EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
BETWEEN
SAMARITAN HEALTH SYSTEM
AND
AIR EVAC SERVICES, INC.
Dated as of December 31, 1997
ASSET PURCHASE AGREEMENT
BETWEEN
SAMARITAN HEALTH SYSTEM
AND
AIR EVAC SERVICES, INC.
TABLE OF CONTENTS
ARTICLE I PURCHASE AND SALE OF ASSETS -1-
1.1 Purchase and Sale of Assets. -1-
1.2 Transfer and Conveyance -2-
1.3 Assumption of Certain Obligations -2-
ARTICLE II PURCHASE PRICE -3-
2.1 Purchase Price -3-
2.2 Allocation of Purchase Price -3-
ARTICLE III SAMARITAN'S GENERAL REPRESENTATIONS AND
WARRANTIES -3-
3.1 Due Organization and Qualification. -3-
3.2 Corporate Power and Authority -3-
3.3 Investment Representations -4-
3.4 True, Correct and Complete Information -4-
ARTICLE IV SAMARITAN'S REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO THE BUSINESS AND ASSETS -5-
4.1 Availability of Documents -5-
4.2 Title; Use of Assets -5-
4.3 Inventory -5-
4.4 Physical Properties -5-
4.5 Trademarks, Etc. -6-
4.6 Permits -6-
4.7 Compliance with Laws -7-
4.8 Material Contracts -7-
4.9 Contract Defaults -8-
4.10 Litigation -8-
4.11 Financial Statements and Results of Operations -9-
4.12 Employee Benefits -9-
4.13 Employees; Employee Relations -10-
4.14 Consents -11-
4.15 Insurance -12-
4.16 Taxes -12-
4.17 Business Relations -12-
4.18 Environmental Laws and Regulations -12-
4.19 Absence of Certain Changes or Events -13-
4.20 Broker's and Finder's Fees -13-
4.21 Restrictive Documents or Laws -13-
4.22 EMTALA -13-
4.23 Medicare and Medicaid Programs; Licensure, etc -13-
4.24 Fraud and Abuse and ▇▇▇▇▇ Law -14-
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY -14-
5.1 Organization and Authority -14-
5.2 Consents -15-
5.3 Broker's and Finder's Fees -15-
5.4 Litigation -15-
5.5 Employees -15-
5.6 Preferred Stock -15-
5.7 Capitalization -16-
ARTICLE VI COVENANTS OF SAMARITAN WITH RESPECT TO THE
BUSINESS -16-
6.1 Affirmative Covenants -16-
6.2 Negative Covenants -16-
6.3 Access to Properties and Records -17-
6.4 Employees of Samaritan -18-
6.5 Approvals of Third Parties -18-
6.6 Notices -18-
6.7 Access to Books and Records -18-
6.8 No Solicitation of Offers -18-
6.9 Release of Financing Statements -18-
6.10 Maintenance of Existence -18-
ARTICLE VII COVENANTS OF THE COMPANY -19-
7.1 Access to Properties and Records -19-
7.2 Approvals of Third Parties -19-
7.3 Removal of Samaritan Name -19-
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF THE COMPANY -20-
8.1 Representations and Warranties of Samaritan -20-
8.2 Covenants of Samaritan -20-
8.3 Samaritan's Certificate -20-
8.4 Noncompetition Agreements -20-
8.5 Certain Payments to Employees -20-
8.6 No Casualty Losses -21-
8.7 Certificates of Authorities -21-
8.8 Litigation -21-
8.9 Satisfactory to the Company's Counsel -21-
8.10 Opinion of Samaritan's Counsel -21-
8.11 No Material Adverse Effect -21-
8.12 Consents -22-
8.13 Financing -22-
8.14 Service Agreement -22-
8.15 Further Assurances -22-
ARTICLE IX CONDITIONS TO OBLIGATIONS OF SAMARITAN -22-
9.1 Representations and Warranties of the Company -22-
9.2 Covenants of the Company -22-
9.3 Certificate of the Company -22-
9.4 Certificates of Authorities -23-
9.5 Satisfactory to Samaritan's Counsel -23-
9.6 Opinion of the Company's Counsel -23-
9.7 Option Agreement -23-
9.8 Consents -23-
ARTICLE X CLOSING -23-
10.1 Date and Place of Closing -23-
10.2 Samaritan's Performance -23-
10.3 The Company's Performance -24-
10.4 Other Instruments -25-
ARTICLE XI INDEMNIFICATION AND POST-CLOSING MATTERS -25-
11.1 Indemnification by Samaritan -25-
11.2 Indemnification by the Company -26-
11.3 Notice of Loss -26-
11.4 Payment -26-
11.5 Right to Defend -27-
11.6 Cooperation -27-
11.7 Limitation on Indemnification -28-
11.8 Survival of Representations and Covenants -28-
11.9 Non-exclusivity of Indemnification Remedies -28-
11.10 Interest -28-
11.11 Right to Require Cure of Breach -28-
ARTICLE XII TERMINATION -29-
12.1 Termination -29-
12.2 No Further Force or Effect -29-
ARTICLE XIII MISCELLANEOUS -30-
13.1 Expenses -30-
13.2 Entire Agreement -30-
13.3 Publicity -30-
13.4 Successors and Assigns -30-
13.5 Counterparts -30-
13.6 Headings -30-
13.7 Use of Certain Terms -30-
13.8 Modification and Waiver -31-
13.9 Notices -31-
13.10 Governing Law -32-
13.11 Reformation and Severability -32-
13.12 Remedies Cumulative -32-
SCHEDULES:
Schedule 1.1A Assets and Assumed Contracts
Schedule 1.1B Excluded Assets
Schedule 4.2 Good Title to Assets; Encumbrances
Schedule 4.5 Trademarks, Etc.
Schedule 4.6 Permits
Schedule 4.8 Material Contracts
Schedule 4.10 Litigation
Schedule 4.11 Financial Statement and Results of Operations
Schedule 4.12 Employee Benefits
Schedule 4.13 Employees
Schedule 4.14 Consents
Schedule 4.17 Business Relations
Schedule 4.18 Environmental Matters
Schedule 4.19 Absence of Certain Changes or Events
Schedule 4.21 Restrictive Documents or Laws
Schedule 4.23 Medicare and Medicaid Programs
Schedule 5.2 Buyer's Consents
EXHIBITS:
Exhibit A ▇▇▇▇ of Sale and Assignment
Exhibit B Assumption Agreement
Exhibit C Articles of Incorporation of the Company
Exhibit D Allocation of Purchase Price
Exhibit E Noncompetition Agreement
Exhibit F Matters Covered by Opinion of
Samaritan's Counsel - ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Exhibit G Service Agreement
Exhibit H Matters Covered by Opinion of
Company's Special Counsel - ▇▇▇▇▇ ▇▇▇▇▇▇▇
Rain ▇▇▇▇▇▇▇ (A Professional Corporation)
Exhibit I Option Agreement
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into
as of the 31st day of December, 1997, by and between Samaritan
Health System, an Arizona non-profit corporation ("Samaritan"),
and Air Evac Services, Inc., a Louisiana corporation (the
"Company").
WHEREAS, Samaritan operates an air medical transport
business under the name "Samaritan AirEvac" (the "Business"); and
WHEREAS, Samaritan desires to sell to the Company, and the
Company desires to buy from Samaritan, certain specified assets
used in the Business, which are described below, on the terms and
conditions specified hereinbelow.
NOW, THEREFORE, for and in consideration of the mutual
representations, warranties, covenants and agreements hereinafter
set forth and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, and
upon the terms and subject to the conditions hereinafter set
forth, the parties do hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
I.1 Purchase and Sale of Assets. At the Closing (as that
term is defined in Section 10.1), Samaritan, will sell, convey,
transfer, assign and deliver to the Company, and the Company
shall purchase and accept from Samaritan, the following assets
and properties, free and clear of any and all options, pledges,
mortgages, security interests, liens, charges, adverse claims,
rights, restrictions, burdens and encumbrances whatsoever
("Encumbrances"):
(a) All of the personal property and other tangible
assets and properties of Samaritan used exclusively in the
operation of the Business, wherever located and whether or not
described or referred to herein, including, without limitation,
all aircraft, equipment, tools, vehicles, inventories (including
supplies in store, maintenance items and spare parts (which
hereinafter shall sometimes be collectively referred to as the
"Inventory")), prepaid accounts and prepaid expenses, furniture,
fixtures, fixed assets, books, reports and records listed on
Schedule 1.1A;
(b) The third party payor agreements, contracts,
leases, arrangements and commitments listed on Schedule 1.1A and
no others;
(c) All intangible properties and rights (other than
third party payor agreements, contracts, leases, arrangements and
commitments not listed on Schedule 1.1A and the names "Samaritan
AirEvac" and "Samaritan" which shall be Excluded Assets (as
defined below)), wherever located and whether or not described or
referred to herein, including, without limitation, all know-how,
trade secrets, technology, all trade names, trademark
registrations and applications, common law trademarks,
servicemarks, copyrights and copyright registrations and
applications, and the goodwill related to trade names, trademarks
and servicemarks;
(d) All licenses, permits, certificates and
authorizations relating to the Assets or Business; and
(e) Any other property or right, tangible or
intangible, of Samaritan used exclusively in the Business (other
than third party payor agreements, contracts, leases,
arrangements and commitments not listed on Schedule 1.1A) (the
items in (a) through (e) hereof hereinafter collectively referred
to as the "Assets");
provided, however, that Samaritan will not convey, transfer,
assign or deliver to the Company, and the Company will not
acquire from Samaritan, the items listed on Schedule 1.1B
(collectively, the "Excluded Assets").
I.2 Transfer and Conveyance. Samaritan shall execute and
deliver to the Company at or prior to the Closing a ▇▇▇▇ of Sale
and Assignment in substantially the form attached hereto as
Exhibit A and all such other assignments, endorsements and
instruments of transfer as shall be necessary or appropriate to
carry out the intent of this Agreement and as shall be sufficient
to vest in the Company title to all of the Assets and all right,
title and interest of Samaritan thereto.
I.3 Assumption of Certain Obligations. Effective at the
Closing and subject to the terms set forth herein, at the Closing
the Company shall assume and be liable for Samaritan's
obligations to render performance arising after the Closing Date
under, or otherwise accruing after the Closing Date under, the
third party payor agreements, contracts, leases, arrangements and
commitments listed on Schedule 1.1A (but not any obligation for
performance or obligation or liability of Samaritan for default
or nonperformance under said third party payor agreements,
contracts, leases, arrangements and commitments arising prior to
the Closing)(collectively, the "Assumed Liabilities"). The
Company will not assume and will not be liable for any debts,
contracts, leases, liabilities, arrangements, commitments,
obligations, restrictions or duties of Samaritan, other than as
specified in the preceding sentence. The Company shall execute
and deliver to Samaritan at the Closing an Assumption Agreement
in substantially the form attached hereto as Exhibit B. From and
after the Closing, Samaritan shall remain responsible for, and
shall pay and discharge on a timely basis, all debts, contracts,
leases, liabilities, arrangements, commitments, obligations,
restrictions or duties of the Business not specifically assumed
by the Company under the Assumption Agreement (the "Excluded
Liabilities").
ARTICLE II
PURCHASE PRICE
II.1 Purchase Price. The purchase price for the Assets
(the "Purchase Price") shall be (i) $8,400,000 cash (the "Cash
Consideration") and (ii) 1,000 shares of Series A Cumulative
Accruing Pay-in-Kind Preferred Stock, par value $100.00 per
share, of the Company (the "Preferred Stock"). The rights,
preferences and limitations of the Preferred Stock are as
described in the Articles of Incorporation of the Company, a copy
of which is attached as Exhibit C to this Agreement.
II.2 Allocation of Purchase Price. Samaritan and the
Company agree to file all income tax returns and reports,
including without limitation, IRS Form 8954, to reflect the
allocation of the Purchase Price in a manner consistent with
Exhibit D attached hereto and not to take any position
inconsistent therewith before any governmental agency charged
with the collection of taxes or in any judicial proceeding
relating solely to tax reporting.
ARTICLE III
SAMARITAN'S GENERAL REPRESENTATIONS AND WARRANTIES
Samaritan represents and warrants to the Company as follows:
III.1 Due Organization and Qualification. Samaritan is a
non-profit corporation duly organized, validly existing and in
good standing under the laws of the State of Arizona, and has all
requisite corporate power and authority to own, lease or operate
its properties and to carry on its business as it is presently
being operated and in the place where such properties are owned,
leased or operated and such business is conducted. Samaritan is
duly qualified and licensed as a foreign non-profit corporation
and in good standing in each jurisdiction in which the character
or location of the property owned, leased or operated by it or
the nature of the business conducted by it makes such
qualification necessary unless the failure to be so qualified and
licensed would not have a material adverse effect on it.
III.2 Corporate Power and Authority. Samaritan has full
power, authority and legal right to enter into this Agreement,
and all other agreements by and among the parties, and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement by
Samaritan, and all other agreements by and among the parties, and
the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite action and no
further action or approval is required in order to permit
Samaritan to consummate the transactions contemplated hereby and
thereby. This Agreement constitutes, and all other agreements by
and among the parties, when executed and delivered in accordance
with the terms thereof, will constitute the legal, valid and
binding obligations of Samaritan enforceable in accordance with
their terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and (ii) the remedy of
specific performance and injunctive relief are subject to certain
equitable defenses and to the discretion of the court before
which any proceedings may be brought (the "Equitable
Exceptions"). The making and performance of this Agreement, and
all other agreements by and among the parties, and the
consummation of the transactions contemplated hereby and thereby
in accordance with the terms hereof and thereof will not (a)
conflict with the Articles of Incorporation or the Bylaws of
Samaritan, (b) result in any breach or termination of, or
constitute a default under, or constitute an event that with
notice or lapse of time, or both, would become a default under,
or result in the creation of any Encumbrance upon any of the
Assets under, or create any rights of termination, cancellation
or acceleration in any person under, any Material Contract (as
defined below), or violate any order, writ, injunction or decree,
to which Samaritan is a party, by which any of the Assets or
business or operations of Samaritan may be bound or affected or
under which any of the Assets or business or operations of
Samaritan receive benefits, (c) result in the loss or adverse
modification of any license, certificate, franchise, permit or
other authorization granted to or otherwise held by Samaritan and
related to their business operations or (d) result in the
violation of any provisions of law applicable to Samaritan, the
violation of which could have an adverse effect upon the Assets
or business or operations of Samaritan.
III.3 Investment Representations.
(a) Samaritan is an "accredited investor" within the
meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
(b) Samaritan understands and agrees that the
issuance of shares of Preferred Stock to Samaritan upon
consummation of the transactions contemplated hereby will not be
registered under the Securities Act and applicable state
securities laws and that the issuance of shares of Preferred
Stock is intended to be exempt from the registration requirements
of the Securities Act and applicable state securities laws. The
certificates representing such shares will be imprinted with a
legend indicating that such shares have not been registered under
the Securities Act or any state securities laws and may not be
sold without registration as required by the Securities Act and
applicable state securities laws or exemptions therefrom, and in
the case of such an exemption, requiring delivery to the Company
of a legal opinion of counsel that such exemption is applicable
(such opinion and such counsel to be reasonably acceptable to the
Company).
(c) Samaritan is acquiring the shares of Preferred
Stock that it will be receiving at the Closing for Samaritan's
own account and not with a view to distribution thereof in
violation of the Securities Act. Samaritan has been afforded the
opportunity to ask questions of and receive answers from the
Company concerning the terms and conditions of the shares of
Preferred Stock, the business of the Company and has had all such
questions answered to its satisfaction and has been supplied all
additional information deemed necessary by it to verify the
accuracy of all information provided.
III.4 True, Correct and Complete Information. All written
agreements, lists, schedules, instruments, exhibits, documents,
certificates, reports, books, records, statements and other
writings furnished to the Company pursuant hereto or in
connection with this Agreement or the transactions contemplated
hereby are and will be complete and accurate in all material
respects and have been maintained in accordance with all
applicable laws and regulations. No representation or warranty
by Samaritan contained in this Agreement, in the schedules
attached hereto or in any certificate furnished or to be
furnished by Samaritan to the Company in connection herewith or
pursuant hereto contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact
necessary in order to make any statement contained herein or
therein not misleading. There is no fact known to Samaritan that
has specific application to Samaritan, the Business or the Assets
(other than general economic or industry conditions) and that
materially adversely affects or, as far as Samaritan can
reasonably foresee, materially threatens, the assets, business,
prospects, financial condition, or results of operations of
Samaritan, the Business or the Assets that has not been set forth
in this Agreement or any schedule hereto.
ARTICLE IV
SAMARITAN'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
THE BUSINESS AND ASSETS
Samaritan represents and warrants to the Company with
respect to the Business and the Assets (but not the Excluded
Assets) as follows:
IV.1 Availability of Documents. Samaritan has made
available for inspection by the Company at the offices of
Samaritan true, correct and complete copies of its Articles of
Incorporation and By-Laws and all third party payor agreements,
contracts, books and records attributable to each aircraft
composing part of the Assets, leases, arrangements, commitments
and documents referred to herein or in any schedule referred to
herein, in each case together with all amendments and supplements
thereto.
IV.2 Title; Use of Assets. Samaritan has, and upon
conveyance of the Assets to the Company by Samaritan at the
Closing, the Company will acquire and hold, good, marketable and
valid title to all of the Assets, free and clear of any and all
Encumbrances except as set forth on Schedule 4.2. The Assets
constitute all of the property now used in and necessary for the
conduct of the Business as presently conducted.
IV.3 Inventory. The Inventory consists of current items of
a quality and quantity that are usable in the ordinary course of
the Business, are suitable for the purpose or purposes for which
they will be used, and are in good condition. Inventory not
usable in the Business has been written down in value in
accordance with the normal business practice of Samaritan to
estimated net realizable market values.
IV.4 Physical Properties. Set forth on Schedule 4.2 is a
description of (i) all aircraft owned or leased by Samaritan and
included among the Assets (showing aircraft type, aircraft
identification number and whether owned or leased), (ii) all
vehicles owned or leased by Samaritan and included among the
Assets (showing motor vehicle identification numbers and whether
owned or leased), and (iii) all physical properties (other than
the types of properties referred to in (i) and (ii) above), real,
personal or mixed, owned by or leased to Samaritan and included
among the Assets, having an original cost in excess of $5,000
(exclusive of Inventory). Except as set forth in Schedule 4.2,
all real property and structures and all aircraft, vehicles,
machinery, equipment and other tangible personal property
included among the Assets are suitable for the purpose or
purposes for which they are being used (including compliance in
all material respects with all laws and regulations relating to
such use) and are in good condition, normal wear and tear
excepted. Samaritan enjoys peaceable possession of all
properties owned or leased by it.
IV.5 Trademarks, Etc. Schedule 4.5 lists the domestic and
foreign trade names, trademarks, service marks, trademark
registrations and applications, service ▇▇▇▇ registrations and
applications, patents, patent applications, patent licenses,
software licenses and copyright registrations and applications
owned by Samaritan or used thereby in the operation of the
Business (collectively, the "Intellectual Property"), which
Schedule indicates (i) the term and exclusivity of its rights
with respect to the Intellectual Property and (ii) whether each
item of Intellectual Property is owned or licensed by Samaritan,
and if licensed, the licensor and the license fees therefor.
Unless otherwise indicated on Schedule 4.5, Samaritan has the
right to use and license the Intellectual Property and to
transfer and convey the Intellectual Property. Each item
constituting part of the Intellectual Property has been, to the
extent indicated on Schedule 4.5, registered with, filed in or
issued by, as the case may be, the United States Patent and
Trademark Office or such other government entity, domestic or
foreign, as is indicated on Schedule 4.5; all such registrations,
filings and issuances remain in full force and effect; and all
fees and other charges with respect thereto are current. Except
as stated on Schedule 4.5, there are no pending proceedings or
adverse claims made or, to the best knowledge of Samaritan,
threatened against Samaritan with respect to the Intellectual
Property; there has been no litigation commenced or threatened in
writing within the past five (5) years with respect to the
Intellectual Property or the rights of Samaritan therein; and
Samaritan has no knowledge that (i) the Intellectual Property or
the use thereof by Samaritan before the Closing or by the Company
after the Closing conflicts or will conflict with any trade
names, trademarks, service marks, trademark or service ▇▇▇▇
registrations or applications, patents, patent applications,
patent licenses or copyright registrations or applications of
others ("Third Party Intellectual Property"), or (ii) such Third
Party Intellectual Property or its use by others or any other
conduct of a third party conflicts with or infringes upon the
Intellectual Property or its use by Samaritan before the Closing
or the Company after the Closing.
IV.6 Permits. Samaritan holds all licenses, certificates,
franchises, permits and other governmental authorizations,
including permits, titles (including, without limitation,
aircraft titles and motor vehicle titles and current certificates
of air worthiness and registrations), fuel permits, licenses,
franchises, certificates, trademarks, trade names, patents,
patent applications and copyrights owned or held by Samaritan,
the absence of any of which could reasonably be expected to have
a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise), results
of operations or prospects of Samaritan, the Assets or the
Business (the "Material Permits") and, since October 31, 1997,
there has been no event or condition of any character (whether
actual, or to the knowledge of Samaritan, threatened or
contemplated that has had or can be reasonably anticipated to
have a material adverse effect on the financial condition,
results of operations or prospects of the Business (collectively,
a "Material Adverse Effect"). An accurate list and summary
description is set forth on Schedule 4.6 hereto of all such
Material Permits. Except as set forth in Schedule 4.6, the
Material Permits are valid and in full force and effect and may
be transferred to the Company at the Closing. Samaritan has not
received any notice that any governmental authority intends to
cancel, terminate or not renew any such Material Permit, and
there is no existing breach of, and there is no existing grounds
for rescission or withdrawal of, any of the Material Permits.
Samaritan has conducted and is conducting its business in
compliance with the requirements, standards, criteria and
conditions set forth in each of the Material Permits and
applicable orders, approvals, variances, rules and regulations
and is not in violation of any of the foregoing except where such
noncompliance or violation would not have a Material Adverse
Effect. Except as specifically provided on Schedule 4.6, the
transactions contemplated by this Agreement will not result in a
default under or a breach or violation of, or adversely affect
the rights and benefits afforded to Samaritan before the Closing
or to the Company after the Closing by, any such Material
Permits. Each aircraft composing part of the Assets is duly
registered with the Federal Aviation Authority.
IV.7 Compliance with Laws. Samaritan (including, without
limitation, its medical director, nurses, licensed employees,
ambulance crew and others providing air ambulance and patient
care services) (i) has complied with all laws, regulations,
licensing requirements and orders applicable to its business or
personnel, the noncompliance with which could reasonably be
expected to have a Material Adverse Effect, and (ii) has filed
with the proper authorities all statements and reports required
by the laws, regulations, licensing requirements and orders to
which it or any of its employees (because of their activities on
behalf of their employer) is subject, the failure of which to
file could reasonably be expected to have a Material Adverse
Effect. All reports and returns required to be filed by
Samaritan with any governmental authority have been filed, and
were accurate and complete when filed. Without limiting the
generality of the foregoing: (i) the operation of Samaritan's
business as it is now or heretofore has been conducted does not,
nor does any condition exist as to, give rise to or constitute
the grounds for a meritorious suit, action, claim or demand by
any person or persons seeking compensation or damages or seeking
to restrain, enjoin or otherwise prohibit any aspect of the
conduct of such business or the manner in which it is now
conducted; and (ii) Samaritan has made all required payments with
the appropriate governmental departments of the state, local and
federal governments. Samaritan has not been investigated,
charged, fined, sanctioned, audited by any federal, state or
local regulatory authority for alleged violations of laws and
regulations.
IV.8 Material Contracts. Set forth on Schedule 4.8 is a
list of all contracts, agreements, arrangements or commitments
(the following, "Material Contracts") that relate to: (i) the
employment of any person other than personnel employed at the
pleasure of Samaritan in the ordinary course of its business at
rates of compensation and on terms consistent with good business
practice; (ii) collective bargaining with, or any representation
of any employees by, any labor union or association; (iii) the
acquisition or provision of services, spare parts, supplies,
equipment or other personal property involving more than $25,000
or that is not terminable by Samaritan upon not more than thirty
(30) days' notice without obligation on the part of Samaritan;
(iv) the purchase or sale of real property; (v) lease of real or
personal property as lessor or lessee or sublessor or sublessee;
(vi) lending or advancing of funds other than the extension of
credit to trade purchasers in the ordinary course of Samaritan's
business consistent with past business practice; (vii) borrowing
of funds or receipt of credit other than by Samaritan in the
ordinary course of business consistent with good business
practice and except for trade payables in amounts and on terms
consistent with past practice; (viii) incurring of any obligation
or liability except for transactions engaged in by Samaritan in
the ordinary course of business consistent with good business
practice; (xi) the sale of personal property (other than sales of
Inventory in the ordinary course of business consistent with good
business practice) or services under which payments due after the
date of this Agreement exceed $25,000; and (x) any matter or
transaction not in the ordinary course of the business of
Samaritan or that is inconsistent with the past business practice
of Samaritan.
IV.9 Contract Defaults. Samaritan is not in default in any
respect under any Material Contract, and such Material Contracts
are legal, valid and binding obligations of the respective
parties thereto in accordance with their terms and, except to the
extent reflected in Schedule 4.8, have not been amended; and no
defenses, offsets or counterclaims thereto have been asserted or
to the best knowledge of Samaritan, may be made, by any party
thereto other than Samaritan nor has Samaritan waived any
substantial rights thereunder. Except as set forth in Schedule
4.8, Samaritan has not received any notice from any third party
payor or supplier to the effect that such third party payor or
supplier will terminate its relationship with Samaritan as a
result of the transactions contemplated by this Agreement.
IV.10 Litigation. Set forth on Schedule 4.10 is a list of
all actions, suits, proceedings, investigations, arbitrations,
audits or grievances pending against Samaritan or, to the best
knowledge of Samaritan threatened against Samaritan, Samaritan's
business or any property or rights of Samaritan, at law or in
equity or before or by any court or federal, state, municipal or
other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign ("Agencies"). None of
the actions, suits, proceedings, arbitrations, audits or
investigations listed on Schedule 4.10 either (i) has or would,
if adversely determined, have a Material Adverse Effect or (ii)
affects or would, if adversely determined, affect the right or
ability of Samaritan to carry on its business substantially as
now conducted. Samaritan is not subject to any continuing court
or Agency order, writ, injunction or decree applicable
specifically to the Assets, the business operations of Samaritan
or employees of Samaritan, or in default with respect to any
order, writ, injunction or decree of any court or Agency with
respect to the Assets, its business, operations or employees.
Neither Samaritan nor its officers or directors or employee
management knows or have grounds to know of any basis for any
proceedings, investigations or inquiries against Samaritan except
as disclosed on Schedule 4.10.
IV.11 Financial Statements and Results of Operations.
(a) Samaritan has previously furnished to the Company
true, correct and complete copies of the audited balance sheet of
Samaritan as of December 31, 1996, and the related statements of
income, shareholders' equity and cash flows for the three (3)
fiscal years then ended, as reviewed by Ernst & Young, LLP,
certified public accountants, together with Samaritan's unaudited
balance sheet, statements of income and shareholders' equity for
the 10-month period ended October 31, 1997 (collectively, the
"Financial Statements"). The Financial Statements (i) are
accurate and in accordance with the books and records and
accounting methods of Samaritan, (ii) constitute true, full and
complete disclosure of the financial position and results of
operations of Samaritan as of the dates and for the periods
indicated and (iii) except for the lack of footnotes in the
financial statements for the 10-month period ended October 31,
1997, have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved. Except as may be set forth on the Financial Statements
or otherwise disclosed herein, there are no liabilities,
contingent or otherwise, by which Samaritan or any of the Assets
or the Business may be bound or affected other than those
incurred in the ordinary course of business consistent with good
business practice none of which could have a Material Adverse
Effect. Samaritan has previously permitted the Company full
access to papers pertaining to the Financial Statements,
including those work papers in the possession of or prepared by
Ernst & Young, LLP.
(b) Except to the extent (and not in excess of the
amounts) reflected in the October 31, 1997 balance sheet included
in the Financial Statements or as disclosed on Schedule 4.11,
Samaritan does not have any liabilities or obligations of any
nature related to the Business, whether absolute, accrued,
unmatured, contingent or otherwise that did not arise in the
ordinary course of business from and after October 31, 1997, or
any unsatisfied judgments.
IV.12 Employee Benefits. Samaritan maintains a defined
benefit pension plan (the "Pension Plan") and a 401(k) Savings
Plan (the "Savings Plan") and certain cafeteria, health and
medical, insurance and short and long term disability plans (the
"Welfare Benefit Plans") listed in Schedule 4.12. The Pension
Plan and Savings Plan are hereinafter collectively referred to as
the "Retirement Plans." The Welfare Benefit Plans and the
Retirement Plans are collectively referred to as the "Plans."
The Plans are in substantial compliance with applicable law and
have been administered and operated in all material respects
according to their terms. The Retirement Plans are qualified
within the meaning of Section 401(a) of the Code, and except for
the Savings Plan, have received a favorable determination from
the Internal Revenue Service ("IRS"), and no event has occurred
and no condition exists that would be expected to result in the
revocation of any such determination. A letter requesting a
favorable determination from the IRS that the Savings Plan is
qualified under Section 401(a) of the Code will be submitted by
Samaritan to the IRS within the remedial amendment period
specified in Section 401(b) of the Code. The Pension Plan is
frozen, as of December 1, 1993, and no further benefits are
accruing under the Pension Plan, except for certain transitional
benefits available to certain long service employees. The
Savings Plan is not subject to Title IV of ERISA, and neither
Samaritan nor any Group Member has made any contributions to or
participated in any multi-employer plans, as defined in Section
3(37) of ERISA. All contributions required to be made under the
Retirement Plans have been made (excluding any amounts not yet
due) and all amounts properly accrued to date as liabilities of
Samaritan that have not been paid have been properly recorded on
the Financial Statements. The Savings Plan is not subject to
Part 3 of Subtitle B of Title 1 of ERISA. No lien imposed under
Section 401(a)(29) or Section 412(n) of the Code, Section 302(f)
or Section 4068 of ERISA, or arising out of any action filed
under Section 4301(b) of ERISA, exists upon any of the Assets.
Neither Samaritan nor, to the best knowledge of Samaritan, any
other "disqualified person" or "party in interest" (within the
meaning of Section 4975(e)(2) of the Code and Section 3(14) of
ERISA, respectively) has engaged in any transactions in
connection with any Plan that could be expected to result in the
imposition of a material penalty pursuant to Section 502(i) of
ERISA, damages pursuant to Section 409 of ERISA, or a tax
pursuant to Section 4975(a) of the Code which would adversely
affect the Company or the Assets. No material claim, action,
proceeding or litigation has been made, commenced or, to the best
knowledge of Samaritan, threatened with respect to any Plan
(other than for benefits payable in the ordinary course and PBGC
insurance premiums). No Plan or related trust owns any
securities in violation of Section 407 of ERISA. Neither
Samaritan nor any Group member has incurred any liability or
taken any action, that could cause it to incur, and has received
no notice of, any liability (i) under Section 412 of the Code or
Title IV of ERISA with respect to any "single employer plan"
(within the meaning of Section 4001(a)(15) of ERISA), (ii) on
account of a partial or complete withdrawal (within the meaning
of Section 4205 and 4203 of ERISA, respectively) with respect to
any "multi-employer plan" (within the meaning of Section 3(37) of
ERISA), (iii) on account of unpaid contributions to any such
multi-employer plan, or (iv) to provide health benefits or other
non-pension benefits to retired or former employees, except as
specifically required by Section 4980B(f) of the Code. For
purposes of this Agreement, "Group Member" shall mean any member
of any "affiliated service group," as defined in Section 414(m)
of the Code, that includes Samaritan, any member of any
"controlled group of corporations" as defined in Section 1563 of
the Code that includes Samaritan, or any member of any group of
"trades or businesses under common control" as defined by Section
414(c) of the Code that includes Samaritan.
IV.13 Employees; Employee Relations.
(a) Schedule 4.13 sets forth (i) the name and current
annual salary (or rate of pay) and other compensation (including,
without limitation, normal bonus, profit-sharing and other
compensation) now payable by Samaritan to each employee whose
current total annual compensation or estimated compensation is
$25,000 or more, (ii) any increase to become effective after the
date of this Agreement in the total compensation or rate of total
compensation payable by Samaritan to each such person, (iii) any
increase to become payable after the date of this Agreement by
Samaritan to employees other than those specified in clause (i)
of this Section 4.13(a), (iv) all presently outstanding loans and
advances (other than routine travel advances to be repaid or
formally accounted for within sixty (60) days) related to the
Business and made by Samaritan to, or made to Samaritan by, any
director, officer or employee, (v) all other transactions between
Samaritan and any director, officer or employee of Samaritan
since October 31, 1997, and (vi) an estimate of the amount of
"paid time off" that each employee of Samaritan who will be
employed by the Company effective on the Closing Date will not
have used as of December 31, 1997 and an estimate of the amount
of such paid time off that each employee will carry forward to
1998 (referred to herein for each such employee as "Carry Forward
Paid Time Off". For purposes of this Agreement, "paid time off"
shall mean the benefit plans maintained by Samaritan for its
employees with respect to vacation and sick leave.
(b) Except as disclosed on Schedule 4.13, Samaritan
is not a party to, nor bound by, the terms of any collective
bargaining agreement, and Samaritan has not experienced any
material labor difficulties during the last five (5) years.
Except as set forth on Schedule 4.13, there are no labor disputes
existing, or to the best knowledge of Samaritan, threatened
involving, by way of example, strikes, work stoppages, slowdowns,
picketing, or any other interference with work or production, or
any other concerted action by employees. No charges or
proceedings before the National Labor Relations Board, or similar
agency, exist, or to the best knowledge of Samaritan, are
threatened.
(c) Samaritan's relationship with its respective
employees is good. Except as disclosed on Schedule 4.13,
Samaritan is not a party to any employment contract with any
individual or employee, either express or implied. No legal
proceedings, charges, complaints or similar actions exist under
any federal, state or local laws affecting the employment
relationship including, but not limited to: (i) anti-
discrimination statutes such as Title VII of the Civil Rights Act
of 1964, as amended (or similar state or local laws prohibiting
discrimination because of race, sex, religion, national origin,
age and the like); (ii) the Fair Labor Standards Act or other
federal, state or local laws regulating hours of work, wages,
overtime and other working conditions; (iii) requirements imposed
by federal, state or local governmental contracts such as those
imposed by Executive Order 11246; (iv) state laws with respect to
tortious employment conduct, such as slander, harassment,
invasion of privacy, negligent hiring or retention, intentional
infliction of emotional distress, assault and battery, or loss of
consortium; or (v) the Occupational Safety and Health Act, as
amended, as well as any similar state laws, or other regulations
respecting safety in the workplace; and to the best knowledge of
Samaritan, no proceedings, charges, or complaints are threatened
under any such laws or regulations and no facts or circumstances
exist that would give rise to any such proceedings, charges,
complaints, or claims, whether valid or not. Samaritan is in
full compliance with the provisions of the Americans with
Disabilities Act (the "ADA"). Samaritan is not subject to any
settlement or consent decree with any present or former employee,
employee representative or any government or Agency relating to
claims of discrimination or other claims in respect to employment
practices and policies; and no government or Agency has issued a
judgment, order, decree or finding with respect to the labor and
employment practices (including practices relating to
discrimination) of Samaritan.
(d) Samaritan has not incurred any liability or
obligation under the Worker Adjustment and Retraining
Notification Act or similar state laws. Samaritan has not laid
off more than ten percent (10%) of its employees at any single
site of employment in any ninety (90) day period during the
twelve (12) month period ending October 31, 1997.
IV.14 Consents. Except as disclosed in Schedule 4.14, no
consent, approval, authorization or order of any court, Agency or
any other person or under any Material Contract is required in
order to permit Samaritan to execute and deliver this Agreement
and to consummate the transactions contemplated by this
Agreement.
IV.15 Insurance. Samaritan has been and is insured with
responsible insurers in respect of its properties against
business risks normally insured against by companies in similar
lines of business. Samaritan has not, during the past three
fiscal years, been denied or had revoked any policy of insurance,
and no insurance carrier has reduced any insurance coverage or
has given notice or other indication of its intention to reduce
coverage or revoked any such policy, or to increase premiums
based on claims history or for any reason related to Samaritan's
business.
IV.16 Taxes. Samaritan has duly filed all federal, state,
county, local and other excise, franchise, property, payroll,
income, capital stock, sales and use and other tax returns that
are required to be filed by it and such returns are true, correct
and complete in all respects. Samaritan has paid all taxes which
have become due or have been assessed against it or the Assets
and all taxes, penalties and interest which any taxing authority
has proposed or asserted to be owing. All tax liabilities to
which the properties of Samaritan may have been subjected have
been discharged, except for taxes assessed but not yet payable
but for which Samaritan shall remain responsible and shall pay on
a timely basis. There are no tax claims presently being asserted
against Samaritan or the Assets and Samaritan knows of no basis
for any such claim. Samaritan has not granted any extension to
any taxing authority of the limitation period during which any
tax liability may be asserted thereby.
IV.17 Business Relations. Schedule 4.17 contains an
accurate list of all significant customers of the Business (i.e.,
those customers representing 2% or more of Samaritan's revenues
for the twelve (12) months ended October 31, 1997). Except as
set forth in Schedule 4.17, Samaritan has not experienced any
difficulties in obtaining any inventory items, spare parts or
equipment necessary to the operation of its business, and, to the
best knowledge of Samaritan, no such shortage of supply of
inventory, spare parts or equipment items is threatened or
pending. Samaritan is not required to provide any bonding or
other financial security arrangements in any material amount in
connection with any transactions with any of its customers or
suppliers.
IV.18 Environmental Laws and Regulations. Except as set
forth in Schedule 4.18, Samaritan is in compliance in all
material respects with all applicable Environmental Requirements.
Samaritan has not received any notice or other communication (in
writing or otherwise) that alleges that Samaritan is not in
compliance with any Environmental Requirements, and, to the best
knowledge of Samaritan, there are no circumstances that may
prevent or interfere with Samaritan or the Company's compliance
with any Environmental Requirements in the future.
"Environmental Requirements" shall mean all laws, statutes,
rules, regulations, ordinances, guidance documents, judgments,
decrees, orders, agreements and other restrictions and
requirements (whether now or hereafter in effect) of any
governmental authority, including, without limitation, federal,
state and local authorities, relating to the regulation or
protection of human health and safety, natural resources,
conservation, the environment, or the storage, treatment,
disposal, transportation, handling or other management of
industrial or solid waste, hazardous waste, hazardous or toxic
substances or chemicals, or pollutants.
IV.19 Absence of Certain Changes or Events. Since
December 31, 1996, Samaritan has not (i) suffered any
extraordinary losses or waived any rights of substantial value;
(ii) amended its Articles of Incorporation or Bylaws; (iii) made
any change in its mode of management or any change in its method
of operation or method of accounting; (iv) made or become
obligated to make any capital expenditures other than such
expenditures or commitments exceeding $50,000 individually, which
expenditures are listed on Schedule 4.19; (v) suffered any event
or circumstance that could have a Material Adverse Effect; (vi)
entered into any transaction, except in the ordinary course of
its business consistent with good business practice; (vii)
received any notice of any claim asserted against it by any
Agency that could have a Material Adverse Effect; or (viii)
incurred or agreed to incur any material obligation outside the
ordinary course of business that has not heretofore been
disclosed in writing to the Company.
IV.20 Broker's and Finder's Fees. Samaritan has not made
any agreement with any person, or taken any action which would
cause any person, to become entitled to an agent's, broker's or
finder's fee or commission in connection with the transactions
contemplated by this Agreement.
IV.21 Restrictive Documents or Laws. With the exception of
the matters listed in Schedule 4.21, Samaritan is not a party to
or bound by any mortgage, lien, lease, agreement, contract,
instrument, law, order, judgment or decree, or any similar
restriction not of general application which has a Material
Adverse Effect, or reasonably could be expected to so affect, (a)
the continued operation or use by the Company of the Assets after
the Closing on substantially the same basis as the Assets are
currently operated or (b) the consummation of the transactions
contemplated by this Agreement.
IV.22 EMTALA. Samaritan has complied with all Emergency
Medical Treatment and Labor Act ("EMTALA") requirements.
Samaritan has not been the subject of an investigation or
administrative termination proceeding by the Health Care
Financing Administration for an EMTALA violation.
IV.23 Medicare and Medicaid Programs; Licensure, etc. Each
of Samaritan, and Samaritan's medical director, nurses, licensed
employees and other individuals providing air ambulance and
patient care services on behalf of Samaritan is qualified,
credentialed and licensed for participation in the Medicare and
Medicaid programs and as otherwise required under applicable
state law, and each has been required to be so qualified,
credentialed and licensed prior to providing air ambulance and
patient care services on behalf of Samaritan. Samaritan is a
party to supplier agreements under the Medicare and Medicaid
programs which are in full force and effect with no defaults
having occurred thereunder. Samaritan has timely filed all
claims or other reports required to be filed with respect to the
services provided to Medicare, Medicaid and third party payors,
and all such claims or reports are complete and accurate, and
Samaritan has no liability to any payor with respect thereto.
Except as set forth in Schedule 4.23, there are no pending
appeals, overpayment determinations, adjustments, challenges,
audit litigation or notices of intent to open Medicare or
Medicaid, or third party claim determinations or other reports
required to be filed by Samaritan.
Neither Samaritan, nor any medical director, nurses,
licensed employees or other individuals providing patient care
services on behalf of Samaritan has been convicted of, or pled
guilty or nolo contendere to, patient abuse or negligence, or any
other Medicare or Medicaid program related offense and none has
committed any offense which may serve as the basis for suspension
or exclusion from the Medicare and Medicaid programs.
IV.24 Fraud and Abuse and ▇▇▇▇▇ Law. Samaritan, its
officers, directors, employees and agents have not engaged in any
activities which are prohibited under 1320a-7b or 139nn of
Title 42 of the United States Code or the regulations promulgated
thereunder, or related state or local statutes or regulations, or
which are prohibited by rules of professional conduct including,
but not limited to, the following: (a) knowingly and willfully
making or causing to be made a false statement or representation
of a material fact in any application for any benefit or payment,
(b) 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, (c) any failure by
a claimant to disclose knowledge of the occurrence of any event
affecting the initial or continued right to any benefit or
payment on its own behalf or on behalf of another, with the
intent to fraudulently secure such benefit or payment, and
(d) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate) directly
or indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration (i) 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 (ii) in return for purchasing, leasing or ordering or
arranging for, or recommending, purchasing, leasing or ordering
any good, facility, service or item for which payment may be made
in whole or in part by Medicare or Medicaid, or (e) referring a
patient for designated health services to or providing designated
health services to a patient upon referral from an entity or
person with which the physician or an immediate family member has
a financial relationship, and to which no exception under
1395nn of Title 42 of the United States Code applies.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Samaritan as follows:
V.1 Organization and Authority.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Louisiana, and has all requisite corporate power and authority
to own or lease its respective properties and to carry on its
business as it is presently being operated and in the place where
such properties are owned or leased and such business is
conducted. The Company has full power, authority and legal right
to enter into this Agreement and all other agreements by and
among the parties and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance of
this Agreement by the Company, and all other agreements by and
among the parties, and the consummation by it of the transactions
contemplated hereby and thereby, have been or will be duly
authorized by all requisite corporate action. This Agreement
constitutes, and all other agreements by and among the parties,
when executed and delivered in accordance with the terms thereof,
will constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to
the Equitable Exceptions. The making and performance of this
Agreement, and all other agreements by and among the parties, and
the consummation of the transactions contemplated hereby and
thereby in accordance with the terms hereof and thereof will not
(i) conflict with the Certificate of Incorporation or Bylaws of
the Company, (ii) result in any breach or termination of, or
constitute a default under, or constitute an event which with
notice or lapse of time, or both, would become a default under,
or result in the creation of any Encumbrance upon any asset of
the Company under, or create any rights of termination,
cancellation or acceleration in any person under, any contract,
lease, arrangement or commitment, or violate any order, writ,
injunction or decree, to which the Company is a party or by which
the Company or its assets, business or operations may be bound or
affected or under which the Company or its respective assets,
business or operations receive benefits, (iii) result in the loss
or adverse modification of any material license, franchise,
permit or other authorization granted to or otherwise held by the
Company that is material to the business or financial condition
of the Company or (iv) result in the violation of any provisions
of law applicable to the Company, the violation of which could
have a material adverse effect upon the business, operations or
assets of the Company, taken as a whole.
V.2 Consents. Except as set forth on Schedule 5.2, no
consent, approval, authorization or order of any court, Agency or
any other person is required in order to permit the Company to
consummate the transactions contemplated by this Agreement.
V.3 Broker's and Finder's Fees. The Company has not made
any agreement with any person, or taken any action which would
cause any person, to become entitled to an agent's, broker's or
finder's fee or commission in connection with the transactions
contemplated by this Agreement.
V.4 Litigation. There is no pending or, to the knowledge
of the Company, threatened litigation in any court or any
proceeding before any Agency in which it is sought to restrain,
prohibit, invalidate or obtain damages in respect of the
consummation of the purchase and sale of the Assets or the other
transactions contemplated hereby.
V.5 Employees. The Company represents that it presently
intends to offer employment to all of the employees of Samaritan
associated with the Business; provided, however, that the Company
shall have no such obligation to offer such employment to
Samaritan's employees.
V.6 Preferred Stock. The shares of Preferred Stock to be
delivered to Samaritan at the Closing shall when issued
constitute valid and legally issued shares of the Company, fully
paid and non-assessable, and, except as set forth in this
Agreement, will be owned free and clear of all Encumbrances.
V.7 Capitalization. The authorized capital stock of the
Company consists of (i) 7,000 shares of common stock, no par
value, of which on the date hereof 1,000 shares are issued and
outstanding and (ii) 3,000 shares of Preferred Stock, of which no
shares are issued and outstanding immediately prior to the date
hereof. All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid
and non-assessable.
ARTICLE VI
COVENANTS OF SAMARITAN WITH RESPECT TO THE BUSINESS
Samaritan covenants and agrees with the Company with respect
to the Business as follows:
VI.1 Affirmative Covenants. Prior to the Closing Date,
Samaritan will operate the Business only in the usual, regular
and ordinary course of business consistent with good business
practices, and will use its best efforts to: (i) preserve intact
its business organization and the Assets; (ii) maintain its level
of Inventory at levels consistent with good business practices
and maintain its properties, machinery and equipment in good
operating condition and repair; (iii) continue all existing
policies of insurance (or comparable insurance) in full force and
effect up to and including the Closing Date (and will not cancel
any such insurance or take (or fail to take) any action that
would enable the insurers under such policies to avoid liability
for claims arising out of any occurrence prior to the Closing
Date without the prior written consent of the Company); (iv) keep
available the services of its employees and agents; (v) preserve
its present relationships with suppliers, third party payors and
customers; and (vi) maintain its books, accounts and records in
the usual, regular and ordinary manner on a basis consistently
applied. Samaritan will notify the Company in writing within
five (5) business days of learning of any facts, event or
circumstance that is reasonably likely to have a Material Adverse
Effect.
VI.2 Negative Covenants. Prior to the Closing Date,
Samaritan will not, without the prior written consent of the
Company: (i) with regard to employees utilized in the Business,
make any increase in the compensation payable or to become
payable by it to any employee, establish any severance plan, or
contribute or make any commitment to or representation that it
will contribute any amounts to any bonus or other employee
benefit plan for employees of Samaritan, except as required by
law or by the terms of any such plan in the ordinary course of
business consistent with good business practices; (ii) make any
amendment to its Certificate of Incorporation, Bylaws or other
organizational documents; (iii) make any material change in the
character of the Business; (iv) incur any obligation or liability
(fixed or contingent) with regard to the Business except in the
ordinary course of business consistent with good business
practices; (v) discharge or satisfy any Encumbrance or pay any
obligation or liability (fixed or contingent) with regard to the
Business other than in the ordinary course of business consistent
with good business practices; (vi) mortgage, pledge, transfer or
otherwise dispose of or subject to any Encumbrance any of the
Assets; (vii) acquire any assets or properties with regard to the
Business, except in the ordinary course of business consistent
with good business practices; (viii) cancel or compromise any
material debt or claim with regard to the Business; (ix) waive or
release any rights of material value with regard to the Business;
(x) transfer, grant or terminate contract, lease, arrangement or
commitment rights under any concessions, leases, licenses,
agreements, patents, patent licenses, inventions, trademarks,
trade names, service marks, or copyrights or registrations or
licenses thereof or applications therefor or with respect to any
know-how or other proprietary or trade rights with regard to the
Business; (xi) modify or change in any material respect or
terminate any third party payor agreement, existing contract,
lease, arrangement or commitment required to be listed on
Schedule 1.1A; (xii) undertake any material borrowing of any
nature whatsoever with regard to the Business; (xiii) make any
loans or extensions of credit with regard to the Business; or
(xiv) make or become obligated to make any capital expenditures
or enter into commitments therefor with regard to the Business
exceeding $50,000 in the aggregate.
VI.3 Access to Properties and Records. Samaritan will keep
the Company advised of all material developments relevant to the
consummation of the transactions contemplated hereby and will
cooperate fully in permitting the Company to make a full
investigation of the business, properties and financial condition
of Samaritan during regular business hours and upon reasonable
notice and in bringing about the consummation of the transactions
contemplated hereby. Samaritan will, during regular business
hours and upon reasonable notice, afford to the Company and its
representatives full access to the offices, buildings, real
properties, machinery and equipment, inventory and supplies,
spare parts, records, files, books of account, tax returns,
agreements and commitments, corporate record books and personnel
of Samaritan and will permit the Company and its representatives
to contact and interview Samaritan's personnel, certified public
accountants, attorneys, suppliers, third party payors, vendors,
referral sources and any other persons that the Company shall
reasonably determine to be necessary for it to make a full
investigation of the Business, provided that all confidential
information disclosed to the Company shall be maintained by the
Company in accordance with the provisions of the Confidentiality
Agreement dated November 1, 1996 between Samaritan and Petroleum
Helicopters, Inc. Samaritan will furnish to the Company all such
further information concerning the business and affairs of
Samaritan as the Company may reasonably request. Samaritan will
update by amendment or supplement each of the Schedules referred
to herein and any other disclosure in writing from Samaritan
required by this Agreement to be disclosed in writing by
Samaritan to the Company promptly upon any change in the
information set forth in such Schedules or other disclosures, and
Samaritan hereby represents and warrants that such Schedules and
such written disclosures, as so amended or supplemented, shall be
true, correct and complete as of the date or dates thereof;
provided, however, that the inclusion of any information in any
such amendment or supplement, not included in the original
Schedule or other disclosure at or prior to the date of this
Agreement, shall not limit or impair any right which the Company
might otherwise have to terminate this Agreement pursuant to
Section 12.1(b) due to the failure to satisfy the condition in
Section 8.1. No investigation pursuant to this Section 6.3 shall
affect any representations or warranties or the conditions to the
obligations of the Company to consummate the transactions
contemplated hereby. In the event of the termination of this
Agreement, the Company will deliver to Samaritan all documents,
work papers and other material (including copies thereof)
obtained by the Company or on its behalf from Samaritan as a
result of this Agreement or in connection herewith, whether so
obtained before or after the execution hereof and, if the
transactions contemplated hereby are not consummated, the Company
will hold such information in confidence until such time as such
information is otherwise publicly available.
VI.4 Employees of Samaritan. Samaritan shall pay all
salaries and wages to all employees of Samaritan associated with
the Business due on or before the Closing Date, and effective on
the Closing Date shall terminate all such employees. Samaritan
shall maintain through the Closing Date all currently-existing
medical, dental, 401(k), life insurance, and any other welfare or
benefit plans for its employees. Samaritan shall make all
workers' compensation payments due on or before the Closing Date.
VI.5 Approvals of Third Parties. As soon as practicable
after the date hereof, Samaritan will use its best efforts to
secure all necessary consents, approvals and clearances of third
parties and Agencies that shall be required for Samaritan to
consummate the transactions contemplated hereby and will
otherwise use its best efforts to cause the consummation of such
transactions in accordance with the terms and conditions of this
Agreement.
VI.6 Notices. Samaritan will timely give all notices
required to be given relating to the transactions contemplated
hereby, including without limitation, (i) notices to employees
and (ii) any notices required or requested to be given to all
creditors and claimants against Samaritan.
VI.7 Access to Books and Records. Samaritan agrees to
provide the Company, its accountants, counsel and other
representatives, during normal business hours and upon reasonable
notice, for a period of four (4) years after the Closing Date,
access to the books, records, income tax returns, contracts and
other underlying data and documentation of Samaritan relating to
the period prior to the Closing Date and to make available to the
Company personnel of Samaritan in the Company's review thereof
for the purpose of enabling them to determine and calculate any
tax liabilities in connection with the Assets. Samaritan agrees
that, for such four-year period, it will preserve and keep intact
all such books and records.
VI.8 No Solicitation of Offers. Samaritan covenants and
agrees that it will not solicit, entertain, encourage or assist
any acquisition proposal with respect to the purchase or exchange
of the Assets or any portion thereof, or with respect to any
proposed merger, consolidation, sale of securities or other
acquisition involving Samaritan, by or with any person other than
the Company until January 31, 1998.
VI.9 Release of Financing Statements. Samaritan shall
obtain and file in the appropriate jurisdictions Termination
Statements properly executed by any parties holding a security
interest or other Encumbrance with respect to the Assets as
identified by lien searches conducted with respect to Samaritan
and the Assets.
VI.10 Maintenance of Existence. Samaritan shall maintain
its existence as an Arizona non-profit corporation until its
obligations under this Agreement are satisfied.
ARTICLE VII
COVENANTS OF THE COMPANY
The Company covenants and agrees with Samaritan as follows:
VII.1 Access to Properties and Records. The Company will
keep Samaritan advised of all material developments relevant to
the consummation of the transactions contemplated hereby and will
cooperate fully in permitting Samaritan to make a full
investigation of the business, properties and financial condition
of the Company during regular business hours and upon reasonable
notice and in bringing about the consummation of the transactions
contemplated hereby. The Company will, during regular business
hours and upon reasonable notice, afford to Samaritan full access
to its offices, buildings, records, files, books of account,
corporate record books and personnel of the Company, and will
permit Samaritan and its representatives to contact and interview
the Company's personnel, attorneys and any other persons that
Samaritan shall reasonably determine to be necessary for it to
make a full investigation of the Company, provided that all
confidential information disclosed to Samaritan shall be
maintained by Samaritan in accordance with the provisions of the
Confidentiality Agreement dated November 1, 1996 between
Samaritan and Petroleum Helicopters, Inc. The Company will
update by amendment or supplement each of the Schedules referred
to herein and any other disclosure in writing from the Company
required by this Agreement to be disclosed in writing by the
Company to Samaritan promptly upon any change in the information
set forth in such Schedules or other disclosures, and the Company
hereby represents and warrants that such Schedules and such
written disclosures, as so amended or supplemented, shall be
true, correct and complete as of the date or dates thereof;
provided, however, that the inclusion of any information in any
such amendment or supplement, not included in the original
Schedule or other disclosure at or prior to the date of this
Agreement, shall not limit or impair any right which Samaritan
might otherwise have to terminate this Agreement pursuant to
Section 12.1(c) due to the failure to satisfy the condition in
Section 9.1. No investigation pursuant to this Section 7.1 shall
affect any representations or warranties or the conditions to the
obligations of Samaritan to consummate the transactions
contemplated hereby. In the event of the termination of this
Agreement, Samaritan will deliver to the Company all documents,
work papers and other material (including copies thereof)
obtained by Samaritan or on its behalf from the Company as a
result of this Agreement or in connection herewith, whether so
obtained before or after the execution hereof and, if the
transactions contemplated hereby are not consummated, Samaritan
will hold such information in confidence until such time as such
information is otherwise publicly available.
VII.2 Approvals of Third Parties. As soon as practicable
after the date hereof, the Company will use its best efforts to
secure all necessary consents, approvals and clearances of third
parties and Agencies that shall be required for the Company to
consummate the transactions contemplated hereby and will
otherwise use its best efforts to cause the consummation of such
transactions in accordance with the terms and conditions of this
Agreement.
VII.3 Removal of Samaritan Name. The Company shall use
commercially reasonable efforts to remove by December 31, 1998
the Samaritan name and logo on the aircraft and inventory
comprising a part of the Assets, the uniforms of the employees of
the Company and signage associated with the Business and until
such process is complete shall take commercially reasonable steps
to assure that the public is not confused or misled as to
Samaritan's association with the Company.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to purchase the Assets and to
consummate the other transactions contemplated hereby at Closing
shall be subject to the satisfaction on or prior to the Closing
Date of all of the following conditions, except such conditions
as the Company may waive in writing:
VIII.1 Representations and Warranties of Samaritan. All
of the representations and warranties of Samaritan contained in
this Agreement and in any Schedule or other disclosure in writing
from Samaritan shall have been true and correct in all material
respects when made, and shall be true and correct in all material
respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been
made on and as of the Closing Date.
VIII.2 Covenants of Samaritan. All of the covenants and
agreements herein on the part of Samaritan to be complied with or
performed on or before the Closing Date shall have been fully
complied with and performed.
VIII.3 Samaritan's Certificate. There shall be
delivered to the Company a certificate dated as of the Closing
Date and signed by the President of Samaritan to the effect set
forth in Sections 8.1 and 8.2, which certificate shall have the
effect of a representation and warranty made by Samaritan on and
as of the Closing Date.
VIII.4 Noncompetition Agreements. Samaritan shall have
executed and delivered to the Company a Noncompetition Agreement
in substantially the form attached hereto as Exhibit E (the
"Noncompetition Agreement").
VIII.5 Certain Payments to Employees. Samaritan on the
Closing Date will deliver to the Company an update to Schedule
4.13 to reflect the paid time off that each employee of Samaritan
who will be employed by the Company effective on the Closing will
not have used as of December 31, 1997 and the Carry Forward Paid
Time Off for each such employee as of December 31, 1997.
Samaritan on or prior to the Closing Date will pay to each
employee of Samaritan who will be employed by the Company
effective on the Closing a cash payment in an amount equal to the
cash value of the Carry Forward Paid Time Off of such employee.
On or prior to the Closing Date, Samaritan shall deliver to the
Company an agreement satisfactory to the Company and its counsel
(i) with respect to certain matters covering paid time off from
and after the Closing and (ii) providing for the payment to the
Company of $47,406.50 on the last day of each month during the
period commencing January 1, 1998 and ending June 30, 1998 which
shall represent a payment by Samaritan to the Company for the
cash equivalent of the number of days of vacation which each
employee of Samaritan who will be employed by the Company
effective on the Closing Date will be entitled to in 1999 under
the Company's then existing vacation policy. In calculating an
employee's seniority to determine the number of days of vacation
to which such employee is entitled in 1998, an employee's years
of service as an employee of Samaritan shall be treated as years
of service with the Company.
VIII.6 No Casualty Losses. The Assets shall not have
suffered any destruction or damage by fire, explosion, crash or
other casualty which has materially impaired the operation of the
Assets or otherwise had a Material Adverse Effect.
VIII.7 Certificates of Authorities. Samaritan shall
have furnished to the Company (i) certificates of the Secretary
of State of Arizona, dated as of a date not more than five (5)
days prior to the Closing Date, attesting to the organization,
existence and good standing of Samaritan, (ii) a copy, certified
by the Secretary of State of Arizona as of a date not more than
twenty (20) days prior to the Closing Date, of Samaritan's
Certificate of Incorporation and all amendments thereto, (iii) a
copy, certified by the Secretary of Samaritan, of the Bylaws of
Samaritan, as amended and in effect at the Closing Date, and (iv)
a copy, certified by an authorized officer of Samaritan, of
resolutions duly adopted by the Board of Directors of Samaritan
duly authorizing the transactions contemplated in this Agreement.
VIII.8 Litigation. At the Closing Date, there shall not
be pending or threatened any litigation in any court or any
proceeding before any Agency, (i) in which it is sought to
restrain, invalidate, set aside or obtain damages in respect of
the consummation of the purchase and sale of the Assets or the
other transactions contemplated hereby, (ii) that could, if
adversely determined, result in any Material Adverse Effect, or
(iii) as a result of which, in the reasonable judgment of the
Company, the Company would be deprived of the material benefits
of its ownership of the Assets.
VIII.9 Satisfactory to the Company's Counsel. All
actions, proceedings, instruments and documents required to carry
out this Agreement or incidental thereto and all other related
matters shall have been satisfactory to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain
▇▇▇▇▇▇▇ (A Professional Corporation), New Orleans, Louisiana,
special counsel for the Company.
VIII.10 Opinion of Samaritan's Counsel. The Company
shall have received the opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, counsel for
Samaritan, dated the Closing Date, in form and substance
satisfactory to the Company, with respect to the matters set
forth on Exhibit F.
VIII.11 No Material Adverse Effect. There shall not have
occurred any Material Adverse Effect. The Company shall receive
a certificate from Samaritan, dated as of the Closing Date and in
form and substance satisfactory to the Company, as to the
fulfillment of the conditions set forth in this Section 8.11
VIII.12 Consents. Samaritan shall have obtained all
necessary orders, approvals, estoppel certificates or consents of
third parties and Agencies, including, without limitation, any
orders, approvals, certificates or consents deemed necessary by
counsel to the Company that shall be required for Samaritan to
consummate the transactions contemplated hereby, including,
without limitation, consents to the assignment of the Assumed
Liabilities listed on Schedule 1.1A.
VIII.13 Financing. The Company shall have obtained
funds, in an amount and on terms satisfactory to the Company,
necessary to pay the Cash Consideration to Samaritan.
VIII.14 Service Agreement. Samaritan shall have executed
and delivered to the Company a Service Agreement in substantially
the form attached hereto as Exhibit G (the "Service Agreement").
VIII.15 Further Assurances. Samaritan shall take all
such further action as may be reasonably requested by the Company
in order to effectuate the consummation of the transactions
contemplated by this Agreement. If the Company shall reasonably
determine that any further conveyance, assignment or other
document or any further action is necessary to vest in it full
title to the Assets, Samaritan shall cause the appropriate
officers to execute and deliver all such instruments and take all
such action as the Company may reasonably determine to be
necessary.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SAMARITAN
The obligations of Samaritan to sell the Assets and to
consummate the other transactions contemplated hereby at Closing
shall be subject to the satisfaction on or prior to the Closing
Date of all of the following conditions, except such conditions
as Samaritan may waive in writing:
IX.1 Representations and Warranties of the Company. All of
the representations and warranties of the Company contained in
this Agreement and in any Schedule or other disclosure in writing
from the Company shall have been true and correct in all material
respects when made, and shall be true and correct in all material
respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been
made on and as of the Closing Date.
IX.2 Covenants of the Company. All of the covenants and
agreements herein on the part of the Company to be complied with
or performed on or before the Closing Date shall have been fully
complied with and performed.
IX.3 Certificate of the Company. There shall be delivered
to Samaritan a certificate dated as of the Closing Date and
signed by the President of the Company to the effect set forth in
Sections 9.1 and 9.2, which certificate shall have the effect of
a representation and warranty made by the Company on and as of
the Closing Date.
IX.4 Certificates of Authorities. The Company shall have
furnished to Samaritan (i) certificates of the Secretary of State
of Louisiana, dated as of a date not more than five (5) days
prior to the Closing Date, attesting to the organization,
existence and good standing of the Company, (ii) copies,
certified by the Secretary of State of Louisiana, as of a date
not more than twenty (20) days prior the Closing Date, of the
Company's Certificate of Incorporation and all amendments
thereto, (iii) a copy, certified by the Secretary of the Company,
of the Bylaws of the Company, as amended and in effect at the
Closing Date, and (iv) copies, certified by authorized officers
of the Company, of resolutions duly adopted by the Board of
Directors of the Company duly authorizing the transactions
contemplated in this Agreement.
IX.5 Satisfactory to Samaritan's Counsel. All actions,
proceedings, instruments and documents required to carry out this
Agreement or incidental thereto and all other related legal
matters shall have been satisfactory to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, counsel
for Samaritan.
IX.6 Opinion of the Company's Counsel. Samaritan shall
have received an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A
Professional Corporation), special counsel for the Company, dated
the Closing Date, in form and substance satisfactory to
Samaritan, with respect to the matters set forth on Exhibit H.
IX.7 Option Agreement. The Company shall have executed and
delivered to Samaritan an Option Agreement in substantially the
form attached hereto as Exhibit I (the "Option Agreement").
IX.8 Consents. The Company shall have obtained all
necessary orders, approvals, estoppel certificates or consents of
third parties and Agencies, including, without limitation, any
orders, approvals, certificates or consents deemed necessary by
counsel to Samaritan that shall be required for the Company to
consummate the transactions contemplated hereby.
ARTICLE X
CLOSING
X.1 Date and Place of Closing. Subject to satisfaction or
waiver of the conditions to the obligations of the parties, the
purchase and sale of the Assets pursuant to this Agreement shall
be consummated at a closing (the "Closing") to be held in the
offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A Professional
Corporation), in New Orleans, Louisiana, or such other place as
mutually agreed to by the parties, at 10:00 a.m., New Orleans,
Louisiana time, but shall be effective as of 11:59 P.M., New
Orleans, Louisiana time, on December 31, 1997, or such other date
as agreed to by the Company and Samaritan (the "Closing Date").
X.2 Samaritan's Performance. At the Closing, concurrently
with performance by the Company of its obligations to be
performed at the Closing:
(a) Conveyances. Samaritan shall execute and deliver
to the Company, in form and substance acceptable to the Company,
(i) a ▇▇▇▇ of Sale and Assignment in substantially the form
attached hereto as Exhibit A conveying to the Company all items
of personalty included among the Assets, (ii) assignments of each
of the third party payor agreements, contracts, leases,
arrangements and commitments listed on Schedule 1.1A and (iii)
all other assignments, endorsements and instruments of transfer
as shall be necessary or appropriate to carry out the intent of
this Agreement and as shall be sufficient to vest in the Company
title to all of the Assets and all right, title and interest of
Samaritan thereto. If requested by the Company, such documents
shall be in a form suitable for recording.
(b) Records. Samaritan shall deliver to the Company
all documents, agreements, reports, books, records and accounts
pertaining specifically to the Assets and the Business that are
in Samaritan's possession.
(c) Certificates. Samaritan shall execute and
deliver to the Company the certificates referred to in
Sections 8.3 and 8.11.
(d) Noncompetition Agreement. Samaritan shall
execute and deliver to the Company the Noncompetition Agreement.
(e) Certain Payments and Agreements. Samaritan shall
have made the payments and delivered the agreement specified in
Section 8.5 above.
(f) Certificates of Authorities. Samaritan shall
deliver to the Company the certificates of authorities referred
to in Section 8.7.
(g) Opinion of Samaritan's Counsel. Samaritan shall
deliver to the Company the opinions of its counsel, dated the
Closing Date, as specified in Section 8.10.
(h) Consents. Samaritan shall deliver to the Company
the consents and approvals required by Section 8.12.
(i) Service Agreement. Samaritan shall deliver to
the Company the Service Agreement.
(j) Allocation of Purchase Price. Samaritan shall
deliver to the Company the Allocation of Purchase Price in the
form of Exhibit D annexed hereto.
(k) Other Actions. Samaritan shall take all such
other steps as may be necessary or appropriate to put the Company
in actual and complete ownership and possession of the Assets.
X.3 The Company's Performance. At the Closing,
concurrently with the performance by Samaritan of its obligations
to be performed at the Closing:
(a) Purchase Price. The Company shall deliver to
Samaritan the Cash Consideration and a certificate representing
1,000 shares of Preferred Stock.
(b) Assumption Agreement. The Company shall execute
and deliver to Samaritan the Assumption Agreement in
substantially the form attached hereto as Exhibit B.
(c) Certificate. The Company shall execute and
deliver the certificate referred to in Section 9.3.
(d) Certificates of Authorities. The Company shall
deliver to Samaritan the certificates of authorities referred to
in Section 9.4.
(e) Opinion of the Company's Counsel. The Company
shall deliver to Samaritan the opinion of its special counsel,
dated the Closing Date, as specified in Section 9.6.
(f) Option Agreement. The Company shall deliver to
Samaritan the Option Agreement.
(g) Covenants. The Company shall deliver to
Samaritan the consents and approvals required by Section 9.8.
X.4 Other Instruments. In addition to the foregoing, the
Company and Samaritan agree as follows:
(a) Further Action by Samaritan. At any time and
from time to time, at or after the Closing, upon request of the
Company, Samaritan shall do, execute, acknowledge and deliver or
shall cause to be done, executed, acknowledged and delivered all
such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may reasonably be required
in order to evidence, vest in and confirm to the Company full and
complete title to, possession of, and the right to use and enjoy,
the Assets.
(b) Further Action by the Company. At any time and
from time to time, at or after the Closing, upon request of
Samaritan, the Company shall do, execute, acknowledge and deliver
all such further acts and assurances as may reasonably be
required in order to better assure and confirm to Samaritan the
assumption by the Company of the obligations to render
performance that are to be assumed by the Company pursuant to
this Agreement.
ARTICLE XI
INDEMNIFICATION AND POST-CLOSING MATTERS
XI.1 Indemnification by Samaritan. Samaritan agrees to
indemnify and hold harmless the Company, the Company's affiliates
and the shareholders, directors, officers, employees,
representatives, agents and attorneys of the Company and its
affiliates from, against, for and in respect of any and all
damages (including, without limitation, amounts paid in
settlement with Samaritan's consent, which may not be
unreasonably withheld), penalties, fines, interest and monetary
sanctions, losses, obligations, debts, liabilities, claims,
deficiencies, costs and expenses, including, without limitation,
reasonable attorneys' fees and other costs and expenses incident
to any suit, action, investigation, claim or proceeding suffered,
sustained, incurred or required to be paid by any of them
(hereinafter referred to collectively as "Company Losses") by
reason of (i) any representation or warranty made by Samaritan in
or pursuant to this Agreement (as amended or supplemented
pursuant to Section 6.3) being untrue or incorrect in any
respect; (ii) any liability arising from or with respect to the
Assets or the employees of Samaritan employed in connection with
the Business as of or prior to the Closing Date; (iii) any
failure by Samaritan to observe or perform its covenants and
agreements set forth in this Agreement; (iv) any failure by
Samaritan to satisfy and discharge the Excluded Liabilities; or
(v) the items described in Schedule 4.10.
XI.2 Indemnification by the Company. The Company agrees to
indemnify and hold harmless Samaritan, its directors, officers,
employees, representatives, agents and attorneys from, against,
for and in respect of any and all damages (including, without
limitation, amounts paid in settlement with the Company's
consent, which may not be unreasonably withheld), penalties,
fines, interest and monetary sanctions, losses, obligations,
debts, liabilities, claims, deficiencies, costs and expenses,
including, without limitation, reasonable attorneys' fees and
other costs and expenses incident to any suit, action,
investigation, claim or proceeding (hereinafter referred to
collectively as "Samaritan's Losses") suffered, sustained,
incurred or required to be paid by Samaritan by reason of (i) any
representation or warranty made by the Company in or pursuant to
this Agreement (as amended or supplemented pursuant to Section
6.1) being untrue or incorrect in any respect, (ii) any liability
arising from or with respect to the Assets after the Closing Date
or (iii) any failure by the Company to satisfy and discharge any
liability or obligation expressly assumed by the Company pursuant
to this Agreement.
XI.3 Notice of Loss. Except to the extent set forth in the
next sentence, a party to this Agreement shall not have any
liability under the indemnity provisions of this Agreement with
respect to a particular matter unless a notice setting forth in
reasonable detail the breach which is asserted has been given to
the Indemnifying Party (as hereafter defined) and, in addition,
if such matter arises out of a suit, action, investigation or
proceeding, such notice is given promptly, but in any event
within thirty (30) days after the Indemnified Party (as hereafter
defined) is given notice of the commencement of the suit, action,
investigation or proceeding. Notwithstanding the preceding
sentence, failure of the Indemnified Party to give notice
hereunder shall not release the Indemnifying Party from its
obligations under this Article XI, except to the extent the
Indemnifying Party is actually prejudiced by such failure to give
notice. For purposes of this Agreement, the party required to
indemnify another party pursuant to this Article XI is referred
to herein as the "Indemnifying Party", and the party entitled to
indemnification pursuant to this Article XI is referred to herein
as the "Indemnified Party."
XI.4 Payment. Claims for indemnification involving the
payment of money by an Indemnifying Party to an Indemnified Party
shall be paid by the Indemnifying Party within 10 days of
notification thereof; claims for indemnification involving
amounts due to third parties shall be promptly paid by the
Indemnifying Party, subject to the Indemnifying Party's right to
defend such third party claim as provided in Section 11.5 below.
XI.5 Right to Defend. Upon receipt of notice of any suit,
action, investigation, claim or proceeding for which
indemnification might be claimed by an Indemnified Party, the
Indemnifying Party shall be entitled to defend, contest or
otherwise protect against such suit, action, investigation, claim
or proceeding at its own cost and expense, and the Indemnified
Party must cooperate in any such defense or other action. The
Indemnified Party shall have the right, but not the obligation,
to participate at its own expense in a defense thereof by counsel
of its own choosing, but the Indemnifying Party shall be entitled
to control the defense unless the Indemnified Party has relieved
the Indemnifying Party from liability with respect to the
particular matter or the Indemnifying Party fails to assume
defense of the matter or the Indemnifying Party has undertaken
such defense but thereafter fails to continue to do so diligently
and in good faith. In the event the Indemnifying Party shall
fail to defend, contest or otherwise protect in a timely manner
against any such suit, action, investigation, claim or proceeding
or the Indemnifying Party has undertaken such defense but
thereafter fails to continue to do so diligently and in good
faith, the Indemnified Party shall have the right, but not the
obligation, to defend, contest or otherwise protect against the
same and make any compromise or settlement thereof and recover
the entire cost thereof from the Indemnifying Party including
reasonable attorneys' fees, disbursements and all amounts paid as
a result of such suit, action, investigation, claim or proceeding
or the compromise or settlement thereof; provided, however, that
the Indemnified Party must send a written notice to the
Indemnifying Party of any such proposed settlement or compromise,
which settlement or compromise the Indemnifying Party may reject,
in its reasonable judgment, within thirty (30) days of receipt of
such notice. Failure to reject such notice within such thirty
(30) day period shall be deemed an acceptance of such settlement
or compromise. The Indemnified Party shall have the right to
effect a settlement or compromise over the objection of the
Indemnifying Party; provided, that if (i) the Indemnifying Party
is contesting such claim in good faith or (ii) the Indemnifying
Party has assumed the defense from the Indemnified Party, the
Indemnified Party waives any right to indemnity therefor. If the
Indemnifying Party undertakes the defense of such matters, the
Indemnified Party shall not, so long as the Indemnifying Party
does not abandon the defense thereof, be entitled to recover from
the Indemnifying Party any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense
thereof other than the reasonable costs of investigation
undertaken by the Indemnified Party with the prior written
consent of the Indemnifying Party.
XI.6 Cooperation. Each of the parties to this Agreement
and each of their affiliates, successors and assigns shall
cooperate with each other in the defense of any suit, action,
investigation, proceeding or claim by a third party and, during
normal business hours, shall afford each other access to their
books and records and employees relating to such suit, action,
investigation, proceeding or claim and shall furnish each other
all such further information that they have the right and power
to furnish as may reasonably be necessary to defend such suit,
action, investigation, proceeding or claim.
XI.7 Limitation on Indemnification. Subject to the last
sentence of this Section 11.7, the liability of Samaritan under
this Agreement shall be limited such that Samaritan shall have no
liability or obligation to the Company under Section 11.1 unless
and until the amount of the Company's Losses incurred by the
Company in the aggregate exceed the sum of $50,000 and then
Samaritan shall be responsible for the entirety of the Company's
Losses (and not merely the portion of the Company's Losses
exceeding $50,000). The liability of the Company under this
Agreement shall be limited such that the Company shall have no
liability or obligation to Samaritan under Section 11.2 unless
and until the amount of Samaritan's Losses incurred by Samaritan
in the aggregate exceed the sum of $50,000 and then the Company
shall be responsible for the entirety of Samaritan's Losses (and
not merely the portion of Samaritan's Losses exceeding $50,000).
The limitation on the indemnification obligations set forth in
this Section 11.7 shall not apply to any inaccuracy in or breach
of the Specified Representations or any covenant or obligation to
be performed after the Closing.
XI.8 Survival of Representations and Covenants. The
representations, warranties, covenants and obligations of each
party shall survive the Closing to the extent provided in this
Section 11.8. The Specified Representations (as defined below)
and any covenants or obligations to be performed after the
Closing shall survive and continue indefinitely. All other
representations and warranties (as well as covenants and
obligations to be performed prior to the Closing Date) of the
parties shall terminate on the later to occur of (i) the fourth
anniversary of the date of the Closing or (ii) the expiration of
the applicable statute of limitation period or periods applicable
to the warranties, representations, covenants or agreements. For
purposes of this Agreement, "Specified Representations" shall
mean the representations and warranties set forth in Sections
3.2, 4.2, 4.7, 4.10 and 4.18.
XI.9 Non-exclusivity of Indemnification Remedies. The
indemnification remedies and other remedies provided in this
Article XI shall not be deemed to be exclusive. Accordingly, the
exercise by any person or entity of any of its rights under this
Article XI shall not be deemed to be an election of remedies and
shall not be deemed to prejudice, or to constitute or operate as
a waiver of, any other right or remedy that such person or entity
may be entitled to exercise (whether under this Agreement, under
any other agreement, under any statute, rule or other legal
requirement, at common law, in equity or otherwise).
XI.10 Interest. Any party that is required to indemnify any
other party pursuant to this Article XI with respect to any
matter set forth in Article XI shall also be required to pay such
other person or entity interest on the amount of the indemnity
award at a floating rate equal to the rate of interest publicly
announced by Hibernia National Bank, New Orleans, Louisiana, from
time-to-time as its prime base or reference rate plus 3%, except
to the extent interest may have been included in the amount of
the indemnity awarded.
XI.11 Right to Require Cure of Breach. Without limiting the
generality of anything contained in Section 11.1, if there is any
inaccuracy in, breach of or failure to comply with any
representation, warranty, covenant or agreement made by
Samaritan, then Samaritan shall be obligated, in addition to its
other obligations under this Article XI, to take such other
actions as the Company in good faith may request for purposes of
causing such inaccuracy, breach or failure to be corrected, cured
and eliminated.
ARTICLE XII
TERMINATION
XII.1 Termination. This Agreement may be terminated and
abandoned at any time on or prior to the Closing Date:
(a) By the consent in writing of the Company and
Samaritan;
(b) By the Company, if any of the material conditions
to the obligations of the Company contained herein shall not have
been satisfied or, if unsatisfied, waived by the Company as of
the Closing Date;
(c) By Samaritan, if any of the material conditions
to the obligations of Samaritan contained herein shall not have
been satisfied or, if unsatisfied, waived by Samaritan as of the
Closing Date;
(d) By the Company or Samaritan, if the Closing shall
not have occurred by January 31, 1998;
(e) By a party hereto, in the event of a breach by
the other party (a) of any covenant or agreement contained herein
if such breach results in a material increase in the cost of the
non-breaching party's performance of this Agreement or (b) of any
representation or warranty herein if the facts constituting such
breach reflect a material and adverse change in the financial
condition, results of operations, business, or prospects taken as
a whole, of the breaching party, which in either case cannot be
or is not cured within sixty (60) days after written notice of
such breach is given to the party committing such breach;
(f) By the Company, upon the occurrence of any
Material Adverse Effect;
(g) By the Company, within thirty (30) days after the
date hereof, if its due diligence review of the Business or
Assets results and/or discloses material liabilities, obstacles
to the Company's continuation of the Business or other
circumstances that are disclosed in this Agreement or the
Schedules hereto and that, in the good faith judgment of the
Company, materially alter the economic basis for, or feasibility
of, the transactions contemplated by this Agreement.
XII.2 No Further Force or Effect. In the event of
termination and abandonment of this Agreement pursuant to the
provisions of Section 12.1, this Agreement shall be of no further
force or effect, except for Sections 6.3, 7.1 and 13.1, which
shall not be affected by termination of this Agreement.
ARTICLE XIII
MISCELLANEOUS
XIII.1 Expenses. Each party hereto shall bear all
expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby, including the fees,
disbursements and expenses of its legal counsel and auditors.
XIII.2 Entire Agreement. This Agreement (including the
exhibits and schedules hereto) constitutes the entire agreement
and supersedes all prior agreements and understandings, both
written and oral, between the parties hereto with respect to the
subject matter hereof, and no party shall be liable or bound to
the other in any manner by any representations or warranties not
set forth herein.
XIII.3 Publicity. No party hereto shall issue any
press release or make any public statement, in either case
relating to or in connection with or arising out of this
Agreement or the matters contained herein, without obtaining the
prior written approval of the other parties hereto to the content
and manner of presentation and publication thereof, which consent
shall not be unreasonably withheld or delayed; provided, however,
that the parties shall be entitled, following reasonable prior
written notice to the other party, to issue such press releases
and make such public statements as are, in the opinion of its
legal counsel, required by applicable law.
XIII.4 Successors and Assigns. This Agreement and the
rights of the parties hereunder may not be assigned by either
party hereto without the prior written consent of the other party
hereto, which shall be given or withheld in such party's sole
discretion, and the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any
party, other than the parties and their respective affiliates and
the successors and assigns of the parties and their respective
affiliates, any rights, remedies, obligations or liabilities
under or by reason of such agreements.
XIII.5 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall constitute the
same instrument.
XIII.6 Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience of
reference only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
XIII.7 Use of Certain Terms. As used in this Agreement,
the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular paragraph, subparagraph or other subdivision.
XIII.8 Modification and Waiver. Any of the terms or
conditions of this Agreement may be waived in writing at any time
by the party which is entitled to the benefits thereof, and this
Agreement may be modified or amended by a written instrument
executed by the parties hereto. No supplement, modification or
amendment of this Agreement shall be binding unless executed in
writing by all of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
XIII.9 Notices. All notices of communication required
or permitted hereunder shall be in writing and may be given by
(a) depositing the same in United States mail, addressed to the
party to be notified, postage prepaid and registered or certified
with return receipt requested, (b) delivering the same in person
to an officer or agent of such party, or (c) telecopying the same
with electronic confirmation of receipt.
(i) If to Samaritan: ▇▇▇▇▇▇ ▇. Zara
Senior Vice President, System Services
Samaritan Health Systems
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Samaritan Health System
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.:(▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Company: Air Evac Services, Inc.
Suite 400
2121 Airline Highway
Metairie, Louisiana 70004-0578
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Petroleum Helicopters, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, Esq.
▇▇▇▇▇▇▇, Fishman, Haygood, Phelps,
Weiss, Walmsley & Casteix, L.P.
47th Floor
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address or counsel as any party hereto shall
specify pursuant to this Section 12.9 from time to time.
XIII.10 Governing Law. This agreement shall be construed
in accordance with the laws of the State of Louisiana (without
giving effect to its choice of laws provisions).
XIII.11 Reformation and Severability. In case any
provision of this Agreement shall be invalid, illegal or
unenforceable, it shall, to the extent possible, be modified in
such manner as to be valid, legal and enforceable but so as to
most nearly retain the intent of the parties, and if such
modification is not possible, such provision shall be severed
from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement
shall not in any way be affected or impaired thereby.
XIII.12 Remedies Cumulative. No right, remedy or
election given by any term of this Agreement shall be deemed
exclusive but each shall be cumulative with all other rights,
remedies and elections available at law or in equity.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be signed in counterparts all as of the date
first above written.
SAMARITAN HEALTH SYSTEM
By:
Printed Name:
Title:
AIR EVAC SERVICES, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board and President