obtain Licenses and agreements from required Governmental Authorities so
that Purchaser may operate the Facilities after the Closing. Seller shall
submit such documentation regarding the transactions that are provided for
in this Agreement as may be requested by DHH or any other Governmental
Authority. At such time as mutually agreed to by the Parties, Seller shall:
(a) provide Purchaser with copies of all Permits and Licenses,
certificates of need and all Provider Agreements;
(b) notify each Accreditation Body and Third Party Payor as required
by any Legal Requirement of the pending change of ownership of the
Facilities; and
(c) provide such other notices as required by all Legal Requirements
including, if required, (i) notices to the Facilities' patients and
(ii) notices to referral or human service agencies. Prior to sending
the notices, Seller shall provide copies to Purchaser for review and
approval, which approval shall not be unreasonably withheld, delayed
or conditioned.
8.1.3 NOTICE OF MATERIAL DAMAGE. Give to Purchaser prompt notice in
writing of any fact that, if known on the date hereof, would have been
required to be set forth or disclosed in or pursuant to this Agreement, or
which would result in the breach in any material respect by Seller of any
of its representations, warranties, covenants or agreements hereunder;
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8.1.4 COMPLIANCE WITH AGREEMENT. Not undertake any course of action
inconsistent with satisfaction of the conditions applicable to it set forth
in this Agreement, and use all reasonable efforts to do all such acts and
take all such measures as may be reasonably necessary to comply with the
representations, agreements, conditions and other provisions of this
Agreement;
8.1.5 UPDATE SCHEDULE. Promptly disclose to Purchaser any information
contained in the representations and warranties of Seller contained in
Article VI or in any of the Schedules to this Agreement which is no longer
complete or correct (including furnishing updated financial statements);
8.1.6 INTERIM FINANCIAL STATEMENTS. Deliver to Buyer within fifteen
(15) days after the end of each month a copy of the interim balance sheet
for such month prepared in a manner and containing information consistent
with Seller's current practices; and
8.2 MEDICARE AND MEDICAID COST REPORTS. Seller shall timely file all
Medicare and Medicaid cost reports for all cost reporting periods for which the
deadline for filing will arise after the Effective Date, in accordance with all
applicable Legal Requirements, including the final Medicare and Medicaid cost
reports for the Facilities which must be filed no later than five (5) months
following the Effective Date. Purchaser shall be liable for any Medicare or
Medicaid overpayments or any other financial obligations arising from any
adjustments or reductions in Medicare or Medicaid reimbursement for the period
of time prior to the Effective Date, or for any other obligations imposed by
either the Medicare or Medicaid program for the period of time prior to the
Effective Date. Subject to the provisions of this Agreement, any liability of
Seller required to be paid as a result of any such cost report for any time
period prior to the Effective Date shall be paid by Seller in accordance with
any repayment plans with the Centers for Medicare & Medicaid Services ("CMS"),
and Purchaser shall be entitled to receive, and Purchaser shall promptly remit
to Seller if it receives, any refunds or cash settlements resulting from the
audit of such cost reports. Prior to the Closing Date, Seller shall take such
actions as may be necessary to determine any potential liability for an
overpayment or for other possible adjustments to such Medicare and Medicaid
reimbursement or anticipated cost reports and shall promptly disclose such
information to Purchaser. Seller's action shall include the preparation of
preliminary cost reports for operations prior to the Effective Date. Any appeals
from any such notices of overpayment or other obligations imposed by the
Medicare or Medicaid programs shall be the responsibility of Seller, and such
appeals shall have no effect on Seller's obligations under this Section.
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ARTICLE IX. COVENANTS OF PURCHASER
PRIOR TO AND AFTER THE CLOSING DATE
9.1 REQUIRED ACTIONS. Between the Effective Date of this Agreement and the
competition of the Disclosure Schedules as more fully addressed in Section 15.19
Purchaser shall, except as otherwise agreed by Seller in writing:
9.1.1 ADVISE OF CHANGES. Advise Seller promptly in writing of any fact
that, if known on the date hereof, would have been required to be set forth
or disclosed in or pursuant to this Agreement, or which would result in the
breach by Purchaser of any of its representations, warranties, covenants or
agreements hereunder;
9.1.2 COMPLIANCE WITH AGREEMENT. Not undertake any course of action
inconsistent with satisfaction of the conditions applicable to it set forth
in this Agreement, and Purchaser shall use its best efforts to do all such
acts and take all such measures as may be reasonably necessary to comply
with the representations, agreements, conditions and other provisions of
this Agreement;
9.1.3 Intentionally omitted;
9.1.4 COOPERATION. Cooperate with Seller and its agents in connection
with the transfer of all Permits and Licenses necessary to operate the
Facilities and in obtaining the approvals and consents as contemplated by
Section 8.1.7 hereof; and
9.2 ASSUMED LIABILITIES. After the Closing, Purchaser shall timely pay all
of the Assumed Liabilities except for those contested pursuant to Section 12.2.4
hereof and shall timely perform the obligations it has agreed to perform after
the Closing.
ARTICLE X. CONDITIONS PRECEDENT
TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to proceed with the Closing under this
Agreement is subject to the fulfillment prior to the specified date or at the
time of the Closing of the following conditions with respect to Seller, any one
or more of which may be waived in whole or in part by Purchaser:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in this Agreement shall have been true in all
material respects as of the date hereof or such other specified date and shall
be true in all material respects on and as of the Closing Date or such other
specified date with such changes therein as are contemplated by the terms of
this Agreement.
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10.2 PERFORMANCE OF AGREEMENT. Seller shall have performed in all material
respects all obligations and agreements and complied in all material respects
with all covenants and conditions contained in this Agreement to be performed or
complied with by it at or prior to the Closing.
10.3 SELLER'S CERTIFICATE. Purchaser shall have received a certificate from
Seller, dated as of the Closing, reasonably satisfactory in form and substance
to Purchaser and its counsel, certifying as to the matters specified in Section
10.1 and Section 10.2 hereof. The matters set forth in such certificate shall
constitute representations and warranties of Seller hereunder.
10.4 SELLER'S SECRETARY'S CERTIFICATE. Purchaser shall have received a
certificate, dated as of the Closing, of an authorized representative of Seller
with respect to:
(a) the resolutions of the Board of Directors and sole member of
Seller, authorizing the execution and delivery of this Agreement and the
Ancillary Agreements to which Seller is a party and the performance by
Seller of the transactions contemplated hereby and thereby; and
(b) the incumbency of each officer or representative of Seller
executing this Agreement, the certificate referred to in Section 10.3 and
the Ancillary Agreements to which Seller is a party.
10.6 INJUNCTION. As of the Closing, there shall be no injunction, writ,
preliminary restraining order or any order of any nature in effect issued by a
court of competent jurisdiction directing that the transactions provided for
herein, or any of them, not be consummated as herein provided and no suit,
action investigation, inquiry or other legal or administrative proceeding by any
Governmental Authority or other Person shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
or which if successfully asserted will otherwise have a Material Adverse Effect
on the conduct of the Facilities or impose any additional material financial
obligation on, or require the surrender of any material right by, Purchaser.
10.7 ACTIONS AND PROCEEDINGS. All Seller actions, proceedings, instruments
and documents required to carry out the transactions contemplated by this
Agreement or incidental hereto and all other related legal matters shall be
reasonably satisfactory to counsel for Purchaser, and such counsel shall have
been furnished with certified copies of such Seller actions and proceedings and
such other instruments and documents as it shall have reasonably requested,
including, without limitation:
(a) incumbency certificates dated as of the Closing, signed by
officers of Seller certified by the secretary or assistant secretary of
Seller; and
(b) true and correct copies of the Article of Organization (and any
amendments thereto) of Seller, certified by the Louisiana Secretary of
State; and
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(c) original certificates of good standing of Seller from the
Louisiana Secretary of State, dated the most recent practical date prior to
Closing.
10.8 CONSENTS. Any consents, approvals, authorizations or Permits required
from any Governmental Authorities necessary for the conveyance of the Purchased
Assets or valid consummation of the transactions contemplated hereby shall have
been obtained, or Purchaser has received reasonable assurances that they will be
able to be obtained after the Closing.
10.9 Intentionally omitted.
10.10 CLOSING DOCUMENTS. Purchaser shall have received the other documents
referred to in Section 5.2.
10.11 Intentionally omitted.
10.12 ABSENCE OF INVESTIGATIONs. As of the Closing, there are no surveys,
inspections, audits, reviews, investigations or comparable actions currently
being undertaken of or at the Facilities (other than routine audits of the cost
reports of the Facility or annual surveys of the Facility) by any Governmental
Authority, authorized representative of a Governmental Authority, including the
fiscal intermediary, or any Accreditation Body (collectively, the
"Investigations" or individually, an "Investigation"), the results of which will
have a Material Adverse Effect on the Purchased Assets or the Facilities.
10.13 SUPERVENING LAW. No Governmental Authority (or their representatives)
which administers Medicare, any other payor, or any other federal, state or
local government or agency has passed, issued or promulgated after the date
hereof any law, rules, regulation, standard or interpretation, including
standards and interpretations of existing law, or any court of competent
jurisdiction has rendered after the date hereof any decision or issued any other
pronouncement, which prohibits, restricts, limits or in any way substantially
adversely changes the Third Party Payor Programs or the then current operations
of the Facility or which otherwise significantly adversely affects either
Party's rights or obligations under this Agreement.
ARTICLE XI CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER
The obligation of Seller to proceed with the Closing under this Agreement
is subject to the fulfillment prior to the specified date or at the time of the
Closing of the following conditions with respect to Purchaser, any one or more
which may be waived in whole or in part by Seller:
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11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in this Agreement shall have been true in all
material respects as of the date hereof and shall be true in all material
respects on and as of the Closing Date with such changes therein as are
contemplated by the terms of this Agreement.
11.2 PERFORMANCE OF AGREEMENT. Purchaser shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement to be
performed or complied with by it at or prior to the Closing.
11.3 PURCHASER'S CERTIFICATE. Seller shall have received a certificate from
Purchaser, dated as of the Closing, reasonably satisfactory in form and
substance to Seller and its counsel, certifying as to the fulfillment of all
matters specified in Section 11.1 and Section 11.2 hereof. The matters set forth
in such certificate shall constitute representations and warranties of Purchaser
hereunder.
11.4 PURCHASER'S SECRETARY'S CERTIFICATE. Seller shall have received a
certificate, dated as of the Closing, of an authorized representative of
Purchaser with respect to:
(a) the resolutions of the Board of Directors of Purchaser authorizing
the execution and delivery of this Agreement and the Ancillary Agreements
to which Purchaser is a party and the performance by Purchaser of the
transactions contemplated hereby and thereby; and
(b) the incumbency of each officer of Purchaser executing this
Agreement and the Ancillary Agreements to which Purchaser is a party.
11.5 INJUNCTION. As of the Closing, there shall be no injunction, writ,
preliminary restraining order or any order of any nature in effect issued by a
court of competent jurisdiction directing that the transactions provided for
herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any Governmental Authority or other Person shall have been instituted,
threatened or anticipated which questions the validity or legality of the
transactions contemplated hereby.
11.6 ACTIONS AND PROCEEDINGS. All Purchaser actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental hereto and all other related legal matters shall be
reasonably satisfactory to counsel for Seller, and such counsel shall have been
furnished with such certified copies of such company actions and proceedings and
such other instruments and documents as it shall have reasonably requested,
including, without limitation:
32
(a) incumbency certificates dated as of the Closing, signed by the
authorized representative of Purchaser and certified by an authorized
representative of Purchaser; and
(b) true and correct copies of the Articles of Incorporation (and any
amendments thereto) of Purchaser as of the Closing, certified by the
Florida Secretary of State; and
(c) original certificate of good standing of Purchaser from the
Florida Secretary of State, dated the most recent practical date prior to
Closing.
11.8 CONSENTS. Any consents, approvals, authorizations or Permits required
from any Governmental Authorities necessary for the conveyance of the Purchased
Assets or valid consummation of the transactions contemplated hereby shall have
been obtained, or Seller has received reasonable assurances that they will be
able to be obtained after the Closing.
ARTICLE XII. OBLIGATIONS FROM AND AFTER THE CLOSING DATE
12.1 Intentionally omitted.
12.2 CERTAIN TRANSITIONAL MATTERS.
12.2.1 TRANSFER OF ASSETS. Seller agrees that Purchaser, from and
after the Closing Date, shall have the right and authority to take
possession for Purchaser's own account of all items which shall be
transferred to Purchaser as provided herein.
12.2.2 SELLER'S REMITTANCE OF FUNDS. From and after the Closing Date,
Seller shall promptly transfer and deliver to Purchaser any cash or other
property, if any, that Seller may receive related to the Purchased Assets
other than the Excluded Assets.
12.2.3 PURCHASER'S REMITTANCE OF FUNDS. From and after the Closing
Date, Purchaser shall promptly transfer and deliver to Seller any cash or
other property, if any, that Purchaser may receive related to the Excluded
Assets.
12.2.4 NOTIFICATION AND COOPERATION RELATED TO THE ASSUMED LIABILITIES
AND RETAINED LIABILITIES. Seller shall notify Purchaser promptly of any
claim made against it with respect to any Assumed Liability and shall not,
except with the prior written consent of Purchaser, voluntarily make any
payment of, or settle or offer to settle, or consent to any compromise with
respect to, any such Assumed Liability. Seller shall cooperate with
Purchaser in connection with any negotiations or proceedings involving any
such contested Assumed Liability. Purchaser shall notify Seller promptly of
any claim made against it with respect to any Retained Liability and shall
33
not, except with the prior written consent of Seller, voluntarily make any
payment of, or settle or offer to settle, or consent to any compromise with
respect to, any such Retained Liability. Purchaser shall cooperate with
Seller in connection with any negotiations or proceedings involving any
such contested Retained Liability.
12.2.5 EXISTING PATIENTS. Purchaser acknowledges that as of the
Closing Date there will be patients located in the Facilities and Purchaser
will accept such patients as patients of Purchaser, and Purchaser will
assume and accept (and hereby agrees to assume and accept) responsibility
and liability for treating such patients commencing as of the Closing Date;
all revenues generated in connection with such patients shall be
Purchaser's property and all expenses in connection with such patients
shall be Purchaser's obligation. If Seller receives any amount from
patients or Third Party Payors which relate to services rendered by the
Purchaser, Seller shall promptly remit said full amount to Purchaser. In
the event that Purchaser and Seller are unable to agree on the amount to be
paid to Seller under this Section 12.2.5, Seller and Purchaser shall each
have the right to require that such dispute be resolved pursuant to Section
15.18 hereof.
12.3 ACCESS TO RECORDS. To the extent required by any applicable Legal
Requirement, Seller agrees to make available to the Comptroller General of the
United States, the Department of Health and Human Services and their duly
authorized representatives, the books, documents and records of Seller and any
Affiliate and such other information as may be required by the Comptroller
General or Secretary of Health and Human Services to verify the nature and
extent of the costs of services provided by Seller and any Affiliate under the
Contracts in connection with the Facility.
12.4 FURTHER ASSURANCES OF SELLER. From and after the Closing Date and to
the extent consistent with the terms of this Agreement, Seller shall, at the
request of Purchaser, execute, acknowledge and deliver to Purchaser, without
further consideration, all such further assignments, conveyances, endorsements,
deeds, consents and other documents, and take such other action, as Purchaser
may reasonably request (i) to transfer to and vest in Purchaser all the
Purchased Assets and (ii) otherwise to consummate the transactions contemplated
by this Agreement. In addition, from and after the Closing Date and upon
reasonable prior notice, Seller shall afford Purchaser and its attorneys,
accountants and other representatives access, during normal business hours, to
any Books and Records relating to the Facility that Seller may retain as may
reasonably be required in connection with the preparation of financial
information or Tax Returns of Purchaser.
12.5 FURTHER ASSURANCES OF PURCHASER. From and after the Closing Date and
upon reasonable prior notice, Purchaser shall afford to Seller and its
attorneys, accountants and other representatives access, during normal business
hours, to such Books and Records relating to the Facilities as may reasonably be
required in connection with the preparation of financial information or Tax
Returns for periods concluding prior to the Closing Date. Purchaser shall
cooperate in all reasonable respects with Seller with respect to its former
34
interest in the Facilities and in connection with financial account closing and
reporting and claims and litigation asserted by or against third parties,
including, but not limited to, making Purchaser's employees available at
reasonable times to assist with, or provide information in connection with
financial account closing and reporting and claims and litigation.
12.6 PRESERVATION AND ACCESS TO RECORDS FROM AND AFTER THE CLOSING. From
and after the Closing Date, Purchaser shall, in the Ordinary Course of Business
and as required by law, keep and preserve all medical records and other Books
and Records of the Facilities existing as of the Closing and which constitute a
part of the Purchaser Purchased Assets delivered to Purchaser at the Closing.
Purchaser acknowledges that as a result of entering into this Agreement and
operating the Facilities it will gain access to patient and other information
which is subject to rules and regulations concerning confidentiality. Purchaser
agrees to abide by any such rules and regulations relating to the confidential
information it acquires. Purchaser agrees, at its cost, to maintain the patient
records delivered to Purchaser at the Closing at the Facilities (or at a
suitable offsite location) after the Closing in accordance with applicable law
(including, if applicable, Section 1861 (v)(I)(l) of the Social Security Act (42
U.S.C. ss.1395(v)(1)(1)), and requirements of relevant insurance carriers, all
in a manner consistent with the maintenance of patient records generated at the
Facilities after the Closing. Upon reasonable notice, at the sole cost and
expense of Purchaser (unless otherwise agreed upon by the Parties) and upon
Purchaser's receipt of appropriate consents and authorizations, Purchaser will
afford to the representatives of Seller, including their counsel and
accountants, full and complete access to, and copies of, the records transferred
to Purchaser at the Closing (including, without limitation, access to patient
records in respect of patients treated by Seller at the Facilities). Upon
reasonable notice, during normal business hours and at the sole cost and expense
of Purchaser (unless otherwise agreed upon by the Parties), Purchaser shall also
make its officers and employees available to Seller at reasonable times and
places after the Closing. Any access to the Facilities, its records or
Purchaser's personnel granted to Seller in this Agreement shall be upon the
condition that any such access not materially interfere with the business
operations of Purchaser.
12.7 REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating
hereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, (b) the documents delivered at the Closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished to Seller or to Purchaser, may, subject to the provisions of
Section 9.2 hereof, be reproduced by Seller and by Purchaser by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and Seller and Purchaser may destroy any original
documents so reproduced. Seller and Purchaser agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial, arbitral or administrative proceeding (whether or not the original is
in existence and whether or not such reproduction was made by Seller or
Purchaser in the Ordinary Course of Business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
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12.8 COOPERATION ON TAX MATTERS. Following the Closing, the Parties shall
cooperate fully with each other and shall make available to the other, as
reasonably requested and at the expense of the requesting Party, and to any
taxing authority, all information, records or documents relating to Tax
liabilities or potential Tax liabilities of Seller for all periods prior to the
Closing Date and any information which may be relevant to determining the amount
payable under this Agreement, and shall preserve all such information, records
and documents (to the extent a part of the Purchased Assets delivered to
Purchaser at the Closing) at least until the expiration of any applicable
statute of limitations or extensions thereof.
12.9 INTENTIONALLY OMITTED.
12.10 USE OF PROVIDER NUMBERS. Seller shall allow Purchaser to continue to
use all of the Facilities' current Third Party Payor provider numbers after the
Closing during the period during which the Third Party Payor Programs are
processing the change of ownership documentation and Purchaser agrees to take
all steps necessary to expedite the processing thereof.
12.11 TRANSFER OF UNEMPLOYMENT EXPERIENCE RATING.
(a) The Parties agree that the unemployment experience of the Facilities
will be transferred to Purchaser if such a transfer of unemployment experience
is allowed by law and elected by Purchaser. If the payroll of the Facilities is
reported in an employment insurance account with other payroll prior to the
Closing, the portion of the unemployment experience transferred to Purchaser
shall be the same portion as the Facilities' state unemployment taxable payroll
bears to the total state unemployment taxable payroll of the Facilities'
unemployment insurance account.
(b) Seller shall use all reasonable efforts to make available to Purchaser
the records of individual wages of all Employees who accept employment with
Purchaser, as well as copies of state unemployment tax returns, to the extent
necessary for Purchaser to verify future unemployment tax rates and to calculate
the correct taxable payroll for the remainder of the calendar year in which the
Closing occurs.
ARTICLE XIII. TERMINATION
13.1 TERMINATION OF AGREEMENT. This Agreement may be terminated:
(a) by the mutual consent of Seller and Purchaser;
(b) by Seller if Purchaser materially breaches or fails to fulfill its
obligations under this Agreement, which failure continues and remains
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uncured for thirty (30) consecutive calendar days after Seller gives
written notice of such failure to Purchaser;
(c) by Purchaser if Seller materially breaches or fails to fulfill its
obligations under this Agreement, which failure continues and remains
uncured for thirty (30) consecutive calendar days after Purchaser gives
written notice of such failure to Seller;
13.2 Intentionally omitted.
13.3 RETURN OF DOCUMENTS. If this Agreement is terminated for any reason
pursuant to this Article XIII, each Party shall return to the other Party all
documents and copies thereof which shall have been furnished to it by such other
Party or, with the agreement of the other Party, shall destroy all such
documents and copies thereof.
13.4 REMEDIES. If this Agreement is terminated by Purchaser or Seller as
permitted under Sections 13.1(a), (b), (c) or (f), such termination shall be
without liability of any Party.
13.5 DAMAGES PAYABLE TO PURCHASER. If this Agreement is terminated by
Purchaser pursuant to Sections 13.1(e), then Seller shall pay to Purchaser, as
stipulated damages, an amount equal to Two Hundred Thousand ($250,000.00)
Dollars plus the documented out-of-pocket costs and expenses (including
attorney, accountant, bank and other professional fees) incurred by Purchaser
and return the fifty million shares of Pacer Health Corporation stock issued to
Butterscotch Investments, L.L.C. at Seller's request. Payment shall be made by
Seller within ten (10) days of the written demand for payment of same from
Purchaser. Seller acknowledges that Purchaser's damages will be difficult to
ascertain and the above damages are to compensate Purchaser, and are not a
penalty upon Seller. Seller shall be further liable for any fees or expenses
(including reasonable attorney fees) incurred by Purchaser to collect such
damages from Seller.
ARTICLE XIV. SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
14.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Parties and all covenants and agreements set forth in this
Agreement shall terminate at the Closing except as follows:
(a) those set forth in Articles XII, XIV and XV and Sections 3.2, 4.1,
4.2, 6.21, 6.29, 8.2 and 9.2 of this Agreement shall survive the
Closing indefinitely or such shorter time period as is expressly
provided for in the related covenant or agreement;
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(b) those set forth in Sections 4.4, 6.1-6.4, 6.10-6.13, 6.15, 6.19, 6.28,
6.30-6.32, 7.1, 7.2, 13.3, 13.4, and 13.5 of this Agreement shall
survive the Closing until the first anniversary following the Closing
Date.
14.2 INDEMNIFICATION BY SELLER. Subject to Sections 14.1 and 14.4, Seller,
from and after the Closing, shall indemnify, save and hold Purchaser harmless
from and against all assessments, losses, damages, liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any and all
demands, claims, actions or causes of action and whether or not any such
demands, claims, etc., of third parties are meritorious) (collectively,
"Damages") actually incurred by Purchaser and, in each case, net of any and all
amounts received from insurance and other contractual and legal rights,
resulting from (a) a breach of any representation or warranty made by Seller in
this Agreement which survives the Closing or (b) a breach or nonfulfillment of
any covenant or agreement made by Seller in or pursuant to this Agreement which
survives the Closing.
14.3 INDEMNIFICATION BY SELLER FOR RETAINED LIABILITIES. Notwithstanding
anything to the contrary contained in this Agreement, Seller, from and after the
Closing, shall indemnify, save and hold Purchaser harmless from and against all
Damages actually incurred by Purchaser resulting from any Retained Liability.
14.4 INDEMNIFICATION BY PURCHASER. Subject to Sections 14.1, Purchaser,
from and after the Closing, shall indemnify, save and hold Seller harmless from
and against all Damages actually incurred by Seller and, in each case, net of
any and all amounts received from insurance and other contractual and legal
rights, resulting from (a) a breach of any representation or warranty made by
Purchaser in this Agreement which survives the Closing; (b) a breach or
nonfulfillment of any covenant or agreement made by Purchaser in or pursuant to
this Agreement which survives the Closing; and (c) any Assumed Liability.
14.5 NOTICE OF CLAIMS; CAP.
(a) If Purchaser or Seller (an "Indemnified Party") believes that it has
suffered or incurred or will suffer or incur any Damages for which it is
entitled to indemnification under this Article XIV, such Indemnified Party shall
so notify the party or parties from whom indemnification is being claimed (the
"Indemnifying Party") with reasonable promptness and reasonable particularity in
light of the circumstances then existing. If any action at law or suit in equity
is instituted by or against a third party with respect to which any Indemnified
Party intends to claim any Damages, such Indemnified Party shall promptly notify
the Indemnifying Party of such action or suit. The failure of an Indemnified
Party to give any notice required by this Section shall not affect any of such
party's rights under this Article XIV or otherwise except and to the extent that
such failure is actually prejudicial to the rights or obligations of the
Indemnified Party.
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(b) In no event shall Seller be liable for Damages to Purchaser and any
other amounts under this Article XIV in the aggregate in excess of $1,000,000
(the "Cap").
14.6 THIRD PARTY CLAIMS. The Indemnifying Party shall be obligated to
defend, and shall have the right to conduct and control, at its expense and
through counsel of its choosing, the defense of any third party claim, action or
suit for which a claim is made that if successful, would entitle the Indemnified
Party to indemnity under this Article XIV, and the Indemnifying Party may
compromise or settle the same, provided that the Indemnifying Party shall give
the Indemnified Party advance notice of any proposed compromise or settlement.
The Indemnifying Party shall permit the Indemnified Party to participate in the
defense of any such action or suit through counsel chosen by the Indemnified
Party, provided that the fees and expenses of such counsel shall be borne by the
Indemnified Party. If the Indemnifying Party undertakes, conducts and controls
the conduct and settlement of such action or suit, the Indemnifying Party shall
not thereby permit to exist any Encumbrance upon any asset of the Indemnified
Party; the Indemnifying Party shall not consent to any settlement that does not
include as an unconditional term thereof the giving of a complete release from
liability with respect to such action or suit to the Indemnified Party; the
Indemnifying Party shall permit the Indemnified Party to participate in such
conduct or settlement through counsel chosen by the Indemnified Party (at its
own cost and expense); and the Indemnifying Party, unless it has reserved its
rights, shall agree promptly to reimburse the Indemnified Party for the full
amount of any Damages including fees and expenses of counsel for the Indemnified
Party incurred after giving the foregoing notice to the Indemnifying Party and
prior to the assumption of the conduct and control of such action or suit by the
Indemnifying Party, but subject to the limitations of Section 14.5(b).
14.7 EXCLUSIVE OF OTHER REMEDIES. The indemnification rights of any
Indemnified Party under this Article XIV are exclusive of and in lieu of any
other rights and remedies for money damages as such Indemnified Party may have
at law, in equity or otherwise for any misrepresentation, breach of warranty or
failure to fulfill any covenant or agreement under or in connection with this
Agreement on the part of any Party, all of which rights or remedies shall be
waived hereby.
ARTICLE XV. GENERAL
15.1 EXPENSES. Whether or not the transactions contemplated hereby shall be
consummated and except as otherwise provided herein, the parties agree as
follows: (a) Purchaser will pay the fees, expenses, and disbursements of
Purchaser and its agents, representatives, accountants, and counsel incurred in
connection with this Agreement, the cost of a survey, phase I environmental
assessment and/or title insurance, and all recording fees and general
intangibles or recording taxes incurred in connection with the transfer and
conveyance of the Purchased Assets from Seller; and (b) Seller shall pay the
fees, expenses and disbursements of Seller and its agents, representatives,
39
accountants and counsel incurred in connection with this Agreement and any fees
related to obtaining Attorney General Approval of the proposed transaction.
15.2 PUBLICITY. All notices to third-parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by and among Purchaser and Seller. Except as may be
required by law, no Party shall act unilaterally in this regard without prior
written approval of every other Party, such approval not be unreasonably
withheld.
15.3 WAIVERS. The waiver by any Party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
15.4 BINDING EFFECT; BENEFITS. This Agreement shall inure to the benefit of
the Parties hereto, and shall be binding upon the Parties hereto and, subject to
Section 15.14, their respective successors and assigns. Nothing in this
Agreement, express or implied, is intended to confer on any Person other than
the Parties hereto, or their respective permitted successors and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
15.5 NOTICES. All notices, requests, demands, elections and other
communications which any Party to this Agreement may be required to give
hereunder shall be in writing and shall be delivered personally, by a reputable
courier service which requires a signature upon delivery, by mailing the same by
registered or certified first class mail, postage prepaid, return receipt
requested, or by telecopying with receipt confirmation (followed by a first
class mailing of the same) to the Party to whom the same is so given or made.
Such notice, request, demand, waiver, election or other communication will be
deemed to have been given upon receipt.
15.5.1 NOTICE TO SELLER:
If to Seller: Camelot Specialty Hospital of Cameron, L.L.C.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
with a copy to : Xxxxxx Xxxxx, APLC
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
X.X. Xxxxxx 0000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxx, Xx., Esq.
15.5.2 NOTICE TO PURCHASER:
If to Purchaser: Pacer Health Management Corporation
0000 Xxxx Xxxxxx Xxxxxxx
00
Xxxxxxx, XX 00000
Attn: Administrator
with a copy to: Pacer Health Corporation
Park West Professional Center
0000 X.X. 000 Xxxxxx
Xxxxx, XX 00000
Attn: Rainier Xxxxxxxx, CEO
With a required copy to: Sullivan, Stolier, & Resor
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Or to such other addresses as such Party shall have specified by notice to every
other Party hereto.
15.6 ENTIRE AGREEMENT. This Agreement (including the Schedules hereto) and
the Ancillary Agreements and documents delivered at Closing pursuant hereto and
thereto constitute the entire agreement and understanding between the Parties
hereto as to the matters set forth herein and therein and supersede and revoke
all prior agreements and understandings, oral and written, between the Parties
hereto and thereto or otherwise with respect to the subject matter hereof or
thereof. No change, amendment, termination or attempted waiver of any of the
provisions hereof or thereof shall be binding upon any Party unless set forth in
an instrument in writing signed by the Party to be bound or their respective
successors in interest.
15.7 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
15.8 HEADINGS. The article, section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be a part
of this Agreement or to affect the meaning or interpretation of this Agreement.
15.9 CONSTRUCTION. Within this Agreement, the singular shall include the
plural and the plural shall include the singular, and any gender shall include
all other genders, all as the meaning and the context of this Agreement shall
require.
15.10 GOVERNING LAW AND CHOICE OF FORUM. The validity and interpretation of
this Agreement shall be construed in accordance with, and governed by, the
internal laws of the State of Louisiana. All claims, disputes or causes of
action relating to or arising out of this Agreement shall be brought, heard and
resolved solely and exclusively by and in the federal or state courts situated
in either Lafayette Parish, Louisiana. The Parties hereto agree to submit to the
41
jurisdiction of such courts and agree that such jurisdiction shall be proper for
all purposes of this Agreement.
15.11 COOPERATION. The Parties hereto shall cooperate fully at their own
expense, except as otherwise provided in this Agreement, with each other and
their respective counsel and accountants in connection with all steps to be
taken as part of their obligations under this Agreement.
15.12 SEVERABILITY. If any term, covenant, condition or provision of this
Agreement or the application thereof to any circumstance shall be invalid or
unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition and provision of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
15.13 ATTORNEYS' FEES. If a dispute arises among the Parties as a result of
which an action is commenced to interpret or enforce any of the terms of this
Agreement, including the collection of any payments due a Party hereunder, the
non-prevailing Parties shall pay the prevailing Party's reasonable out-of-pocket
attorney's fees, costs and expenses incurred in connection with the prosecution
or defense of such action.
15.14 SUCCESSORS AND ASSIGNS. The covenants, agreements, and conditions
contained herein or granted hereby shall be binding upon and shall inure to the
benefit of Purchaser and Seller, and each of their respective permitted
successors and assigns. Seller shall not assign, or otherwise transfer any
interest in this Agreement to any other Person without the prior written consent
of Purchaser, which consent shall not unreasonably be withheld, delayed or
conditioned. Purchaser shall not assign, or otherwise transfer any interest in
this Agreement to any other Person without the prior written consent of Seller,
which consent shall not unreasonably be withheld, delayed or conditioned.
15.15 NO THIRD PARTY BENEFICIARIES. The terms and provisions of this
Agreement are intended solely for the benefit of each Party hereto and their
respective successors or permitted assigns, and it is not the intention of the
Parties hereto to confer third-party beneficiary rights upon any other Person.
15.16 NO INFERENCES. Inasmuch as this Agreement is the result of
negotiations between sophisticated parties of equal bargaining power represented
by counsel, no inference in favor of, or against, either Party shall be drawn
from the fact that any portion of this Agreement has been drafted by or on
behalf of such Party.
15.17 Intentionally omitted.
15.18 DISPUTE RESOLUTION. In the event there exists any dispute between the
Parties arising out of this Agreement, such dispute shall be submitted to
Mediation Arbitration Professional Systems, Inc. located at Two Lakeway Xxxxxx,
00
Xxxxx 000, 0000 X. Xxxxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxx 00000 for mandatory
mediation pursuant to the American Health Lawyers Association Alternative
Dispute Resolution Rules of Procedure for Mediation. If such mandatory mediation
is unsuccessful in resolving the dispute within sixty (60) days after the
dispute has been submitted to and accepted by a mediator, either Party may
resort to litigation for the purpose of resolving such controversy, dispute or
disagreement. Notwithstanding the foregoing, either Party may obtain in any
court of competent jurisdiction specific performance and injunctive relief to
restrain a violation by the other Party of any term or covenant of this
Agreement.
15.19 COMPLETION OF DISCLOSURE SCHEDULE. The Parties acknowledge that the
Schedules comprising the Disclosure Schedule have not been completed on the date
of execution of this Agreement. The Parties agree to make diligent efforts to
complete the Schedules in a manner mutually acceptable to them no later than
March 31, 2004. If completion thereof is not accomplished by such date, as
evidenced by a Disclosure Schedule agreed to in writing by the Parties, either
party may terminate this Agreement by written notice to the other Party and the
provisions of Sections 13.3 and 13.4 shall be applicable to such termination.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties have
caused this Agreement to be signed in their respective names by an officer
thereof duly authorized as of the date first above written.
SELLER:
CAMELOT SPECIALTY HOSPITAL OF CAMERON, L.L.C.
By: /s/ Xxxxxx Xxxxx
----------------------------------------------
Name: Xxxxxx Xxxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
Date of Signature March 22, 2004
-------------------------
PURCHASER:
PACER HEALTH MANAGEMENT CORPORATION
By: /s/ Xxxxx Xxxxx
----------------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
Date of Signature March 22, 2004
-------------------------
44
