MANAGEMENT AND ACQUISITION AGREEMENT
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THIS MANAGEMENT AND ACQUISITION AGREEMENT is made and entered into as of
this 2nd day of February 2004 (the "Effective Date") by and between PACER HEALTH
MANAGEMENT CORPORATION, a Louisiana corporation (the "Manager") and CAMELOT
SPECIALTY HOSPITAL OF CAMERON, L.L.C. ("Camelot").
WITNESSETH:
WHEREAS, prior to September 28, 2000, the Lower Cameron Hospital Service
District d/b/a South Cameron Memorial Hospital (the "District") operated an
acute care hospital known as South Cameron Memorial Hospital, licensed to
provide 34 acute care hospital beds in its main campus in Creole, Louisiana (the
"Main Campus"), licensed to operate 15 psychiatric beds on its remote campus in
Lake Charles, Louisiana, known as Calcasieu Oaks Geriatric Psychiatric Unit (the
"Lake ▇▇▇▇▇▇▇ Campus") and an outpatient clinic in Cameron, Louisiana, known as
the Cameron Rural Health Clinic (the "Cameron Campus") (the Main Campus, Lakes
▇▇▇▇▇▇▇ Campus and Cameron Campus are collectively referred to as the
"Hospital"); and
WHEREAS, effective September 28, 2000, the District leased the Hospital to
Camelot pursuant to that certain Cooperative Endeavor Lease Agreement and
Assignment of Third Party Lease dated March 28, 2000, as amended (the "Lease");
and
WHEREAS, pursuant to the Lease, Camelot now operates the Main Campus
(currently operating 25 beds), the Lake ▇▇▇▇▇▇▇ Campus (currently operating 24
beds) and the Cameron Campus; and
WHEREAS, Camelot has encountered certain financial difficulties in its
operation of the Hospital, and is contemplating the potential sale and
assignment of certain of its assets, including, without limitation, the Lease,
to the Manager; and
WHEREAS, in the interim and prior to such potential sale and assignment,
Camelot desires to enlist the services of Manager to manage and operate the
Hospital; and
WHEREAS, Camelot desires to formalize its relationship with Manager through
the execution of this Agreement, wherein the Manager will provide
administrative, operational and management services for the compensation
hereinafter specified; and
NOW, THEREFORE, in consideration of the premises and the mutual
representations, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Manager and Camelot do hereby represent, covenant, promise and
agree as follows:
1. RECITALS. The above recitals are true and correct and are incorporated
into this Agreement by this reference.
2. APPOINTMENT. Camelot hereby engages Manager to conduct, supervise and
manage the day-to-day operations of the Hospital, all as more fully hereinafter
set forth, and Manager agrees and hereby does accept such engagement pursuant to
the terms and conditions hereinafter stated.
3. MANAGEMENT SERVICES. In connection with its appointment, as provided
for in this Agreement, Manager shall, as Camelot's representative and at the
expense of the Hospital, perform the services set forth in this Section 3,
consistent with the budget prepared and modified, from time to time, by Manager,
and approved by the Board (as defined in Section 4(a)) of the Hospital.
(a) HOSPITAL CHARGES. Manager shall establish, maintain, revise and
administer the overall charge structure of the Hospital.
(b) CONTRACTS. Manager shall negotiate service and such other
contracts reasonably necessary or desirable in connection with the Hospital
operation in the usual course of business and will execute, in Camelot's name,
all provider agreements necessary and appropriate to obtain and maintain the
Hospital's status as a reimbursable provider of services under the Medicare
program, the Medicaid program, other applicable federal or state health benefit
programs, and third party payors, including, without limitation, prepaid health
plans, health maintenance organizations and other managed care plans ("Health
Plans").
(c) BILLING AND COLLECTION OF ACCOUNTS. Manager shall be responsible
for billing for services and materials furnished by the Hospital and for the
collection of accounts and monies owed to the Hospital, including the
responsibility to enforce the rights of the Hospital as creditor under any
contract or in connection with the rendering of any services. Notwithstanding
the foregoing, Manager shall not acquire any ownership or control over, and this
Agreement shall not be interpreted or construed to grant the Manager any
ownership or control over, the accounts receivable existing as of the Effective
Date or any of the proceeds therefom, and such accounts receivable and any
proceeds therefrom shall be the property of Camelot and the Hospital, and
Camelot and Hospital shall retain sole control (including, without limitation,
the allocation and use of such monies) over said accounts receivable and any
proceeds therefrom.
(d) PAYMENT OF ACCOUNTS AND INDEBTEDNESS. Manager shall be responsible
for the payment of payroll, trade accounts, amounts due on short and long-term
indebtedness, current taxes and all other ordinary and customary obligations of
the Hospital arising from or relating to services of the Hospital after the
Effective Date; provided, however, that Manager shall have no liability for such
payments to the extent the aggregate amount of said payments exceeds the
revenues of the Hospital on hand and derived from the services of the Hospital
after the Effective Date. Manager's responsibility under this paragraph shall be
limited to the exercise of reasonable diligence and care to apply the funds
collected in the operation of the Hospital to its obligations in a timely and
prudent manner, and Manager shall have no separate liability with respect to any
obligations of the Hospital or Manager, including, without limitation, the
obligation to fund any deficiencies or loan funds to Camelot or the Hospital to
cover their respective financial obligations. In addition to and without
limiting the foregoing, Manager shall not have any responsibility for the
payment of any obligations or liabilities of the Hospital existing as of the
Effective Date, including, without limitation, any payroll, trade accounts,
amounts due on short and long-term indebtedness, tax liabilities, Medicare or
Medicaid liabilities or obligations to any other applicable federal or state
health benefit programs, as such obligations shall remain the sole
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responsibility of Camelot, and Camelot shall be exclusively responsible for the
negotiation, payment and/or compromise of such liabilities.
(e) ACCOUNTING AND FINANCIAL RECORD PROCEDURES AND SYSTEMS. Manager
shall establish and administer accounting procedures and controls, as well as
systems for the development, preparation, and safekeeping of records and books
of account relating to the business and financial affairs of the Hospital.
(f) DEPOSITORY OF ACCOUNTS. Manager shall maintain accounts in such
banks and other financial institutions as the Manager may from time to time
select with such balances therein as Manager shall from time to time deem
appropriate, taking into account the operating needs of the Hospital and the
disbursements from such accounts of such amounts of the Hospital's funds as
Manager shall from time to time determinate appropriate in the discharge of its
responsibilities under this Agreement; provided, however, that Manager shall
not, in any case, have any obligation to supply, out of its own funds, working
capital for the Hospital.
(g) PURCHASES AND LEASES. Manager shall purchase and lease equipment,
drugs, supplies and all materials and services from the revenues of the Hospital
which Manager, in its sole discretion, shall deem to be necessary in the
operation of the Hospital.
(h) QUALITY CONTROL. Manager shall implement, with Board (as defined
in Section 4(a)) approval, quality control programs designed to meet standards
imposed by applicable certifying and accrediting agencies in accordance with
Board policies and resources available to Hospital.
(i) QUARTERLY AND ANNUAL FINANCIAL STATEMENTS. Manager shall provide
to Camelot, for its internal use, unaudited Hospital quarterly and annual
financial statements which shall contain, among other things, statistics
regarding occupancy, revenues, expenses, a profit and loss statement, a balance
sheet and similar matters as well as such narrative explanation as Manager
reasonably deems necessary. Quarterly statements shall be prepared no later than
the close of business on the 45th day following the quarter for which the report
is being made. Annual statements shall be prepared no later than the close of
business on the 90th day following the annual period for which the report is
being made.
(j) MAINTENANCE OF RECORDS. In accordance with Section 1861(v)(1)(I)
of the Social Security Act (42 U.S.C. ss.1395x(v)(1)(I)), Manager agrees to
maintain for a period of not less than four (4) years after furnishing services
pursuant to this Agreement, all books, documents and records necessary to verify
the nature and extent of the costs of providing the services contemplated herein
and to make such documents available to the Secretary of the United States
Department of Health and Human Services, the Comptroller General of the United
States, and any of their duly authorized representatives upon written request
made in accordance with the criteria and procedures which the Secretary shall
provide by regulation for access to books, documents, and records under the
above federal law. In the event Manager enters into a subcontract to provide
goods or services pursuant to this Agreement with a value of $10,000 or more,
the subcontractor shall be required to provide access to its books, documents
and records in accordance with the above statute.
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(k) COST REPORTS. Manager shall cause to be prepared, on behalf of
Camelot, all Medicaid and Medicare cost reports necessary for reimbursement to
the Hospital under the Louisiana Medicaid Program, the Federal Medicare Program
and any other federal or state cost reimbursed health benefit programs. Camelot
shall be solely responsible for timely filing cost reports for all services
rendered during such time as Camelot is the licensee of the Hospital. In the
event the Manager becomes the licensee of the Hospital, the Manager will assist
Camelot in preparing and Camelot shall timely file the final cost report through
the effective date of termination of this Agreement. Upon termination of this
Agreement, the parties shall cooperate in providing the financial information
necessary to prepare all cost reports required by the Medicare and Medicaid
programs and all other applicable federal and state cost-reimbursed health
benefit programs.
(l) PERSONNEL SERVICES. Manager shall, on behalf of Camelot, hire,
discharge, supervise and manage all employees of the Hospital, subject to and in
accordance with policies and procedures duly approved by the Board. Manager
shall determine, from time to time, the numbers and qualifications of employees
needed in the various departments and services of the Hospital and shall
establish, revise and administer the wage scales, rates of compensation,
employee benefits, rates and conditions of employment, in-service training,
attendance at seminars or conferences, staffing schedules, and job and position
descriptions with respect all employees of the Hospital. Without limiting the
foregoing, Manager shall hire an administrator, to be an employee of the
Hospital who shall be the chief administrative officer of the Hospital. Camelot
shall remain the sole employer of the Hospital personnel, and shall remain
solely liable and responsible for withholding all sums for income tax,
unemployment insurance, social security and any other withholding required
pursuant to any law or requirement of any government body; provided, however,
that Manager shall, from the Hospital's revenues and in accordance with the
Hospital's customary payroll periods, pay the wages and salary of such
personnel, less applicable withholdings, in accordance with Section 3 hereof.
Camelot will indemnify and hold harmless the Manager, its shareholders,
officers, directors, employees, agents, successors and assigns, from any and all
loss or liability arising from its failure to make such payments, withholdings
and benefits, if any.
4. OBLIGATIONS OF CAMELOT.
(a) GOVERNANCE. The governing body of the Hospital (the "Board") shall
retain all authority placed in it by applicable law, regulations, licensure and
accreditation standards and the Hospital's bylaws, as may be amended from time
to time, and shall retain such other authority as shall not have been
specifically delegated by it to Manager pursuant to the terms of this Agreement
or otherwise. Manager's designated representative shall be entitled to attend
and participate in all Board meetings throughout the term of this Agreement. By
entering into this Agreement, Camelot, as licensee of the Hospital, does not
delegate to Manager any of Camelot's duties and responsibilities vested
exclusively in the Board by law, and Manager shall undertake only such
activities as permitted by law. The Board shall represent Camelot in matters
pertaining to the interpretation of this Agreement; provided, however, that in
any situation in which the Board shall be required or permitted to take any
action, to give any approval, or to receive any report, Manager may rely upon
the written statement of the Chairman of the Board, or other representative
thereof who shall be designated in writing by the Board to act on its behalf
under this Agreement (the "Designated Representative") to the effect that any
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such action or approval has been taken or given. Whenever any action shall be
subject to the approval of the Board, Manager shall be entitled to receive a
decision of the Board within 15 days, or such shorter period as necessary to
ensure compliance with applicable law and regulations and as designated by
Manager in its notice, after notification of the proposed action shall have been
delivered in writing to the Designated Representative.
(b) MEDICAL STAFF. Camelot shall be responsible for maintaining the
medical staff of the Hospital. The medical staff shall be organized and function
according to its bylaws, as they may be amended from time to time. All medical
and professional matters shall be the responsibility of the Board or its
Designated Representative and the medical staff of the Hospital.
(c) LICENSURE, CERTIFICATION AND ACCREDITATION. Camelot shall be
solely responsible for maintaining the Hospital fully licensed and in good
standing, and certified to participate in the Medicare and Medicaid programs as
a rural hospital and the Cameron Campus, as a rural health clinic. Camelot shall
further be responsible to maintain at all times, in good standing, all the
licenses, accreditation and certification of the Hospital. If Camelot or
Hospital receives notice, whether written or verbal, that Camelot or the
Hospital is in violation of any license, certification or accreditation, or that
any such license, certification or accreditation is in jeopardy, Camelot shall,
within 24 hours' after receipt of same, provide written notice thereof to
Manager, and Manager may immediately terminate this Agreement without notice.
(d) PROVISION OF INFORMATION. Manager shall be given complete access
to the Hospital, its records, offices and facilities, in order that it may carry
out its obligations hereunder. Without limiting the foregoing, Camelot shall
provide to Manager, true, correct and accurate copies of all historical and
current financial, statistical and patient service information, data, materials,
books, records and reports necessary or desirable for Manager to prepare all
cost reports and financial statements required under Section 3 hereof, as well
as for Manager, in accordance with Section 3 hereof, to properly ▇▇▇▇ for
services and materials furnished by the Hospital, to collect accounts and monies
owed to the Hospital and, on behalf of Hospital, to pay accounts and
indebtedness of the Hospital.
(e) FINANCIAL STATEMENTS AND TAX RETURNS. Camelot shall be solely
responsible for retaining an accounting and/or auditing firm to prepare and, if
required by applicable law or regulation, timely file the Hospital's financial
statements with applicable governing bodies and timely file the Hospital's
federal and state income, payroll, property and other tax returns. Manager shall
have full access to Camelot's accounting firm and Camelot shall advise its
accountant to cooperate fully with Manager and provide all information Manager
may request.
(f) CREDITORS. Camelot shall maintain the sole and absolute control
over, and shall have sole responsibility for, all existing liabilities,
indebtedness and obligations of the Hospital and which are in existence on the
Effective Date or which arise from events occurring prior to the Effective Date.
Furthermore, Camelot and/or the Hospital, as applicable, shall be solely
responsible for the payment, discharge and performance of all liabilities,
indebtedness and obligations that relate to the Hospital whether existing on the
date hereof or arising hereafter, except for such customary and ordinary
payments of the Hospital to be made from the Hospital's revenues, in accordance
with Section 3(d) hereof. The Manager is not assuming any liability or
obligation of Camelot or the Hospital and will not pay, discharge, perform or
otherwise be liable for any liabilities, indebtedness or obligations that relate
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to the Hospital or Camelot whether existing on the date hereof or arising
hereafter, except for such payments to be made, from the Hospital's revenues, in
accordance with Section 3(d) hereof. All such liabilities and obligations shall
be retained by and remain obligations and liabilities of Camelot and the
Hospital. Without limiting the generality of the foregoing, Camelot shall be
responsible for the negotiation, payment and/or compromise of any prior taxes,
charges, fees, levies or other assessments imposed by any federal, state, local
taxing authority, incurred, or attributed to Camelot or the Hospital, including,
but not limited to, income, excise, property, ad valorem, sales, transfer,
franchise, payroll, withholding, social security or other taxes, including any
interest, penalties or additions attributable thereto, as well as to any
payments to the Medicare and Medicaid programs, and other applicable federal or
state benefit programs.
(g) EXISTING ACCOUNTS RECEIVABLE. Manager shall not acquire any
ownership or control over, and this Agreement shall not be interpreted or
construed to grant the Manager any ownership or control over, the accounts
receivable existing as of the Effective Date or any of the proceeds therefom,
and such accounts receivable and any proceeds therefrom shall be the sole and
exclusive property of Camelot and the Hospital, and Camelot and Hospital shall
retain sole control (including, without limitation, decisions on the allocation
and use of such monies) over said accounts receivable and any proceeds
therefrom.
(h) CONTRACTS. Camelot and/or the Hospital, as applicable, shall be
solely responsible for its compliance with any agreements and contracts to which
Camelot and/or the Hospital is a party, including, without limitation, those
certain Escrow and Special Escrow Agreements dated October 20, 2003 by and
between, among others, Camelot and the District, as well as any plans or
arrangements between Camelot and/or the Hospital and the Medicare and Medicaid
programs. If Camelot or Hospital receives notice, whether written or verbal,
that Camelot or the Hospital is in violation of any agreement, contract, plan or
arrangement to which it is a party, Camelot shall, within 24 hours' after
receipt of same, provide written notice thereof to Manager, and Manager may
immediately terminate this Agreement without notice.
(i) PURCHASE AND SALE OF HOSPITAL. As a material inducement for
Manager to enter into this Agreement and to perform the management services set
forth in this Agreement, Camelot hereby agrees that upon written request from
Manager, and in accordance with such reasonable terms and conditions supplied to
Camelot by Manager (including, without limitation, reasonable closing date and
fair price), it shall sell, transfer and assign to Manager such of its assets
including, without limitation the sale of any accounts receivable and/or the
assignment of the Lease, as Manager determines in its sole discretion. The
purchase price for any such assets selected by the Manager shall be determined
by an independent third party appraiser selected by the Manager to determine the
value of the asset(s). The closing of any transaction shall be consummated at
11:59 p.m. on the day before the Hospital is scheduled to undergo a survey for
Manager to obtain a new hospital license issued by the Louisiana Department of
Health and Hospitals and a new Medicare provider number issued by the Centers
for Medicare & Medicaid Services to operate the Hospital as a new 49 bed acute
care or critical access hospital in the Hospital facilities. Without limiting
the foregoing, approvals of all applicable federal and state agencies to operate
the Hospital and rural health clinic and to receive reimbursement from Medicare,
Medicaid and other third party payors shall be a condition precedent to closing
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the transaction, unless waived by Manager. The purchase price shall be paid,
within thirty (30) days of closing, 100% in restricted common stock of Pacer
Health Corporation.
(j) APPLICATION FOR CHANGE OF OWNERSHIP. Camelot acknowledges and
agrees that upon execution hereof, Manager will apply with the applicable
federal, state and local agencies for all necessary licenses, permits and
certifications required to operate the Hospital as the licensee thereof and to
participate in the Medicare and Medicaid programs. Camelot shall use its best
efforts to assist Manager in applying for the licenses required to operate the
Hospital and to reflect the Hospital's change of ownership. Without limiting the
foregoing, Camelot shall execute such documents and provide to Manager such
information as may be necessary or desirable for Manager to timely file its
licensing and other required applications with the State of Louisiana (or
applicable agency thereof) and the federal Medicare program in accordance with
applicable laws and regulations.
5. MANAGER'S COMPENSATION FOR SERVICES
(a) RETAINER. As a material inducement for Manager to enter into this
Agreement, Camelot shall pay to Manager upon its execution of this Agreement a
non-refundable fee of Sixty Thousand Dollars ($60,000).
(b) MANAGEMENT FEE. As compensation for the services rendered by
Manager during the term of this Agreement, Manager shall be paid a fixed
management fee of $25,000 per month, payable on the 15th day of each month for
the services rendered in the immediately preceding month.
(c) BILLING AND COLLECTION. In consideration for Manager billing and
collecting for services and materials furnished by the Hospital prior to the
Effective Date and for accounts and monies owed to the Hospital, as a result of
such services and materials furnished by the Hospital prior to the Effective
Date, Camelot shall pay to Manager a fee equal to twenty percent (20%) of such
amounts collected by Manager.
(d) ACQUISITION OF FUTURE RECEIVABLE. Manager shall be responsible for
billing for services and materials furnished by the Hospital after the Effective
Date and for the collection of accounts and monies owed to the Hospital after
the Effective Date, including the responsibility to enforce the rights of the
Hospital as creditor under any contract or in connection with the rendering of
any services; provided, however, that upon collection thereof, same shall be
irrevocably transferred to and acquired by Manager, and Manager shall be the
sole owner of such accounts (to the extend permitted by law) and proceeds
thereof. Notwithstanding the foregoing, the Manager shall remain responsible for
the payment of the obligations of the Hospital as set forth in 3(d), payable
from such collected accounts or proceeds thereof, but nothing herein shall
require Manager to pay any obligations which exceed the amounts so collected by
Manager.
(e) ADVANCES BY MANAGER. Manager may, but shall not be required to,
advance funds for the operation of the Hospital in the event the revenues of the
Hospital are insufficient to meet operating expenses incurred subsequent to the
Effective Date. All funds advanced shall be treated as a loan and evidenced by a
loan and security agreement and note, in such form as provided by Manager,
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executed by Camelot and secured by the assets, including, without limitation,
all accounts receivable accrued, and the proceeds therefrom, of the Hospital
subsequent to the Effective Date. The loan and security agreement and note and
financing documents shall be referred to collectively as the "Financing
Agreements". Except as otherwise required by law, Manager shall be entitled to
and shall have all right, title and interest to any and all payments due from
the United States Government under the Medicare Program, the State of Louisiana
Medicaid Program, all patients and responsible parties, Health Plans and other
third party payors, arising out of the operation of the Hospital subsequent to
the Effective Date. Camelot shall promptly account and pay Manager all monies
paid to or received by Camelot for services performed after the Effective Date.
Manager shall promptly account and pay Camelot all monies paid to or received by
Manager for services performed on or before Effective Date. Each party shall
cooperate, at no cost or expense to such cooperating party, in all reasonable
respect with the other party's efforts to collect its accounts receivable.
6. INSURANCE. Camelot agrees to provide such commercially reasonable
insurance coverage for the Hospital as required by the Manager, based on the
scope of operations of the Hospital, and naming Manager and its appropriate
affiliates, their agents, servants, employees, officers and directors as
additional named insureds. Without limiting the foregoing, Camelot shall secure
and maintain worker's compensation and employer's liability insurance,
comprehensive general and professional liability (including, personal injury,
products and completed operations liability, blanket automobile liability)
insurance, each in such amounts as required by Manager. At all times, Camelot
shall maintain insurance on the Hospital buildings, furnishings, and equipment
against loss or damage by fire, flood, lightning, wind storm, explosion, vehicle
and smoke damage in the amount of their full insurance values.
7. INDEMNITY. Camelot shall indemnify and hold Manager and its affiliates
harmless from any and all demands, claims, losses and expenses, including,
without limitation, reasonable attorney's fees caused by or resulting from (i)
the negligent or intentional acts or omissions of the Hospital or Camelot or any
employee thereof or of any member of the Board or the medical staff; and (ii)
existing or future obligations, liabilities or debts of the Hospital or Camelot.
8. TERM AND TERMINATION
(a) TERM. The term of this Agreement shall be for a period of one (1)
year commencing on the Effective Date.
(b) BY CAMELOT. Camelot shall have the right to terminate this
Agreement for cause by providing Manager with not less than one hundred eighty
(180) days' advance written notice. In no event shall this Agreement be
terminated by Camelot without cause. Cause, for the purposes of this Agreement,
shall be limited to the following:
(i) Manager fails to make the payments required under the Lease,
unless otherwise excused by the District; or
(ii) Manager fails to pay withholding taxes when due to the
Internal Revenue Service with respect to payroll expenses incurred subsequent to
the Effective Date; or
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(iii) the State of Louisiana (or an applicable agency thereof)
revokes the license of the Hospital; or
(iv) the Centers for Medicare and Medicaid de-certifies the
Hospital for participation in the Medicare program or suspends payment.
(c) BY MANAGER. Manager may terminate this Agreement immediately with
cause for breach of this Agreement by Camelot provided that Manager shall have
provided Camelot with notice stating with particularity the nature of the breach
which breach has not been cured within two (2) days of receipt of such notice.
Manager may terminate this Agreement with or without cause by providing Camelot
with not less than thirty (30) days advance written notice.
In the event Camelot attempts to terminate this Agreement with or
without cause, other than as set forth in Section 8(a) above, Manager shall be
entitled to injunctive relief, upon the payment of a bond in the amount of
$1,000 or such greater amount required by law, immediate payment of all sums
advanced by Manager for the operations of the Hospital pursuant to the Financing
Agreements, and payment in full of all Management Fees accrued but unpaid. In
addition, Camelot shall pay the attorneys' fees and costs incurred by Manager in
enforcing Manager's rights pursuant to this Section 8(b). All amounts unpaid
within five (5) days of the effective date of termination shall bear interest at
the rate of the lesser of: (i) eighteen percent (18%) per annum or (ii) the
highest interest rate permitted law, until paid in full.
(d) PURCHASE AND SALES OF ASSETS OF HOSPITAL. This Agreement shall
terminate upon the closing of the purchase and sale of certain assets of the
Hospital from Camelot to Manager, as contemplated by Section 4 hereof.
(e) LIMITATION OF LIABILITY. The liability of Manager for failure to
perform its obligations hereunder, absent gross or willful negligence, shall be
limited to the amount of Management Fees paid to Manager pursuant to this
Agreement in excess of its actual costs, it being expressly understood and
agreed that Manager shall perform its duties hereunder under the auspices of
Camelot, as licensee of the Hospital.
(f) EFFECT OF TERMINATION. Upon termination of this Agreement the
parties shall have no further obligations as of the effective date of
termination and shall be entitled solely to the rights which accrued prior to
the effective date of termination. Without limiting the foregoing, Manager shall
be responsible for expenses and shall be entitled to all cash on hand, accounts
receivable, and proceeds therefrom which accrued subsequent to the Effective
Date through the effective date of termination.
9. REPRESENTATIONS AND WARRANTIES OF CAMELOT. As a material inducement for
Manager to enter into this Agreement and for the performance of its obligations
under this Agreement, Camelot represents and warrants to Manager the following:
(a) ORGANIZATION. Camelot is a limited liability company duly
organized, validly existing and in good standing under the laws of Louisiana.
Camelot has the power and authority to lease and operate the Hospital and to the
carry on the business as now conducted.
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(b) AUTHORITY. Camelot has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
Camelot. This Agreement has been duly and validly executed and delivered by
Camelot and constitutes the legal, valid and binding agreement of Camelot,
enforceable against Camelot in accordance with its terms.
(c) NO VIOLATIONS. The execution and delivery of this Agreement and
the consummation and compliance with the transactions contemplated hereunder and
thereunder by Camelot shall not, directly or indirectly (with or without notice
or the lapse of time or both): (i) contravene, conflict with, or result in a
violation of any provision of Camelot's governing documents or the resolutions
adopted by the Board of Directors of Camelot; (ii) contravene, conflict with or
result in the breach of any agreement to which Camelot is a party or by which it
is bound, or (iii) violate, or give any person the right to obtain any relief or
exercise any remedy under, any applicable law to which Camelot is subject.
(d) CONSENTS AND APPROVALS. There is no requirement applicable to
Camelot to make any filing with, or to obtain any permit, authorization,
license, consent or approval of, any governmental or regulatory authority as a
condition to the lawful consummation of the transactions contemplated by this
Agreement. Camelot has all power and responsibility required by the State of
Louisiana to be retained and exercised by the holder of the license for
operation of the business of the Hospital as currently being conducted.
(e) LICENSING. Camelot shall take all steps necessary to keep the
Hospital fully licensed and in good standing, and certified to participate in
the Medicare and Medicaid programs as a rural hospital and rural health clinic.
Camelot shall maintain at all times in good standing all the licenses,
accreditation and certification of the Hospital, and Camelot shall not take any
actions to jeopardize or breach Medicare, Medicaid and other third party
reimbursement agreements.
(f) FURTHER ASSURANCES. Camelot shall take all actions and to do all
things necessary or desirable under applicable law to perform its obligations
under this Agreement and to enable Manager to perform its respective obligations
under this Agreement. Camelot agrees to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be reasonably necessary or desirable in order to implement
expeditiously the actions contemplated by this Agreement.
(g) COMPLIANCE WITH LAWS. Camelot shall abide by all laws, ordinances,
rules and regulations of state, local or federal governments pertaining to
Camelot's ownership and operation of the Hospital and to its performance of this
Agreement.
10. STATUS OF THE PARTIES. In the performance of their respective duties
and obligations hereunder, Manager shall be and is acting as an independent
contractor. Camelot and Manager agree that each party hereto is neither the
employee, employer, principal, nor the agent of the other. Furthermore, nothing
herein contained shall be construed to constitute a joint venture or partnership
between the parties. Camelot shall neither have nor exercise any control or
direction over the methods buy which Manager performs its services hereunder, it
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being agreed that said services are at all times to be performed in strict
accordance with currently approved methods and practices.
11. MISCELLANEOUS.
(a) FORCE MAJEURE. Neither party shall be liable for any delay or
failure to perform hereunder due to floods, riots, strikes, freight embargoes,
acts of God, acts of war or hostilities of any nature, laws or regulations of
any government (whether foreign or domestic, federal, state, county or
municipal) or any other similar cause beyond the reasonable control of the party
affected. It is understood that lack of financial resources shall not be deemed
a cause beyond a party's control. A party relying on such an event to excuse its
performance hereunder shall, as soon as reasonably possible, notify the other
party in writing of the nature of that event and the prospects for that party's
future performance and shall thereafter, while that event continues, respond
promptly and fully in writing to all reasonable requests for information from
the other party relating to that event and those prospects.
(b) WAIVERS AND AMENDMENTS. The delay or failure by either party to
exercise or enforce any of its rights under this Agreement shall not constitute
or be deemed a waiver of that party's right thereafter to enforce those rights,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. No amendment or
waiver of any provision of this Agreement shall be effective unless it is in
writing, and the writing makes specific reference to this Section 10, and it is
signed by the party against which it is sought to be enforced.
(c) SEVERABILITY. If any provision of this Agreement is held to be
void, the remaining provisions shall remain valid and shall be construed in such
a manner as to achieve their original purposes in full compliance with the
applicable laws and regulations.
(d) SOLE AGREEMENT. This Agreement is intended to be the sole and
complete statement of the obligations and rights of the parties as to all
matters covered by this Agreement, and supersedes all previous understandings,
agreements, negotiations and proposals relating thereto.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors. This
Agreement shall not be assigned by either party without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
(f) WRITTEN COMMUNICATIONS. All notices, orders and other
communications provided for hereunder shall be in writing and shall be delivered
by hand delivery, next day delivery by an express courier services, of facsimile
as to each party hereto, at its address set forth on the first page of this
Agreement and or at such other address as shall be designated by such party in a
written notice to the other party, and to the party executing this Agreement on
such party's behalf. All such communications shall be effective as follows: (i)
when delivered, if by hand delivery; (ii) next day, if by next day deliver by
express courier; or (iii) upon electronic confirmation of transmission, if by
facsimile.
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(g) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.
(h) EFFECT OF HEADINGS. The headings to the Articles, Sections and
Exhibits of this Agreement shall not affect the construction of this Agreement.
(i) ATTORNEYS' FEES. If either party commences any action or
proceeding against the other party to enforce this Agreement, the prevailing
party in such action or proceeding shall be entitled to recover from the other
party the actual attorneys' fees, costs and expenses incurred by such prevailing
party in connection with such action or proceeding and in connection with
enforcing any judgment or order thereby obtained.
(j) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of Louisiana, excluding any conflicts of law rules
requiring the application of the substantive law of any other jurisdiction.
(k) THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement,
whether expressed or implied shall be deemed to confer any rights or remedies
(including, without limitation, third party beneficiary rights) upon, or
obligate either party to, any third person or entity.
(l) MODIFICATION OF TERMS. To the extent any provision hereof is
deemed by a court of law or other governmental entity to violate, on its face or
in practice, any federal, state or local law, rule, regulation, policy,
procedure or interpretation thereof (collectively, "Law"), then such provision
shall be modified by mutual agreement of the parties hereto to the extent
necessary in order to make such provision or the application thereof to comply
with such Law.
(m) CHANGE OF CIRCUMSTANCES. In the event any federal, state or local
legislative or regulatory authority adopts any Law which, in the reasonable
determination of either Manager or Camelot, based on the advice of legal counsel
(which such advice shall be in writing and furnished to the other party) is more
likely than not to require a material change in the manner of either party's
operations or obligations under this Agreement, then, upon the circumstances,
the parties shall enter into good-faith negotiations for the purpose of
establishing such amendments or modification to this Agreement, and any other
agreement to which the parties may be a party, as may be appropriate in order to
accommodate the new requirement and change of circumstances while preserving the
original intent of this Agreement to the greatest extent possible. In the event
that within the period of 90 days following the date notice is first given by
one party hereunder to the other that a material change in the manner of either
party's operations under this Agreement is required, the parties have not agreed
to amend or modify this Agreement, or any other agreement to which the parties
hereto may be a party, then upon 30 days notice thereafter by either party to
the other, this Agreement may be terminated without incurring any liability as a
result thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized representatives on the date first set forth
above.
CAMELOT SPECIALTY HOSPITAL OF
CAMERON, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
PACER HEALTH MANAGEMENT
CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President of Finance
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