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▇▇▇▇▇▇▇▇▇ CONTRIBUTION AGREEMENT
Table of Contents
Page No.
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1. Contribution of Assets; Purchase and Sale of
Membership Interest ........................................................2
1.1 Creation of Subsidiary; Agreement to Contribute;
Purchase and Sale of Membership Interest. .............................2
1.2 Excluded Assets........................................................4
1.3 Contract Assignments...................................................5
1.4 Instruments of Conveyance..............................................6
1.5 Issuance of Membership Interest to Desert Springs;
Working Capital Shortage/Overage.......................................6
1.6 Liabilities Assumed....................................................8
1.7 Liabilities Not Assumed................................................8
1.8 Closing ..............................................................10
2. Representations and Warranties of ▇▇▇▇▇▇▇▇▇ ...............................11
2.1 Existence; Good Standing; Partnership Authority .....................11
2.2 Authorization; Validity and Effect of Agreements......................11
2.3 Subsidiaries..........................................................12
2.4 Capitalization........................................................12
2.5 Records.............................................................. 13
2.6 Financial Statements..................................................13
2.7 Absence of Undisclosed Liabilities ...................................13
2.8 Absence of Certain Changes or Events Since the
Date of the ▇▇▇▇▇▇▇▇▇ Balance Sheet ..............................13
2.9 Taxes.................................................................15
2.10 Real Property.........................................................16
2.11 Title to Property and Assets; Sufficiency of
Facilities Assets.....................................................18
2.12 Condition of Property.................................................18
2.13 List of Contracts and Other Data......................................19
2.14 No Breach or Default..................................................20
2.15 Labor Controversies...................................................21
2.16 Litigation............................................................21
2.17 Patents; Trademarks, Etc..............................................22
2.18 Licenses; Permits; Authorizations.....................................22
2.19 Compliance with Applicable Law;
Environmental Laws....................................................22
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2.20 Employee Benefit Plans; Employees and Employee
Relations.............................................................25
2.21 Adverse Agreements; No Adverse Change.................................26
2.22 Trade Notes and Accounts Receivable; Trade Accounts
Payable; Prepaid Contracts............................................26
2.23 Inventories and Supplies..............................................27
2.24 Illegal Payments......................................................27
2.25 Insurance Policies....................................................27
2.26 Professional Staff, Medicare, Medicaid and
Other Health Care Programs............................................28
2.27 UHS Facility Surveys..................................................39
2.28 Related Party Transactions............................................39
2.29 No Brokers............................................................30
2.30 No Misrepresentation or Omission......................................30
3. Representations and Warranties of Desert Springs...........................39
3.1 Existence; Good Standing; Corporate Authority .......................39
3.2 Authorization; Validity and Effect of Agreements......................39
3.3 No Brokers............................................................31
4. Covenants of the ▇▇▇▇▇▇▇▇▇ and Desert Springs .............................33
4.1 Access to UHS Facilities and Additional
Information...........................................................32
4.2 Operations.......................................................... 332
4.3 Negative Covenants....................................................33
4.4 Governmental Approvals................................................34
4.5 Insurance Ratings.....................................................34
4.6 Employees; Employee Benefit Plans.....................................35
4.7 Further Acts and Assurances...........................................35
4.8 Valley Transaction....................................................35
4.9 Additional Properties and Assets
[Intentionally Omitted]...........................................36
5. Matters Pertaining to the Company..........................................36
5.1 Employee Matters......................................................36
5.2 Further Acts and Assurances...........................................37
6. Conditions of Closing......................................................37
6.1 Conditions of Closing.................................................37
7. Nature and Survival of Representations
and Warranties; Indemnification............................................40
7.1 Events of Default.....................................................40
7.2 Survival of Representations, Etc......................................41
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7.3 Indemnification.......................................................41
7.4 Representation, Cooperation and Settlement............................42
8. Transactions Subsequent to the Closing Date................................42
8.1 Access to Records.....................................................42
8.2 Litigation Cooperation................................................43
9. Termination................................................................44
9.1 Methods of Termination................................................44
9.2 Procedure Upon Termination............................................44
10. Miscellaneous..............................................................44
10.1 Notice...............................................................44
10.2 Execution of Additional Documents....................................46
10.3 Waivers and Amendment................................................46
10.4 Expenses.............................................................47
10.5 Occurrence of Conditions Precedent...................................47
10.6 Confidentiality Obligations; Public Announcements....................47
10.7 Binding Effect; Benefits.............................................48
10.8 Entire Agreement.....................................................48
10.9 Governing Law........................................................48
10.10 Counterparts.........................................................48
10.11 Headings.............................................................48
10.12 Incorporation of Exhibits and Schedules..............................49
10.13 Severability.........................................................49
10.14 Assignability........................................................49
Joinder Agreement - Universal Health Services, Inc.........................51
Joinder Agreement - Quorum Health Group, Inc...............................52
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▇▇▇▇▇▇▇▇▇ CONTRIBUTION AGREEMENT
This Agreement (the "Agreement") is dated this 30th day of January,
1998, by and among ▇▇▇▇▇▇▇▇▇ HOSPITAL MEDICAL CENTER, L.P.,a Delaware limited
partnership formerly known as ▇▇▇▇▇▇▇▇▇ Medical Center, L.P. ("▇▇▇▇▇▇▇▇▇") and
NC-DSH, INC., a Nevada corporation ("Desert Springs")(▇▇▇▇▇▇▇▇▇ and Desert
Springs are sometimes hereinafter referred to collectively as the "Parties" and
individually as a "Party").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇▇ owns all of the right, title and interest in and to
certain assets used to operate ▇▇▇▇▇▇▇▇▇ Hospital Medical Center and certain
related businesses operated by ▇▇▇▇▇▇▇▇▇ in and around Las Vegas, Nevada
(collectively, the "UHS Facilities"); and
WHEREAS, ▇▇▇▇▇▇▇▇▇ desires to operate the UHS Facilities as a limited
liability company pursuant to the Limited Liability Company Act as enacted in
the State of Delaware (the "LLC Act"); and
WHEREAS, pursuant to the terms of this Agreement ▇▇▇▇▇▇▇▇▇ desires to
contribute the UHS Facilities in exchange for a 100% membership interest in such
limited liability company, such membership interest to be subsequently reduced
to a 73.885% membership interest pursuant to the terms of this Agreement; and
WHEREAS, Desert Springs desires to acquire from ▇▇▇▇▇▇▇▇▇, subsequent
to the formation of such limited liability company and the contribution of the
UHS Facilities by ▇▇▇▇▇▇▇▇▇, a 26.115% membership interest in such limited
liability company in exchange for the payment of $23,078,619 to ▇▇▇▇▇▇▇▇▇; and
WHEREAS, the Parties desire to enter into this Agreement for the
purpose of setting forth their respective rights and obligations as hereinafter
set forth.
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NOW, THEREFORE, in consideration of the premises, the provisions and
the respective agreements hereinafter set forth, the Parties, intending to be
legally bound hereby, agree as follows:
1. CONTRIBUTION OF ASSETS; PURCHASE AND SALE OF MEMBERSHIP
INTEREST.
1.1 CREATION OF SUBSIDIARY; AGREEMENT TO CONTRIBUTE; PURCHASE
AND SALE OF MEMBERSHIP INTEREST. On or prior to the Closing Date (as hereinafter
defined) ▇▇▇▇▇▇▇▇▇ shall create ▇▇▇▇▇▇▇▇▇ Hospital Medical Center LLC, a wholly
owned limited liability company (the "Company") pursuant to the LLC Act. Upon
the terms and subject to the conditions set forth in this Agreement, on the
Closing Date, ▇▇▇▇▇▇▇▇▇ shall contribute, convey, assign, transfer and deliver
to the Company all of ▇▇▇▇▇▇▇▇▇'▇ right, title and interest in and to the
Facilities Assets (as defined below), except for the Excluded Assets (as
hereinafter defined), free and clear of all liens, charges, claims, pledges,
security interests and encumbrances of any nature whatsoever (collectively,
"Liens"), except for Permitted Encumbrances (as hereinafter defined).
Immediately following the contribution, conveyance, assignment, transfer and
delivery of the Facilities Assets in accordance with the preceding sentence,
Desert Springs shall purchase from ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇ shall sell and
transfer to Desert Springs, a 26.115% membership interest in the Company, and in
exchange therefore, Desert Springs shall pay and deliver to ▇▇▇▇▇▇▇▇▇, by wire
transfer of immediately available funds to an account or accounts designated by
▇▇▇▇▇▇▇▇▇, the sum of $23,078,619 (the "Desert Springs Payment"). Following the
contribution, conveyance, assignment, transfer and delivery of the Facilities
Assets and the payment and delivery of the Desert Springs Payment as provided in
this Section 1.1, ▇▇▇▇▇▇▇▇▇ shall own a 73.885% membership interest in the
Company and Desert Springs shall own a 26.115% membership interest in the
Company. The "Facilities Assets" shall mean and include all those personal,
tangible and intangible properties, and the real properties and improvements of
▇▇▇▇▇▇▇▇▇ used in connection with the operation of the UHS Facilities as set
forth below, other than the Excluded Assets, including, without limitation,(i)
the going concern value of the UHS Facilities, if any, and (ii) the following:
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(a) all fee or leasehold title to all real property, including
the real property described in Schedule 2.10, which Schedule identifies the
property as fee or leasehold, together with all improvements, buildings and
fixtures located thereon or therein, including the UHS Facilities and all
construction in progress (such real properties owned in fee are hereafter
collectively, the "Real Property");
(b) all equipment, computers, computer hardware and software
(subject to any restrictions by the licensor on the assignment thereof), tools,
supplies, furniture, vehicles and other tangible personal property and assets
owned or leased by ▇▇▇▇▇▇▇▇▇ related to the UHS Facilities as of the date of
this Agreement, as such items may be modified prior to the Closing Date in the
ordinary course of business, and including without limitation those items set
forth on Schedule 1.1(b);
(c) all items of inventory listed on the ▇▇▇▇▇▇▇▇▇ Balance
Sheet (as hereinafter defined), as such items may be modified prior to the
Closing Date in the ordinary course of business;
(d) all patients accounts, notes and other receivables,
whether or not written off, or recorded or not recorded, exclusive of any third
party cost report payables or receivables, ▇▇▇▇▇ cash and those prepaid expenses
usable by the Company;
(e) all financial records located at the UHS Facilities and
all patient, medical staff, research and development, and other records
(including equipment records, medical/ administrative libraries, medical
records, documents, production reports and records, personnel records, catalogs,
books, records, files, equipment logs and operating manuals) located at the UHS
Facilities or necessary for the operation of the UHS Facilities;
(f) all of ▇▇▇▇▇▇▇▇▇'▇ interest in the Assumed Contracts, as
defined in Section 1.3.1;
(g) all licenses, permits and other governmental approvals
(including certificates of need), to the extent assignable, held or used by
▇▇▇▇▇▇▇▇▇ in connection with the
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ownership, development and operations of the UHS Facilities (including any
pending or approved governmental approvals regarding the UHS Facilities);
(h) all marks, names, trademarks, service marks, patents,
patent rights, assumed names, logos and copyrights used in the business of the
UHS Facilities;
(i) the interest in all property, real, personal or mixed,
tangible or, to the extent assignable, intangible, arising or acquired in the
ordinary and regular course of ▇▇▇▇▇▇▇▇▇'▇ business in connection with the UHS
Facilities between the date hereof and the Closing Date;
(j) all insurance proceeds (including applicable deductibles,
copayments or self-insured requirements) arising in connection with damage to
the UHS Facilities occurring prior to the Closing Date, to the extent not
expended for the repair or restoration of the UHS Facilities;
(k) all assets included in the ▇▇▇▇▇▇▇▇▇ Balance Sheet
generally as "inventories", "property, plant or equipment", and
"other assets";
(l) all of ▇▇▇▇▇▇▇▇▇'▇ membership interest in Oasis
Health System LLC (25% of which is owned by ▇▇▇▇▇▇▇▇▇); and
(m) all other property of every kind, character or
description, to the extent assignable, owned by ▇▇▇▇▇▇▇▇▇ and used or held for
use in the business of the UHS Facilities, whether or not reflected on the
Financial Statements (as hereinafter defined) of ▇▇▇▇▇▇▇▇▇, located at the UHS
Facilities or necessary for the operation of the UHS Facilities and whether or
not similar to the things specifically set forth above, except the Excluded
Assets.
Except as expressly set forth in this Agreement, including the
Schedules and Exhibits hereto, all of the Facilities Assets contributed by
▇▇▇▇▇▇▇▇▇ to the Company shall be contributed on an "as is" basis.
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1.2 EXCLUDED ASSETS. The following items are not part
of the contributions contemplated hereunder and are excluded from
the Facilities Assets (collectively, the "Excluded Assets");
(a) all of ▇▇▇▇▇▇▇▇▇'▇ deferred taxes and intercompany
receivables;
(b) personnel records and any other records which ▇▇▇▇▇▇▇▇▇ is
required by law to retain in its possession, but only to the extent such records
are not necessary for the continued operation of the UHS Facilities in the
manner in which they are currently being operated;
(c) all claims for amounts due, or that may become due from
Medicare, Medicaid or any other health care payment intermediary resulting from
cost reports for periods through the Closing Date;
(d) all refunds relating to any federal, state, local
or foreign taxes paid by, or on behalf or for the benefit of ▇▇▇▇▇▇▇▇▇ or, to
the extent they relate to the period prior to the Closing Date, the UHS
Facilities, whether received prior to or after the Closing Date;
(e) any proprietary information contained in ▇▇▇▇▇▇▇▇▇'▇
employee or operation manuals;
(f) ▇▇▇▇▇▇▇▇▇'▇ corporate and financial records; and
(g) cash and cash equivalents.
1.3 CONTRACT ASSIGNMENTS.
1.3.1 ASSIGNMENT OF INTEREST IN CONTRACTS.
Except for intercompany and non-physician employment contracts, on the Closing
Date and upon and subject to the terms and conditions set forth in this
Agreement, ▇▇▇▇▇▇▇▇▇ shall transfer or cause to be transferred and assign or
cause to be assigned to the Company, and the Company shall assume and perform
all of ▇▇▇▇▇▇▇▇▇'▇ interest in (including all rights, benefits and obligations)
all commitments, contracts, leases, licenses, agreements and understandings, and
all outstanding offers or
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solicitations to enter into any of the foregoing, including those described on
Schedule 1.3.1 hereto (the "Assumed Contracts").
1.3.2 CONSENTS TO ASSIGNMENTS. Notwithstanding
anything in this Agreement to the contrary, this Agreement shall not constitute
an agreement to assign or transfer any of the Assumed Contracts or part thereof
or right or benefit arising thereunder or resulting therefrom if an attempted
assignment or transfer thereof, without the consent of a third party thereto,
would constitute a breach thereof or in any way affect the rights of the Company
following the Closing Date. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would affect the rights of the
Company following the Closing Date so that the Company would not in fact receive
all such rights, ▇▇▇▇▇▇▇▇▇ (i) shall cooperate with the Company in its request
in endeavoring to obtain such consent promptly at no cost to the Company, and
(ii) if any such consent is unobtainable, shall cooperate with the Company in
any reasonable arrangement (the "Assignment Substitute") designed to provide the
Company the benefits under any such Assumed Contract or part thereof or any
right or benefit arising thereunder or resulting therefrom, including
enforcement for the benefit of the Company of any and all rights of ▇▇▇▇▇▇▇▇▇
against a third party arising out of the breach or cancellation by such third
party or otherwise. ▇▇▇▇▇▇▇▇▇ shall, to the extent necessary, perform under the
Assignment Substitute without a fee to the Company except the consideration
being tendered hereunder.
1.4 INSTRUMENTS OF CONVEYANCE.
On the Closing Date, ▇▇▇▇▇▇▇▇▇ shall deliver to the Company
such deeds (in the case of the real property and the improvements thereon
described in Schedules 2.10 hereto, a special warranty deed or the equivalent
thereof in use in accordance with local practice), bills of sale, endorsements,
assignments and other good and sufficient instruments of conveyance and
assignment as shall be effective to vest in the Company all of ▇▇▇▇▇▇▇▇▇'▇
right, title and interest in and to the Facilities Assets, free and clear of all
Liens except for the Permitted Encumbrances. Simultaneously with such delivery,
▇▇▇▇▇▇▇▇▇ will take all reasonable additional steps as may be necessary to put
the Company in possession of the Facilities Assets. ▇▇▇▇▇▇▇▇▇ shall pay all
transfer costs, title insurance
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fees, recording fees and transfer or stamp taxes or similar charges payable by
reason of the contribution, conveyance, assignment, transfer and delivery
hereunder of the Facilities Assets.
1.5 ISSUANCE OF MEMBERSHIP INTEREST TO DESERT SPRINGS;
WORKING CAPITAL SHORTAGE/OVERAGE.
1.5.1 On the Closing Date, immediately following the issuance
of the ▇▇▇▇▇▇▇▇▇ membership interest to ▇▇▇▇▇▇▇▇▇ in accordance with Section 1.1
hereof, ▇▇▇▇▇▇▇▇▇ shall sell, transfer and deliver to Desert Springs, and Desert
Springs shall purchase and acquire from ▇▇▇▇▇▇▇▇▇, a 26.115% membership interest
in the Company. Accordingly, in consideration of and subject to the payment of
the Desert Springs Payment by Desert Springs and the receipt by ▇▇▇▇▇▇▇▇▇ of the
full amount of such Desert Springs Payment in immediately available funds as
provided in Section 1.1 hereof, on the Closing Date ▇▇▇▇▇▇▇▇▇ shall cause the
Company to issue a 26.115% membership interest in the Company to Desert Springs,
which 26.115% membership interest in the Company shall be free and clear of all
Liens except for those listed or described on Schedule 1.5 (the "Permissible
Liens").
1.5.2 Within 45 days after the Closing Date, the Parties will
determine the amount of Working Capital (as defined below) contributed to the
Company by ▇▇▇▇▇▇▇▇▇ as of the Closing Date. Desert Springs will pay to
▇▇▇▇▇▇▇▇▇ in cash 26.115% of the amount of the Working Capital. For the sole
purpose of determining the amount to be paid by Desert Springs to ▇▇▇▇▇▇▇▇▇ on
account of Working Capital, Working Capital will be defined as the sum of the
following items that have been contributed to or assumed by the Company, all
valued in accordance with generally accepted accounting principles, consistently
applied (unless otherwise specified):
(a) patient accounts receivable, net of allowances for
contractual adjustments and discounts and bad debts;
(b) plus inventories, based on a physical count at the Closing
Date, priced at latest invoice cost, and including only those items and areas
that have historically been counted;
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(c) plus prepaid expenses, but only to the extent that
they are usable by the Company;
(d) plus other receivables, net of allowances for
uncollectibles;
(e) less trade accounts payable;
(f) less accrued compensation and related taxes thereon and
related liabilities, including accrued vacation, sick leave payable in cash for
reasons other than actual absence, paid time off, or the like;
(g) less other accrued liabilities and expenses;
(h) less the present value (computed using the prime rate as
the discount factor) of remaining payments due under any capitalized lease
included in the Assumed Contracts; and
(i) less any other liabilities assumed by the Company
to the extent such liabilities are to be included on the balance
sheet under generally accepted accounting principles.
Each of the Parties will work together in good faith to agree
on the amount of Working Capital and the amount to be paid by Desert Springs to
▇▇▇▇▇▇▇▇▇ pursuant to this Section 1.5.2. No later than 45 days after the
Closing Date, the Parties hereto shall prepare the "Final Closing Statement"
reflecting the items listed above determined as set forth above. If the Parties
are unable to agree on the Final Closing Statement within the 45 day period,
they shall appoint Coopers & ▇▇▇▇▇▇▇, a firm of independent certified public
accounts of recognized national standing (the "Accountants"), to make such
determination, which determination shall be final and binding on the Parties
hereto for the purposes of this Agreement, and ▇▇▇▇▇▇▇▇▇ and Desert Springs
shall each pay one-half of the fee. Each Party represents that the Accountants
are not its auditor. Upon determination of the Final Closing Statement, whether
by agreement of the Parties or by determination of the Accountants, Desert
Springs shall immediately pay to ▇▇▇▇▇▇▇▇▇ in cash 26.115% of the amount of the
Working Capital.
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1.6 LIABILITIES ASSUMED. In further consideration for the
contribution of the Facilities Assets, on and as of the Closing Date, subject to
the exclusion of liabilities described in Section 1.7 below, the Parties
acknowledge and agree that the Company, following the contribution of the
Facilities Assets, shall assume and agree to pay, perform and discharge the
following liabilities (collectively, the "Assumed Liabilities"):
(a) all current liabilities of ▇▇▇▇▇▇▇▇▇ (except for the
current portion of long term debt, accrued interest, pension plan liabilities,
employer benefit plan liabilities, intercompany liabilities and self-insurance
costs);
(b) all obligations under the Assumed Contracts and
Section 4.6 hereof; and
(c) such other liabilities of ▇▇▇▇▇▇▇▇▇ which the Company
agrees in writing at or prior to the Closing Date that the Company will assume,
which liabilities are listed on Schedule 1.6(c).
1.7 LIABILITIES NOT ASSUMED. The Company, following the
contribution of the Facilities Assets, shall assume only those liabilities and
obligations specified in Section 1.6 above. Without limiting the generality of
the foregoing sentence, the Company shall not assume and ▇▇▇▇▇▇▇▇▇ shall retain
and be responsible for the following obligations and liabilities to the extent
they relate to ▇▇▇▇▇▇▇▇▇ (each reference in this Section 1.7 to ▇▇▇▇▇▇▇▇▇ shall
include ▇▇▇▇▇▇▇▇▇ and its affiliates):
(a) any and all obligations for the payment of any long term
debt existing at the Closing Date (including the current portion thereof)
relating to ▇▇▇▇▇▇▇▇▇ and whether or not set forth on the ▇▇▇▇▇▇▇▇▇ Balance
Sheet;
(b) any and all accrued interest payable by ▇▇▇▇▇▇▇▇▇
in respect of periods through the Closing Date;
(c) liabilities or obligations of ▇▇▇▇▇▇▇▇▇ arising under
Medicare, Medicaid, Blue Cross or other comparable third party payor programs
(the "Government Reimbursement Programs") for periods through the Closing Date
and as a result of the
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consummation of the transactions contemplated herein, including reimbursement
recapture or any other adjustments;
(d) liabilities or obligations for Taxes (as
hereinafter defined) of ▇▇▇▇▇▇▇▇▇ in respect of periods prior to
the Closing Date or resulting from the consummation of the
transactions contemplated;
(e) liabilities under any Employee Benefit Plan (as
hereinafter defined) of ▇▇▇▇▇▇▇▇▇; and liabilities for any and all EEOC, wage
and hour, unemployment compensation, employee medical or workers' compensation
claims relating to periods prior to the Closing Date;
(f) except as provided in Section 4.6 below, liabilities or
obligations for any and all workers' compensation, health, disability or other
benefits due to or for the benefit of any employees of ▇▇▇▇▇▇▇▇▇ (or their
covered dependents);
(g) liabilities arising out of or in connection with claims,
litigations or proceedings described in Section 2.16, and claims, litigations or
proceedings (whether instituted prior to or after the Closing Date) for acts or
omissions which allegedly occurred prior to or at the Closing Date;
(h) liabilities attributable to legal, accounting or
brokerage fees, and similar costs incurred by ▇▇▇▇▇▇▇▇▇ related
to the contribution of any of the Facilities Assets;
(i) except as expressly set forth herein, liabilities
arising from ▇▇▇▇▇▇▇▇▇'▇ assignment and the Company's assumption
of the Assumed Liabilities;
(j) liabilities for the payment by ▇▇▇▇▇▇▇▇▇ of any
deductibles, copayments or other self-insurance requirements
relating to events occurring prior to the Closing Date;
(k) any and all liabilities respecting any intercompany
transactions of ▇▇▇▇▇▇▇▇▇, whether or not such transaction relates to the
provision of goods and services, tax sharing arrangements, payment arrangements,
intercompany charges or balances, or the like;
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(l) except for Assumed Liabilities, any and all actual or
contingent liabilities or obligations of or demands upon ▇▇▇▇▇▇▇▇▇ arising from
acts or omissions of ▇▇▇▇▇▇▇▇▇ (actual or alleged) prior to the Closing Date;
(m) all liabilities arising out of or in connection
with the existence of Materials of Environmental Concern (as hereinafter
defined) upon, about, beneath or migrating to or from any of the Real Property
on or before the Closing Date or the existence on or before the Closing Date of
any Environmental Claim (as hereinafter defined) or any violation of any
Environmental Laws (as hereinafter defined) pertaining to such Real Property or
the operation of the UHS Facilities by ▇▇▇▇▇▇▇▇▇ or any other business operated
therefrom;
(n) any liability of ▇▇▇▇▇▇▇▇▇ which allegedly occurred out of
any negligence, medical malpractice or similar acts or omissions which allegedly
occurred prior to the Closing Date;
(o) sales, income, franchise, use and other taxes payable with
respect to the business or operations of ▇▇▇▇▇▇▇▇▇ through the Closing Date or
the transactions contemplated hereby;
(p) except as expressly set forth herein, liabilities for
rights or remedies claimed by third parties under any of the Assumed Liabilities
which broaden or vary the rights and remedies such third parties would have had
against ▇▇▇▇▇▇▇▇▇ if the contribution of the Facilities Assets were not to
occur; and
(q) liabilities on account of those liens or mortgages
set forth on Schedule 1.7(g).
With respect to Subsection 1.7(m) above, for a period of five
(5) years from and after the Closing Date, in the event that it cannot be proven
that the event giving rise to a Subsection 1.7(m) liability occurred after the
Closing Date then it shall be presumed to have occurred on or before the Closing
Date and ▇▇▇▇▇▇▇▇▇ can rebut this presumption with a Phase I environmental
study. From and after five (5) years following the Closing Date, the presumption
shall shift and thereafter all events giving rise to a Subsection 1.7(m)
liability shall be presumed to have occurred from and after the Closing Date.
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1.8 CLOSING. The closing of the transactions provided herein
will be accomplished by means of overnight courier delivery and facsimile
transmission or by such other method as may be agreed upon by the Parties. Upon
contribution of the Facilities Assets which shall be effective as of 11:59 p.m.
Pacific Time on January 31, 1998, payment of the Desert Springs Payment and the
issuance of membership interests to Desert Springs in accordance with Section
1.5 hereof, the closing shall be deemed to be effective as of 12:01 a.m. Pacific
Time on February 1, 1998. Such date of effectiveness of closing is herein
referred to as the "Closing Date". On the date of effectiveness of the Closing,
▇▇▇▇▇▇▇▇▇ shall receive good funds in the amount of the Desert Springs Payment
if a business day, otherwise the parties shall agree on whether it shall be
prior or after such effectiveness. The parties have agreed that if the Closing
is to be effective February 1, 1998, the parties shall use their best efforts to
close the transaction sufficiently so that the funds shall be wired on January
30, 1998. In the event that the Desert Springs Payment is received by ▇▇▇▇▇▇▇▇▇
before or after the date of the effectiveness of the Closing, the Desert Springs
Payment shall be reduced or increased on a per diem basis, based on the prime
rate as reported in The Wall Street Journal five (5) business days before the
actual date of closing.
2. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇
hereby represents, warrants and agrees as follows:
2.1 EXISTENCE; GOOD STANDING; PARTNERSHIP AUTHORITY. ▇▇▇▇▇▇▇▇▇
is a Delaware limited partnership duly formed, validly existing and in good
standing under the laws of the State of Delaware. ▇▇▇▇▇▇▇▇▇ has all requisite
partnership power and authority to own its properties and carry on its business
as now conducted. The copies provided to Desert Springs of the Agreement of
Limited Partnership of ▇▇▇▇▇▇▇▇▇, as amended to date, are complete and correct
and presently in effect. ▇▇▇▇▇▇▇▇▇ has not failed to qualify in any jurisdiction
in which property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary and where the failure to so
qualify would have a material adverse effect on it. ▇▇▇▇▇▇▇▇▇ is not in default
with respect to any order of any court, governmental authority or arbitration
board or tribunal to which it is a party or is subject.
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2.2 AUTHORIZATION; VALIDITY AND EFFECT OF AGREEMENTS. The
execution, delivery and performance of this Agreement and all agreements and
documents contemplated hereby by ▇▇▇▇▇▇▇▇▇ and the consummation by it of the
transactions contemplated hereby, have been duly and effectively authorized by
all necessary partnership action on its part. This Agreement constitutes, and
all agreements and documents contemplated hereby when executed and delivered
pursuant hereto will constitute, the valid and legally binding obligations of
▇▇▇▇▇▇▇▇▇, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws of general application now or
hereafter in effect relating to the enforcement of creditors' rights generally
and except that remedies of specific performance, injunction and other forms of
equitable relief are subject to certain tests of equity jurisdiction, equitable
defenses and the discretion of the court before which any proceeding therefor
may be brought. Except as set forth on Schedule 2.2 hereto, the execution and
delivery of this Agreement by ▇▇▇▇▇▇▇▇▇ does not, and the consummation of the
transactions contemplated hereby will not, except to the extent the same would
not have a material adverse effect on it: (i) require the consent, approval or
authorization of any person, corporation, partnership, joint venture or other
business association or any governmental, public authority or accrediting body;
(ii) violate, with or without the giving of notice or the passage of time, or
both, any provisions of law or statute or any rule, regulation, order, award,
judgment, or decree of any court or governmental authority applicable to such
Party;(iii) result in the breach or termination of any term or provision of, or
constitute a default under, or result in the acceleration of or entitle any
party to accelerate (whether after the giving of notice or the lapse of time or
both) any obligation under, or result in the creation or imposition of any lien,
charge, pledge, security interest or other encumbrance upon any part of the
property of ▇▇▇▇▇▇▇▇▇ pursuant to any provision of, any order, judgment,
arbitration award, injunction, decree, indenture, mortgage, lease, license,
lien, or other agreement or instrument to which ▇▇▇▇▇▇▇▇▇ is a party or by which
it is bound, or violate any provision of the Agreement of Limited Partnership of
▇▇▇▇▇▇▇▇▇, as amended to the date of this Agreement; or (iv) result in any
suspension, revocation, impairment, forfeiture or nonrenewal of any License (as
hereinafter defined) relating to the ownership and operation
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by ▇▇▇▇▇▇▇▇▇ of health care facilities which are the subject of the transactions
contemplated hereby, subject to the Company obtaining new Licenses for its
operation of the UHS Facilities.
2.3 SUBSIDIARIES. Except as set forth on Schedule 2.3,
▇▇▇▇▇▇▇▇▇ does not own, directly or indirectly, any debt or equity securities
issued by any other partnership or corporation, or any interest in any
partnership, joint venture or other business enterprise. During the period
between the effective time of its creation and the effective time of the
transactions described in Section 1.1 above, the Company shall not have
conducted any business or incurred any liabilities.
2.4 CAPITALIZATION. Schedule 2.4 sets forth a list of the
general and limited partnership interests issued and outstanding and owned of
record and beneficially by each of the partners in ▇▇▇▇▇▇▇▇▇. Except as set
forth on Schedule 2.4, there are no outstanding or authorized rights, warrants,
options, subscriptions, agreements or commitments of any character giving anyone
any right to require ▇▇▇▇▇▇▇▇▇ to sell or issue any partnership interests or
other securities, nor are there any voting trusts or other agreements or
understandings with respect to the partnership interests in ▇▇▇▇▇▇▇▇▇. On and as
of the date of payment of the Desert Springs Payment, ▇▇▇▇▇▇▇▇▇ shall be the
owner of 100% of the outstanding membership interests in the Company, free and
clear of all Liens other than the Permissible Liens.
2.5 RECORDS. The books, records and work papers of ▇▇▇▇▇▇▇▇▇
will be made available to Desert Springs for inspection prior to the Closing
Date and (a) will contain the minutes of all meetings of partners and actions
taken by partners, (b) have been maintained in accordance with good business
practice and (c) accurately reflect the basis for the financial condition and
results of operations of ▇▇▇▇▇▇▇▇▇ set forth in the financial statements
referred to in Section 2.6 hereof except to the extent the same would not have a
material adverse effect on it.
2.6 FINANCIAL STATEMENTS. ▇▇▇▇▇▇▇▇▇ has furnished true,
complete and correct copies of its unaudited balance sheet as of December 31,
1997 and related statements of income and operations for the period then ended
(the "▇▇▇▇▇▇▇▇▇ Balance
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Sheet, or sometimes the "Financial Statements"). Copies of the Financial
Statements are attached hereto as Schedule 2.6. The Financial Statements of
▇▇▇▇▇▇▇▇▇ are in accordance with its books and records, are complete and correct
in all material respects, fully and fairly set forth the financial condition of
▇▇▇▇▇▇▇▇▇ as of the dates indicated, and the results of its operations for the
periods indicated, and have been prepared in accordance with generally accepted
accounting principles consistently applied, except as otherwise stated therein
and except for normal year-end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse) and the absence of
notes.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. ▇▇▇▇▇▇▇▇▇ has no
liabilities or obligations of any nature, either accrued, absolute, contingent
or otherwise, which are not reflected or provided for in the Financial
Statements, except (i) those arising after the date of the ▇▇▇▇▇▇▇▇▇ Balance
Sheet which are in the ordinary course of business, in each case in normal
amounts and none of which is materially adverse, and (ii) as and to the extent
specifically described in Schedule 2.7 hereof. Except as set forth on Schedule
2.7, ▇▇▇▇▇▇▇▇▇ does not know and has no reasonable grounds to know of any
reasonable basis, as of the date hereof, for assertion against it of any claim
or liability of any nature in excess of $25,000 individually or $50,000 in the
aggregate not fully disclosed in the ▇▇▇▇▇▇▇▇▇ Balance Sheet.
2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS SINCE THE DATE OF THE
▇▇▇▇▇▇▇▇▇ BALANCE SHEET. Except as otherwise disclosed in Schedule 2.8, since
the date of the ▇▇▇▇▇▇▇▇▇ Balance Sheet ▇▇▇▇▇▇▇▇▇ has not, except to the extent
the same would not have a material adverse effect on it:
2.8.1 incurred any obligation or liability
(fixed, contingent or otherwise), except normal trade or business obligations
incurred in the ordinary course of business and consistent with past practice,
none of which is materially adverse, and except in connection with this
Agreement and the transactions contemplated hereby;
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2.8.2 discharged or satisfied any lien, security
interest or encumbrance or paid any obligation or liability (fixed, contingent
or otherwise), including intercompany obligations and liabilities except in the
ordinary course of business;
2.8.3 mortgaged, pledged or subjected to any Lien
any of its assets or properties (other than mechanic's, materialman's and
similar statutory liens arising in the ordinary course of business and purchase
money security interests arising as a matter of law between the date of delivery
and payment);
2.8.4 sold, assigned, conveyed, transferred,
leased or otherwise disposed of, or agreed to sell, assign, convey, transfer,
lease or otherwise dispose of any of its assets or properties except for a fair
consideration in the ordinary course of business and consistent with past
practice or, except in the ordinary course of business and consistent with past
practice, acquired any assets or properties;
2.8.5 canceled or compromised any debt or claim
in excess of $2,500 for any individual debt or claim or $10,000 in the aggregate
except patient account bad debt which is addressed in Section 2.8.14;
2.8.6 waived or released any rights of material
value;
2.8.7 made or granted any wage or salary increase
applicable to any group or classification of employees generally except merit
increases and bonuses pursuant to prior personnel practices, entered into any
employment contract with, or made any loan to, or entered into any material
transaction of any other nature with any partner, officer or employee, been the
subject of any material labor dispute or, to its knowledge, threat thereof;
2.8.8 entered into any transaction or contract
(other than Immaterial Contracts as defined in Section 2.13.4), except (i)
contracts listed on Schedule 2.8 and (ii) this Agreement and the transactions
contemplated hereby;
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2.8.9 suffered any casualty loss or damage
(whether or not such loss or damage shall have been covered by insurance) which
affects in any material respect its ability to conduct business;
2.8.10 authorized or effected any amendment or
restatement of its Agreement of Limited Partnership, or taken any
steps looking toward its dissolution or liquidation;
2.8.11 suffered any material adverse change in
its operations, earnings, assets, liabilities, properties or business or in its
condition, financial or otherwise, other than changes in the general market
conditions and prospects for the UHS Facilities;
2.8.12 made capital expenditures or entered into
any commitment therefore which, in the aggregate, exceed
$500,000;
2.8.13 suffered any material adverse change in
its relations with, or any material loss or, to its knowledge, material adverse
threatened loss of any of its material suppliers, managed care contracts, or
Medicare or Medicaid contracts;
2.8.14 written off as uncollectible any accounts
receivable or trade notes in excess of reserves; or
2.8.15 introduced any material change with
respect to the operation of its business, including its method of
accounting.
2.9 TAXES. Except as set forth in Schedule 2.9, ▇▇▇▇▇▇▇▇▇ (i)
has duly and timely filed or caused to be filed all federal, state, local and
foreign tax returns and reports of "Taxes" (as hereinafter defined) required to
be filed by it prior to the date of this Agreement which relate to it or with
respect to which it or its assets or properties are liable or otherwise in any
way subject, (ii) has paid or fully accrued for all Taxes, interest, penalties,
assessments and deficiencies shown to be due and payable on such returns and
reports (which Taxes, interest, penalties, assessments and deficiencies are all
the Taxes,
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interest, penalties, assessments and deficiencies due and payable under the laws
and regulations pursuant to which such returns were filed), and (iii) has
properly accrued for all such Taxes accrued in respect of it or its assets and
properties for periods subsequent to the periods covered by such returns. Except
as set forth in Schedule 2.9, no deficiency in payment of taxes for any period
has been asserted by any taxing body and remains unsettled at the date of this
Agreement. Such Party has made all withholdings of Taxes required to be made
under all applicable United States, state and local tax regulations and such
withholdings have either been paid to the respective governmental agencies or
set aside in accounts for such purpose or accrued, reserved against and entered
upon the books of such Party. As used herein, the term "Tax" or "Taxes" means
any federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Internal Revenue Code ("Code") Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum or
estimated tax, assessment, charge, levy or fee of any kind whatsoever, which are
due or alleged to be due to any taxing authority, whether disputed or not.
2.10 REAL PROPERTY. Except as set forth on Schedule 2.10:
(a) Schedule 2.10 hereto identifies all interests
in real property, including land and improvements held by ▇▇▇▇▇▇▇▇▇ as of the
date hereof, together with the nature of such interest. ▇▇▇▇▇▇▇▇▇ owns fee
simple title to the tracts of Real Property. To the extent that any interest in
Real Property set forth thereon is shared, Schedule 2.10 sets forth the nature
and proportion of the sharing arrangement;
(b) the Real Property comprises all of the real
property associated with or employed or used in the business of
the UHS Facilities;
(c) except as set forth in Schedule 2.10(c), to
the best knowledge of ▇▇▇▇▇▇▇▇▇, no part of the Real Property contains, is
located within or abuts any navigable water or other
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body of water, tideland, wetland, marshland or any other area which is subject
to special state, federal or municipal regulation, control or protection;
(d) such Real Property adjoins dedicated public
roadways and there is access for motor vehicles from the Real
Property to such roadways by valid public or private easements; and, to the best
knowledge of ▇▇▇▇▇▇▇▇▇, there are no conditions existing which could result in
the termination or reduction of the current access from the Real Property to
existing roadways;
(e) all essential utilities (including water,
sewer, electricity and telephone service) are available to the
Real Property;
(f) to the best knowledge of ▇▇▇▇▇▇▇▇▇, the UHS
Facilities and the Real Property and the businesses conducted thereon are in
material compliance with all applicable planning, zoning, land use, public
health, fire safety and building codes and ordinances; the consummation of the
transactions contemplated herein will not result in a violation of any
applicable planning, land use, public health, fire safety, zoning or building
code or ordinance, or the termination of any applicable zoning variances,
conditional use permits, waivers, exemptions or "grandfathering" now existing
with respect to the Real Property; and final, permanent and unconditional
certificates of occupancy and/or use have been duly issued by the applicable
governmental authority having jurisdiction for all buildings located on the Real
Property;
(g) ▇▇▇▇▇▇▇▇▇ has not received actual notice of a
violation of any ordinance or other law, order, regulation or requirement, and
has not received actual notice of condemnation or similar proceedings relating
to any part of the Real Property;
(h) the Real Property is subject only to the
Liens described in Schedule 2.10(h), and on the Closing Date will be subject
only to the Liens described on Schedule 2.10(h) which are not designated therein
as "excluded" and any other Liens approved by the Company in writing on or after
the effective date hereof (the "Permitted Encumbrances");
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(i) ▇▇▇▇▇▇▇▇▇ has not created or may not assert
any rights in respect of any Liens which will interfere with the
Company's use of the Real Property after the Closing Date;
(j) except for those tenants in possession of the
Real Property under contracts described in Schedule 2.10(j), there are no
parties in possession of, or claiming any possession, adverse or not, to or
other interest in, any portion of the Real Property as lessees, tenants at
sufferance, trespassers or otherwise;
(k) with respect to the Real Property, no tenant
is entitled to any rebate, concession or free rent, other than as set forth in
the contract with such tenant; no commitments have been made to any tenant for
repairs or improvements other than for normal repairs and maintenance in the
future or as set forth in the contract with such tenant; and no rents due under
any of the tenant contracts have been assigned or hypothecated to, or encumbered
by, any person, other than pursuant to the encumbrances relating to indebtedness
to be satisfied on or prior to the Closing Date, or Permitted Encumbrances, as
additional security for the payment thereof;
(l) no part of the Real Property is currently
subject to condemnation, eminent domain or other proceedings for the taking
thereof, and to the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, no condemnation or taking is
threatened or known by ▇▇▇▇▇▇▇▇▇ to be contemplated; and
(m) the improvements to the Real Property are
located entirely within the boundaries of the Real Property and, to ▇▇▇▇▇▇▇▇▇'▇
knowledge, do not materially violate any building set back lines or materially
encroach upon any easements located on the Real Property.
2.11 TITLE TO PROPERTY AND ASSETS; SUFFICIENCY OF
FACILITIES ASSETS.
(a) ▇▇▇▇▇▇▇▇▇ has good and marketable title to
the Facilities Assets (including, without limitation, the properties and assets
reflected in the ▇▇▇▇▇▇▇▇▇ Balance Sheet except any thereof since disposed of
for value in the ordinary course of business) except for the Permitted
Encumbrances, and
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none of such properties or assets is, except as disclosed in the ▇▇▇▇▇▇▇▇▇
Balance Sheet or the Schedules hereto, subject to a contract of sale not in the
ordinary course of business, or, except for Permitted Encumbrances, subject to
any Liens.
(b) Except as described on Schedule 2.11, the
Facilities Assets constitute, in the aggregate, all the properties and assets
necessary for the operation of the UHS Facilities as currently conducted. The
Facilities Assets, together with the Excluded Assets, comprise all of the
following: (i) all assets owned by ▇▇▇▇▇▇▇▇▇, (ii) all assets used in connection
with the UHS Facilities and their related businesses and (iii) all assets owned,
used or operated by any affiliate of ▇▇▇▇▇▇▇▇▇ located within a fifty (50) mile
radius of Las Vegas, Nevada.
2.12 CONDITION OF PROPERTY. All buildings on the Real Property
and all items of tangible personal property, equipment, fixtures and inventories
included within the assets and properties of ▇▇▇▇▇▇▇▇▇ or required to be used in
the ordinary course of its business are being contributed and transferred
pursuant to this Agreement on an "as is, where is" basis with no representations
or warranties express or implied as to their physical condition and WITHOUT ANY
WARRANTIES FROM ANY PARTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
2.13 LIST OF CONTRACTS AND OTHER DATA. Schedule 2.13 sets
forth the following information with respect to the properties and assets of
▇▇▇▇▇▇▇▇▇, other than the Excluded Assets (indicating in each case, where
appropriate, whether or not consent by a third party is required for the
transfer by ▇▇▇▇▇▇▇▇▇ of such properties and assets to the Company):
2.13.1 a description of all real property leased
by ▇▇▇▇▇▇▇▇▇ and all leases of real property to which ▇▇▇▇▇▇▇▇▇
is a party;
2.13.2 a list of all personal property owned of
record or beneficially by ▇▇▇▇▇▇▇▇▇ having a value per item or group of items in
excess of $1,000 and all leases of personal property, licenses, permits,
franchises, concessions,
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certificates of public convenience or the like to which ▇▇▇▇▇▇▇▇▇ is a party;
2.13.3 a list of (i) all United States and
foreign patents, trademarks and trade names, trademark and trade name
registrations, service marks and service ▇▇▇▇ registrations, copyrights and
copyright registrations, unexpired as of the date hereof, all United States and
foreign applications pending on said date for patents, for trademark or trade
name registrations, for service ▇▇▇▇ registrations, or for copyright
registrations, and all trademarks, trade names, service marks, labels and other
trade rights in use on said date, all of the foregoing being owned in whole or
in part as noted thereon on said date by ▇▇▇▇▇▇▇▇▇, (ii) a description of all
action taken by ▇▇▇▇▇▇▇▇▇ to protect all tradenames used by it, and (iii) all
licenses granted by or to ▇▇▇▇▇▇▇▇▇ and all other agreements to which ▇▇▇▇▇▇▇▇▇
is a party, which relate in whole or in part to any items of the categories
mentioned in clause (i) above or to any other proprietary rights, whether owned
by ▇▇▇▇▇▇▇▇▇ or otherwise;
2.13.4 a list of all existing contracts and
commitments to which ▇▇▇▇▇▇▇▇▇ is a party or by which ▇▇▇▇▇▇▇▇▇
or any of its respective properties or assets is bound, except for Immaterial
Contracts. "Immaterial Contracts" shall mean contracts which (i) no party
thereto is a physician, physician group or other referral source to a UHS
Facility, and is not a third party payor contract and is not a real estate lease
and (ii) requires payment by ▇▇▇▇▇▇▇▇▇ of less than $100,000 per year; and
2.13.5 a list of (i) all collective bargaining
agreements, multi-employer pension plans, employment, consulting and separation
agreements, executive compensation plans, bonus plans, incentive compensation
plans, deferred compensation agreements, employee pension plans or retirement
plans, employee profit sharing plans, employee stock purchase and stock option
plans and hospitalization insurance or other plans or arrangements providing for
benefits for employees or former employees of ▇▇▇▇▇▇▇▇▇, and (ii) all
Multiemployer Plans (as defined in ERISA as hereinafter defined) which ▇▇▇▇▇▇▇▇▇
maintains or has maintained or to which ▇▇▇▇▇▇▇▇▇ makes, is
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required to make, has made or has been required to make a contribution.
All documents, rights, obligations and commitments referred to
in this Section 2.13 are, to the best knowledge of ▇▇▇▇▇▇▇▇▇, valid and
enforceable in accordance with their terms for the period stated therein and
there is not under any of them any existing breach, default, event of default or
event which with the giving of notice or lapse of time, or both, would
constitute a default, by ▇▇▇▇▇▇▇▇▇, or, to ▇▇▇▇▇▇▇▇▇'▇ knowledge, by any other
party thereto, nor, except as set forth on Schedule 2.13, has any party thereto
given notice of or made a claim with respect to any breach or default. There are
no existing laws, regulations or decrees, nor to ▇▇▇▇▇▇▇▇▇'▇ knowledge are there
any proposed laws, regulations or decrees, which adversely affect any of such
documents, rights, obligations or commitments. Except as set forth on Schedule
2.13, no part of the business or operations of ▇▇▇▇▇▇▇▇▇ is dependent to any
material extent on any patent, trademark, copyright, or license or any
assignment thereof or any secret processes or formulae. Except as set forth on
Schedule 2.13, none of the rights of ▇▇▇▇▇▇▇▇▇ under such documents, rights,
obligations or commitments is subject to termination or modification as a result
of the transactions contemplated hereby.
2.14 NO BREACH OR DEFAULT. ▇▇▇▇▇▇▇▇▇ is not in default under
any contract to which it is a party or by which it is bound, nor has any event
occurred which, after the giving of notice or the passage of time or both, would
constitute a default under any such contract except as set forth in Schedule
2.14. ▇▇▇▇▇▇▇▇▇ has no reason to believe that the parties to such contracts will
not fulfill their obligations under such contracts in all material respects or
are threatened with insolvency.
2.15 LABOR CONTROVERSIES. Neither ▇▇▇▇▇▇▇▇▇ nor any of its
employees is a party to any collective bargaining agreement except as included
in Schedule 2.13. There are not any controversies pending or, to the knowledge
of ▇▇▇▇▇▇▇▇▇, threatened between ▇▇▇▇▇▇▇▇▇ and any of its employees which might
reasonably be expected to materially adversely affect the conduct of its
business, or any unresolved labor union grievances or unfair labor practice or
labor arbitration proceedings pending or, to the knowledge of ▇▇▇▇▇▇▇▇▇,
threatened relating to its
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business, and to the knowledge of ▇▇▇▇▇▇▇▇▇, there are not any further
organizational efforts presently being made or threatened involving any of the
employees of ▇▇▇▇▇▇▇▇▇. Except as set forth on Schedule 2.15, ▇▇▇▇▇▇▇▇▇ has not
received any notice or claim that it has not complied with any laws relating to
the employment of labor, including any provisions thereof relating to wages,
hours, collective bargaining, the payment of social security and similar taxes,
equal employment opportunity, employment discrimination and employment safety,
or that ▇▇▇▇▇▇▇▇▇ is liable for any arrears of wages or any taxes or penalties
for failure to comply with any of the foregoing.
No person or Party (including, but not limited to, any
governmental agency) has any claim or basis for any action or proceeding,
against ▇▇▇▇▇▇▇▇▇, arising out of any statute, ordinance or regulation relating
to wages, collective bargaining, discrimination in employment or employment
practices or occupational safety and health standards (including, but not
limited to, the Fair Labor Standards Act, Title VII of the Civil Rights Act of
1964, as amended, the Occupational Safety and Health Act, or the Age
Discrimination in Employment Act of 1967 or the Americans With Disabilities Act
of 1990). ▇▇▇▇▇▇▇▇▇ has complied with all laws and regulations with respect to
the determining of independent contractor or employee status.
2.16 LITIGATION. Except as set forth in Schedule 2.16, there
are no claims, actions, suits or proceedings or, to the knowledge of ▇▇▇▇▇▇▇▇▇,
investigations with respect to ▇▇▇▇▇▇▇▇▇, involving claims by or against
▇▇▇▇▇▇▇▇▇ which are pending or, to ▇▇▇▇▇▇▇▇▇'▇ knowledge, threatened against
▇▇▇▇▇▇▇▇▇, at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, or before the internal grievance mechanisms of ▇▇▇▇▇▇▇▇▇. To
▇▇▇▇▇▇▇▇▇'▇ knowledge, no basis for any action, suit or proceeding exists, and
there are no orders, judgments, injunctions or decrees of any court or
governmental agency with respect to which it has been named or to which it is a
party, which directly apply, in whole or in part, to the business of ▇▇▇▇▇▇▇▇▇,
or to any of its assets or properties, or which would result in any material
adverse change in its business.
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2.17 PATENTS; TRADEMARKS, ETC. No patents, trademarks, trade
names, copyrights, registrations or applications are necessary for the conduct
of the business of ▇▇▇▇▇▇▇▇▇ as now conducted, other than those listed in
Schedule 2.13 hereto. Except as described in Schedule 2.13 hereto, all such
patents, trademarks, trade names, copyrights and registrations are in good
standing, are valid and enforceable and are free from any default on the part of
▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ is not a licensor in respect of any patents, trademarks,
trade names, copyrights or registrations or applications therefor. ▇▇▇▇▇▇▇▇▇ is
not in violation of any patent, patent license, trade name, trademark, or
copyright of others. No officer, partner or employee of ▇▇▇▇▇▇▇▇▇ owns, directly
or indirectly, in whole or in part, any patents, trademarks, trade names,
copyrights, registrations or applications therefor or interests therein which
▇▇▇▇▇▇▇▇▇ has used, is presently using, or the use of which is necessary for its
business as now conducted.
2.18 LICENSES; PERMITS; AUTHORIZATIONS. Schedule 2.18 hereto
is a schedule of all rights, approvals, authorizations, consents, licenses,
orders, accreditations, franchises, concessions, certificates and permits of all
governmental agencies, whether United States, state or local, and accrediting
bodies, (collectively, the "Licenses") required by the nature of the business
conducted by ▇▇▇▇▇▇▇▇▇ to permit the continued operation of its business in the
manner in which it was conducted as of the date hereof (indicating in each case
of a License held by ▇▇▇▇▇▇▇▇▇, where appropriate, whether or not the consent by
a third party to the transfer to the Company of such License is required).
▇▇▇▇▇▇▇▇▇ has all Licenses required to permit the operation of its business as
presently conducted; ▇▇▇▇▇▇▇▇▇'▇ business is and has been operated in all
material respects in compliance therewith and all such Licenses are in full
force and effect and no action or claim is pending, nor to the knowledge of
▇▇▇▇▇▇▇▇▇, is threatened to revoke, terminate or declare invalid any of the
foregoing.
2.19 COMPLIANCE WITH APPLICABLE LAW; ENVIRONMENTAL
LAWS.
(a) Except as set forth on Schedule 2.19 hereto,
the conduct of the business of ▇▇▇▇▇▇▇▇▇ does not (i) violate or infringe any
domestic or foreign laws, statutes, rules or
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regulations or any material ordinances, including, without limitation, any of
the foregoing that pertain to or regulate the operation of a hospital, consumer
protection, health and safety or occupational safety matters, or (ii) violate or
infringe any right or patent, trademark, trade name, service ▇▇▇▇, copyright,
know-how or other proprietary right of third parties, the enforcement of which
would adversely affect the business of ▇▇▇▇▇▇▇▇▇ or the value of its properties
or assets.
(b) Neither ▇▇▇▇▇▇▇▇▇ nor, to the knowledge of
▇▇▇▇▇▇▇▇▇, any of its employees, partners and officers in their capacities as
such, have engaged in any activities which are prohibited under any federal
laws, or the regulations promulgated pursuant to such laws or related state or
local laws, statutes or regulations or which are prohibited by rules of
professional conduct, including but not limited to the following: (i) 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; (ii) knowingly
and willfully making or causing to be made any false statement or representation
of a material fact for use in determining rights to any benefit or payment;
(iii) presenting or causing to be presented a claim for reimbursement for
services under Medicare, Medicaid or other state health care programs that is
for an item or service that is known or should be known to be (a) not provided
as claimed, or (b) false or fraudulent; (iv) failing to disclose knowledge by a
claimant 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 intent
to fraudulently secure such benefit or payment; (v) knowingly and willfully
offering, paying, soliciting, or receiving any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind (a) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare, Medicaid or other state
health care program, or (b) 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, Medicaid or other state health care program; (vi) knowingly making a
payment, directly or indirectly, to a physician as an inducement to reduce or
limit necessary services to individuals who are under the
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direct care of the physician and who are entitled to benefits under Medicare,
Medicaid, or other state health care programs; (vii) providing to any person
information that is known or should be known to be false or misleading that
could reasonably be expected to influence the decision when to discharge a
patient from a UHS Facility; (viii) knowingly and willfully making or causing to
be made or inducing or seeking to induce the making of any false statement or
representation (or omitting to state a material fact required to be stated
therein or necessary to make the statement contained therein not misleading) of
a material fact with respect to (a) the conditions or operations of a UHS
Facility in order that the UHS Facility may qualify for Medicare, Medicaid or
other state health care program certification, or (b) information required to be
provided under ss. 1124A of the Social Security Act (42 U.S.C. ss. 1320a-3); or
(ix) knowingly and willfully (a) charging for any Medicaid service money or
other consideration at a rate in excess of the rates established by the state,
or (b) charging, soliciting, accepting or receiving, in addition to amounts paid
by Medicaid, any gift money, donation or other consideration (other than a
charitable, religious or other philanthropic contribution from an organization
or from a person unrelated to the patient) (1) as a precondition of admitting
the patient, or (2) as a requirement for the patient's continued stay in the UHS
Facility.
(c) All Licenses currently held by ▇▇▇▇▇▇▇▇▇
pursuant to the Environmental Laws are identified in Schedule
2.18.
(d) ▇▇▇▇▇▇▇▇▇ is in compliance in all material
respects with all applicable Environmental Laws except as
disclosed in Schedule 2.19.
(e) In regards to the UHS Facilities and the Real
Property, there is no Environmental Claim pending or, to such Party's knowledge,
threatened against the UHS Facilities or the Real Property, or, to ▇▇▇▇▇▇▇▇▇'▇
best knowledge after due inquiry, any other person whose liability for any
Environmental Claim ▇▇▇▇▇▇▇▇▇ has retained or assumed contractually; to
▇▇▇▇▇▇▇▇▇'▇ knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the release, emission,
discharge or disposal of any Materials of Environmental Concern, that could form
the basis of
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any Environmental Claim against ▇▇▇▇▇▇▇▇▇ or against any person whose liability
for any Environmental Claim ▇▇▇▇▇▇▇▇▇ has retained or assumed contractually; and
▇▇▇▇▇▇▇▇▇ has not received any written communication, whether from a
governmental authority or otherwise, that alleges that ▇▇▇▇▇▇▇▇▇ is not in full
compliance with all applicable Environmental Laws.
(f) In regards to the UHS Facilities and the Real
Property, without in any way limiting the generality of the foregoing, (i) all
on-site and off-site locations where ▇▇▇▇▇▇▇▇▇ has stored, disposed or arranged
for the disposal of Materials of Environmental Concern are identified in
Schedule 2.19, (ii) all Contracts dealing with the removal, storage, disposal
and handling of Materials of Environmental Concern are with properly licensed
and registered vendors, (iii) all underground storage tanks, and the capacity
and contents of such tanks, located on the Real Property identified in Schedule
2.19, (iv) except as set forth on Schedule 2.19, there is no asbestos contained
in or forming part of the Real Property, and (v) except as set forth on Schedule
2.19, no polychlorinated biphenyls (PCBs) are used or stored on the Real
Property.
(g) As used herein: (i) "Environmental Claim"
means any written notice by a person alleging potential liability (including
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal injuries
or penalties) arising out of, based on or resulting from, directly or
indirectly, the presence, or release into the environment, of any Materials of
Environmental Concern (as defined below); (ii) "Environmental Laws" means any
and all federal, state, local and foreign laws and regulations (including common
law) relating to pollution or protection of human health or the environment
(including ground water, land surface or subsurface strata), including laws and
regulations relating to emissions, discharges, releases or threatened releases
of Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
recycling, reporting or handling of Materials of Environmental Concern; and
(iii) "Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes (including medical waste), toxic substances,
polychlorinated biphenyls (PCB's), ureaformaldehyde, petroleum and petroleum
products and such other substances,
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materials and wastes which are defined or classified as hazardous or toxic under
any Environmental Laws.
2.20 EMPLOYEE BENEFIT PLANS; EMPLOYEES AND EMPLOYEE
RELATIONS.
2.20.1 Attached hereto is an accurate list
(Schedule 2.20.1) of all "employee welfare benefit plans" and "employee pension
benefit plans" (collectively, "Qualified Plans"), as such terms are defined by
the Employment Retirement Income Security Act of 1974, as amended ("ERISA"), and
any other group employee benefit plan, agreement, arrangement or understanding
maintained for the benefit of ▇▇▇▇▇▇▇▇▇ (the Qualified Plans, together with such
other plans, arrangements and understandings, collectively, the "Employee
Benefit Plans"). To the extent available, complete and genuine copies of the
summary plan descriptions have been provided to Desert Springs, which summary
plan descriptions accurately summarize the material provisions of the Employee
Benefit Plans. Neither ▇▇▇▇▇▇▇▇▇ nor any other members of the Controlled Group
of Corporations (as defined in Section 1563 of the Code) that includes ▇▇▇▇▇▇▇▇▇
contributes to, ever has contributed to, or ever has been required to contribute
to any Multiemployer Plan (as defined in Section 3(37) of ERISA) or has any
liability (including withdrawal liability) under any Multiemployer Plan. There
is no lien, encumbrance or claim of any type on the Facilities Assets or against
▇▇▇▇▇▇▇▇▇ with respect to the Employee Benefit Plans, and ▇▇▇▇▇▇▇▇▇ has not
taken any action, or omitted to take any action, with respect to the Employee
Benefit Plans (or has any knowledge of the same) that would or could be expected
to result in a Lien on the Facilities Assets or against ▇▇▇▇▇▇▇▇▇.
2.20.2 Schedule 2.20.2 sets forth a complete list
(as of the date set forth therein) of names, positions, current annual salaries
or wage rates, and bonus and other compensation arrangements of all full-time
and part-time employees of ▇▇▇▇▇▇▇▇▇.
2.21 ADVERSE AGREEMENTS; NO ADVERSE CHANGE.
(a) ▇▇▇▇▇▇▇▇▇ is not a party to or subject to any
agreement or instrument or subject to any charter or other
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corporate restriction or any judgment, order, writ, injunction, decree or rule
specifically naming ▇▇▇▇▇▇▇▇▇ which adversely affects the business, operations,
properties, assets or conditions, financial or otherwise, of ▇▇▇▇▇▇▇▇▇.
(b) To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge there
has not been any material adverse change in, or development materially adversely
affecting the business, assets, financial position or results of operations of
any of ▇▇▇▇▇▇▇▇▇ since the ▇▇▇▇▇▇▇▇▇ Balance Sheet date.
2.22 TRADE NOTES AND ACCOUNTS RECEIVABLE; TRADE
ACCOUNTS PAYABLE; PREPAID CONTRACTS.
(a) Except as set forth on Schedule 2.22 hereto,
the trade notes and accounts receivable of ▇▇▇▇▇▇▇▇▇ are reflected on the
▇▇▇▇▇▇▇▇▇ Balance Sheet and all trade notes and accounts receivable arising
thereafter and prior to the Closing Date arose and will arise from bona fide
transactions in the ordinary course of business of ▇▇▇▇▇▇▇▇▇, and are (except
for normal claims and allowances which are consistent with past experience of
▇▇▇▇▇▇▇▇▇ and which in the aggregate are not material) current, arose in the
usual and ordinary course of business of ▇▇▇▇▇▇▇▇▇ from arms-length
transactions, are not subject to any defenses, counterclaims or set-offs which
would materially adversely affect such trade notes and accounts receivable, and,
to ▇▇▇▇▇▇▇▇▇'▇ knowledge, are fully collectible, less the applicable allowance
for doubtful accounts. ▇▇▇▇▇▇▇▇▇ has fully performed all obligations with
respect to such trade notes and accounts receivable which it was obligated to
perform prior to the date hereof and Schedule 2.22 sets forth an aging schedule,
as of December 31, 1997, for all such trade notes and accounts receivable.
(b) The trade accounts payable of ▇▇▇▇▇▇▇▇▇
reflected on the ▇▇▇▇▇▇▇▇▇ Balance Sheet and all trade accounts payable arising
thereafter and prior to the Closing Date arose and will arise from bona fide
transactions in the ordinary course of business of ▇▇▇▇▇▇▇▇▇ and were paid or
are not yet due and payable.
(c) Schedule 2.22 hereto sets forth the amounts
and dates of all payments (the "Prepayments") received by
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▇▇▇▇▇▇▇▇▇ which relate to services to be performed by ▇▇▇▇▇▇▇▇▇ subsequent to
the Closing Date, including, without limitation, all such payments expressly
authorized to be made in advance by any of the terms of any contract or
agreement with ▇▇▇▇▇▇▇▇▇.
2.23 INVENTORIES AND SUPPLIES. All inventories and supplies of
▇▇▇▇▇▇▇▇▇, whether or not reflected in the ▇▇▇▇▇▇▇▇▇ Balance Sheet, consist of a
quality and quantity useable and salable in the ordinary course of business,
without discount or reduction, except for obsolete items and items of
below-standard quality, all of which have been written off or written down to
net realizable value in the ▇▇▇▇▇▇▇▇▇ Balance Sheet. All inventories and
supplies not written off are valued at the lower of cost (applied on a first in,
first out basis) or market in accordance with generally accepted accounting
principles. The present quantities of inventory and supplies are not excessive
and are reasonable and consistent with the past inventory and supply practices
of ▇▇▇▇▇▇▇▇▇.
2.24 ILLEGAL PAYMENTS. ▇▇▇▇▇▇▇▇▇ has not, nor to the
knowledge of ▇▇▇▇▇▇▇▇▇, has any of its respective partners, directors or
officers, in their capacity as such, either directly or indirectly, made any
illegal payments to, or provided any illegal benefit or inducement for, any
person pursuant to an action illegal under any federal, state or local law.
2.25 INSURANCE POLICIES. (a) Schedule 2.25 contains a correct
and complete description of all insurance policies of ▇▇▇▇▇▇▇▇▇ covering
▇▇▇▇▇▇▇▇▇ and its employees, agents and assets. Each such policy is in full
force and effect and, to the knowledge of ▇▇▇▇▇▇▇▇▇, is reasonably adequate in
coverage and amount to insure against customarily insured risks to which
▇▇▇▇▇▇▇▇▇ and its employees, businesses, properties and other assets may likely
be exposed in the operation of its business. All premiums with respect to such
insurance policies have been paid on a timely basis, and no notice of
cancellation or termination has been received with respect to any such policy.
To the knowledge of ▇▇▇▇▇▇▇▇▇, and except as set forth on Schedule 2.25, there
are no pending claims against such insurance by ▇▇▇▇▇▇▇▇▇ as to which the
insurers have denied coverage or otherwise reserved rights. Since January 1,
1994, ▇▇▇▇▇▇▇▇▇ has not been refused any insurance with respect to its assets or
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operations, nor has its coverage been limited by any insurance carrier to which
it has applied for any such insurance or with which it has carried insurance.
(b) Schedule 2.25 contains a correct and complete
description of all insurance policies of ▇▇▇▇▇▇▇▇▇ covering the Real Property.
Each such policy is in full force and effect and, to the knowledge of ▇▇▇▇▇▇▇▇▇,
is reasonably adequate in coverage and amount to insure against customarily
insured risks with respect to property of this type. All premiums with respect
to such insurance policies have been paid on a timely basis, and no notice of
cancellation or termination has been received with respect to any such policy.
Except as set forth on Schedule 2.25, there are no pending claims against such
insurance by ▇▇▇▇▇▇▇▇▇ as to which the insurers have denied coverage or
otherwise reserved rights.
2.26 PROFESSIONAL STAFF, MEDICARE, MEDICAID AND OTHER
HEALTH CARE PROGRAMS.
(a) The professional licensed provider staff of
the UHS Facilities consists of the persons whose names and status are set forth
on Schedule 2.26(a) hereto.
(b) Except as set forth on Schedule 2.26(b)
hereto, ▇▇▇▇▇▇▇▇▇ is certified for participation in the Medicare and Nevada
Medical Assistance ("Medicaid") programs, and has a current and valid provider
contract with such programs.
(c) Except as set forth on Schedule 2.26(c)
hereto, ▇▇▇▇▇▇▇▇▇ has timely filed or caused to be timely filed all cost reports
and other reports of every kind whatsoever required by any governmental or other
entity to be made by it with respect to the purchase of services by third-party
purchasers, including but not limited to Medicare and Medicaid programs and
other insurance carriers, and all such reports are complete and accurate in all
material respects. ▇▇▇▇▇▇▇▇▇ has paid or caused to be paid all refunds,
discounts or adjustments which have become due in accordance with said reports
as filed and, except as set forth on Schedule 2.26(c), have not been notified
that there is any further liability now due (whether or not disclosed in any
report heretofore or hereafter made) for any such refund, discount or
adjustment, or any interest or penalties
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accruing with respect thereto. ▇▇▇▇▇▇▇▇▇ has delivered to Desert Springs
complete copies of all of its Medicare and Medicaid cost reports submitted by
▇▇▇▇▇▇▇▇▇ for the two most recent fiscal years.
(d) To the knowledge of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and
its partners, officers, employees or agents (acting in their capacities as
such), have not engaged in any activities which (i) could subject ▇▇▇▇▇▇▇▇▇ or
such person to sanctions under 42 U.S.C. ss. 1320a-7 (other than subparagraph
(b)(7) thereof) or (ii) at the time such activities were engaged in were known
or reasonably could have been known to be prohibited under Federal Medicare and
Medicaid statutes, 42 U.S.C. ss. ss. 1320a-7a and 1320a-7b, or the regulations
promulgated pursuant to such statutes or related state or local statutes or
regulations or which are prohibited by rules of professional conduct.
2.27 UHS FACILITY SURVEYS. True and complete copies of any and
all licensure survey reports and any and all Medicare and/or Medicaid and JCAHO
or other accreditation survey reports issued within the 24-month period
preceding the execution of this Agreement with respect to each UHS Facility for
which surveys are conducted by the appropriate state or Federal agencies having
jurisdiction thereof and JCAHO or accreditation bodies have been furnished to
Desert Springs, along with true and complete copies of any and all plans of
correction which the agencies required to be submitted in response to said
survey reports.
2.28 RELATED PARTY TRANSACTIONS. To the knowledge of
▇▇▇▇▇▇▇▇▇, except as set forth in Schedule 2.28, and except for compensation to
employees for services rendered, no current partner or officer of ▇▇▇▇▇▇▇▇▇ or
any affiliate thereof is presently, or during the last fiscal year has been, (a)
a party to any material transaction with ▇▇▇▇▇▇▇▇▇ (including, but not limited
to, any contract or other arrangement providing for the furnishing of service
by, or rental of real or personal property from, or otherwise requiring payments
to, any such partner or officer, or (b) the direct or indirect owner of any
interest in any person which is a present competitor, supplier or customer of
▇▇▇▇▇▇▇▇▇ with respect to the business, nor does any such person receive income
from any source other than ▇▇▇▇▇▇▇▇▇ which should properly accrue to ▇▇▇▇▇▇▇▇▇.
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2.29 NO BROKERS. ▇▇▇▇▇▇▇▇▇ has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of the Company or the other Party to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby, and ▇▇▇▇▇▇▇▇▇ is not aware of any claim or basis for any
claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
2.30 NO MISREPRESENTATION OR OMISSION. No representation or
warranty by ▇▇▇▇▇▇▇▇▇ in this Article 2 or in any other Article or Section of
this Agreement, or in any certificate or other document furnished or to be
furnished by or on behalf of ▇▇▇▇▇▇▇▇▇ pursuant hereto, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF DESERT SPRINGS. Desert
Springs hereby represents, warrants and agrees as follows:
3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Desert
Springs is a Nevada corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Desert Springs has all requisite
corporate power and authority to own its properties and carry on its business as
now conducted. The copies provided to ▇▇▇▇▇▇▇▇▇ of the Articles of Incorporation
and Bylaws of Desert Springs, as amended to date, are complete and correct and
presently in effect. Desert Springs has not failed to qualify in any
jurisdiction in which property owned, leased or operated by it or the nature of
the business conducted by it makes such qualification necessary and where the
failure to so qualify would have a material adverse effect on it. Desert Springs
is not in default with respect to any order of any court, governmental authority
or arbitration board or tribunal to which it is a party or is subject.
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3.2 AUTHORIZATION; VALIDITY AND EFFECT OF AGREEMENTS. The
execution, delivery and performance of this Agreement and all agreements and
documents contemplated hereby by Desert Springs and the consummation by it of
the transactions contemplated hereby, have been duly and effectively authorized
by all necessary corporate action on its part. This Agreement constitutes, and
all agreements and documents contemplated hereby when executed and delivered
pursuant hereto will constitute, the valid and legally binding obligations of
Desert Springs, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws of general
application now or hereafter in effect relating to the enforcement of creditors'
rights generally and except that remedies of specific performance, injunction
and other forms of equitable relief are subject to certain tests of equity
jurisdiction, equitable defenses and the discretion of the court before which
any proceeding therefor may be brought. Except as set forth on Schedule 3.2
hereto, the execution and delivery of this Agreement by Desert Springs does not,
and the consummation of the transactions contemplated hereby will not, except to
the extent the same would not have a material adverse effect on it: (i) require
the consent, approval or authorization of any person, corporation, partnership,
joint venture or other business association or any governmental, public
authority or accrediting body; (ii) violate, with or without the giving of
notice or the passage of time, or both, any provisions of law or statute or any
rule, regulation, order, award, judgment, or decree of any court or governmental
authority applicable to such Party; or (iii) result in the breach or termination
of any term or provision of, or constitute a default under, or result in the
acceleration of or entitle any party to accelerate (whether after the giving of
notice or the lapse of time or both) any obligation under, or result in the
creation or imposition of any lien, charge, pledge, security interest or other
encumbrance upon any part of the property of Desert Springs pursuant to any
provision of, any order, judgment, arbitration award, injunction, decree,
indenture, mortgage, lease, license, lien, or other agreement or instrument to
which Desert Springs is a party or by which it is bound, or violate any
provision of the Articles of Incorporation or Bylaws of Desert Springs, as
amended to the date of this Agreement.
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3.3 NO BROKERS. Desert Springs has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of the Company or the other Party to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby, and Desert Springs is not aware of any claim or basis for
any claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
4. COVENANTS OF ▇▇▇▇▇▇▇▇▇ AND DESERT SPRINGS.
4.1 ACCESS TO UHS FACILITIES AND ADDITIONAL INFORMATION.
4.1.1 From the date hereof until the Closing
Date, ▇▇▇▇▇▇▇▇▇ shall provide, and cause its agents (including counsel and
accountants) to provide to Desert Springs reasonable access to and the right to
inspect the Facilities Assets and the books and records pertaining to the
Facilities Assets, and ▇▇▇▇▇▇▇▇▇ will furnish and cause to be furnished to
Desert Springs all material information concerning its businesses not otherwise
disclosed pursuant to this Agreement, and such additional financial, operating
and other data and information regarding ▇▇▇▇▇▇▇▇▇ and its businesses and the
Facilities Assets, as Desert Springs may from time to time reasonably request,
without regard to where such information may be located.
4.1.2 Promptly after the execution of this
Agreement, ▇▇▇▇▇▇▇▇▇ shall deliver to Desert Springs, to the extent not already
delivered, copies of all title insurance policies and binders in the possession
of ▇▇▇▇▇▇▇▇▇ for any of the Real Property and copies of all surveys of any of
the Real Property in the possession of ▇▇▇▇▇▇▇▇▇.
4.2 OPERATIONS. From the date hereof until the Closing Date
and except as otherwise expressly provided in this Agreement:
(a) each of ▇▇▇▇▇▇▇▇▇ and Desert Springs will
carry on its business in substantially the same manner as heretofore and not
make any material change in its personnel,
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operations, finances, accounting policies, or real or personal property;
(b) ▇▇▇▇▇▇▇▇▇ will maintain the Facilities Assets
and all parts thereof in their current condition, ordinary wear
and tear excepted;
(c) ▇▇▇▇▇▇▇▇▇ will perform all of its obligations
relating to or affecting the Facilities Assets or the business of
the UHS Facilities;
(d) ▇▇▇▇▇▇▇▇▇ will use its reasonable efforts to
obtain appropriate releases, consents, estoppels and other
instruments as Desert Springs may reasonably request;
(e) ▇▇▇▇▇▇▇▇▇ will keep in full force and effect
present insurance policies or other comparable insurance and maintain sufficient
liquid reserves to meet all deductible, self-insurance and copayment
requirements under present insurance policies;
(f) ▇▇▇▇▇▇▇▇▇ will maintain and preserve its
business organizations and operations intact, and deal with its present
employees at the UHS Facilities in a manner consistent with its existing
personnel policies; ▇▇▇▇▇▇▇▇▇ will maintain its relationships with physicians,
suppliers and other persons having business relations with it; and ▇▇▇▇▇▇▇▇▇
will take such actions as are reasonably necessary to facilitate the smooth,
efficient and successful transition to the Company following the Closing Date of
the business organizations and operations and employee and other relations of
▇▇▇▇▇▇▇▇▇; and
(g) ▇▇▇▇▇▇▇▇▇ will permit and allow reasonable
access by the Company to discuss post-closing employment with any of its
personnel and to establish relationships with physicians, suppliers and others
having business relations with it.
4.3 NEGATIVE COVENANTS. From the date hereof until the Closing
Date, except as otherwise expressly permitted by this Agreement or without the
prior written consent of Desert Springs:
(a) ▇▇▇▇▇▇▇▇▇ will not amend or terminate any of
the Assumed Contracts, enter into any contract or agreement or
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incur or agree to incur any liability, except in the ordinary and regular course
of business, and in no event that requires the payment by ▇▇▇▇▇▇▇▇▇ prior to the
Closing Date or the Company following the Closing Date of an amount greater than
twenty-five thousand dollars ($25,000) per contract or agreement, or that is not
terminable without cause or penalty within thirty (30) days following the
Closing Date;
(b) ▇▇▇▇▇▇▇▇▇ will not make offers to any of its
employees for employment with it after the Closing Date;
(c) ▇▇▇▇▇▇▇▇▇ will not increase compensation
payable or to become payable to, make a bonus payment to, or otherwise enter
into one or more bonus agreements with, any of its employees or agents, except
in the ordinary and regular course of business in accordance with existing
personnel policies;
(d) ▇▇▇▇▇▇▇▇▇ will not create, assume or permit
to exist any new Lien upon any of the Facilities Assets other than purchase
money liens arising in the ordinary course of business;
(e) ▇▇▇▇▇▇▇▇▇ will not sell, assign, transfer,
distribute or otherwise dispose of any property, plant or equipment, except in
the ordinary and regular business of the UHS Facilities with comparable
replacement thereof;
(f) ▇▇▇▇▇▇▇▇▇ will not take any action outside
the ordinary and regular course of business;
(g) ▇▇▇▇▇▇▇▇▇ will not take any action relating
to its liquidation or dissolution; and
(h) ▇▇▇▇▇▇▇▇▇ will not create, incur, assume,
guarantee or otherwise become liable for, cancel, pay, agree to cancel or pay,
provide for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waive any right to receive any direct or indirect
payment or other benefit under, any liability except in the ordinary and regular
course of business and in an amount not exceeding $25,000 individually or
$50,000 in the aggregate.
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4.4 GOVERNMENTAL APPROVALS. From the date hereof until the
Closing Date, ▇▇▇▇▇▇▇▇▇ shall (a) promptly apply for and use its reasonable best
efforts to obtain prior to the Closing Date all consents, approvals,
authorizations and clearances of governmental and regulatory authorities
required of it to consummate the transactions contemplated hereby, (b) provide
such information and communications to governmental and regulatory authorities
as such authorities may reasonably request, and (c) assist and cooperate with
such other Party to obtain all consents, licenses, permits, approvals,
authorizations and clearances of governmental and regulatory authorities that
such other Party reasonably deems necessary or appropriate, and to prepare any
document or other information required of the Company following the Closing by
any such authorities, in order to consummate the transactions contemplated
herein.
4.5 INSURANCE RATINGS. From the date hereof until the Closing
Date, ▇▇▇▇▇▇▇▇▇ will take all action it deems reasonably necessary to enable the
Company following the Closing Date to succeed to the worker's compensation and
unemployment insurance ratings of ▇▇▇▇▇▇▇▇▇ with respect to the UHS Facilities
for insurance purposes. The Company shall not be obligated to succeed to any
such rating except as it may elect to do so.
4.6 EMPLOYEES; EMPLOYEE BENEFIT PLANS. ▇▇▇▇▇▇▇▇▇ shall retain
all liabilities and obligations for all benefits under its Employee Benefit
Plans, regardless of whether any such liabilities and obligations are disclosed
on the ▇▇▇▇▇▇▇▇▇ Balance Sheet (including, without limitation, any and all
workers' compensation, health, disability or other benefits due to or for the
benefit of any employees of ▇▇▇▇▇▇▇▇▇ or their covered dependents) with the
exception of vacation, sick leave, paid time off and the like, and COBRA, all of
which will be assumed by the Company. As of the Closing Date, ▇▇▇▇▇▇▇▇▇ shall
terminate the participation of all employees in any Employee Pension Benefit
Plan in which any of ▇▇▇▇▇▇▇▇▇'▇ employees participates, and provide for
distributions pursuant to the terms of the plans, ERISA and the Code.
4.7 FURTHER ACTS AND ASSURANCES. At any time and from time to
time at and after the Closing Date, upon request of the Company, ▇▇▇▇▇▇▇▇▇ shall
do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such
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further acts, deeds, assignments, transfers, conveyances, powers of attorney,
confirmations and assurances as the Company may reasonably request to more
effectively convey, assign and transfer to and vest in the Company, full legal
right, title and interest in and actual possession of the Facilities Assets and
the business of ▇▇▇▇▇▇▇▇▇, to confirm each Party's capacity and ability to
perform its post-closing covenants and agreements under this Agreement, and to
generally carry out the purposes and intent of this Agreement. ▇▇▇▇▇▇▇▇▇ shall
also furnish the Company with such information and documents in its possession
or under its control, or which ▇▇▇▇▇▇▇▇▇ can execute or cause to be executed, as
will enable the Company to prosecute any and all petitions, applications, claims
and demands by or against third parties relating to or constituting a part of
the Facilities Assets and the business of ▇▇▇▇▇▇▇▇▇. After the Closing Date,
▇▇▇▇▇▇▇▇▇ shall promptly remit to the Company any payments received by ▇▇▇▇▇▇▇▇▇
with respect to any accounts receivable or other amounts sold to the Company;
and similarly, after the Closing Date the Company shall promptly remit to
▇▇▇▇▇▇▇▇▇ any payments received by the Company with respect to accounts
receivable or other amounts retained by ▇▇▇▇▇▇▇▇▇. Any funds so collected will
be remitted within five (5) days following receipt of such payment.
4.8 VALLEY TRANSACTION. Simultaneous with the contribution of
the Facilities Assets and the payment of the Desert Springs Payment to ▇▇▇▇▇▇▇▇▇
pursuant to this Agreement, (i) Valley Hospital Medical Center, Inc., a Nevada
corporation ("Valley"), shall contribute, convey, assign, transfer and deliver
to Valley Health System LLC, a limited liability company ("Newco UHS-1") created
by Valley pursuant to the LLC Act, and Desert Springs shall contribute, convey,
assign, transfer and deliver to Newco Q LLC, a limited liability company ("Newco
Q-1") created by Desert Springs pursuant to the LLC Act, those assets and
properties of Valley, in the case of Newco UHS-1, and those assets and
properties of Desert Springs, in the case of ▇▇▇▇▇ ▇-▇, which are in the nature
of the Facilities Assets (but excluding those assets and properties which are in
the nature of Excluded Assets), (ii) Newco UHS-1 shall assume and agree to pay,
perform and discharge the liabilities and obligations of Valley which are in the
nature of Assumed Liabilities, and (iii) Newco Q-1 shall assume and agree to
pay, perform and discharge the liabilities and obligations of Desert Springs
which are in the nature of Assumed Liabilities. Immediately following the
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consummation of such transactions in accordance with the preceding sentence,
Newco Q-1 shall be merged with and into Newco UHS-1 pursuant to an agreement of
merger on such terms and conditions as are mutually acceptable to Valley,
▇▇▇▇▇▇▇▇▇ and Desert Springs (the "Merger"). Following the Merger, the separate
legal existence of Newco Q-1 shall cease and Newco UHS-1 shall continue as the
entity surviving the Merger (the "Valley Company"), with Valley thereafter
owning a 72.5% membership interest in the Valley Company and Desert Springs
thereafter owning a 27.5% membership interest in the Valley Company.
4.9 ADDITIONAL PROPERTIES AND ASSETS. [INTENTIONALLY
OMITTED.]
5. MATTERS PERTAINING TO THE COMPANY.
5.1 EMPLOYEE MATTERS. Subject to the exclusions set forth in
this Section, ▇▇▇▇▇▇▇▇▇ and Desert Springs will cause the Company to offer to
employ as of the Closing Date, on an at-will basis (subject to any existing
union contracts), all employees working at the UHS Facilities immediately prior
to the Closing Date (including those on leave) so that ▇▇▇▇▇▇▇▇▇ may avoid the
imposition of any liability under the WARN Act and the Company shall pay all
liability of ▇▇▇▇▇▇▇▇▇ under the WARN Act resulting from the Company's failure
to do so. For the employees who accept the Company's offer of employment, the
Company shall recognize the employee's length of service with ▇▇▇▇▇▇▇▇▇ for
vesting and benefits eligibility purposes under the Company's employee benefit
programs. Notwithstanding the foregoing, the Company shall have no obligation to
offer employment to, except as required under any union contract, (i) those
employees who are "part-time employees" (as defined in the WARN Act) and (ii)
those employees who voluntarily elect to leave the employment of ▇▇▇▇▇▇▇▇▇.
5.2 FURTHER ACTS AND ASSURANCES. At any time and from time to
time at and after the Closing Date, ▇▇▇▇▇▇▇▇▇ and Desert Springs shall cause the
Company to execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered such further acts, deeds, assignments, transfers,
conveyances, powers of attorney, confirmations and assurances as the Parties may
reasonably request to confirm the capacity and ability of the Company to perform
those acts relating to the
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post-closing covenants and agreements of the Parties (with respect to causing
the Company to perform such acts) under this Agreement, and to generally carry
out the purposes and intent of this Agreement. ▇▇▇▇▇▇▇▇▇ and Desert Springs
shall cause the Company to furnish ▇▇▇▇▇▇▇▇▇ with such information and documents
in its possession or under its control, or which it can execute or cause to be
executed, as will enable ▇▇▇▇▇▇▇▇▇ to prosecute any and all petitions,
applications, claims and demands by or against third parties relating to or
constituting a part of the Facilities Assets and the business of the UHS
Facilities for which ▇▇▇▇▇▇▇▇▇ is liable hereunder or relating to Government
Reimbursement Programs.
6. CONDITIONS OF CLOSING.
6.1 CONDITIONS OF CLOSING. The obligations of ▇▇▇▇▇▇▇▇▇ to
contribute the Facilities Assets and of Desert Springs to make the Desert
Springs Payment, the obligation of ▇▇▇▇▇▇▇▇▇ to sell and deliver to Desert
Springs a 26.115% membership interest in the Company, and the obligations of the
Parties to otherwise cause the consummation of the transactions contemplated by
this Agreement, shall be subject to and conditioned upon the satisfaction at the
Closing Date of each of the following conditions (it being understood and agreed
that (i) the conditions to the benefit of ▇▇▇▇▇▇▇▇▇ are solely with respect to
the Desert Springs Payment and Desert Springs and not with respect to itself or
the UHS Facilities, and (ii) the conditions to the benefit of Desert Springs are
solely with respect to the UHS Facilities and ▇▇▇▇▇▇▇▇▇ and not with respect to
itself or the Desert Springs Payment):
6.1.1 All representations and warranties of the
Parties contained in this Agreement and the Schedules hereto shall be true and
correct in all material respects at and as of the Closing Date, the Parties
shall have performed in all material respects all agreements and covenants and
satisfied all conditions on their part to be performed or satisfied by the
Closing Date pursuant to the terms of this Agreement, and each Party shall have
received a certificate of the other Party dated the Closing Date to such effect.
6.1.2 Except as caused solely by any change in
the relevant market conditions and prospects, for which the other such Party
shall assume all risk, there shall have been no
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material adverse change since September 30, 1997 in the financial condition,
business or affairs of ▇▇▇▇▇▇▇▇▇ or Desert Springs; and neither ▇▇▇▇▇▇▇▇▇ nor
Desert Springs shall have suffered any material loss (whether or not insured) by
reason of physical damage caused by fire, earthquake, accident or other calamity
which substantially affects the value of its assets, properties or business the
insurance proceeds related to which are not, in the reasonable opinion of such
other Party, adequate to repair such damage and compensate for any lost business
related thereto. ▇▇▇▇▇▇▇▇▇ and Desert Springs each shall have received a
certificate of the other such Party dated the Closing Date that the statements
set forth in this Section 6.1.2 are true and correct.
6.1.3 Each Party shall have delivered to the other
Party a Certificate of the Secretary of State (or other authorized officer) of
the State of its jurisdiction of incorporation or formation, and certifying as
of a date reasonably close to the Closing Date that such Party has filed all
required reports, paid all required fees and taxes, and is, as of such date, in
good standing and authorized to transact business as a domestic corporation or
limited partnership, as the case may be.
6.1.4 Each Party shall have delivered to the other
Parties a certificate of its corporate or partnership Secretary certifying:
(i) The Resolutions of its Board of
Directors or its general partner authorizing the execution, performance and
delivery of this Agreement and the execution, performance and delivery of all
agreements, documents and transactions contemplated hereby;
(ii) The incumbency of its officers or the
officers of its general partner executing this Agreement and all
agreements and documents contemplated hereby; and
(iii) That the Articles of Incorporation and
Bylaws of Desert Springs, or the Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇,
as the case may be, attached to such certificate are complete and correct and in
effect as of the date of such certification.
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6.1.5 Each Party shall have received from counsel
for the other Party (which may be house counsel), an opinion, dated the Closing
Date, satisfactory to such Party in the form attached hereto as Exhibit A.
6.1.6 All material authorizations, consents,
waivers, approvals, orders, registrations, qualifications, designations,
declarations, filings or other actions required with or from any governmental
entity (including without limitation receipt of licenses (or commitments to
issue licenses) to own and operate the UHS Facilities and for the Company
following the Closing Date to conduct the businesses of ▇▇▇▇▇▇▇▇▇ as currently
conducted) in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby shall
have been duly obtained and shall be reasonably satisfactory to the Parties, and
copies thereof shall be delivered to the Parties prior to the Closing Date.
6.1.7 On the Closing Date, no injunction or order
shall be in effect prohibiting consummation of the transactions contemplated
hereby or which would make the consummation of such transactions unlawful and no
action or proceeding shall have been instituted and remain pending before a
governmental entity to restrain or prohibit the transactions contemplated by
this Agreement and no adverse decision shall have been made by any such
governmental entity which is reasonably likely to materially adversely affect
the Company, the Parties or the Facilities Assets. No federal, state or local
statute, rule or regulation shall have been enacted the effect of which would be
to prohibit, materially restrict, impair or delay the consummation of the
transactions contemplated hereby or materially restrict or impair the ability of
the Company following the Closing Date to own the Facilities Assets or to
conduct the businesses relating thereto.
6.1.8 The receipt by ▇▇▇▇▇▇▇▇▇ and Desert Springs
of standard ALTA or CLTA fee owner's title insurance policies using the current
ALTA or CLTA form(the "Title Policies") insuring title (at standard market rates
for fee simple or leasehold title) to each parcel of Real Property in the
Company, as fee owner, subject only to the Permitted Encumbrances, in the
aggregate amount of $60,000,000, and issued by a national title insurance
company (the "Title Company"). The Title Policies shall be issued
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with all standard or general printed exceptions (other than the survey contain a
so-called "non-imputation" endorsement and such additional endorsements as the
Parties may reasonably require.
6.1.9 Execution and delivery by ▇▇▇▇▇▇▇▇▇ of the
Instruments of Conveyance set forth in Section 1.4.
6.1.10 Execution and delivery by the Company and
the parties thereto of the Management Agreement in substantially the form
attached hereto as Exhibit B (the "Management Agreement").
6.1.11 Execution and delivery by the Company,
▇▇▇▇▇▇▇▇▇ and Desert Springs of the Operating Agreement in substantially the
form attached hereto as Exhibit C (the "Operating Agreement").
6.1.12 The Company's receipt of current as-built
surveys of the Real Property, prepared and certified by a registered surveyor
licensed in the State of Nevada (the "Surveys"). The Surveys shall be in form
and substance mutually satisfactory to ▇▇▇▇▇▇▇▇▇ and Desert Springs.
6.1.13 ▇▇▇▇▇▇▇▇▇'▇ receipt of the membership
interest in the Company to be distributed to it in accordance with Section 1.1
hereof.
6.1.14 ▇▇▇▇▇▇▇▇▇'▇ receipt of the Desert Springs
Payment in immediately available funds in accordance with Sections 1.1 and 1.5
hereof.
6.1.15 Desert Springs' receipt from ▇▇▇▇▇▇▇▇▇ of a
26.115% membership interest in the Company free and clear of all Liens other
than Permissible Liens.
6.1.16 Execution and delivery by the parties
thereto of the Survey Agreement substantially in the form attached hereto as
Exhibit D.
7. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.
7.1 EVENTS OF DEFAULT. A breach as a result of the failure of
a Party to perform any of its agreements, covenants
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and obligations under this Agreement, shall be considered a default hereunder
giving rise to the indemnification set forth in Section 7.3 hereof.
7.2 SURVIVAL OF REPRESENTATIONS, ETC. All representations
and warranties made by the Parties in this Agreement or in any exhibit,
schedules or certificates hereof or in connection with the transactions
contemplated hereby shall terminate at the Closing Date, and thereafter be of no
further force or effect and no action or cause of action on account thereof
shall survive. All other agreements, covenants and obligations of the Parties in
this Agreement or in any exhibit, schedules, certificate, document or instrument
delivered pursuant to the provisions hereof or in connection with the
transactions contemplated hereby, and the remedies of the Parties with respect
thereto, shall survive the closing of the transactions contemplated by this
Agreement.
7.3 INDEMNIFICATION. From and after the Closing Date, each
Party, as the case may be (an "Indemnifying Party"), severally and not jointly,
shall indemnify and hold the other Party and the Company, as the case may be,
and their respective affiliates, agents and representatives (an "Indemnified
Party"), harmless from and against any and all claims, losses, expenses, damages
or liabilities arising out of or relating to any of the following: (i) any
breach, violation or nonperformance of a covenant, agreement or obligation to be
performed hereunder on the part of any Indemnifying Party; (ii) any claims
against, or liabilities or obligations of an Indemnifying Party not specifically
assumed by an Indemnified Party pursuant to this Agreement; (iii) any claims
against, or liabilities or obligations relating to the ▇▇▇▇▇▇▇▇▇ Limited
Partnership Agreement, or the partnership actions involved in accomplishing this
transaction; or (iv) any actions, judgments, costs and expenses (including
reasonable attorneys' fees and all other expenses incurred in investigating,
preparing or defending any litigation or proceedings, commenced or threatened)
incident to any of the foregoing or the enforcement of this Section. In addition
to the foregoing, following the Closing Date the Parties shall cause the Company
to indemnify and hold the Parties and their affiliates harmless from and against
any and all claims, losses, expenses, damages or liabilities arising out of or
relating to the Company's assumption of the Assumed Liabilities and any actions,
judgments, costs and expenses (including
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reasonable attorneys' fees and all other expenses incurred in investigating,
preparing or defending any litigation or proceedings, commenced or threatened)
incident to the foregoing. Any indemnification payment pursuant to the foregoing
shall include interest at a floating rate equal the prime rate of Citibank N.A.,
from time to time, from the date the Indemnified Party provides the Indemnifying
Party notice of the loss, cost, expenses or damages until the date of payment.
7.4 REPRESENTATION, COOPERATION AND SETTLEMENT.
(a) An Indemnified Party agrees to give prompt
written notice to an Indemnifying Party of any claim against it which might give
rise to a claim by such Indemnified Party based on the indemnity agreement
contained in Section 7.3 hereof, stating the nature and basis of the
first-mentioned claim and the amount thereof; provided, that the failure of the
Indemnified Party to give the Indemnifying Party prompt notice shall not relieve
the Indemnifying Party of any of its obligations hereunder, but may create a
cause of action for breach for damages directly attributable to such delay.
(b) The Indemnifying Party shall have full
responsibility and authority with respect to the payment, settlement, compromise
or other disposition of any third party dispute, action, suit or proceeding
subject to indemnification by such Indemnifying Party hereunder, including,
without limitation, the right to conduct and control all negotiations with
respect to the settlement, compromise or other disposition thereof, and the
Indemnified Party agrees to cooperate with the Indemnifying Party in any
reasonable manner requested by the Indemnifying Party in connection with any
such negotiations. The Indemnified Party shall have the right, without prejudice
to the Indemnifying Party's rights under this Agreement, at the Indemnified
Party's sole expense, to be represented by counsel of its own choosing and with
whom counsel for the Indemnifying Party shall confer in connection with the
defense of any such action, suit or proceeding. The Parties agree to render to
each other such assistance as may reasonably be requested in order to insure the
proper and adequate defense of any such action, suit or proceeding.
Notwithstanding the foregoing, the Indemnifying Party may compromise and settle
any claim, action, or suit to which it must indemnify an Indemnified Party
hereunder, provided that it gives the Indemnified Party advance notice of any
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proposed compromise or settlement and shall obtain the consent of the
Indemnified Party to such proposed compromise or settlement, which consent shall
not be unreasonably withheld.
8. TRANSACTIONS SUBSEQUENT TO THE CLOSING DATE
8.1 ACCESS TO RECORDS. From time to time after the Closing
Date, upon the request of the Company, ▇▇▇▇▇▇▇▇▇ will provide the Company with
reasonable access to any records, documents and data relating to the Facilities
Assets retained by ▇▇▇▇▇▇▇▇▇ wherever located. From time to time after the
Closing Date, upon the request of either ▇▇▇▇▇▇▇▇▇ or Desert Springs, the other
such Party shall cause the Company to make available to the requesting Party any
records, documents and data relating to the Facilities Assets acquired by the
Company as needed for any lawful purpose (including such Party's inspection and
copying of the same), and ▇▇▇▇▇▇▇▇▇ shall have the same rights of access to
inspect and copy that ▇▇▇▇▇▇▇▇▇ had prior to the Closing Date; provided,
however, that any records, documents and data delivered to or made available to
such Party and its representatives will be treated as strictly confidential by
such Party and its representatives, will not be directly or indirectly divulged,
disclosed or communicated to any other person other than such Party and its
representatives who are reasonably required to have access to such information
(unless such Party is compelled to disclose the same by judicial or
administrative process), and will be returned to the Company when such Party's
use therefor has terminated. ▇▇▇▇▇▇▇▇▇ and Desert Springs shall cause the
Company to instruct the appropriate employees of the Company to cooperate in
providing access to such records to such Parties and their authorized
representatives as contemplated herein. Access to such records shall be,
wherever reasonably possible, during normal business hours, with reasonable
prior written notice to the Company of the time when such access shall be
needed. ▇▇▇▇▇▇▇▇▇ and Desert Springs shall cause the Company to provide
sufficient office space to such requesting Party without charge to conduct the
activities described herein. The employees, representatives and agents of
▇▇▇▇▇▇▇▇▇ and Desert Springs shall conduct themselves in such a manner so that
the Company's normal business activities shall not be unduly or unnecessarily
disrupted. For a period of seven (7) years following the Closing Date, neither
▇▇▇▇▇▇▇▇▇ nor Desert Springs shall, and each of such Parties shall cause the
Company not to, discard, destroy or otherwise dispose of records, documents and
data relating to the
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Facilities Assets or such Parties without first making such records, documents
and data available to the other such Party for inspection and copying. ▇▇▇▇▇▇▇▇▇
and Desert Springs shall cause the Company to retain the records, documents and
data pertaining to the UHS Facility at the UHS Facility (or at such other
locations as the Company and such Parties shall determine by their mutual
agreement from time to time) at the Company's cost, until the expiration of
seven (7) years from the Closing Date.
8.2 LITIGATION COOPERATION. After the Closing Date, upon prior
reasonable written request, each Party shall cooperate with the other and with
the Company, at the requesting Party's expense (but including only out-of-pocket
expenses to third parties and not the costs incurred by any Party for the wages
or other benefits paid to its partners, officers, directors or employees), in
furnishing information, testimony and other assistance in connection with any
actions, tax or cost report audits, proceedings, arrangements or disputes
involving any of the Parties hereto (other than in connection with disputes
between the Parties hereto) and based upon contracts, arrangements or acts of
any Party or any of their respective affiliates which were in effect or occurred
on or prior to the Closing Date and which related to the Facilities Assets,
including, without limitation, arranging discussions with, and the calling as
witnesses of, officers, directors, managers, employees, agents and
representatives of the Company.
9. TERMINATION.
9.1 METHODS OF TERMINATION. The transactions contemplated
herein may be terminated at any time before or after approval thereof by the
Parties, but not later than the Closing Date:
(i) By mutual consent of the Parties; or
(ii) by a Party after March 1, 1998 if any of the
conditions in Section 6.1 to the benefit of such Party shall not have been met
or waived in writing prior to such date.
9.2 PROCEDURE UPON TERMINATION. In the event of termination
pursuant to Section 9.1 hereof, written notice thereof shall forthwith be given
to the other Parties and the transactions contemplated by this Agreement shall
be terminated,
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without further action by any party. If the transactions contemplated by this
Agreement are terminated as provided herein:
(i) Each Party will redeliver all documents, work
papers and other material of the other Parties relating to the transactions
contemplated hereby, whether so obtained before or after the execution of this
Agreement, to the Party furnishing the same; and
(ii) No Party shall have any liability or further
obligation to the other Parties other than the confidentiality obligations set
forth in Section 10.6 hereof.
10. MISCELLANEOUS.
10.1 NOTICE. Any notice required or permitted hereunder shall
be in writing and shall be sufficiently given if personally delivered or mailed
by certified or registered mail, return receipt requested, addressed as follows:
IF TO ▇▇▇▇▇▇▇▇▇: Universal Health Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Box 61558
King of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice President
COPIES TO: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
General Counsel
Universal Health Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇ of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
AND
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
A Professional Corporation
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
IF TO DESERT SPRINGS:
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Quorum Health Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President/General Counsel
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
COPIES TO: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇, Esquire
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & Manner, P.C.
1800 First American Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
IF TO THE
COMPANY: ▇▇▇▇▇▇▇▇▇ Hospital Medical Center LLC
c/o Universal Health Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Box 61558
King of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice President
and
▇▇▇▇▇▇▇▇▇ Hospital Medical Center LLC
c/o Quorum Health Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President/General Counsel
(or to such other address as any Party or the Company, as the case may be, shall
specify by written notice so given), and shall be deemed to have been duly
delivered: (a) if delivered personally or sent by facsimile, on the date
received and (b) if delivered by overnight courier, on the day after mailing.
10.2 EXECUTION OF ADDITIONAL DOCUMENTS. The Parties will at
any time, and from time to time after the Closing Date, upon request of any
other Party, execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may be
required
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to carry out the intent of this Agreement and to transfer and vest title to any
Facilities Assets or membership interests being transferred hereunder, and to
protect the right, title and interest in and enjoyment of such membership
interests and of all of the Facilities Assets granted, assigned, transferred,
delivered and conveyed pursuant to this Agreement with all costs being borne by
the Company; provided, however, that this Agreement shall be effective
regardless of whether any such additional documents are executed.
10.3 WAIVERS AND AMENDMENT.
(a) Each Party may, by written notice to each of
the other Parties executed by a properly authorized officer, in the case of
Desert Springs, or its general partner, in the case of ▇▇▇▇▇▇▇▇▇, (i) extend the
time for the performance of any of the obligations or other actions of another
Party; (ii) waive any inaccuracies in the representations or warranties of
another Party contained in this Agreement; (iii) waive compliance with any of
the covenants of another Party contained in this Agreement; and (iv) waive or
modify performance of any of the obligations of another Party.
(b) This Agreement may be amended, modified or
supplemented only by a written instrument executed by all the Parties. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any Party,
shall be deemed to constitute a waiver by the Party taking such action of
compliance with any representations, warranties, covenants or agreements
contained herein. The waiver by any Party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
10.4 EXPENSES. Whether or not the transactions
contemplated by this Agreement are consummated, each Party shall pay the fees
and expenses of their respective counsel, accountants, other experts and all
other expenses incurred by them incident to the negotiation, preparation and
execution of this Agreement and the performance by them of their obligations
hereunder.
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10.5 OCCURRENCE OF CONDITIONS PRECEDENT. Each of the
Parties agrees to use its reasonable efforts to cause all conditions precedent
to its obligations under this Agreement to be satisfied.
10.6 CONFIDENTIALITY OBLIGATIONS; PUBLIC
ANNOUNCEMENTS.
(a) Each Party agrees that it will treat in
confidence all documents, materials and other information which it shall have
obtained regarding the other Party during the course of the negotiations leading
to the consummation of the transactions contemplated hereby (whether obtained
before or after the date of this Agreement), the investigation provided for
herein and the preparation of this Agreement and other related documents, and,
in the event the transactions contemplated hereby shall not be consummated, each
Party will return to the other Parties all copies of non-public documents and
materials which have been furnished in connection therewith. The obligation of
each Party to treat such documents, materials and other information in
confidence shall not apply to any information which (i) such Party can
demonstrate was already lawfully in its possession prior to the disclosure
thereof by any other Party, (ii) is known to the public and did not become so
known through any violation of a legal obligation, (iii) became known to the
public through no fault of such Party or (iv) is later lawfully acquired by such
Party from other sources. Except as required by law and except for disclosures
to its advisors, who shall be advised of the confidentiality requirements
herein, no Party shall disclose to any person the identity of any other Party,
the terms or provisions of this Agreement or the content of any discussions or
communications between any of the Parties.
(b) Any public announcement or similar publicity
with respect to this Agreement or the transactions contemplated hereby will be
issued, if at all, at such time and in such manner as the Parties determine.
Unless consented to by each Party in advance or required by law, prior to the
Closing Date, each Party shall keep this Agreement strictly confidential and may
not make any disclosure of this Agreement to any person. ▇▇▇▇▇▇▇▇▇ will consult
with Desert Springs concerning the means by which the employees, customers, and
suppliers of ▇▇▇▇▇▇▇▇▇ and others having dealings with it will be informed of
the transactions contemplated by this Agreement.
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10.7 BINDING EFFECT; BENEFITS. Subject to Section 10.14, this
Agreement shall be binding upon and shall inure to the benefit of the Parties
and their respective heirs, successors, executors, administrators and assigns.
Notwithstanding anything contained in this Agreement to the contrary, nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the Parties or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
10.8 ENTIRE AGREEMENT. This Agreement, together with the
Exhibits, Schedules and other documents contemplated hereby, constitute the
final written expression of all of the agreements between the Parties, and is a
complete and exclusive statement of those terms. It supersedes all prior
understandings and negotiations (written and oral) concerning the matters
specified herein. Any representations, promises, warranties or statements made
by a Party that differ in any way from the terms of this written Agreement and
the Exhibits, Schedules and other documents contemplated hereby, shall be given
no force or effect. The Parties specifically represent, each to the other, that
there are no additional or supplemental agreements between them related in any
way to the matters herein contained unless specifically included or referred to
herein. No addition to or modification of any provision of this Agreement shall
be binding upon any party unless made in writing and signed by all Parties.
10.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada exclusive of the
conflict of law provisions thereof.
10.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.
10.11 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the Parties only, and shall be given no
substantive or interpretive effect whatsoever.
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10.12 INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits
and Schedules attached hereto are by this reference incorporated herein and made
a part hereof for all purposes as if fully set forth herein.
10.13 SEVERABILITY. If for any reason whatsoever, any one or
more of the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid as applied to any particular case or in
all cases, such circumstances shall not have the effect of rendering such
provision invalid in any other case or of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid.
10.14 ASSIGNABILITY. Neither this Agreement nor any of the
Parties' rights hereunder shall be assignable by any Party without the prior
written consent of the other Parties.
[SIGNATURES ARE ON THE NEXT FOLLOWING PAGES]
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IN WITNESS WHEREOF, the Parties have executed this Agreement
and caused the same to be duly delivered on their behalf on the day and year
hereinabove first set forth.
▇▇▇▇▇▇▇▇▇ HOSPITAL MEDICAL CENTER,
L.P.
BY: UHS HOLDING COMPANY, INC., ITS
GENERAL PARTNER
By:________________________
Title:_____________________
NC-DSH, INC.
By:________________________
Title:_____________________
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JOINDER AGREEMENT
The undersigned hereby agrees to become a party to that
certain Contribution Agreement (the "Contribution Agreement") by and among
▇▇▇▇▇▇▇▇▇ Hospital Medical Center, L.P., a Delaware limited partnership
("▇▇▇▇▇▇▇▇▇") and NC-DSH, Inc., a Nevada corporation ("Desert Springs"), for the
sole purpose of unconditionally guaranteeing the performance of the obligations
of and the payments by ▇▇▇▇▇▇▇▇▇ under Section 7.3 of the Contribution Agreement
and for no other purpose. By executing this Joinder Agreement the undersigned
hereby guarantees the due and punctual payment and performance by ▇▇▇▇▇▇▇▇▇ of
its obligations under Section 7.3 of the Contribution Agreement. This Joinder
Agreement may not be terminated by the undersigned until such time as all
amounts due and obligations owing or to be owed by ▇▇▇▇▇▇▇▇▇ under such Section
shall have been fully paid and performed. In the event of breach under Section
7.3, the parties thereto shall have the right to proceed against the undersigned
or ▇▇▇▇▇▇▇▇▇ separately, jointly, or against the undersigned without first
proceeding against ▇▇▇▇▇▇▇▇▇. Bankruptcy or the like of ▇▇▇▇▇▇▇▇▇ shall be no
defense to the undersigned.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
the undersigned has executed this Joinder Agreement this 30th day of January,
1998.
UNIVERSAL HEALTH SERVICES, INC.
By:________________________________
Title:_____________________________
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JOINDER AGREEMENT
The undersigned hereby agrees to become a party to that
certain Contribution Agreement (the "Contribution Agreement") by and among
▇▇▇▇▇▇▇▇▇ Hospital Medical Center, L.P., a Delaware limited partnership
("▇▇▇▇▇▇▇▇▇") and NC-DSH, Inc., a Nevada corporation ("Desert Springs"), for the
sole purpose of unconditionally guaranteeing the performance of the obligations
of and payments by Desert Springs under Section 7.3 of the Contribution
Agreement and for no other purpose. By executing this Joinder Agreement the
undersigned hereby guarantees the due and punctual payment and performance by
Desert Springs of its obligations under Section 7.3 of the Contribution
Agreement. This Joinder Agreement may not be terminated by the undersigned until
such time as all amounts due and obligations owing or to be owed by Desert
Springs under such Section shall have been fully paid and performed. In the
event of breach under Section 7.3, the parties thereto shall have the right to
proceed against the undersigned or Desert Springs separately, jointly, or
against the undersigned without first proceeding against Desert Springs.
Bankruptcy or the like of Desert Springs shall be no defense to the undersigned.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
the undersigned has executed this Joinder Agreement this 30th day of January,
1998.
QUORUM HEALTH GROUP, INC.
By:________________________________
Title:_____________________________
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SCHEDULES, EXHIBITS AND APPENDICES
TO CONTRIBUTION AGREEMENT
Schedule
---------
1.1(b) Tangible Personal Property
1.3.1 Assumed Contracts
1.5 Permissible Liens
1.6(c) List of Additional Assumed Liabilities
1.7(g) Liens and Mortgages Not Released at Closing
2.2 Authorization; Validity and Effect of Agreements
2.3 Subsidiaries; Debt and Equity Securities
2.4 Partnership Interests; Outstanding Rights,
Warrants, etc.
2.6 Financial Statements
2.7 Absence of Undisclosed Liabilities
2.8 Absence of Certain Changes or Events
2.9 Taxes
2.10 Real Property
2.10(c) Navigable Water
2.10(h) Liens on Real Property
2.10(j) Leases of Real Property
2.11 Exceptions to Sufficiency of Facilities Assets
2.13 List of Contracts and Other Data
2.14 Exceptions to No Breach or Default
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2.15 Labor Controversies
2.16 Litigation
2.18 Licenses; Permits; Authorizations
2.19 Compliance with Applicable Law; Environmental Laws
2.20.1 Employee Benefit Plans
2.20.2 Employees
2.22 Trade Notes and Accounts Receivable; Aging
Schedule; Prepayments
2.25 Insurance Policies; Pending Insurance Claims
2.26(a) Professional Staff
2.26(b) Medicare and Medicaid Participation
2.26(c) Cost Reports
2.28 Related Party Transactions
3.2 Authorization; Validity and Effect of Agreements
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Exhibit
--------
A Form of Opinion of Parties' Counsel
B Form of Management Agreement
C Form of Operating Agreement
D Form of Survey Agreement
iii