EXHIBIT 10.41
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MPT OF NORTH CYPRESS, L.P.
("PURCHASER")
AND
NORTH CYPRESS MEDICAL CENTER
OPERATING COMPANY, LTD.
("SELLER")
DATED EFFECTIVE AS OF JUNE 1, 2005
Table of Contents
Page
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ARTICLE I DEFINED TERMS..................................................................... 2
SECTION 1.1 CERTAIN DEFINED TERMS.................................................. 2
SECTION 1.2 INTERPRETATION; TERMS GENERALLY........................................ 8
ARTICLE II PURCHASE AND SALE OF ASSETS...................................................... 9
SECTION 2.1 PURCHASE AND SALE OF ASSETS............................................ 9
SECTION 2.2 NO ASSUMPTION OF LIABILITIES........................................... 9
SECTION 2.3 WARRANTY............................................................... 9
ARTICLE III PURCHASE PRICE.................................................................. 10
SECTION 3.1 PURCHASE PRICE......................................................... 10
SECTION 3.2 TAXES, RENTALS, UTILITIES.............................................. 10
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.......................... 10
SECTION 4.1 ORGANIZATION........................................................... 10
SECTION 4.2 AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS....................... 10
SECTION 4.3 ABSENCE OF CONFLICTS................................................... 11
SECTION 4.4 CONSENTS AND APPROVALS................................................. 11
SECTION 4.5 FINANCIAL STATEMENTS................................................... 11
SECTION 4.6 NO UNDISCLOSED LIABILITIES............................................. 11
SECTION 4.7 ABSENCE OF CHANGES..................................................... 12
SECTION 4.8 PHYSICIANS............................................................. 12
SECTION 4.9 TAXES.................................................................. 12
SECTION 4.10 TITLE AND CONDITION OF THE ASSETS................................... 13
SECTION 4.11 COMPLIANCE WITH ENVIRONMENTAL LAWS.................................. 13
SECTION 4.12 LITIGATION.......................................................... 14
SECTION 4.13 CONTRACTS, OBLIGATIONS AND COMMITMENTS.............................. 14
SECTION 4.14 LICENSES............................................................ 15
SECTION 4.15 ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS............ 15
SECTION 4.16 HEALTHCARE REGULATORY MATTERS....................................... 15
SECTION 4.17 ▇▇▇▇-▇▇▇▇▇▇ OBLIGATIONS............................................. 16
SECTION 4.18 MEDICAL STAFF MATTERS............................................... 16
SECTION 4.19 COMPLIANCE WITH LAW................................................. 16
SECTION 4.20 INTANGIBLE PROPERTY................................................. 17
SECTION 4.21 RECORDS............................................................. 17
SECTION 4.22 SUBSIDIARIES........................................................ 17
SECTION 4.23 BROKERS............................................................. 17
SECTION 4.24 REPRESENTATIONS COMPLETE............................................ 17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................................... 18
SECTION 5.1 ORGANIZATION........................................................... 18
SECTION 5.2 AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS....................... 18
SECTION 5.3 ABSENCE OF CONFLICTS................................................... 18
SECTION 5.4 CONSENTS AND APPROVALS................................................. 18
SECTION 5.5 LITIGATION............................................................. 19
SECTION 5.6 POSSESSION OF PERMITS.................................................. 19
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SECTION 5.7 COMPLIANCE WITH LAW.................................................... 19
SECTION 5.8 BROKERS................................................................ 19
SECTION 5.9 REPRESENTATIONS COMPLETE............................................... 19
ARTICLE VI TITLE AND SURVEY................................................................. 20
SECTION 6.1 SURVEY................................................................. 20
SECTION 6.2 TITLE INSURANCE........................................................ 20
ARTICLE VII PRE-CLOSING COVENANTS........................................................... 20
SECTION 7.1 NO SHOP................................................................ 20
SECTION 7.2 ACCESS................................................................. 21
SECTION 7.3 CONFIDENTIALITY........................................................ 21
SECTION 7.4 REGULATORY AND OTHER AUTHORIZATIONS, NOTICES AND CONSENTS.............. 22
SECTION 7.5 MUTUAL COVENANTS....................................................... 22
SECTION 7.6 SCHEDULE UPDATES....................................................... 22
SECTION 7.7 CONDUCT OF BUSINESS BY THE SELLER PENDING THE CLOSING.................. 22
SECTION 7.8 PUBLIC ANNOUNCEMENTS................................................... 23
ARTICLE VIII CLOSING CONDITIONS............................................................. 23
SECTION 8.1 CONDITIONS TO THE OBLIGATIONS OF THE SELLER............................ 23
SECTION 8.2 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER......................... 23
SECTION 8.3 FAILURE OF CONDITIONS.................................................. 25
ARTICLE IX CLOSING.......................................................................... 25
SECTION 9.1 CLOSING DATE........................................................... 25
SECTION 9.2 SELLER'S CLOSING DATE DELIVERABLES..................................... 25
SECTION 9.3 PURCHASER'S CLOSING DATE DELIVERABLES.................................. 27
ARTICLE X TERMINATION....................................................................... 27
SECTION 10.1 TERMINATION PRIOR TO CLOSING........................................ 27
SECTION 10.2 NOTICE OF TERMINATION PRIOR TO CLOSING.............................. 27
ARTICLE XI POST CLOSING COVENANTS........................................................... 27
SECTION 11.1 JCAHO COMPLIANCE.................................................... 27
SECTION 11.2 HIPAA COMPLIANCE.................................................... 28
SECTION 11.3 NECESSARY PERMITS................................................... 28
SECTION 11.4 PARTICIPATION IN GOVERNMENT PROGRAMS................................ 28
SECTION 11.5 COMPLIANCE WITH WHOLE HOSPITAL EXCEPTION............................ 28
SECTION 11.6 POST-CLOSING ACCESS TO INFORMATION.................................. 28
SECTION 11.7 SURVIVAL............................................................ 28
ARTICLE XII INDEMNIFICATION................................................................. 28
SECTION 12.1 INDEMNIFICATION OF THE PURCHASER PARTIES............................ 28
SECTION 12.2 INDEMNIFICATION OF SELLER PARTIES................................... 28
SECTION 12.3 NOTIFICATION AND DEFENSE OF CLAIMS.................................. 29
SECTION 12.4 LIMITATIONS ON CLAIMS............................................... 30
SECTION 12.5 INVESTIGATIONS...................................................... 31
SECTION 12.6 TREATMENT OF INDEMNIFICATION PAYMENTS............................... 31
SECTION 12.7 INSURED LOSSES...................................................... 31
SECTION 12.8 EXCLUSIVE REMEDY.................................................... 31
ARTICLE XIII CHOICE OF LAW/JURISDICTION AND VENUE........................................... 31
SECTION 13.1 CHOICE OF LAW....................................................... 31
SECTION 13.2 JURISDICTION AND VENUE.............................................. 31
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ARTICLE XIV MISCELLANEOUS................................................................... 32
SECTION 14.1 ASSIGNMENT.......................................................... 32
SECTION 14.2 NOTICE.............................................................. 32
SECTION 14.3 SECURITIES OFFERING AND FILINGS..................................... 33
SECTION 14.4 EXPENSES............................................................ 34
SECTION 14.5 CAPTIONS............................................................ 34
SECTION 14.6 ENTIRE AGREEMENT; MODIFICATION...................................... 34
SECTION 14.7 SCHEDULES AND EXHIBITS.............................................. 34
SECTION 14.8 SEVERABILITY........................................................ 34
SECTION 14.9 CONSTRUCTION........................................................ 34
SECTION 14.10 FURTHER ASSURANCES.................................................. 34
SECTION 14.11 COUNTERPARTS........................................................ 35
SECTION 14.12 BINDING EFFECT...................................................... 35
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made and entered into as of the ______ day
of June, 2005, but effective as of June 1, 2005, by and between MPT OF NORTH
CYPRESS, L.P., ("Purchaser"), a Delaware limited partnership, and NORTH CYPRESS
MEDICAL CENTER OPERATING COMPANY, LTD. ("Seller"), a Texas limited partnership.
W I T N E S S E T H:
WHEREAS, North Cypress Property Holdings, Ltd. ("Hospital Tract Owner") is the
owner of that certain parcel of real property located in ▇▇▇▇▇▇ County, Texas
and being more particularly described on EXHIBIT "A" attached hereto and by this
reference made a part hereof (the "Hospital Tract");
WHEREAS, Northern Healthcare Land Ventures, Ltd. ("Northern Healthcare"), an
affiliate of the Hospital Tract Owner, is the owner of that certain parcel of
real property located adjacent to the Hospital Tract and consisting of
approximately 1.8 acres and being more particularly described on EXHIBIT "B"
attached hereto and by this reference made a part hereof (the "Northeast Parking
Parcel");
WHEREAS, Hospital Tract Owner and Purchaser, of even date, have entered into
that certain Net Ground Lease (Hospital Tract) pursuant to which Purchaser has
leased from Hospital Tract Owner the Hospital Tract;
WHEREAS, Northern Healthcare and Purchaser, of even date, have entered into that
certain Net Ground Lease (Northeast Parking Parcel) pursuant to which Purchaser
has leased from Northern Healthcare the Northeast Parking Parcel;
WHEREAS, Purchaser has subleased the Hospital Tract to Seller pursuant to that
certain Sublease Agreement (Pre-Construction) dated of even date herewith;
WHEREAS, Hospital Tract Owner and Purchaser, of even date herewith have entered
into that certain Contract for Purchase and Sale of Real Property, pursuant to
which Hospital Tract Owner shall sell to Purchaser and Purchaser shall purchase
from Hospital Tract Owner the Hospital Tract;
WHEREAS, of even date herewith, Seller and MPT Finance Company, LLC ("Lender")
have consummated a construction loan, the proceeds of which shall be utilized by
Seller for construction of the Hospital Improvements;
WHEREAS, Seller shall construct the Hospital Improvements in accordance with and
pursuant to the terms of the Construction Loan Agreement; and
WHEREAS, Purchaser intends to acquire from Seller and Seller intends to sell to
Purchaser the Hospital Improvements, all in accordance with the terms and
provisions herein contained.
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NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller and Purchaser do hereby agree as
follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 CERTAIN DEFINED TERMS. Capitalized terms used herein shall have the
respective meanings ascribed to them in this Section 1.1.
"Affiliate" shall mean, as to the Person in question, any Person that directly
or indirectly controls, is controlled by, or is under common control with, the
Person in question and any successors or assigns of such Persons; and the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person whether through
ownership of voting securities, by contract or otherwise.
"Agreement" means this Purchase and Sale Agreement, and all Exhibits and
Schedules hereto, as amended from time to time in accordance with the terms of
this Agreement.
"Appraisal" means an appraisal of the Hospital Improvements and an accompanying
reliance letter expressly stating that Purchaser may rely thereon, each in form
and substance, and prepared by a Person, satisfactory to Purchaser in its sole
discretion.
"Assets" shall have the meaning set forth in Section 2.1 hereof.
"Balance Sheet" shall have the meaning set forth in Section 4.5 hereof.
"Balance Sheet Date" shall have the meaning set forth in Section 4.5 hereof.
"Business" means the Seller's lease and operation of the Hospital and the
engagement in and pursuit and conduct of any business ventures or activities
reasonably related thereto.
"Business Contracts" shall have the meaning set forth in Section 4.13 hereof.
"Business Day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York, New York are
authorized or required by law, regulation or executive order to close.
"Claim" shall have the meaning set forth in Section 4.12 hereof.
"Closing" shall have the meaning set forth in Section 9.1 hereof.
"Closing Date" shall have the meaning set forth in Section 9.1 hereof.
"Confidentiality Agreement" shall have the meaning set forth in Section 7.3
hereof.
"Confidential Information" shall have the meaning set forth in Schedule 7.3
hereof.
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"Construction Loan" means that certain loan from Lender to Seller in the
original principal amount of Sixty-Four Million Twenty-Eight Thousand and No/100
Dollars ($64,028,000.00), the proceeds of which shall be utilized by Seller to
construct the Hospital Improvements and which loan is evidenced, among other
documents, by that certain Promissory Note, of even date herewith from Seller to
Lender in the principal amount of Sixty-Four Million Twenty-Eight Thousand and
No/100 Dollars ($64,028,000.00) (the "Note") and the Construction Loan
Agreement.
"Construction Loan Agreement" shall mean that certain Construction Loan
Agreement dated of even date herewith by and between Lender and Seller.
"Damages" means demands, claims, actions, losses, damages, liabilities,
penalties, Taxes, costs and expenses (including, without limitation, attorneys'
and accountants' fees, settlement costs, arbitration costs and any other
reasonable expenses for investigating or defending any Claim or threatened
Claim).
"Defaulting Party" shall have the meaning set forth in Section 8.3 hereof.
"Environmental Claim" means any claim, action, cause of action, investigation or
notice (written or oral) by any Person alleging actual or potential liability
for investigatory, cleanup or governmental response costs, or natural resources
or property damages, or personal injuries, attorney's fees or penalties relating
to (i) the presence, or release into the environment, of any Hazardous Materials
at any location owned or operated by the Seller or any Affiliate of the Seller,
now or in the past, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
"Environmental Law" means all local, state and federal laws relating to
environmental conditions and industrial hygiene, including, without limitation,
the Resource Conservation and Recovery Act of 1976 ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"),
the Hazardous Materials Transportation Act, 49 U.S.C. Section 6901, et seq.,
the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq., the
Clean Air Act, 42 U.S.C. Sections 741 et seq., the Clean Water Act, 33 U.S.C.
Section 7401, et seq., the Toxic Substances Control Act, 15 U.S.C. Sections
2601-2629, the Safe Drinking Water Act, 42 U.S.C. Sections 300f-300j, and all
similar federal, state and local environmental statutes, ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder.
"Equity Constituents" means, with respect to any Person, as applicable, the
members, general and/or limited partners, shareholders, stockholders or other
Persons, however designated, who are the owners of the issued and outstanding
equity or ownership interests of such Person.
"Excluded Liabilities" shall have the meaning set forth in Section 2.2 hereof.
"Financial Statements" shall have the meaning set forth in Section 4.5 hereof.
"Fixtures" means all permanently affixed equipment, machinery, fixtures, and
other items of real and/or personal property, including all components thereof,
now and hereafter located in, on or used in connection with, and permanently
affixed to or incorporated into the Hospital, including,
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without limitation, all furnaces, boilers, heaters, electrical equipment,
heating, plumbing, lighting, ventilating, refrigerating, incineration, air and
water pollution control, waste disposal, air-cooling and air-conditioning
systems and apparatus, sprinkler systems and fire and theft protection
equipment, and built-in vacuum system, cable transmission, built-in oxygen and
similar systems, all of which, to the greatest extent permitted by law, are
hereby deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto.
"GAAP" means generally accepted accounting principles as consistently applied in
the United States and in effect from time to time. Any accounting term used
herein and not specifically defined herein shall be construed in accordance with
GAAP.
"Governing Documents" means, with respect to any Person, as applicable, such
Person's charter, articles or certificate of incorporation, bylaws, limited
partnership agreement, limited liability company agreement, stockholders'
agreement or other documents or instruments which establish the rules,
procedures and rights with respect to such Person' governance, and relations
among such Person's Equity Constituents, in each case as amended, restated,
supplemented and/or modified and in effect as of the relevant date.
"Governmental Entity" means any national, federal, regional, state, provincial,
municipal, foreign or multinational court or other governmental or regulatory
authority, administrative body or government, department, board, body, tribunal,
instrumentality or commission of competent jurisdiction.
"Government Programs" shall have the meaning set forth in Section 4.16 hereof.
"Hazardous Materials" means any substance, including without limitation,
asbestos or any substance containing asbestos and deemed hazardous under any
Environmental Law, the group of organic compounds known as polychlorinated
biphenyls, flammable explosives, radioactive materials, infectious wastes,
biomedical and medical wastes, chemicals known to cause cancer or reproductive
toxicity, pollutants, effluents, contaminants, emissions or related materials
and any items included in the definition of hazardous or toxic wastes, materials
or substances under any Environmental Law.
"Healthcare Fraud Laws" shall have the meaning set forth in Section 4.16(a)
hereof.
"Hospital" means the general acute care hospital facility and related Hospital
Improvements to be constructed on the Land.
"Hospital Improvements" means all buildings, improvements, structures and
Fixtures, including, without limitation, landscaping, parking lots and
structures, roads, drainage and all above ground and underground utility
structures, equipment systems and other so-called "infrastructure" improvements
and all other improvements constructed for use or used in connection with the
Hospital.
"Hospital Tract" shall have the meaning set forth in the first "WHEREAS" clause.
"Hospital Tract Owner" shall have the meaning set forth in the first "WHEREAS"
clause.
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"Indebtedness" of any Person means, without duplication, (a) all liabilities and
obligations, contingent or otherwise, of any such Person: (i) in respect of
borrowed money (whether secured or unsecured), (ii) under conditional sale or
other title retention agreements relating to property or services purchased
and/or sold by such Person, (iii) evidenced by bonds, notes, debentures or
similar instruments, (iv) for the payment of money relating to a capitalized
lease obligation, (v) evidenced by a letter of credit or a reimbursement
obligation of such Person with respect to any letter of credit, (vi) pursuant to
any guarantee, or (vii) secured by (or for which the holder of such obligation
has an existing right, contingent or otherwise, to be secured by) a Lien on the
assets or property of such Person, and (b) all liabilities and obligations of
others of the kind described in the preceding clause (a) and otherwise that (i)
such Person is responsible or liable for, directly or indirectly, as obligor,
guarantor, surety or otherwise, or (ii) which are secured by a Lien on any of
the assets or property of such Person.
"Indemnified Party" shall have the meaning set forth in Section 12.3(a) hereof.
"Indemnifying Party" shall have the meaning set forth in Section 12.3(a) hereof.
"Intangible Property" shall have the meaning set forth in Section 4.20 hereof.
"Knowledge" means, with respect to any Person, such Person's actual or deemed
knowledge of a particular fact or matter if (i) any of such Person's current or
former officers or directors (or other Persons, however designated, currently or
formerly possessing and/or exercising similar authority with respect to such
Person) (a Person's "Knowledge Group") has actual knowledge of such fact or
matter; or (ii) any of such Person's Knowledge Group would reasonably be
expected to discover or otherwise become aware of such fact or matter after
conducting a reasonably diligent inquiry.
"Land" means, collectively, the Hospital Tract and the Northeast Parking Parcel.
"Law" means any federal, state or local statute, law, rule, regulation,
ordinance, order, code, policy or rule of common law, now or hereafter in
effect, and in each case as amended, and any judicial or administrative
interpretation thereof by a Governmental Entity or otherwise, including, without
limitation, any judicial or administrative order, consent, decree or judgment.
"Lease" shall mean that certain Lease Agreement to be entered into by Purchaser
and the Seller at Closing, a copy of which is attached hereto as EXHIBIT "C".
"Lender" shall have the meaning set forth in the seventh "WHEREAS" clause of
this Agreement.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, lien (statutory or otherwise) or preference,
security interest or other encumbrance of any kind or nature whatsoever,
including the Construction Loan.
"Material Adverse Effect" means any changes, event(s), occurrence(s) or
effect(s), whether direct or indirect, that, both before and after giving effect
to the transactions contemplated by this Agreement, could, individually or in
the aggregate, reasonably be expected to have a material adverse effect on (i)
Seller's business, properties, results of operations, assets, revenue, income,
condition (financial or otherwise) or ability to timely satisfy its obligations
or liabilities (whether
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absolute or contingent), (ii) the Assets, or (iii) the conduct of the Business
or Seller's ability to perform its obligations under, and/or consummate the
transactions contemplated by, this Agreement within the time periods specified
herein.
"Medicaid" shall mean the medical assistance program established by the State
under Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et seq.) and
any statute succeeding thereto.
"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.
"Non-Prevailing Party" means, with respect to any Claim between any of the
parties to this Agreement, such party determined as the non-prevailing party by
a court with proper jurisdiction.
"Northeast Parking Parcel" shall have the meaning set forth in the second
"WHEREAS" clause.
"Northern Healthcare" shall have the meaning set forth in the second "WHEREAS"
clause.
"Operational Date" means the date on which the construction of the Hospital is,
in accordance with the terms of the Construction Loan Agreement, substantially
complete.
"Ordinary Course of Business" means, with respect to any Person, any action
that: (a) is consistent in nature, scope and magnitude with the past practices
of such Person and is taken in the ordinary course of the normal, day-to-day
operations of such Person; (b) does not require authorization by the board of
directors (or other Persons, however designated, possessing and/or exercising
similar authority with respect to such Person) or Equity Constituents of such
Person and does not require any other special authorization of any nature; or
(c) is similar in nature, scope and magnitude to actions customarily taken,
without any special authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same line of business as
such Person.
"Outside Closing Date" shall have the meaning set forth in Section 9.1 hereof.
"Permits" shall have the meaning set forth in Section 4.14 hereof.
"Person" means an individual, a corporation, a limited liability company, a
general or limited partnership, an unincorporated association, a joint venture,
a Governmental Entity or other entity or group.
"Physicians" shall have the meaning set forth in Section 4.8 hereof.
"Plan" shall have the meaning set forth in Section 2.1 hereof.
"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.
"Purchaser" shall have the meaning set forth in the Preamble to this Agreement,
its successors and assigns.
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"Purchaser Indemnified Parties" shall have the meaning set forth in Section 12.1
hereof.
"Purchaser Instruments" shall have the meaning set forth in Section 5.2 hereof.
"Purchaser Parties' Indemnity Period" shall have the meaning set forth in
Section 12.4(b) hereof.
"Purchaser's Closing Conditions" shall have the meaning set forth in Section 8.2
hereof.
"Search Reports" means reports of searches made of the uniform commercial code
records of the county in which the Land is located, and of the office of the
secretary of state of the state in which the Land is located and in the state in
which the principal office of the Seller is located.
"Seller" shall have the meaning set forth in the Preamble to this Agreement.
"Seller Indemnified Parties" shall have the meaning set forth in Section 12.2
hereof.
"Seller Instruments" shall have the meaning set forth in Section 4.2 hereof.
"Seller's Indemnity Period" shall have the meaning set forth in Section 12.4(a)
hereof.
"Service Provider" means any Person who has rendered or is rendering services to
or on behalf of Seller.
"Special Purpose Entity" means an entity which (i) exists solely for the purpose
of owning and/or leasing all or any portion of the Hospital Improvements and
conducting the operation of the Business, (ii) conducts business only in its own
name, (iii) does not engage in any business other than the ownership and/or
leasing of all or any portion of the Hospital Improvements and the operation of
the Business, (iv) does not hold, directly or indirectly, any ownership interest
(legal or equitable) in any entity or any real or personal property other than
the interest which it owns in the Hospital Improvements and the other assets
incident to the operation of the Business, (v) does not have any debt other than
as permitted by the Lease or arising in the Ordinary Course of Business and does
not guarantee or otherwise obligate itself with respect to the debts of any
other Person, (vi) has its own separate books, records, accounts, financial
statements and tax returns (with no commingling of funds or assets), (vii) holds
itself out as being a company separate and apart from any other entity, and
(viii) maintains all corporate, limited partnership or limited liability company
formalities independent of any other entity.
"Survey" shall have the meaning set forth in Section 6.1 hereof.
"Taxes" means any and all taxes, charges, fees, levies or other assessments,
including, without limitation, any and all income, gross receipts, excise, real
and personal property (including leaseholds and interests in leaseholds), sales,
use, occupation, transfer, license, ad valorem, gains, profits, gift, minimum
estimated, alternative minimum, social security, unemployment, disability,
premium, recapture, credit, payroll, withholding, severance, stamp, capital
stock, value added leasing, franchise and other taxes or similar charges of any
kind including any interest and penalties on or additions thereto or
attributable to any failure to comply with any requirement regarding any Tax
Return.
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"Tax Return" means any return, declaration, filing, report, claim for refund or
information return or other statement relating to Taxes (whether filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Entity), including any schedule or attachment thereto, and including any
amendment or extension thereof.
"Tax Structure" shall have the meaning set forth in Section 7.3 hereof.
"Tax Treatment" shall have the meaning set forth in Section 7.3 hereof.
"Tenant" means the lessees or tenants under the Tenant Leases, if any.
"Tenant Leases" shall have the meaning set forth in Section 4.10(f) hereof.
"Third Party Claim" shall have the meaning set forth in Section 12.3(a) hereof.
"Title Company" means the title insurance company licensed in the state in which
the Land is located and selected by Purchaser, in its sole discretion, to issue
a title policy or endorsement with respect to the transaction contemplated
hereby.
"Warranty Period" shall have the meaning set forth in Section 2.3 hereof.
SECTION 1.2 INTERPRETATION; TERMS GENERALLY. The definitions set forth in
Section 1.1 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. Unless otherwise indicated, the words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
The words "herein", "hereof" and "hereunder" and words of similar import shall
be deemed to refer to this Agreement (including the preamble, recitals,
Schedules and Exhibits) in its entirety and not to any part hereof, unless the
context shall otherwise require. All references herein to Articles, Sections,
Schedules and Exhibits shall be deemed to refer to Articles, Sections and
Schedules of, and Exhibits to, this Agreement, unless the context shall
otherwise require. Unless the context shall otherwise require, any references to
any agreement or other instrument or statute or regulation are to it as amended
and supplemented from time to time (and, in the case of a statute or regulation,
to any corresponding provisions of successor statutes or regulations).
References to any party to this Agreement shall include references to its
respective successors and permitted assigns. References to a judgment shall
include references to any order, writ, injunction, decree, determination or
award of any court or tribunal. References to any law are references to that law
as of the Closing Date, unless clearly indicated otherwise, and shall also refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. Any reference in this Agreement to a "day" or number of "days" that
does not refer explicitly to a "Business Day" or "Business Days" shall be
interpreted as a reference to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice shall be
deferred until, or may be taken or given on, the next Business Day.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
SECTION 2.1 PURCHASE AND SALE OF ASSETS. Based upon the representations and
warranties of Seller as set forth herein, and subject to the terms and
conditions hereof, at the Closing, Seller, in consideration of the payment of
the Purchase Price in accordance with Section 3.1, shall grant, sell, assign,
transfer, convey and deliver to Purchaser and Purchaser shall purchase and
acquire from Seller, free and clear of all Liens, other than Permitted
Encumbrances, the following assets of Seller (collectively, the "Assets"):
(a) the Hospital Improvements;
(b) all warranties, guarantees, contracts, claims and other intangibles
relating to the Hospital Improvements, including, without limitation, those
matters listed on SCHEDULE 2.1 attached hereto (collectively, the "Contracts");
and
(c) all plans and specifications, permits and approvals relating to the
Hospital Improvements and the construction thereof, including, without
limitation, those matters listed on SCHEDULE 2.1 (collectively, the "Plans")
SECTION 2.2 NO ASSUMPTION OF LIABILITIES. Notwithstanding anything in this
Agreement to the contrary, Purchaser shall not assume or agree to pay, satisfy,
discharge or perform, and or be deemed by virtue of the execution and delivery
of this Agreement or any other document delivered at the Closing pursuant to
this Agreement, or as a result of the consummation of the transactions
contemplated by this Agreement or such other document, to have assumed, or to
have agreed to pay, satisfy, discharge or perform, and shall not be liable for,
any liability, obligation, contract or Indebtedness of Seller, any Affiliate of
Seller or any other Person, whether primary or secondary, direct or indirect,
including, without limitation, any liability or obligation relating to the
ownership, use or operation of the Assets prior to Closing, any liability or
obligation arising out of or related to any breach, default, tort or similar act
committed by Seller or any Affiliate of Seller or for any failure of Seller or
any Affiliate of Seller to perform any covenant or obligation for or during any
period prior to Closing (collectively, the "Excluded Liabilities"). Purchaser,
pursuant to this Agreement, shall not assume or otherwise be deemed to have any
obligations under the Tenant Leases, either during the term of this Agreement or
subsequent to Closing and Seller hereby indemnifies and holds harmless Purchaser
from and against any Claims arising or accruing from or with respect to the
Tenant Leases.
SECTION 2.3 WARRANTY. Seller hereby warrants to Purchaser the construction of
the Hospital Improvements for a period of one (1) year subsequent to the Closing
Date (the "Warranty Period"). If at any time during the Warranty Period,
Purchaser discovers a defect in the construction of all or any part of the
Hospital Improvements, Purchaser shall give notice to Seller of such defect and
Seller, at its sole cost and expense, immediately shall repair, to Purchaser's
satisfaction, such defect. Purchaser, prior to the expiration of the Warranty
Period, shall have the right to conduct a walk through inspection of the
Hospital Improvements and may provide to Seller a list of any defects discovered
in such walk through. Seller, at its sole cost and expense, immediately shall
repair, to Purchaser's satisfaction, all defects set forth in Purchaser's list.
The provisions of this Section 2.3 shall survive Closing.
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ARTICLE III
PURCHASE PRICE
SECTION 3.1 PURCHASE PRICE. The purchase price for the Assets shall be equal to
the total costs incurred by Seller in connection with the acquisition,
development and construction of the Hospital Improvements as determined under
and pursuant to the Construction Loan Agreement and as approved by Lender (the
"Purchase Price"). Subject to the terms and conditions hereof, at Closing,
Purchaser shall pay the Purchase Price to Seller via transfer of immediately
available federal funds to an account specified in writing by Seller not less
than three (3) Business Days prior to the Closing Date.
SECTION 3.2 TAXES, RENTALS, UTILITIES. The parties acknowledge that all utility
charges and all real and personal property Taxes related to the Assets and the
Hospital shall be the responsibility of Seller pursuant to the terms of the
Lease.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
With the understanding that Purchaser shall rely hereon, and as a material
inducement to the Purchaser to enter into this Agreement, Seller hereby
represents, warrants and covenants to Purchaser as of the date hereof and as of
the Closing Date as follows:
SECTION 4.1 ORGANIZATION. The Seller is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Texas and
is duly qualified and registered as a foreign limited partnership in good
standing under the laws of each jurisdiction in which the nature of the business
conducted, or the assets owned, operated and/or leased, by Seller requires or
makes such qualification or registration necessary. SCHEDULE 4.1 attached hereto
sets forth the ownership of Seller and, except as set forth therein, no other
Person has, and Seller has not offered to any Person, any equity interest in
Seller or any option, warrant or other right to acquire the same. Seller is, and
has, at all times since the date of its formation, been, a Special Purpose
Entity.
SECTION 4.2 AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS. Seller has the
requisite limited partnership power and authority to conduct its business as it
is now being conducted and as proposed to be conducted and to execute, deliver
and carry out the terms of this Agreement, all documents and agreements
necessary to give effect to the provisions of this Agreement, including the
Lease, and to consummate the transactions contemplated hereby and thereby. All
limited partnership actions required to be taken by Seller to authorize the
execution, delivery and performance of this Agreement, and all other documents,
agreements and instruments executed by Seller which are necessary to give effect
thereto (collectively, the "Seller Instruments") and all transactions
contemplated hereby and thereby, have been duly and properly taken or obtained
in accordance and in compliance with Seller's Governing Documents. No other
action on the part of Seller or Seller's partners (or other Person's possessing
and exercising similar control and authority over Seller) is necessary to
authorize the execution, delivery and performance of this Agreement, the Lease,
the Seller Instruments and all transactions contemplated hereby and thereby.
This Agreement, the Seller Instruments and all agreements to which Seller will
become a party hereunder, including the Lease, are and will constitute the valid
and legally binding
10
obligations of Seller, and are and will be enforceable against Seller in
accordance with the respective terms hereof or thereof, except as enforceability
may be restricted, limited or delayed by applicable bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and except as
enforceability may be subject to and limited by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
SECTION 4.3 ABSENCE OF CONFLICTS. Seller's execution, delivery and performance
of this Agreement, the Lease and the Seller Instruments, and the consummation of
the transactions contemplated hereby and thereby will not, with or without the
giving of notice and/or the passage of time: (i) violate or conflict with any
provision of Seller's Governing Documents; (ii) violate or conflict with any
provision of any Law to which Seller or any of its Equity Constituents is
subject; (iii) violate or conflict with any judgment, order, writ or decree of
any court applicable to Seller; (iv) result in or cause the creation of a Lien
on the Assets; or (v) result in the breach or termination of any provision of,
or create rights of acceleration or constitute a default under, the terms of any
indenture, mortgage, deed of trust, contract, agreement or other instrument to
which Seller is a party or by which Seller or any of the Assets is bound.
SECTION 4.4 CONSENTS AND APPROVALS. No license, permit, qualification, order,
consent, authorization, approval or waiver of, or registration, declaration or
filing with, or notification to, any Governmental Entity or other Person is
required to be made or obtained by or with respect to Seller in connection with
the execution, delivery and performance of this Agreement, the Lease or the
Seller Instruments, or the consummation of the transactions contemplated hereby
or thereby.
SECTION 4.5 FINANCIAL STATEMENTS. SCHEDULE 4.5 sets forth (i) the unaudited
balance sheet of Seller (the "Balance Sheet") on May 31, 2005 (the "Balance
Sheet Date") and (ii) the unaudited statement of income and cash flows of Seller
for the partial month ended May 31, 2005 (the financial statements described in
this sentence, being referred to herein collectively, as the "Financial
Statements"). Except as set forth on SCHEDULE 4.5, the Financial Statements have
been prepared in accordance with GAAP, are based on the books, records and
accounts of Seller and fairly present the financial condition and results of
operations, cash flows and stockholders' or partners' equity of Seller as of the
respective dates thereof and for the respective periods indicated therein,
except (i) that the Financial Statements do not include complete note (including
footnote) disclosure as required by GAAP; and (ii) that the Financial Statements
are subject to normal, year-end adjustments which are not, and will not be,
material in amount or effect, either individually or in the aggregate.
SECTION 4.6 NO UNDISCLOSED LIABILITIES. Seller has no liabilities or
obligations, whether absolute, accrued, contingent or otherwise, including any
potential future liability arising out of acts or omissions which have already
occurred, which are not fully and accurately reflected or reserved against in
the Balance Sheet except for liabilities or obligations that may have arisen in
the Ordinary Course of Business since the Balance Sheet Date (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement or violation of
law), and Seller has no Knowledge of any fact, condition or circumstance which
could form the basis of any Claim in respect of any such liability or
obligation.
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SECTION 4.7 ABSENCE OF CHANGES. Since the Balance Sheet Date, Seller has:
(a) except as otherwise provided in this Agreement, conducted its business only
in the Ordinary Course of Business;
(b) not suffered any change, event or circumstance which has had, or would be
reasonably expected to have, a Material Adverse Effect;
(c) preserved its legal existence and retained its business organization intact;
(d) paid or satisfied all of its material debts, liabilities or obligations as
the same became due;
(e) timely made all applicable filings with Governmental Entities;
(f) not mortgaged, pledged, subjected to Lien, charged, encumbered or granted a
security interest in or to any of its assets (including, without limitation, any
of the Assets) except to Lender in connection with the Construction Loan or to
equipment lenders in conformance with the Construction Loan;
(g) not suffered any material damage, destruction or loss (whether or not
covered by insurance) affecting any of its assets;
(h) not made or suffered any change to its Governing Documents;
(i) maintained its books and records in accordance with GAAP, consistent with
past practices;
(j) not received any notice of any defections of or other problems related to
its prospective medical staff; and
(k) not agreed or offered, whether in writing or otherwise, to take, and neither
Seller nor its directors, officers or partners (or other Persons, however
designated, exercising similar control or authority over Seller) or Equity
Constituents have authorized the taking of, any action described in Section
4.7(a) through Section 4.7(j) above.
SECTION 4.8 PHYSICIANS. SCHEDULE 4.8 sets forth the names of all of the
physicians who are Equity Constituents, directors or officers of Seller or who
have been or are scheduled to be admitted to the staff of the Hospital (the
"Physicians"). This information shall be kept confidential.
SECTION 4.9 TAXES. Seller has filed or caused to be filed all Tax Returns of
Seller which have become due (taking into account valid extensions of time to
file) prior to the date hereof. Such Tax Returns are accurate and complete in
all material respects, and Seller has paid or caused to be paid all Taxes for
the periods covered by such Tax Returns, whether or not shown to be due on such
Tax Returns. There are (i) no outstanding Liens for any Taxes that have been
filed by any Governmental Entity against Seller or the Business, any of the
Assets or the other assets of Seller (other than for ad valorem taxes not yet
due and payable), and (ii) no claims being asserted
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in writing with respect to any Taxes relating to Seller, the Land, the Business,
any of the Assets or any other assets of Seller for which Purchaser could be
held liable, and there is no basis for the assertion of any such claim.
SECTION 4.10 TITLE AND CONDITION OF THE ASSETS.
(a) Seller, subject to any security interest which are held by lenders of Seller
(which security interest will be satisfied on or before Closing), is or will be
the sole and exclusive legal and equitable owner of the Assets and at Closing
will have and convey to Purchaser good, absolute and marketable title to and
unrestricted possession of the Assets, free and clear of any and all Liens,
encumbrances, restrictions or easements of any kind whatsoever and any adverse
Claims of third parties.
(b) Neither the sale of the Assets pursuant to this Agreement nor the
construction and operation of the Hospital violates or will violate any
applicable law, statute, ordinance, rule, regulation, order or determination of
any Governmental Entity or any restrictive covenant or deed restriction
(recorded or otherwise) affecting the Land, including, without limitation, any
applicable zoning or subdivision ordinance or building code, flood disaster law
or health and environmental law or regulation.
(c) There are existing, or Seller will install, water, sewer, gas and
electricity lines, storm sewer and other utility systems adequate to serve the
utility needs of the Hospital Improvements. As of the Closing Date, all of said
utilities will be installed and operating, with all installation and connection
charges having been paid in full.
(d) There are no Claims, actions, suits, proceedings or investigations pending
or, to the Knowledge of Seller, threatened, against or affecting all or any
portion of the Assets.
(e) SCHEDULE 4.10 attached hereto sets forth an accurate and complete list of
all leases, subleases, commitment letters, letters of intent and other rental
agreements, whether written or oral, now or hereafter in effect, if any, that
grant or will grant a possessory interest in and to any space in the Hospital
Improvements or that otherwise assign or convey rights with regard to the
Hospital Improvements (collectively referred to as the "Tenant Leases").
SCHEDULE 4.10 designates which of the Tenant Leases described therein are with
the referral sources (as determined by any of the Healthcare Fraud Laws) of
Seller and/or any of its Affiliates. SCHEDULE 4.10 specifies the rent and
security deposit, if any, for each Tenant Lease. Seller has provided Purchaser
with complete, correct and current copies of all Tenant Leases. Seller shall
provide Purchaser prior to Closing Tenant Lease estoppels in form satisfactory
to Purchaser from all Tenants under the applicable Tenant Leases. Except for the
Tenant Leases, there are no purchase contracts, leases of space, options, rights
of first refusal or other written or oral agreements of any kind whereby any
person or entity will have acquired or will have any basis to assert any right,
title or interest in, or right to the possession, use, enjoyment or proceeds of,
any part or all of the Hospital Improvements.
SECTION 4.11 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) No Governmental Entity or
any nongovernmental third party has notified Seller, or to Seller's Knowledge,
any other party, of any alleged violation or investigation of any suspected
violation under the Environmental Laws
13
in connection with the ownership or operation of the Hospital Improvements,
including any litigation or cause of action alleging personal injury or property
damage caused by exposure to, or the disposal, release or migration of, any
Hazardous Materials. To Seller's Knowledge, the Land is in full compliance with
the Environmental Laws;
(b) With respect to the ownership of the Hospital Improvements, to the Knowledge
of Seller, no Hazardous Materials have been stored, disposed of or arranged for
the disposal thereon or therein, except in compliance with the Environmental
Laws and Seller has not and will not install any underground storage tanks at,
on or under the Land;
(c) To the Knowledge of Seller, there have been no actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the generation, transportation, treatment, storage, release, emission,
discharge, presence or disposal of any Hazardous Materials on or from Hospital
Improvements that could form the basis of any Environmental Claim against Seller
or Purchaser;
(d) Seller has not contractually assumed or succeeded to any liability of any
direct or indirect predecessors or any other Person related or with respect to
any Environmental Law; and
(e) To the Knowledge of Seller, there are no conditions presently existing on,
at or emanating from the Hospital Improvements that may result in any liability,
investigation or clean-up cost under any Environmental Law.
SECTION 4.12 LITIGATION. There is no suit, action, proceeding, inquiry or
investigation (a "Claim") against or involving Seller or any of its properties
or rights, pending or, to the Knowledge of Seller threatened (including, without
limitation any suit, action, proceeding or investigation pursuant to Title 11 of
the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the Family and Medical Leave Act of 1993, or
any other federal, state or local law regulating employment) nor to the
Knowledge of Seller are there any facts which might result in or form the basis
of any such Claim. There is no judgment, decree, injunction, rule or order of
any Governmental Entity or any other Person (including, without limitation, any
arbitral tribunal) outstanding against Seller and Seller is not in violation of
any term of any judgment, decree, injunction or order outstanding against it.
Furthermore, there is no Claim by or before any Governmental Entity or other
Person pending or, to the Knowledge of Seller, threatened which questions or
challenges the validity of this Agreement or any action taken or to be taken by
Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby, and there is no basis for any such Claim.
SECTION 4.13 CONTRACTS, OBLIGATIONS AND COMMITMENTS. SCHEDULE 4.13 attached
hereto sets forth a list of all contractual agreements, whether written or oral,
or relating to or affecting the assets or the operation of the Business to which
Seller is a party (the "Business Contracts"). Seller has provided to Purchaser
complete and correct copies of all of the Business Contracts. Except as set
forth on SCHEDULE 4.13, (i) the Business Contracts are legally valid, binding
and enforceable against Seller (and, to the best of Seller's Knowledge, against
the other parties thereto) in accordance with their respective terms and are in
full force and effect; (ii) there are no defaults by Seller, or to the best of
Seller's Knowledge, any other party to the Business Contracts; (iii) Seller has
not received written notice of any default, offset, counterclaim or
14
defense under any Business Contract; (iv) no condition or event has occurred
which with the passage of time or the giving of notice or both would constitute
a default or breach by Seller of the terms of any Business Contract; and (v) the
Business Contracts are in compliance with Healthcare Fraud Laws.
SECTION 4.14 LICENSES. SCHEDULE 4.14 attached hereto sets forth a current,
complete and accurate list of all licenses, permits, certificates of need and
other authorizations of Governmental Entities (the "Permits") which will be
required for the construction and development and operation of the Hospital and
the conduct of the Business. Except as set forth in SCHEDULE 4.14, Seller
possesses all such Permits, such Permits are in full force and effect and true
and correct copies of such Permits have been delivered to Purchaser. No notice
from any authority in respect to, as applicable, the threatened, pending or
possible denial, revocation, termination, suspension or limitation of any of the
Permits has been received by Seller and Seller has no Knowledge of any proposed
or threatened issuance of any such notice or of any grounds which would form the
basis for any such notice.
SECTION 4.15 ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS. Except as
set forth on SCHEDULE 4.15 attached hereto, Seller will enroll and become a
provider authorized to participate without restriction under Title XVIII of the
Social Security Act ("Medicare") and Title XIX of the Social Security Act
("Medicaid"), the Medicare and the Medicaid programs of the State of Texas and
the TRICARE/CHAMPUS programs (the "Government Programs"). Seller expects to
receive Medicare or Medicaid reimbursement with respect to the Hospital and to
be eligible to receive payment without restriction under Medicare and Medicaid.
Neither Seller nor any Person who is either an officer or director of, or
directly or indirectly owns an equity interest in, Seller, nor, to Seller's
Knowledge, any Physician or Service Provider (i) has been excluded, suspended or
debarred from, or otherwise ineligible for, participation in any Government
Program including Medicare or Medicaid, or (ii) has been convicted of a criminal
or civil offense related to conduct that would trigger an exclusion from any
Government Program.
SECTION 4.16 HEALTHCARE REGULATORY MATTERS.(a) Except as described on SCHEDULE
4.16 attached hereto, none of Seller, or, to Knowledge of Seller, any Physician
or Service Provider (i) is a party to or has received notice of the commencement
of any investigation or debarment proceedings or any governmental investigation
or action (including any civil investigative demand or subpoena) under the False
Claims Act (31 U.S.C. Section 3729 et seq.), the Anti-Kickback Act of 1986 (41
U.S.C. Section 51 et seq.), the Federal Health Care Programs Anti-Kickback
statute (42 U.S.C. Section 1320a-7a(b)), the Ethics in Patient Referrals Act of
1989, as amended (▇▇▇▇▇ Law) (42 U.S.C. 1395nn), the Civil Money Penalties Law
(42 U.S.C. Section 1320a-7a), or the Truth in Negotiations (10 U.S.C. Section
2304 et seq.), Health Care Fraud (18 U.S.C. 1347), Wire Fraud (18 U.S.C. 1343),
Theft or Embezzlement (18 U.S.C. 669), False Statements (18 U.S.C. 1001), False
Statements (18 U.S.C. 1035), and Patient Inducement Statute and equivalent state
statutes or any rule or regulation promulgated by a Governmental Entity with
respect to any of the foregoing ("Healthcare Fraud Laws") affecting Seller or
the Business (and no grounds for any such proceeding, investigation or action
exist); and (ii) is not in full compliance with all applicable Healthcare Fraud
Laws.
(b) Except as described on SCHEDULE 4.16, neither Seller nor, to Seller's
Knowledge, any Physician or Service Provider has ever been charged or implicated
in any violation of any state
15
or federal statute or regulation involving false, fraudulent or abusive
practices relating to its participation in state or federally sponsored
reimbursement programs, including but not limited to false or fraudulent billing
practices. None of Seller, or, to Seller's Knowledge, any Physician or Service
Provider has engaged in any of the following: (i) knowingly and willfully making
or causing to be made a false statement or representation of a material fact in
any applications for any benefit or payment under Medicare or Medicaid program;
(ii) knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment under Medicare or Medicaid program; (iii) failing to disclose
knowledge of any event affecting the initial or continued right to any benefit
or payment under Medicare or Medicaid program on its own behalf or on behalf of
another, with intent to secure such payment or benefit fraudulently; (iv)
knowingly and willfully soliciting, paying, or receiving any remuneration
(including kickback, bribe or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (a) in return
for referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (b) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or ordering of
any good, facility, service, or item for which payment may be made in whole or
in part by Medicare or Medicaid; (v) presenting or causing to be presented a
claim for reimbursement for services that is for an item or service that was
known or should have been known to be (a) not provided as claimed, or (b) false
or fraudulent; or (vi) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omitting to state a fact required to be stated therein or
necessary to make the statements contained therein not misleading) of a material
fact with respect to (a) a facility in order that the facility may qualify for
Governmental Entity certification or (b) information to be provided under 42
U.S.C. Section 1320a-3.
(c) The Physicians' investment in and ownership of Seller, if any, and the
referral of patients to the Hospital and the Business by such Physicians do not
and shall never violate any applicable Laws, including any Healthcare Fraud Law.
SECTION 4.17 ▇▇▇▇-▇▇▇▇▇▇ OBLIGATIONS. Seller does not have any patient care or
other obligations under the Federal ▇▇▇▇-▇▇▇▇▇▇ program with respect to the
operation of the Hospital.
SECTION 4.18 MEDICAL STAFF MATTERS. Except as set forth in SCHEDULE 4.18
attached hereto, there are no pending or, to the Knowledge of Seller, threatened
appeals, challenges, disciplinary or corrective actions, or disputes involving
applicants to the medical staff of the Hospital. For confidentiality purposes,
all persons identified on SCHEDULE 4.18 are identified by a Hospital-assigned
number rather than name. True and correct copies of Medical Staff Bylaws of the
Hospital, the Hospital's Medical Staff Rules and Regulations, and the Hospital's
Medical Staff Hearing Procedures, all as proposed to be in effect following
completion of the Hospital Improvements, have been previously delivered by
Seller to Purchaser.
SECTION 4.19 COMPLIANCE WITH LAW. Seller (a) is in material compliance with
every applicable law, rule, regulation, ordinance, license, permit and other
governmental action and authority and every order, writ, and decree of every
Governmental Entity in connection with the ownership, conduct, operation and
maintenance of the Business and its ownership and use of its assets, and no
event has occurred or circumstance exists which (without notice or lapse of
time)
16
would result in any noncompliance with any such law, rule, regulation,
ordinance, license permit, order, writ or decree; and (b) has timely made or
given all filings and notices required to be made by Seller with the regulatory
agencies of any Governmental Entity.
SECTION 4.20 INTANGIBLE PROPERTY. A true and complete list of the trademarks,
service marks, and other intangible assets of Seller to be used in the operation
of the Hospital is set forth in SCHEDULE 4.20 attached hereto (the "Intangible
Property"). Seller owns or possesses adequate, enforceable licenses or other
rights to use all of the Intangible Property, and no rights thereto have been
granted to others by Seller. Except as set forth in SCHEDULE 4.20, all of the
Intangible Property is owned or used by Seller free and clear of all
assignments, licenses, restrictions, encumbrances, charges or claims for
infringement, and none is subject to any outstanding order, decree, judgment,
stipulation or charge. There is no unauthorized use, disclosure, infringement or
misappropriation of any of the Intangible Property by any third party. Seller's
use of the Intangible Property does not infringe upon or otherwise violate the
rights of others. No one has asserted to Seller that its use of the Intangible
Property infringes upon the patents, trade secrets, trade names, trademarks,
service marks, copyrights or other intellectual property rights of any other
Person.
SECTION 4.21 RECORDS. True and complete copies of Seller's Governing Documents
have been delivered to Purchaser prior to the execution and delivery of this
Agreement. The books of account, minute books, stock record books and other
records of Seller, all of which have been made available to Purchaser are
complete and correct. The minute books of Seller contain records of all meetings
and other company actions of the directors (or other Persons, however
designated, possessing and/or exercising similar authority and control over
Seller) and Equity Constituents of Seller, and have been delivered to Purchaser
prior to the execution and delivery of this Agreement.
SECTION 4.22 SUBSIDIARIES. Except as set forth on SCHEDULE 4.22 attached hereto,
Seller owns no Subsidiaries.
SECTION 4.23 BROKERS. No Person is or will be entitled to any brokerage fee or
commission in connection with or as a result of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Seller.
SECTION 4.24 REPRESENTATIONS COMPLETE. The representations and warranties made
by Seller in this Agreement and the statements made in or information contained
on any Schedules or certificates furnished by Seller pursuant to this Agreement
do not contain and will not contain, as of their respective dates and as of the
Closing Date, any untrue statement of a material fact, nor do they omit or will
they omit, as of their respective dates or as of the Closing Date, to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties of Seller shall survive Closing
for a period of one (1) year.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser hereby represents and warrants to Seller as of the date hereof and as
of the Closing Date as follows:
SECTION 5.1 ORGANIZATION. Purchaser is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Purchaser is duly qualified as a foreign limited partnership in good standing
under the laws of the jurisdiction(s) in which the nature of the business
conducted, or the assets owned, operated and/or leased by Purchaser requires or
makes such qualification necessary.
SECTION 5.2 AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS. Purchaser has, as
applicable, the requisite limited partnership power and authority to conduct its
respective businesses as they are now being conducted and as proposed to be
conducted and to execute, deliver and carry out the terms of this Agreement and
all documents and agreements necessary to give effect to the provisions of this
Agreement, and to consummate the transactions contemplated hereby and thereby.
All limited partnership actions required to be taken by Purchaser to authorize
the execution, delivery and performance of this Agreement, as well as all other
documents, agreements and instruments executed and delivered by Purchaser which
are necessary to give effect thereto (all such other documents, agreements and
instruments executed and delivered by Purchaser being referred to herein
collectively as the "Purchaser Instruments") and all transactions contemplated
hereby and thereby, have been duly and properly taken or obtained in accordance
and compliance with, as applicable, Purchaser's Governing Documents. No other
action on the part of Purchaser, or the partners thereof, is necessary to
authorize the execution, delivery and performance of, as applicable, this
Agreement, the Purchaser Instruments, and all transactions contemplated hereby
and thereby. This Agreement and the Purchaser Instruments are and will
constitute the valid and legally binding obligations of Purchaser, and are and
will be enforceable against Purchaser, as applicable, in accordance with their
respective terms, except as enforceability may be restricted, limited or delayed
by applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and except as enforceability may be subject to and limited by
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
SECTION 5.3 ABSENCE OF CONFLICTS. The execution, delivery and performance of
this Agreement by Purchaser, the execution, delivery and performance of the
Purchaser Instruments by Purchaser, and the consummation of the transactions
contemplated hereby and thereby will not, with or without the giving of notice
and/or the passage of time: (i) violate or conflict with any provision of the
Governing Documents of Purchaser; (ii) violate or conflict with any provision of
any Law to which Purchaser is subject or (iii) violate or conflict with any
judgment, order, writ or decree of any court applicable to Purchaser.
SECTION 5.4 CONSENTS AND APPROVALS. No license, permit, qualification, order,
consent, authorization, approval or waiver of, or registration, declaration or
filing with, or notification to, any Governmental Entity or other Person is
required to be made or obtained by or with respect to Purchaser in connection
with the execution, delivery and performance of this Agreement, the Lease, or
the consummation of the transactions contemplated hereby or thereby.
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SECTION 5.5 LITIGATION. There is no Claim pending or, to the Knowledge of
Purchaser, threatened against or affecting Purchaser that has had or would
reasonably be expected to have a Material Adverse Effect on Purchaser's
business, properties, assets, financial condition or ability to perform this
Agreement or any aspect of the transactions contemplated hereby and, to the
Knowledge of Purchaser, there is no basis for any such Claim. There is no
judgment, decree, injunction, rule or order of any Governmental Entity or any
other Person (including, without limitation, any arbitral tribunal) outstanding
against Purchaser and Purchaser is not in violation of any term of any judgment,
decree, injunction or order outstanding against it. Furthermore, there is no
Claim by or before any Governmental Entity or other Person pending or to the
Knowledge of Purchaser, threatened, which questions or challenges the validity
of this Agreement or any action taken or to be taken by Purchaser pursuant to
this Agreement or in connection with the transactions contemplated hereby, and
there is no basis for any such Claim.
SECTION 5.6 POSSESSION OF PERMITS. Purchaser possess all franchises,
certificates, licenses, permits and other authorizations from governmental
political subdivisions or regulatory authorities, and all patents, trademarks,
service marks, trade names, copyrights, licenses and other rights, free from
burdensome restrictions, that are necessary for the ownership, maintenance and
operation of any of their properties and assets, except where the failure to
possess any of the foregoing would not prevent or impede Purchaser from
consummating the transactions contemplated hereby.
SECTION 5.7 COMPLIANCE WITH LAW. Purchaser (a) is in compliance with every
applicable law, rule, regulation, ordinance, license, permit and other
governmental action and authority and every order, writ, and decree of every
Governmental Entity in connection with the ownership, conduct, operation and
maintenance of its businesses, and its ownership and use of its assets, except
where non-compliance would not prevent or impede Purchaser from consummating the
transactions contemplated hereby or the ability of Purchaser to perform this
Agreement and, to the Knowledge of Purchaser, no event has occurred or
circumstance exists which (without notice or lapse of time) would result in any
noncompliance with any such law, rule, regulation, ordinance, license permit,
order, writ or decree which would prevent or impede Purchaser from consummating
the transactions contemplated hereby; (b) upon request from Seller, will execute
a "business associates" contract to create compliance with the provisions of the
Health Insurance Privacy and Portability Act of 1996 as it may apply to medical
information; and (c) has timely made or given all filings and notices required
to be made by Purchaser with the regulatory agencies of any Governmental Entity,
except where such failure would prevent or impede Purchaser from consummating
the transaction contemplated hereby.
SECTION 5.8 BROKERS. No Person is or will be entitled to any brokerage fee or
commission in connection with or as a result of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Purchaser.
SECTION 5.9 REPRESENTATIONS COMPLETE. The representations and warranties made by
Purchaser in this Agreement and the statements made in or information contained
on any Schedules or certificates furnished by Purchaser pursuant to this
Agreement do not contain and will not contain, as of their respective dates and
as of the Closing Date, any untrue statement of a material fact, nor do they
omit or will they omit, as of their respective dates or as of the Closing
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Date, to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which they
were made, not misleading.
ARTICLE VI
TITLE AND SURVEY
SECTION 6.1 SURVEY. Within fifteen (15) Business Days prior to the Closing Date,
Seller, at Seller's expense, shall deliver to Purchaser a current as-built
ALTA/ACSM Land Title Survey of the Land, prepared by a duly licensed Texas land
surveyor (the "Survey"). The Survey shall be currently dated, shall show the
location on the Land of all improvements, fences, evidence of abandoned fences,
ponds, creeks, streams, rivers, easements, roads, rights-of-way, means of
ingress and egress, location of all utilities serving the Land, and
encroachments, and shall contain a legal description of the boundaries of the
Land by metes and bounds and the appropriate flood zone designation and the
total number of acres constituting the Land. The surveyor shall certify to
Purchaser and to the Title Company that the Survey is correct and that there are
no visible discrepancies, conflicts, encroachments, overlapping of improvements,
fences, evidence of abandoned fences, ponds, creeks, streams, rivers, easements,
roads or rights-of-way except as are shown on the survey plat. Any and all
matters shown on the Survey shall be legibly identified by appropriate volume
and page recording references with dates of recording noted. If Purchaser shall
disapprove the Survey for any reason in Purchaser's reasonable discretion,
Purchaser may either (i) treat such objection as a title objection and request
that it be cured, or (ii) terminate this Agreement and the parties hereto shall
have no further liability or obligations hereunder, expect as otherwise
expressly set forth herein. If Seller is unable to cure any objection to the
Survey within ten (10) days following delivery of notice to Seller thereof, then
the Purchaser may terminate this Agreement upon written notice to Seller.
SECTION 6.2 TITLE INSURANCE. Purchaser will cause to be prepared, at Seller's
expense, a title commitment to update the Purchaser's existing leasehold owner's
policy of title insurance with respect to the Land from Title Company. All of
the standard exceptions within the policy or title commitment and the exceptions
for mechanic's and materialmen's liens and the survey exception shall be
deleted. If Purchaser shall disapprove any items stated in the title update,
Purchaser may either (i) treat such objection as a title objection and request
that it be cured, or (ii) terminate this Agreement and, upon such termination,
the parties hereto shall have no further liability or obligations hereunder,
except as otherwise expressly provided herein. If Seller is unable to cure any
exception or objection to title within ten (10) days following delivery of
notice to Seller thereof, then Purchaser may terminate this Agreement upon
written notice to Seller.
ARTICLE VII
PRE-CLOSING COVENANTS
From and after the execution and delivery of this Agreement to and including the
Closing Date (unless a later date or time is specified), the applicable party
shall observe the following covenants:
SECTION 7.1 NO SHOP. Neither Seller nor any investment banker, attorney,
accountant, representative or other Person retained by or on behalf of Seller
shall, directly or indirectly, initiate contact with, respond to, solicit or
encourage any inquiries, proposals or offers by,
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participate in any discussions or negotiations with, enter into any agreement
with, disclose any information concerning Seller or Seller's assets to, afford
any access to the properties, books or records of Seller to, or otherwise
assist, facilitate or encourage, any person in connection with any possible
proposal regarding a sale or lease of the Assets or any similar transaction.
Seller shall notify Purchaser immediately if any discussions or negotiations are
sought to be initiated, any inquiry or proposal is made, or any such information
is requested.
SECTION 7.2 ACCESS. Between the date hereof and the Closing, Seller shall (i)
afford Purchaser and its authorized representatives full and complete access to
Seller's employees, medical staff, if any has been hired, and other agents and
representatives and during normal working hours to all books, records, offices
and other facilities of Seller, (ii) permit Purchaser to make such inspections
and to make copies of such books and records as it may reasonably require and
(iii) furnish Purchaser with such financial and operating data and other
information relating to Seller and the Assets as Purchaser may from time to time
reasonably request. Purchaser and its authorized representatives shall conduct
all such inspections under the supervision of personnel of Seller in a manner
that will minimize disruptions to the business and operations of Seller and in a
manner as to maintain the confidentiality of this Agreement. Nothing herein
shall require Seller to disclose any information to Purchaser if such disclosure
would: (A) cause significant competitive harm to its competitive position if the
transactions contemplated hereby are not consummated; (B) jeopardize any
attorney-client or other legal privilege; or (C) contravene any Law, fiduciary
duty or binding agreement entered into prior to the date of this Agreement
(including any confidentiality agreement to which it or its affiliates is a
party); provided, however, that if the Seller relies on this sentence of Section
7.2 as a basis for such non-disclosure, the Seller shall nevertheless inform
Purchaser of the general nature of the information not being disclosed and the
basis for such non-disclosure.
SECTION 7.3 CONFIDENTIALITY. Purchaser and Seller agree to be bound by the terms
and provisions regarding confidentiality set forth in SCHEDULE 7.3 attached
hereto (the "Confidentiality Agreement"). The provisions of the Confidentiality
Agreement shall remain binding and in full force and effect until the Closing
and shall survive the Closing. Notwithstanding anything to the contrary
contained in this Agreement, the confidentiality obligations as they relate to
the transactions contemplated by this Agreement shall not apply to the purported
or claimed Federal income tax treatment of the transactions (the "Tax
Treatment") or to any fact that may be relevant to understanding the purported
or claimed Federal income tax treatment of the transactions (the "Tax
Structure"), and each party hereto (and any employee, representative, or agent
of any party hereto) may disclose to any and all persons, without limitation of
any kind, the Tax Treatment and Tax Structure of the transactions contemplated
by this Agreement and any materials of any kind (including any tax opinions or
other tax analyses) that relate to the Tax Treatment or Tax Structure. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to any tax matter or tax idea related to the transactions contemplated by
this Agreement. The preceding sentence is intended to ensure that the
transactions contemplated by this Agreement shall not be treated as having been
offered under conditions of confidentiality for purposes of the Confidentiality
Agreement and shall be construed in a manner consistent with such purpose. The
information contained herein, in the Schedules hereto or delivered to Purchaser
or its authorized representatives pursuant hereto shall be subject to
Confidentiality Agreement as Information (as defined and subject to the
exceptions contained therein).
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SECTION 7.4 REGULATORY AND OTHER AUTHORIZATIONS, NOTICES AND CONSENTS.
(a) Each party hereto shall use all commercially reasonable efforts to obtain
all authorizations, consents, orders and approvals of all Governmental Entities
and officials that may be or become necessary for its execution and delivery of,
and the performance of its obligations pursuant to, this Agreement and each such
party will cooperate fully with the other parties hereto in promptly seeking to
obtain all such authorizations, consents, orders and approvals.
(b) Seller shall give promptly such notices to third parties and use its
commercially reasonable efforts to obtain such third party consents and estoppel
certificates as Purchaser may in its sole and absolute discretion deem necessary
or desirable in connection with the transactions contemplated by this Agreement,
as may be or become necessary for its execution and delivery of, and performance
of its obligations under, this Agreement.
(c) Purchaser shall cooperate and use commercially reasonable efforts to assist
Seller in giving such notices and obtaining such third party consents and
estoppel certificates; provided, however, that Purchaser shall not have any
obligation to give any guarantee or other consideration of any nature in
connection with any such notice, consent or estoppel certificate which Purchaser
in its sole and absolute discretion may deem adverse to the interests of
Purchaser.
SECTION 7.5 MUTUAL COVENANTS. The parties shall use their good faith reasonable
efforts to satisfy the conditions to the closing of the transactions
contemplated hereby. Without limiting the generality of the foregoing, the
respective parties shall execute and/or deliver, or use their respective good
faith reasonable efforts to cause to be executed and/or delivered, the documents
contemplated to be executed and/or delivered by them at Closing.
SECTION 7.6 SCHEDULE UPDATES. From the date hereof until the Closing Date, the
Purchaser, on the one hand, and the Seller, on the other hand, shall immediately
advise the other party in writing of any additions or changes to any Schedule to
reflect any deficiencies or inaccuracies in such Schedule or to reflect
circumstances or matters which occur after the date of this Agreement which, if
existing prior to such date, would have been required to be described in such
Schedule; provided, however, that no additions or changes made to any Schedule
to correct deficiencies or inaccuracies in such Schedule shall be deemed to cure
any breach or inaccuracy of a representation or warranty, covenant or agreement
or to satisfy any condition unless otherwise agreed to in writing by the other
parties, but provided further, however, that an addition or change made to any
Schedule to reflect circumstances or matters which occur after the date of this
Agreement shall be deemed to cure a breach or inaccuracy of a representation or
warranty, covenant or agreement, but shall not be deemed to satisfy any
condition unless agreed to in writing by the other party.
SECTION 7.7 CONDUCT OF BUSINESS BY THE SELLER PENDING THE CLOSING. Seller
covenants and agrees that, during the period from the date hereof and continuing
until the earlier of the termination of this Agreement or the Closing Date,
unless Purchaser shall otherwise agree in writing, Seller shall conduct the
Business only in, and Seller shall not take any action except in, the Ordinary
Course of Business and in compliance in all material respects with all
applicable laws and regulations, and that Seller shall use reasonable best
efforts to preserve substantially
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intact the business organization of Seller, to keep available the services of
the current officers, employees and consultants of Seller and to preserve the
present relationships of Seller with medical staff, suppliers and other persons
with which Seller has significant business relations and Seller shall not take
any actions or omit to take any actions which would cause the representations
and warranties described in Section 4.7 to be untrue.
SECTION 7.8 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the parties agree
to consult with each other before any party hereto or any of their respective
Affiliates issues any press release or makes any public statement with respect
to this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue, or permit to be issued, any such press release or
make, or permit to be made, any such public statement prior to such
consultation.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.1 CONDITIONS TO THE OBLIGATIONS OF THE SELLER. The obligations of
Seller to effect the transactions contemplated hereby shall be subject to the
fulfillment of the following condition(s), any one or more of which may be
waived by Seller:
(a) All of the representations and warranties of Purchaser set forth in this
Agreement shall be true and correct when made and as of the Closing Date as if
made on the Closing Date;
(b) Purchaser shall have delivered, performed, observed and complied with all of
the items, instruments, documents, covenants, agreements and conditions required
by this Agreement to be delivered, performed, observed and complied with by them
prior to, or as of, the Closing;
(c) Purchaser shall not have suffered any change, event or circumstance which
has had, or would be reasonably expected to have, a Material Adverse Effect, and
Seller has not declared Lender to be in default of any of its material covenants
or obligations under the Construction Loan beyond any applicable notice, cure or
grace period, provided such default is not caused by or did not arise due to any
default by Seller under the Construction Loan;
(d) There shall not have been instituted by any creditor of Purchaser, any
Governmental Entity or any other Person, any suit, action, proceeding or
investigation which would adversely affect Purchaser or seek to restrain, enjoin
or invalidate the transactions contemplated by this Agreement; and
(e) Purchaser shall have executed, where applicable, and delivered to Seller the
documents referenced in Section 9.3 hereof.
SECTION 8.2 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The obligations of
Purchaser to effect the transactions contemplated hereby shall be subject to the
fulfillment of the following conditions (the "Purchaser's Closing Conditions"),
any one or more of which may be waived by Purchaser:
(a) All of the representations and warranties of Seller set forth in this
Agreement shall be true and correct when made and as of the Closing Date as if
made on the Closing Date;
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(b) Seller shall have delivered, performed, observed and complied with all of
the items, instruments, documents, covenants, agreements and conditions required
by this Agreement to be delivered, performed, observed and complied with by it
prior to, or as of, the Closing;
(c) Seller shall not have suffered any change, event or circumstance which has
had, or would be reasonably expected to have, a Material Adverse Effect, and
Lender has not declared Seller to be in default of any of its material covenants
or obligations under the Construction Loan beyond any applicable notice, cure or
grace period, provided such default is not caused by or did not arise due to any
default by Lender under the Construction Loan;
(d) Purchaser shall have completed the due diligence investigations of Seller
and the Assets and shall be satisfied with the results of such investigations;
(e) All necessary approvals, consents, estoppel certificates and the like of
third parties to the validity and effectiveness of the transactions contemplated
hereby have been obtained, and all required governmental filings or approvals,
and lender approvals, have been satisfied;
(f) No portion of the Assets shall have been destroyed by fire or casualty;
(g) Purchaser shall have received copies of all permits, licenses, certificates
of need and other approvals of governmental authorities required for the
operation of the Assets for their intended use and written evidence satisfactory
to Purchaser that the construction, development, operation and use of the
Hospital is in accordance with all applicable governmental requirements;
(h) Seller shall deliver to Purchaser a final certificate of occupancy and a
certificate of substantial completion for the Hospital Improvements from the
architect for the Hospital Improvements;
(i) Purchaser shall have received evidence that Seller is maintaining insurance
on the Assets as required in the Lease and that Purchaser and its lenders, if
any, are named as additional insureds and, where applicable, loss payees;
(j) Seller shall have executed where applicable and delivered to Purchaser, as
applicable, the documents and amounts referenced in Section 9.2 hereof;
(k) There shall not have been instituted by any creditor of Seller, any
Governmental Entity or any other Person (other than Seller or any Affiliate
thereof), any suit, action, proceeding or investigation which would adversely
affect the Assets or seek to restrain, enjoin or invalidate the transactions
contemplated by this Agreement;
(l) The Appraisal shall have been delivered to Purchaser;
(m) Seller shall have delivered to Purchaser audited financial statements for
Seller for all fiscal years since the formation of Seller and a current interim
financial statement from the end of the last fiscal year until the end of the
last quarter of Seller's fiscal year; and
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(n) Seller shall deliver to Purchaser a pro-forma for the operations of the
Hospital for the five (5) year period commencing with the staffing of such
operations.
SECTION 8.3 FAILURE OF CONDITIONS. In the event one or more of the closing
conditions set forth in Sections 8.1 and 8.2 shall not be satisfied as of the
Closing Date, then the party for whose benefit the closing condition exists
shall have the option, to be exercised by written notice to the other party
given as of the Closing Date, either to (i) waive the unsatisfied closing
condition and proceed to Closing, or (ii) extending the Closing Date by such
reasonable period as may be necessary to allow for satisfaction of the
unsatisfied closing condition; provided such extended period shall not be later
than thirty (30) days subsequent to the Outside Closing Date. In the event a
party shall elect to proceed under clause (ii), the notice of such election
shall include the period for which the extension is made. If, after such
extension is made, the closing condition remains unsatisfied at the end of the
extended period, then the party for whose benefit the closing condition exists
shall have the option, to be exercised by written notice to the other party
given as of the end of such extended period, either to (x) waive the unsatisfied
closing condition and proceed to Closing, or (y) terminate this Agreement,
whereupon Purchaser and Seller shall be released and relieved of all further
obligations under this Agreement. The parties agree to use good faith efforts to
satisfy each closing condition which is within such party's power or obligation
to satisfy. Notwithstanding anything in this Agreement to the contrary, if a
closing condition remains unsatisfied as of the Closing Date as a result of the
failure of the party's whose obligation it is to satisfy such condition (the
"Defaulting Party"), then the Defaulting Party shall be in default hereunder and
the Non-Defaulting Party shall have all rights and remedies allowed herein, at
law and in equity.
ARTICLE IX
CLOSING
SECTION 9.1 CLOSING DATE. The closing of the transactions contemplated hereby
(the "Closing") shall be held on or before thirty (30) days subsequent to
satisfaction of the Purchaser's Closing Conditions set forth in Sections 8.2(e),
8.2(g), 8.2(h), 8.2(i) and 8.2(l), at a time, place and date (but not later than
said thirtieth [30th] day) designated by Purchaser to Seller by written notice
given at least five (5) days prior to the designated date; provided in all
events the date for Closing shall be not later than the date which is
twenty-four (24) months after the date of this Agreement (the "Outside Closing
Date") [the actual date of Closing, or the actual date upon which Closing is to
occur, being herein referred to as the "Closing Date"] and provided further, in
the event Purchaser shall not timely give notice to Seller of the date, time and
place for the Closing, the Closing shall be held at the offices of Purchaser at
10:00 a.m. (Eastern Time) on the date which is the earlier of (i) thirty (30)
days subsequent to satisfaction of the Purchaser's Closing Conditions set forth
in Section 8.2(e), 8.2(g), 8.2(h), 8.2(i) and 8.2(l), or (ii) the Outside
Closing Date.
SECTION 9.2 SELLER'S CLOSING DATE DELIVERABLES. On the Closing Date, Seller
shall deliver to Purchaser the documents listed below.
(a) Duly executed bills of sale and assignments transferring tangible and
intangible portions of the Assets to Purchaser in form and substance
satisfactory to Purchaser;
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(b) A duly executed general warranty deed conveying the Hospital Improvements to
Purchaser;
(c) A certified copy of the resolutions of the governing body and/or Equity
Constituents of Seller dated as of the date hereof and authorizing Seller's
execution, delivery and performance of this Agreement and all other documents to
be executed in connection herewith;
(d) Certificates of existence and good standing of Seller from the secretary of
state of Seller's state of organization, dated the most recent practical date
prior to the Closing Date;
(e) A statement certified by the chief financial officer of Seller indicating
that Seller has received from its Equity Constituents equity capital
contributions in an amount not less than Fifteen Million and No/100 Dollars
($15,000,000.00), and that Seller has maintained and shall maintain Consolidated
Net Worth (as defined in the Lease) in those amounts required under Section
16.2(a) of the Lease;
(f) An endorsement to the Purchaser's existing leasehold title policy with
respect to the acquisition of the Assets, in form and substance satisfactory to
Purchaser;
(g) A Zoning Compliance Letter/Certificate dated the most recent practical date
prior to the Closing Date in form and substance satisfactory to Purchaser;
(h) Estoppel certificates from the Tenants in form and substance satisfactory to
Purchaser;
(i) An Owner's Affidavit in form and substance satisfactory to Purchaser and the
Title Company;
(j) The Search Reports dated the most recent practical date prior to the Closing
Date in form and substance satisfactory to Purchaser and the Title Company;
(k) A Non-Foreign Affidavit in form and substance satisfactory to Purchaser;
(l) The Lease;
(m) A certificate dated the Closing Date signed by Seller to the effect that all
of the representations and warranties of Seller contained in the Agreement
(considered collectively) and each of these representations and warranties
(considered individually) remain in all respects true and correct as of the
Closing Date as if made on such date and that Seller has performed and satisfied
in all material respects all covenants and conditions required by this Agreement
to be performed or satisfied by Seller on or prior to Closing;
(n) All necessary approvals, consents, estoppel certificates and the like of
third parties or Governmental Entities to the validity and effectiveness of the
transactions contemplated hereby;
(o) A noncompete agreement in the form attached as SCHEDULE 9.2(o); and
(p) Such other instruments and documents as Purchaser reasonably deems necessary
to effect the transactions contemplated hereby.
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SECTION 9.3 PURCHASER'S CLOSING DATE DELIVERABLES. On the Closing Date,
Purchaser shall deliver to Seller the documents listed below.
(a) A certified copy of the resolutions of the governing body of Purchaser dated
as of the date hereof authorizing the execution, delivery and performance of
this Agreement and all other documents to be executed in connection herewith;
(b) Certificates of good standing of the Purchaser from the Delaware Secretary
of State and foreign qualification from the Texas Secretary of State, dated the
most recent practical date prior to the Closing Date;
(c) The Lease;
(d) A certificate dated the Closing Date signed by Purchaser to the effect that
all of the representations and warranties of Purchaser contained in the
Agreement (considered collectively) and each of these representations and
warranties (considered individually) remain in all respects true and correct as
of the Closing Date as if made on such date and that the Purchaser has performed
and satisfied in all material respects all covenants and conditions required by
this Agreement to be performed or satisfied by Purchaser on or prior to Closing;
(e) Any bills of sale and assignments requiring the signature of Purchaser; and
(f) A noncompete agreement in the form attached as SCHEDULE 9.2(o).
ARTICLE X
TERMINATION
SECTION 10.1 TERMINATION PRIOR TO CLOSING. Notwithstanding anything to the
contrary in this Agreement, the remaining obligations of the parties hereunder
may be terminated and the transactions contemplated hereby abandoned at any time
prior to Closing: (i) by mutual written consent of Seller and Purchaser; or (ii)
as set forth in Section 8.3.
SECTION 10.2 NOTICE OF TERMINATION PRIOR TO CLOSING. In the event of the
termination of this Agreement pursuant to Section 10.1, the party terminating
this Agreement shall give prompt written notice thereof to the other party, and
the transactions contemplated hereby shall be abandoned, without further action
by any party. Each filing, application and other submission relating to the
transactions contemplated hereby shall, to the extent practicable, be withdrawn
from the person to which it was made. Notwithstanding any statement contained in
this Agreement to the contrary, termination of this Agreement shall not relieve
any party from liability for any breach or violation of this Agreement that
arose prior to such termination.
ARTICLE XI
POST CLOSING COVENANTS
SECTION 11.1 JCAHO COMPLIANCE. Seller, as of the Operational Date or as soon as
reasonably practicable thereafter, shall apply for and obtain accreditation by
the Joint Commission on Accreditation of Healthcare Organizations.
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SECTION 11.2 HIPAA COMPLIANCE. Seller shall use commercially reasonable efforts
to be in compliance, upon the Operational Date, with the standards for privacy
of individually-identifiable health information which were promulgated pursuant
to the Health Insurance Portability and Accountability Act of 1996.
SECTION 11.3 NECESSARY PERMITS. Except as set forth in SCHEDULE 11.3 attached
hereto, Seller either has or has begun applying for, and will have, as of the
Operational Date, obtained all Permits from all applicable federal, state and
local authorities and any other regulatory agencies necessary or proper in order
to operate the Hospital and to conduct the Business.
SECTION 11.4 PARTICIPATION IN GOVERNMENT PROGRAMS. Seller shall take all actions
necessary to cause the Hospital to be in compliance with the conditions of
participation for the Government Programs and to receive all approvals or
qualifications necessary for capital reimbursement.
SECTION 11.5 COMPLIANCE WITH WHOLE HOSPITAL EXCEPTION. Seller shall operate in
compliance with the ▇▇▇▇▇ Law whole hospital exception as set forth in 42 C.F.R.
Section 411.356(c) and will not operate as a specialty hospital as defined in 42
C.F.R. Section 411.351.
SECTION 11.6 POST-CLOSING ACCESS TO INFORMATION. Seller and Purchaser
acknowledge that, subsequent to Closing, each may need access to the Assets and
to information, documents or computer data in the control or possession of the
other for purposes of concluding the transactions contemplated herein and for
audits, investigations, compliance with governmental requirements, regulations
and requests, the prosecution or defense of third party claims. Accordingly,
Seller and Purchaser agree that they will make available to the other parties
and their agents, independent auditors and/or governmental entities such
documents and information as may be available relating to the Assets and the
Hospital and will permit the other parties to make copies of such documents and
information at the requesting party's expense.
SECTION 11.7 SURVIVAL. The provisions of this Article XI shall survive Closing.
ARTICLE XII
INDEMNIFICATION
SECTION 12.1 INDEMNIFICATION OF THE PURCHASER PARTIES. Subject to the
limitations set forth in this Article XII, the Seller agrees to indemnify,
defend and hold harmless Purchaser, its Affiliates and their respective
officers, directors, members, (general and limited) partners, shareholders,
employees, agents and representatives (collectively, the "Purchaser Indemnified
Parties") from and against all Damages asserted against or incurred by the
Purchaser Indemnified Parties or any of them arising out of or in connection
with or resulting from (i) any breach of, misrepresentation associated with or
failure to perform under any covenant, representation, warranty or agreement
under this Agreement or the other agreements contemplated hereby on the part of
Seller, or (ii) any liability relating to the operation of the Business prior to
Closing.
SECTION 12.2 INDEMNIFICATION OF SELLER PARTIES. Subject to the limitations set
forth in this Article XII, Purchaser hereby agrees to indemnify, defend and hold
harmless Seller, Seller's Affiliates and their respective officers, directors,
members, (general and limited) partners, shareholders, employees, agents and
representatives (collectively, the "Seller Indemnified Parties") from and
against all Damages asserted against or incurred by the Seller Indemnified
28
Parties or any of them arising out of or in connection with or resulting from
any breach of, misrepresentation associated with or failure to perform under any
covenant, representation, warranty or agreement under this Agreement or the
other agreements contemplated hereby on the part of Purchaser.
SECTION 12.3 NOTIFICATION AND DEFENSE OF CLAIMS.(a) A party entitled to be
indemnified pursuant to Section 12.1 or Section 12.2 (the "Indemnified Party")
shall notify the party liable for such indemnification (the "Indemnifying
Party") in writing of any claim or demand which the Indemnified Party has
determined has given or could give rise to a right of indemnification under this
Agreement, as soon as possible after the Indemnified Party becomes aware of such
claim or demand; provided, that the Indemnified Party's failure to give such
notice to the Indemnifying Party in a timely fashion shall not result in the
loss of the Indemnified Party's rights with respect thereto except to the extent
the Indemnified Party is materially prejudiced by the delay.
If the Indemnified Party shall notify the Indemnifying Party of any claim or
demand pursuant to the provisions hereof, and if such claim or demand relates to
a claim or demand asserted by a third party against the Indemnified Party (a
"Third Party Claim"), the Indemnifying Party shall have the obligation either
(i) to pay such claim or demand, or (ii) defend any such Third Party Claim with
counsel reasonably satisfactory to the Indemnified Party. After the Indemnifying
Party has assumed the defense of such Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 12.3 for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, provided that the Indemnified Party shall have the right to
employ counsel, at the Indemnifying Party's expense, to represent it if (A) in
the Indemnified Party's reasonable opinion the Indemnifying Party is not
diligently prosecuting the defense of such Third Party Claim, (B) such Third
Party Claim involves remedies other than monetary damages and such remedies, in
the Indemnified Party's reasonable judgment, could have a material adverse
effect on such Indemnified Party, (C) the Indemnified Party may have available
to it one or more defenses or counterclaims that are inconsistent with one or
more defenses or counterclaims that may be alleged by the Indemnifying Party, or
(D) the Indemnified Party believes in its reasonable discretion that a conflict
of interest exists between the Indemnifying Party and the Indemnified Party with
respect to such third party claim or action, and in any such event the
reasonable fees and expenses of such separate counsel for the Indemnified Party
shall be paid by the Indemnifying Party. The Indemnified Party shall make
available to the Indemnifying Party or its agents all records and other
materials in the Indemnified Party's possession reasonably required by it for
its use in contesting any third party claim or demand.
(b) No Indemnified Party may settle or compromise any claim or consent to the
entry of any judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party, unless
(i) the Indemnifying Party fails to assume and diligently prosecuting the
defense of such claim pursuant to Section 12.3(a) or (ii) such settlement,
compromise or consent includes an unconditional release of the Indemnifying
Party from all liability arising out of such claim and does not contain any
equitable order, judgment or term which includes any admission of wrongdoing or
could result in any liability (including regulatory liability) of the
Indemnifying Party or which would otherwise in any manner affect, restrain or
interfere with the business of the Indemnifying Party or any Affiliate of the
Indemnifying Party. An Indemnifying Party may not, without the prior written
consent of the
29
Indemnified Party, settle or compromise any claim or consent to the entry of any
judgment with respect to which indemnification is being sought hereunder unless
such settlement, compromise or consent includes an unconditional release of the
Indemnified Party from all liability arising out of such claim and does not
contain any equitable order, judgment or term which includes any admission of
wrongdoing or could result in any liability (including regulatory liability) of
the Indemnified Party or which would otherwise in any manner affect, restrain or
interfere with the business of the Indemnified Party or any of the Indemnified
Party's Affiliates.
SECTION 12.4 LIMITATIONS ON CLAIMS.
(a) Notwithstanding anything in this Article XII to the contrary, no Indemnified
Party's Damages shall be payable pursuant to this Article XII unless and until
the aggregate amount of Damages asserted against the applicable Indemnifying
Party under this Article XII equals or exceeds Fifty Thousand Dollars and No/100
Dollars ($50,000.00) and then only to the extent of such excess.
(b) The indemnification rights provided for under this Article XII shall be
limited in certain respects as follows: (i) the rights of any Seller Indemnified
Party to seek indemnification under this Article XII shall terminate on the
first anniversary of the Closing Date (the "Seller's Indemnity Period"); (ii)
the rights of any Purchaser Indemnified Party to seek indemnification under this
Article XII shall terminate on the second anniversary of Closing Date (the
"Purchaser Parties' Indemnity Period"), except that the Purchaser Parties'
Indemnity Period shall terminate on the fifth anniversary of the Closing Date
with respect to any Claim related to any breach or inaccuracy of any
representation or warranty set forth in Section 4.10 or Section 4.11 hereof.
Notwithstanding the foregoing, if, prior to the close of business on the last
day of, as applicable, the Seller's Indemnity Period or the Purchaser Parties'
Indemnity Period, an Indemnifying Party shall have been properly notified of a
claim for indemnity hereunder and such claim shall not have been finally
resolved or disposed of at such date, such claim shall continue to survive and
shall remain a basis for indemnity hereunder until such claim is finally
resolved or disposed of in accordance with the terms hereof.
(c) The foregoing limitations on time and amount shall not apply to any Damages
asserted or incurred by any Indemnified Party arising or resulting from (i) any
act or omission of an applicable Indemnifying Party which constitutes fraud,
(ii) any breach by an Indemnifying Party of its post-closing covenants, or (iii)
in the case of any Purchaser Indemnified Party, the Excluded Liabilities.
(d) Following full indemnification as provided for hereunder, the Indemnifying
Party shall be subrogated to all rights of the Indemnified Party with respect to
all Persons relating to the matter for which indemnification has been made.
(e) Notwithstanding any provision of this Agreement to the contrary, in the
event any claim is made by one party to this Agreement against another party to
this Agreement, the Non-Prevailing Party, and only the Non-Prevailing Party,
shall be responsible for paying the reasonable legal fees, costs and expenses of
the other party to the claim and the term "Damages," as used herein with respect
to a Non-Prevailing Party, shall be deemed not to include the legal fees and
expenses of such Non-Prevailing Party.
30
SECTION 12.5 INVESTIGATIONS. The right to indemnification based upon breaches or
inaccuracies of representations, warranties and covenants will not be affected
by any investigation conducted with respect to, or knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, whether as a result of
disclosure by a party pursuant to this Agreement or otherwise, with respect to
the accuracy or inaccuracy of or compliance with any such representation,
warranty or covenant. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant, will not affect a party's right to indemnification, payment of damages
or other remedies based on such representations, warranties and covenants.
SECTION 12.6 TREATMENT OF INDEMNIFICATION PAYMENTS. All indemnification payments
made pursuant to this Article XII shall be treated by the parties for income tax
purposes as adjustments to the Purchase Price, unless otherwise required by
applicable Law.
SECTION 12.7 INSURED LOSSES. The amount of any damages for which indemnification
is provided under this Article XII shall be net of any duplicative amounts
recovered by the Indemnified Party under insurance policies or from unaffiliated
third Persons with respect to such damages; provided, however, such Indemnified
Party shall have no duty or obligation to seek recovery of any available
insurance proceeds in advance of exercising its rights or remedies under this
Article XII to seek indemnification by the Indemnifying Party.
SECTION 12.8 EXCLUSIVE REMEDY. FROM AND AFTER CLOSING, THE PARTIES AGREE AND
ACKNOWLEDGE THAT THE INDEMNIFICATION RIGHTS PROVIDED IN THIS ARTICLE XII SHALL
BE THE SOLE AND EXCLUSIVE REMEDY OF THE PARTIES TO THIS AGREEMENT FOR BREACHES
OF THIS AGREEMENT AND FOR ALL DISPUTES ARISING UNDER OR RELATING TO THIS
AGREEMENT AND ANY ADDITIONAL AGREEMENTS OR DOCUMENTS EXECUTED OR DELIVERED IN OR
ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR POST-CLOSING
COVENANTS, CASES WHERE SPECIFIC PERFORMANCE IS AVAILABLE AS A REMEDY AND EXCEPT
IN CASES OF FRAUD.
ARTICLE XIII
CHOICE OF LAW/JURISDICTION AND VENUE
SECTION 13.1 CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law.
SECTION 13.2 JURISDICTION AND VENUE. PURCHASER AND SELLER CONSENT TO THE
PERSONAL JURISDICTION IN DELAWARE. PURCHASER AND SELLER AGREE THAT ANY ACTION OR
PROCEEDING ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE BROUGHT AND TRIED
EXCLUSIVELY IN THE STATE OR FEDERAL COURTS OF DELAWARE. EACH OF THE PARTIES
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. SELLER EXPRESSLY
ACKNOWLEDGES THAT DELAWARE IS A FAIR, JUST AND
31
REASONABLE FORUM AND SELLER AGREES NOT TO SEEK REMOVAL OR TRANSFER OF ANY ACTION
FILED BY PURCHASER IN SAID COURTS. FURTHER, PURCHASER AND SELLER IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR
DOCUMENT BY REGISTERED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED
PURSUANT TO SECTION 14.2 SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH
PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN
ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 ASSIGNMENT. This Agreement is not assignable by any party without
the prior written consent of the other party hereto. Notwithstanding the
foregoing, Purchaser may at any time and without the consent of Seller assign
all of their respective rights and obligations hereunder to one or more of its
Affiliates; provided, however, that no such assignment shall relieve or release
Purchaser from its obligations hereunder.
SECTION 14.2 NOTICE. All notices, demands, consents, approvals, requests and
other communications required or permitted to be given under this Lease shall be
in writing and shall be (a) delivered in person, (b) sent by certified mail,
return receipt requested to the appropriate party at the address set out below,
(c) sent by Federal Express, Express Mail or other comparable courier addressed
to the appropriate party at the address set out below, or (d) transmitted by
facsimile transmission to the facsimile number for each party set forth below:
(a) if to Tenant: North Cypress Medical Center Operating
Company, Ltd.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.,
Chairman of the Board
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Diamond, LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Landlord: MPT of North Cypress, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.,
Executive Vice President & General
Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each notice, demand, consent, approval, request and other communication shall be
effective upon receipt and shall be deemed to be duly received if delivered in
person or by a national courier service, when left at the address of the
recipient and if sent by facsimile, upon receipt by the sender of an
acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient's facsimile number; provided that if a notice, demand, consent,
approval, request or other communication is served by hand or is received by
facsimile on a day which is not a Business Day, or after 5:00 p.m. on any
Business Day at the addressee's location, such notice or communication shall be
deemed to be duly received by the recipient at 9:00 a.m. on the first Business
Day thereafter. Rejection or other refusal by the addressee to accept, or the
inability to deliver because of a changed address or changed facsimile number of
which no notice was given, shall be deemed to be receipt of the notice, demand,
consent, approval, request or communication sent. Any party shall have the
right, from time to time, to change the address or facsimile number to which
notice to it shall be sent by giving to the other party or parties at least ten
(10) days prior notice of the changed address or changed facsimile number.
SECTION 14.3 SECURITIES OFFERING AND FILINGS. Notwithstanding anything contained
herein to the contrary, Seller agrees to cooperate with Purchaser and its
Affiliates in connection with any securities offerings, filings or financing
transactions and, in connection therewith, Seller shall furnish Purchaser and
its Affiliates with such financial and other information as Purchaser shall
request. Purchaser and its Affiliates shall have the right of access, at
reasonable business hours and upon advance notice, to the Hospital Improvements
and all documentation and information relating to the Assets and have the right
to disclose any information regarding this Agreement,
33
Seller, the Assets and all other agreements executed in connection herewith and
all other documents in connection with the transactions contemplated hereby, and
such other additional information which Purchaser and its Affiliates may
reasonably deem necessary.
SECTION 14.4 EXPENSES. Seller shall pay all costs and expenses incurred by
Seller and Purchaser in connection with the transactions contemplated hereby,
including, without limitation, the cost of survey, appraisal, environmental,
title and other third-party reports and all document stamps, transfer taxes,
excise, recording, gains, sales, bulk sales, use and similar conveyance Taxes
and fees imposed by reason of and associated with the transactions contemplated
hereby and by deficiency, interest or penalty asserted with respect thereto, as
well as the cost of the survey, the title insurance and all title endorsements
required by Purchaser and lenders, all recording costs, and all attorneys' fees.
SECTION 14.5 CAPTIONS. The section and paragraph headings or captions appearing
in this Agreement are for convenience only, are not a part of this Agreement,
and are not to be considered in interpreting this Agreement.
SECTION 14.6 ENTIRE AGREEMENT; MODIFICATION. This Agreement, including the
Exhibits and Schedules hereto, and other written agreements executed and
delivered at Closing by the parties hereto, constitute the entire agreement and
understanding of the parties with respect to the subject matter of this
Agreement. This Agreement supersedes any prior oral or written agreements
between the parties with respect to the subject matter of this Agreement. It is
expressly agreed that there are no verbal understandings or agreements which in
any way change the terms, covenants, and conditions set forth in this Agreement,
and that no modification of this Agreement and no waiver of any of its terms and
conditions shall be effective unless it is made in writing and duly executed by
the parties hereto.
SECTION 14.7 SCHEDULES AND EXHIBITS. All Schedules and Exhibits referred to in
this Agreement and attached hereto shall be deemed a part of this Agreement and
are hereby incorporated herein by reference.
SECTION 14.8 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
SECTION 14.9 CONSTRUCTION. The parties hereby agree that each has played an
equal part in the negotiations and drafting of this Agreement, and in
interpreting the provisions hereof, therefore, there shall be no construction or
interpretation of this Agreement for or against either party based upon who
drafted the same.
SECTION 14.10 FURTHER ASSURANCES. From time to time after the Closing and
without further consideration, Seller shall execute and deliver to Purchaser
such instruments of sale, transfer, conveyance, assignment, consent or other
instruments as may be reasonably requested by Purchaser in order to vest all
right, title and interest of Seller in and to the Assets conveyed and
34
delivered at the Closing or as otherwise required to carry out the purpose and
intent of this Agreement.
SECTION 14.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Executed signature pages
to this Agreement may be delivered by facsimile transmission and any such
signature page shall be deemed an original.
SECTION 14.12 BINDING EFFECT. This Agreement shall bind and inure to the benefit
of the parties hereto and their successors and assigns; provided, however, that
this Agreement shall not inure to the benefit of any assignee pursuant to an
assignment which violates the terms of this Agreement.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES]
35
IN WITNESS WHEREOF, Purchaser and Seller, intending to be legally bound hereby,
have caused this Agreement to be executed by their duly authorized
representatives effective as of June 1, 2005.
SELLER:
NORTH CYPRESS MEDICAL CENTER OPERATING
COMPANY, LTD., a Texas limited partnership
By: North Cypress Medical Center Operating
Company, LLC, a Texas limited liability
company, its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Chairman of
the Board
PURCHASER:
MPT OF NORTH CYPRESS, L.P., a Delaware
limited partnership
By: MPT of North Cypress, LLC, a Delaware
limited liability company, its general
partner
By: MPT Operating Partnership, L.P., a
Delaware limited partnership, its
sole member
By: Medical Properties Trust, LLC,
a Delaware limited liability
company, its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------
Title: President & CEO
----------------------------
EXHIBITS AND SCHEDULES
EXHIBITS
--------
Exhibit A Description of the Hospital Tract
Exhibit B Description of the Northeast Parking Parcel
Exhibit C Lease
SCHEDULES
---------
Schedule 2.1 Contracts and Plans
Schedule 4.1 Ownership of the Seller
Schedule 4.5 Balance Sheet and Disclosures
Schedule 4.8 Physicians
Schedule 4.10 Tenant Leases
Schedule 4.13 Business Contracts
Schedule 4.14 Permits
Schedule 4.15 Exclusions for Medicare/Medicaid
Schedule 4.16 Exceptions Relating to Healthcare Regulatory Matters
Schedule 4.18 Medical Staff Matters
Schedule 4.20 Intangible Property
Schedule 4.22 Subsidiaries of the Seller
Schedule 7.3 Confidentiality Provisions
Schedule 9.2(o) Noncompete Agreement
Schedule 11.3 Exceptions to Permits
EXHIBIT A
[LEGAL DESCRIPTION OF THE HOSPITAL TRACT]
[SEE ATTACHED]
EXHIBIT B
[LEGAL DESCRIPTION OF THE NORTHEAST PARKING PARCEL]
[SEE ATTACHED]
EXHIBIT C
[LEASE]
[SEE ATTACHED]
SCHEDULE 2.1
CONTRACTS AND PLANS
Contracts: 1. Agreement between the Seller and
Contractor, Gilbane Building Company
2. Agreement between the Seller and
Architect, ▇▇▇▇▇ ▇▇▇▇▇▇ Collaborative,
P.C.
3. Agreement between the Seller and
Engineer, Benchmark Engineering Company
Plans: 1. Benchmark Engineering Company Site Plans
and Specifications
SCHEDULE 4.1
OWNERSHIP OF SELLER
CLASS A
North Cypress Medical Center Operating Company GP, L.L.C.
S.M. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tampico Holdings, Ltd
Said Bina, M.D. / Bina Holdings L.P.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Bual Childrens Grantor Trust
Casimir Interest, Ltd
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ Family L.P.
▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Julins ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ V. Dolino, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., M.D.
▇▇▇▇▇ ▇▇▇▇▇ Family L.P.
▇▇▇▇▇▇▇ Estantsi
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇, Jr., M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
K/G Family L.P.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
Dr. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ Kitten Farri S Limited Partnership
▇▇▇▇▇ ▇.▇. ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ Family L.P.
▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
▇▇▇ ▇▇▇ ▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇ ▇. ▇▇▇▇▇
▇ ▇ ▇▇▇▇▇▇ Family ▇.▇.
▇▇▇▇ Nair
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., PA
▇▇▇▇▇▇ Investments, L.P.
Prakash Interests, Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇
Satichwaycha Pon
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ St. ▇▇▇▇▇▇▇
▇▇▇▇ Family L.P.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
S.R. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Vondala
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇
CLASS B
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WJKALC Family L.P.
▇▇▇▇ ▇▇▇▇▇▇
Midstreem Invest. LLC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D.
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇▇▇, etal, Ltd
CLASS C
Doctors Medical Center of Dallas, Ltd.
SCHEDULE 4.5
BALANCE SHEET AND DISCLOSURES
There are no financial Statement exceptions to GAAP in the attached
initial un-audited Balance Sheet and Statement of Cashflows of Seller
dated May 31, 2005 [SEE ATTACHED].
SCHEDULE 4.8
PHYSICIANS
CLASS A
Sunramanyam ▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇ ▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Said Bina, M.D.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., M.D.
▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇, Jr., M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇ Kitten, M.D.
▇▇▇▇▇ ▇.▇. ▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
▇▇▇ ▇▇▇ ▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
W ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
Satitpunwaycha Pon, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.
Hamran Sherwani, M.D.
▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. St. Laurent, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇▇, M.D.
S.R. Venkatesh, M.D.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇, M.D.
CLASS B
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D.
H.V. Nook, M.D.
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
J.S. Wilkenfeld, M.d.
SCHEDULE 4.10
TENANT LEASES
None.
SCHEDULE 4.13
BUSINESS CONTRACTS
1. Surgical Development Partners, LLC
Pre-Opening and Management Agreement, May 17, 2005
2. Surgical Development Partners, LLC
Services Agreement, May 17, 2005
SCHEDULE 4.14
PERMITS
1. From ▇▇▇▇▇▇ County, Texas - stripping, clearing, grubbing, excavation, and
fill permits;
2. From the Texas Department of Transportation
- driveway
- cut and fill combo permits for site work
- off trailer permit
- above ground sanitary holding tank permit
- NLI, storm water prevention permit (TCEQ)
- excavation permit for ponds A, B, and C
- drainage permit as part of the storm water permit
3. Texas Department of Health Approval.
SCHEDULE 4.15
EXCLUSIONS FOR MEDICARE/MEDICAID
None.
SCHEDULE 4.16
EXCEPTIONS RELATING TO HEALTHCARE REGULATORY MATTERS
None.
SCHEDULE 4.18
MEDICAL STAFF MATTERS
None.
SCHEDULE 4.20
INTANGIBLE PROPERTY
None.
SCHEDULE 4.22
SUBSIDIARIES OF THE SELLER
None.
SCHEDULE 7.3
CONFIDENTIALITY PROVISIONS
As used herein, the term "Confidential Information" with respect to a party
means (a) any confidential, non-public or proprietary information (including,
without limitation, any business records, financial information, business
activity, ownership or investor lists, ownership or investor information,
service, data, documentation, description, know-how, concept, trade secret,
copyright or other intellectual property right) of such party, whether disclosed
verbally, in writing or electronically, or which is otherwise learned by the
other party hereto, and whether disclosed prior to, on or after the date hereof,
and (b) all data, analyses, compilations, studies or other documents prepared by
the other party hereto that contain or reflect any Confidential Information;
provided, however, that the term "Confidential Information" does not include
information which (i) is already in the other party's possession, provided that
such information is not known by the other party to be subject to another
confidentiality agreement with or other obligation of secrecy to the disclosing
party, or (ii) becomes generally available to the public other than as a result
of a disclosure by the other party in breach hereof, or (iii) becomes available
to the other party on a non-confidential basis from a source other than the
disclosing party or its representatives, provided that such source is not known
by the other party to be bound by a confidentiality agreement with or other
obligation of secrecy to the Company. Neither party makes any representation or
warranty regarding the completeness or accuracy of any Confidential Information.
As a condition to each of the parties furnishing one another with such party's
Confidential Information, each party hereto agrees to treat the other party's
Confidential Information (whether prepared by the disclosing party, its advisors
or otherwise) in accordance with the provisions of this Schedule 7.3 and to take
or abstain from taking certain other actions herein set forth.
Each party hereby agrees that the other party's Confidential Information, and
the fact that the parties are discussing a potential business relationship, will
be kept confidential by such party and will be used by such party solely for the
purpose of (i) evaluating a possible business relationship with the other party,
and (ii) if such business relationship is commenced, fulfilling the obligations
of such party to the other party pursuant to any agreements between the parties
hereto; provided, however, that any Confidential Information and the fact the
parties are discussing a potential business relationship may be disclosed to the
following: (1) such party's agents or representatives who need to know the
Confidential Information for the purpose of evaluating or providing services in
connection with any such possible business relationship (it being understood
that (A) such agents and representatives shall be informed by such party of the
confidential nature of the other party's Confidential Information, (B) such
agents and representatives shall be directed by such party to treat the other
party's Confidential Information confidentially in accordance with the terms of
this Agreement, and (C) such party shall be liable for any breach of
confidentiality committed by such agents or representatives), and (2) Purchaser
and its Affiliates' prospective investors in relation to or in connection with
any private placement or public offering of Purchaser's or its Affiliates'
securities, and (3) any person or entity to whom disclosure is required by
federal or state securities laws.
Except with the prior written consent of the other party and except for the
permitted disclosures described in the immediately preceding paragraph, prior to
any public announcement concerning the business relationship between Purchaser
and Seller, or any transaction related thereto, neither party will, and will
direct its agents and representatives not to, disclose to any person either the
fact that (A) discussion or negotiations are taking place concerning the
potential business relationship between Purchaser and Seller, or (B) that a
business relationship between Purchaser and Seller has commenced. If as a result
of federal or state securities laws, either party is required by law, in the
reasonable opinion of such party's legal counsel, to disclose the fact that
negotiations are taking place concerning the proposed or commenced business
relationship between Seller and Purchaser or any of the proposed or effective
terms of such business relationship, such party shall, to the extent reasonably
practical, provide prior notice thereto to the other party, and shall consult
with the other party concerning the language, form and substance of any
disclosure of the other party's Confidential Information.
In the event that either party, or such party's representatives or agents, are
requested or required in a judicial, administrative or governmental proceeding
to disclose the other party's Confidential Information, such party will
cooperate with the other party and provide it with prompt notice of such
request(s) so that the other party may seek an appropriate protective order
and/or waive compliance with the provisions of this Agreement. If, in the
absence of a protective order or the receipt of a waiver hereunder, a party or
its representatives or agents are nonetheless, in the opinion of such party's
legal counsel, legally required to disclose the other party's Confidential
Information to any tribunal or else stand liable for contempt or suffer other
censure or penalty, such party may disclose the other party's Confidential
Information to such tribunal without liability hereunder.
The parties, upon request of the other party, shall return or destroy all of the
other party's written Confidential Information and all documents, memoranda,
notes and other writings whatsoever prepared by such party or its
representatives or agents based on the other party's Confidential Information.
Neither this letter nor the disclosure of a party's Confidential Information to
the other party grants or confers upon the other party any license, ownership
right or other right in or to such Confidential Information.
SCHEDULE 9.2(o)
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement") is made and entered into
as of ________ __, 200__ by and among MPT OF NORTH CYPRESS, L.P. ("MPT") a
Delaware limited partnership, and NORTH CYPRESS MEDICAL CENTER OPERATING
COMPANY, LTD. (the "Company"), a Texas limited partnership.
RECITALS:
WHEREAS, the Company and MPT are parties to that certain Purchase and Sale
Agreement dated effective as of June 1, 2005 (the "Purchase Agreement") pursuant
to which MPT has agreed to purchase from the Company and the Company has agreed
to sell to MPT, the Assets; and
WHEREAS, as a condition to the closing of the transactions contemplated by
and referenced in the Purchase Agreement, and as an inducement to cause MPT to
enter into and close such transactions, the Company has agreed to enter into,
and to be bound by the terms and conditions of, this Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, MPT and the Company do hereby agree as follows:
1. Capitalized Terms. Any capitalized term or phrase which is used herein
(including the Recitals) and not expressly defined herein shall have the meaning
ascribed to such term or phrase in the Purchase Agreement.
2. Non-Competition Provisions.
(a) The Company agrees that while the Lease is in place and, if such Lease is
terminated for any reason other than the Company's purchase of MPT's leasehold
interest in the Land subject to the Lease, for a period of three (3) years
thereafter (the "Noncompete Period"), neither the Company nor any of its
Affiliates shall, directly or indirectly, acquire, finance, guarantee
indebtedness, own, lease, manage, develop or provide services in connection with
the acquisition, ownership, operation or development of any real estate located
within ten (10) miles of any point on or within the Land, which real estate is
used in a Competing Business (as herein defined). Any violation of the
provisions of this Section 2 shall suspend the Noncompete Period for the
duration of such violation. "Competing Business" shall mean any healthcare
business which involves the operation of a facility in which surgical procedures
are performed and shall include, without limitation, any specialty hospital,
hospital, or ambulatory surgery center; provided, however, that the foregoing
shall not prohibit the Company and/or its Affiliates from acquiring, owning,
operating or developing real estate the acquisition, ownership, operation or
development of which by the Company and/or its Affiliates will not have an
adverse effect on the Land and the Hospital. Nothing contained herein, however,
is intended to conflict with or be
more restrictive in its application than the Covenant Not to Compete provisions
of the Company's Confidential Offering Memorandum dated as of October 18, 2004
and the Amended and Restated Agreement of Limited Partnership included therein
(the "Company's Governing Documents"); provided, however, North Cypress Medical
Center Operating Company, LLC (the "General Partner"), in its capacity as the
general partner of the Company, hereby agrees for itself and its successors and
assigns as the general partner of the Company: (i) to be bound by the Covenant
Not to Compete provisions of the Company's Governing Documents for the
Noncompete Period set forth herein, as if the General Partner were directly
bound by such Covenant Not to Compete provisions in the Company's Governing
Documents, and (ii) from and after the date of this Agreement and throughout the
Noncompete Period set forth herein, to not grant any exceptions to the Covenant
Not to Compete provisions of the Company's Governing Documents without the prior
written consent of MPT, which may be granted or withheld in MPT's sole
discretion.
(b) The Company agrees that the restrictions contained herein are reasonable and
necessary to protect the legitimate interests of MPT, and that any violation of
the provisions would result in damages which cannot be adequately compensated by
money alone. The Company hereto agrees that MPT will be entitled to injunctive
or other equitable relief without proving actual damages or posting any bond in
the event of any violation of the restrictions contained herein; provided,
however, that the foregoing shall not prohibit or limit or be construed to
prohibit or limit the right of MPT to pursue any other legal and equitable
remedies available to it on account of such breach or violation including the
recovery of damages from the Company. If any court shall hold that the duration
or scope (geographic or otherwise) of this Agreement is unreasonable, then, to
the extent permitted by law, the court may prescribe a maximum duration or scope
(geographic or otherwise) that is judicially enforceable and not unreasonable.
The parties agree to accept such determination, subject to their rights of
appeal, which the parties hereto agree shall be substituted in place of any and
every judicially unenforceable provision of this Agreement, and that this
Agreement, as so modified, shall be fully enforceable as if originally executed
in such manner.
(c) This Agreement is intended to comply with all applicable rules and
regulations of all governmental and regulating authorities. Accordingly, the
parties agree to renegotiate, in good faith, any term, condition or provision of
this Agreement, or any other relationship between the parties, determined to be
in contravention of any regulation, policy or law of any such authority. All
other provisions hereof shall remain enforceable to the fullest extent permitted
by law. The parties further agree to comply with all applicable federal and
state laws and regulations, including [42 U.S.C. Section 1395x(v)I,] which is
incorporated herein by reference, relating to maintaining and providing
documents to governmental officials.
3. Legal Fees and Expenses. In the event any claim is made by one party to this
Agreement against another party to this Agreement, the Non-Prevailing Party (as
herein defined), and only the Non-Prevailing Party, shall be responsible for
paying the reasonable costs, expenses and legal fees of the other party to the
claim. "Non-Prevailing Party" shall mean, with respect to any claim between any
parties hereto, such party determined as the non-prevailing party by a court
with proper jurisdiction.
4. Binding Effect and Modifications. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties to this
Agreement. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes any and all prior written
agreements between the parties, and all prior and contemporaneous oral
statements with respect to the restrictions contemplated hereby. This Agreement
may not be changed or terminated orally, but may only be changed by an agreement
in writing signed by the party or parties against whom enforcement of any
waiver, change, modification, extension, discharge or termination is sought.
5. Section, Captions and Counterparts. Section and other captions contained in
this Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof. This Agreement may be executed in several
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall, together, constitute and be one and the
same instrument. The parties may execute this Agreement, individually or in a
representative capacity, and forward an executed counterpart signature to one or
more other parties by telecopy, overnight express or other means, and the party
or parties receiving such executed counterpart signature shall be authorized to
attach it hereto as the legal and valid signature of such executing party. The
party or party receiving such executed counterpart signature, together with
their attorneys and counsel, shall be able to rely on the validity of such
executed counterpart signature as fully as if the original of such signature was
affixed hereon.
6. Notices. All notices, demands, consents, approvals, requests and other
communications required or permitted to be given under this Lease shall be in
writing and shall be (a) delivered in person, (b) sent by certified mail, return
receipt requested to the appropriate party at the address set out below, (c)
sent by Federal Express, Express Mail or other comparable courier addressed to
the appropriate party at the address set out below, or (d) transmitted by
facsimile transmission to the facsimile number for each party set forth below:
(a) if to the Company: North Cypress Medical Center
Operating Company, Ltd.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.,
Chairman of the Board
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Diamond, LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Zimmerman, Axelrad, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to MPT: MPT of North Cypress, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.,
Executive Vice President &
General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each notice, demand, consent, approval, request and other communication shall be
effective upon receipt and shall be deemed to be duly received if delivered in
person or by a national courier service, when left at the address of the
recipient and if sent by facsimile, upon receipt by the sender of an
acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient's facsimile number; provided that if a notice, demand, consent,
approval, request or other communication is served by hand or is received by
facsimile on a day which is not a Business Day, or after 5:00 p.m. on any
Business Day at the addressee's location, such notice or communication shall be
deemed to be duly received by the recipient at 9:00 a.m. on the first Business
Day thereafter. Rejection or other refusal by the addressee to accept, or the
inability to deliver because of a changed address or changed facsimile number of
which no notice was given, shall be deemed to be receipt of the notice, demand,
consent, approval, request or communication sent. Any party shall have the
right, from time to time, to change the address or facsimile number to which
notice to it shall be sent by giving to the other party or parties at least ten
(10) days prior notice of the changed address or changed facsimile number.
7. Governing Law, Jurisdiction and Venue. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. PURCHASER AND SELLER CONSENT TO
THE PERSONAL JURISDICTION IN DELAWARE. PURCHASER AND SELLER AGREE THAT ANY
ACTION OR
PROCEEDING ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE BROUGHT AND TRIED
EXCLUSIVELY IN THE STATE OR FEDERAL COURTS OF DELAWARE. EACH OF THE PARTIES
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. SELLER EXPRESSLY
ACKNOWLEDGES THAT DELAWARE IS A FAIR, JUST AND REASONABLE FORUM AND SELLER
AGREES NOT TO SEEK REMOVAL OR TRANSFER OF ANY ACTION FILED BY PURCHASER IN SAID
COURTS. FURTHER, PURCHASER AND SELLER IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL
ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO SECTION 6 SHALL BE
EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE
JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.
8. Severability. The invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of any other provision hereof,
each of which shall remain in full force and effect.
9. Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver by such
party of any subsequent breach by the breaching party.
10. Construction. The parties have participated jointly in the negotiation and
drafting of this Agreement, and each has been, or had the opportunity to be,
represented by the counsel of its choosing in connection therewith. In the event
an ambiguity or question of intent or interpretation arises, this Agreement will
be construed as if drafted jointly by the parties and no presumption or burden
of proof will arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
[SIGNATURES APPEAR ON THE FOLLOWING THREE PAGES]
IN WITNESS WHEREOF, MPT and the Company have caused their incumbent and duly
authorized representatives to execute this Agreement as of the day and year
first above written.
MPT
MPT OF NORTH CYPRESS, L.P., a Delaware
limited partnership
By: MPT of North Cypress, LLC, a Delaware
limited liability company, its
general partner
By: MPT Operating Partnership, L.P., a
Delaware limited partnership, its
sole member
By: Medical Properties Trust, LLC,
a Delaware limited liability
company, its general partner
By:___________________________
Print Name:___________________
Title:________________________
COMPANY:
NORTH CYPRESS MEDICAL CENTER OPERATING
COMPANY, LTD., a Texas limited partnership
By: North Cypress Medical Center Operating
Company, LLC, a Texas limited liability
company, its general partner
By:___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Chairman
of the Board
SCHEDULE 11.3
EXCEPTIONS TO PERMITS
None.