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Exhibit 10.32
ASSET ACQUISITION AGREEMENT AND ESCROW INSTRUCTIONS
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THIS ASSET ACQUISITION AGREEMENT AND ESCROW INSTRUCTIONS
(the "Agreement") is made as of March 22, 1994, between THC-SEATTLE, INC., a
Washington corporation ("THC" or "Buyer") and COMMUNITY PSYCHIATRIC CENTERS,
a Nevada corporation ("CPC"), on the one hand, and BRIM FIFTH AVENUE, INC., an
Oregon corporation ("Brim" or "Seller"), and BRIM HOSPITALS, INC., an Oregon
corporation ("BHI"), on the other hand.
R E C I T A L S
A. (i) Brim owns and operates a hospital located at 00000 Xxxxx Xxxxxx,
X.X., Xxxxxxx, XX 00000-0000, licensed as a hospital with eighty (80) beds
(the "Hospital") for the provision of general acute care medical-surgical
services.
(ii) Brim owns the real property on which the Hospital is located
and which is more particularly described in Schedule A (the "Realty") and owns
or leases all buildings, structures, fixtures, trade fixtures and other
improvements thereon, therein and thereof (collectively, the "Improvements," and
together with the Realty, the "Real Property").
(iii) Brim is a wholly owned subsidiary of BHI.
B. (i) THC is a wholly owned subsidiary of Transitional Hospitals
Corporation, a Delaware corporation ("Transitional"), which is a wholly owned
subsidiary of CPC.
(ii) Transitional owns and operates facilities which provide
service, care and treatment for patients with long-term acute illnesses,
diseases or conditions.
(iii) CPC owns and operates facilities which provide treatment
for acute psychiatric illness and for chemical dependency and substance abuse.
C. Pursuant to all of the terms and conditions of this Agreement, Buyer
desires to purchase from Seller and Seller desires to sell to Buyer the Real
Property and substantially all of the assets owned and used by Seller in the
operation of the Hospital.
X. Xxxx and THC have entered into a Management and Operations Transfer
Agreement (the "Management Agreement") and a Management Agreement (the
"Management Subcontract") of even date herewith, each effective as of May 1,
1994 (the "Management Commencement Date").
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A G R E E M E N T
NOW, THEREFORE, it is agreed:
1. SALE AND TRANSFER OF ASSETS. On all of the terms and conditions of this
Agreement, Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, on the Closing Date (as defined in paragraph 9), for the consideration
specified in paragraphs 2.1 and 2.2, all of the assets described in paragraph
1.1, but excluding the assets described in paragraph 1.2.
1.1 THE ASSETS. The assets to be sold and purchased pursuant to this
Agreement consist of all real, personal tangible and intangible property used
in the operation of the Hospital (collectively, the "Assets"). Without
limitation of the foregoing sentence, the Assets include:
1.1.1 REAL PROPERTY. The Real Property;
1.1.2 PERSONAL PROPERTY. All furniture, furnishings, equipment and
all other tangible property owned by Seller on the Closing Date which is used
or held in connection with the operation of the Hospital, including that listed
and described in Schedule 1.1.2, and all inventory owned by Seller on the
Closing Date (the "Inventory") of housekeeping and operating items and
materials, supplies, consumables and disposables whether or not such items
would be classified as inventory according to generally accepted accounting
principles (collectively, the "Personal Property");
1.1.3 CONTRACTS. All right, title and interest of Seller under
the contracts, agreements, leases and other rights listed and described in
Schedule 1.1.3 (the "Assumed Contracts") which are assumed by Buyer pursuant to
paragraph 2.2;
1.1.4 INTANGIBLES. All intangible property owned by Seller and
used or necessary for the operation of the Hospital, including without
limitation:
(a) LICENSES. All of the Licenses (as defined in
paragraph 3.6.1), which by law or by their terms are transferrable and which
are necessary for the operation of the Hospital as it is presently operated;
(b) ADVANCES, PREPAYMENTS, DEPOSITS AND PREPAID EXPENSES.
All advances, prepayments, deposits and prepaid expenses on the Assumed
Contracts held by third parties and all patient deposits held by Seller on the
Management Commencement Date (collectively, "Prepaid Expenses");
(c) CLINICAL PROGRAMS. All clinical programs operated by
Seller at the Hospital.
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1.1.5 RECORDS.
(a) PATIENT RECORDS. Original medical records, or
complete and correct copies of medical records, maintained by Seller for the
Hospital;
(b) EMPLOYEE RECORDS. Original, or complete and correct
copies, of all personnel files and employee health records maintained by Seller
for those employees at the Hospital whom THC has given Brim written notice of
THC's intent to rehire after Closing and who have authorized Seller to release
such files to THC;
(c) MEDICAL STAFF FILES. Original, or complete and
correct copies, of all medical staff files maintained by Seller in connection
with the Hospital for which Seller has received written authority from the
physician to release to THC; and
(d) POLICIES AND PROCEDURES MANUALS. Original, or
complete and correct copies, of all current policies and procedures manuals for
the Hospital.
1.2 EXCLUDED ASSETS. Notwithstanding paragraph 1.1, Buyer shall not
purchase, Seller shall not sell and the Assets do not include the following:
1.2.1 CURRENT ASSETS. Accounts and notes receivable, cash on hand,
bank deposits, securities and current assets of Seller (other than Inventory
and Prepaid Expenses) at the Management Commencement Date or to which Seller is
entitled under the Management Subcontract.
1.2.2 CLAIMS. Any claims and causes of action arising before the
Management Commencement Date or in connection with Seller's actions under the
Management Subcontract.
1.2.3 BOOKS AND RECORDS. All financial books and records of Seller,
including but not limited to the general ledger, accounts payable, payroll and
fixed assets.
1.2.4 OTHER EXCLUDED ASSETS. Such other assets of Seller which are
listed and described in Schedule 1.2.4.
1.2.5 PERSONAL PROPERTY OWNED BY THIRD PARTIES. All items of
personal property located at or used in connection with operation of the
Hospital owned by parties other than Seller.
2. CONSIDERATION. The amount, payment and description of the consideration
to be given by Buyer to Seller for the Assets is described in paragraphs 2.1
and 2.2. This consideration shall be allocated among the Assets, the Covenants
(as defined in paragraph 5.12.2) and the consulting services to be provided by
Seller pursuant to paragraph 5.15 as provided in Schedule 2.
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2.1 PURCHASE PRICE. The cash purchase price (the "Purchase Price") to be
paid by Buyer is Six Million Dollars ($6,000,000). The Purchase Price has been
or shall be paid as follows:
2.1.1 DEPOSIT. Buyer has deposited Seventy-Five Thousand Dollars
($75,000) of the Purchase Price (together with all earnings and interest
thereon, the "Deposit") with Chicago Title Insurance Company ("Escrow Holder")
to be deposited and held in an interest-bearing escrow account (the "Escrow")
and invested as instructed by Buyer; provided, however, that such funds must
be readily available on the Closing Date;
(a) CLOSING. If there is a Closing, the Deposit shall be
applied to the Purchase Price at Closing, and
(b) NO CLOSING FOR FAILURE OF CONDITION. If the Closing
does not occur other than because of a material breach of this Agreement or
material breach or untruth of any warranty, representation or covenant
contained in this Agreement or other wrongful act or omission of any of the
parties, the Deposit shall be paid to Buyer as provided in this Agreement and,
except as otherwise provided in this Agreement, neither party shall have any
remedies available to it against the other.
(c) NO CLOSING BECAUSE OF BREACH. If the Closing does not
occur because of a material breach of this Agreement by Seller or material
breach or untruth of any warranty, representation or covenant of Seller
contained in this Agreement or other wrongful act or omission of Brim or BHI,
Buyer shall be entitled to return of the Deposit and shall be entitled to
pursue such other remedies as may be available to it in law or equity. If the
Closing does not occur because of a material breach of this Agreement by Buyer
or material breach or untruth of any warranty, representation or covenant of
Buyer contained in this Agreement or other wrongful act or omission of THC or
CPC, Seller shall be entitled to the Deposit and to pursue such other remedies
as may be available to it in law or equity.
2.1.2 BALANCE. The balance of the Purchase Price shall be paid
to Escrow Holder (the "Balance") in funds immediately available in Seattle,
Washington on the Closing Date, to be disbursed by Escrow Holder in accordance
with the provisions of this Agreement; provided, however, that:
(a) CREDITS. Buyer shall receive a credit against the
Balance due at Closing for (i) any principal payments made by Buyer prior to
Closing with respect to any deed of trust secured by the Hospital; (ii) the
portion of the License Payments (as defined in Section B.2.3 of the Management
Agreement) made by Buyer prior to Closing which is applicable to the Purchase
Price according to the Purchase Price Credit Schedule attached as Exhibit A to
the Management Agreement, and (iii) one hundred percent (100%)
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and fifty percent (50%) of the purchase price paid by Buyer for the Nonsurgical
Inventory and the Common Inventory (each as defined in Section A.10.3 of the
Management Subcontract), respectively, in each case, under the terms of the
Management Agreement and the Management Subcontract; and
(b) INTEREST. If the condition set forth in paragraph 7.5
is satisfied prior to satisfaction of the condition set forth in paragraph 7.3,
the Purchase Price shall bear interest at the rate of five percent (5%) per
annum from the date the condition set forth in paragraph 7.5 is satisfied until
Closing.
2.2 ASSUMPTION OF OBLIGATIONS. On and as of the Management Commencement
Date, Buyer shall assume and agrees to pay or perform in accordance with their
terms all of the Assumed Contracts, prorated and paid by Seller or otherwise
adjusted through the Management Commencement Date.
2.2.1 EXCLUSION OF OTHER LIABILITIES OF SELLER. It is
expressly agreed and understood that, except for the Assumed Contracts and
Permitted Encumbrances (as defined in paragraph 7.4.6), Buyer does not assume
and shall not be liable for, nor shall any of the Assets secure or be subject
to or encumbered by, any Seller's Liabilities (as defined in paragraph 3.3).
3. REPRESENTATIONS AND WARRANTIES OF SELLER. As a material part of the
consideration to THC in this transaction, Seller represents and warrants to
Buyer that:
3.1 ORGANIZATION AND GOOD STANDING. Brim and BHI are, and on the Closing
Date will be, corporations duly organized, validly existing and in good
standing under the laws of the State of Oregon with full power and
authorization to conduct the business of the Hospital as conducted as of the
Management Commencement Date and otherwise to conduct business in the State of
Washington.
3.2 AUTHORITY. The execution, delivery and performance of this Agreement
and the consummation of the transactions described in it by Seller and BHI have
been duly authorized and approved by Seller's and BHI's Boards of Directors,
respectively (either specifically or by appropriate grant of general authority),
and by all other necessary corporate and shareholder action on their part.
Each person who executes this Agreement on behalf of Seller and BHI has been
duly authorized to do so by all corporate action of Seller and BHI,
respectively. Seller and BHI have the corporate power and authority to enter
into, deliver and perform this Agreement, and this Agreement, when executed and
delivered by Seller and BHI, will be a valid and binding obligation of each of
them, enforceable against each according to its terms respectively applicable
to each, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws, regulations and authorities from time to
time in effect affecting creditors' rights generally and
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to general principles of equity, whether considered in a proceeding in equity
or at law.
3.3 SELLER'S LIABILITIES. Except for the Assumed Contracts and
Permitted Encumbrances, Buyer shall not be liable for, nor, after Closing, shall
any of the Assets secure or be encumbered by, any debts, liabilities or
obligations of Seller of any kind, accrued, contingent or absolute, due or to
become due, known or unknown, asserted or unasserted (collectively, "Seller's
Liabilities"), including without limitation:
3.3.1 ACTS OR OMISSIONS. Liabilities of Seller for its own acts or
omissions; including, but not limited to, personal injury, property damage,
professional malpractice and intentional torts;
3.3.2 GOVERNMENTAL PROGRAMS. Claims against Seller, the Hospital or
the Assets by the United States government under the Medicare or Medicaid
programs, the State of Washington under the Medicaid program, and any other
third party payors (including HMOs and Blue Cross/Blue Shield), arising out
of the Hospital's operations through the Management Commencement Date or
Seller's actions under the Management Subcontract or any claim under the
Medicare or Medicaid programs for recapture of depreciation generated by the
transactions contemplated hereby (except as otherwise provided in the
Management Agreement or Management Subcontract) and any claim for repayment
of any overpayments made to Seller under the Medicare or Medicaid programs for
services provided prior to the Management Commencement Date;
3.3.3 TAXES. Federal, state, local income or other taxes or
assessments of Seller and the Hospital, including, without limitation, ad
valorem, real property, personal property, sales, use, franchise and other
taxes, payable with respect to the activities, business or operations of Seller
and the Hospital prior to the Management Commencement Date.
3.3.4 DEFICIENCIES. Liabilities and/or capital expenditures
necessary for Buyer to correct or comply with life safety, building or fire
codes, environmental or health care laws or regulations or Joint Commission on
Accreditation of Health Care Organizations deficiencies existing on the
Management Commencement Date;
3.3.5 LITIGATION. Litigation to which Seller is party or which
relates to Seller's operation of the Hospital prior to the Management
Commencement Date or to Seller's actions under the Management Subcontract,
including but not limited to the litigation described on Schedule 3.7;
3.3.6 OTHER LIABILITIES. Any other debt, obligation or liability of
Seller, as it relates to the Hospital and the Assets (other than the Assumed
Contracts and Permitted Encumbrances),
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including but not limited to, (i) long-term debt and (ii) all debts, obligations
and liabilities to current or former officers, directors, shareholders or
employees including but not limited to salaries, wages, contractually obligated
bonuses, vacation days, sick leave, payroll taxes, withholding taxes and other
withholdings from employees and employees' benefit costs relating to the period
prior to the Management Commencement Date, except as otherwise provided in
paragraph 5.8.
3.4 ASSETS.
3.4.1 DESCRIPTION. Schedule A contains a complete and
correct description of the Realty and Schedule 1.1.2 completely and correctly
lists all material items of Personal Property used or held in connection with
the operation of the Hospital.
3.4.2 EXTENT. The Realty is all of the real property owned
by Seller which is used or held in connection with the operation of the
Hospital. The Personal Property includes all material items of such property
necessary for the operation of the Hospital and the conduct of its business as
presently operated and conducted.
3.4.3 CONDITION. All of the Improvements and Personal
Property are being sold in their As-Is condition. Schedule 3.4.3 sets forth
deficiencies in the condition of any of the Improvements or Personal Property
known to Seller on the Management Commencement Date.
3.4.4 TITLE. Seller now has, or prior to Closing will have,
and at Closing will vest in THC good and marketable title to all of the Assets
(including insurable title to the Real Property), free and clear of restrictions
on or conditions to transfer or assignment and free and clear of liens,
encumbrances, security interests, equities, claims, conditions or restrictions
except for the Permitted Encumbrances.
3.5 EFFECT OF AGREEMENT. Neither the execution and delivery of this
Agreement by Seller or BHI, nor the consummation of the transactions described
in it, at the Closing will:
3.5.1 ARTICLES AND BYLAWS. Violate Brim's or BHI's
Certificate of Incorporation or Bylaws;
3.5.2 BREACH OF AGREEMENTS. Violate, constitute a breach of,
cause a default-under, or permit the termination or foreclosure of any
agreement, obligation, liability, mortgage or deed of trust, security agreement
or other lien, charge or encumbrance on or secured by any of the Assets (except
for obligations to be discharged by Seller at Closing), or to which Seller is a
party;
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3.5.3 ACCELERATION OF INDEBTEDNESS. Accelerate or constitute an event
entitling the holder of any indebtedness secured by the Assets or to which
Seller is a party to accelerate the maturity of any such indebtedness or to
increase the rate of interest presently in effect thereon except for obligations
to be discharged by Seller at Closing; or
3.5.4 JUDGMENTS, ETC. Violate, conflict with or result in the breach
of any material judgment, order, writ, injunction, decree or any rule or
regulation of any court, governmental agency or instrumentality affecting the
Hospital or the Assets.
3.6 COMPLIANCE WITH LAW. The Hospital has been operated in substantial
conformity with, and Brim is in substantial compliance with, all federal, state
and local laws, regulations or orders, including without limitation, employment,
insurance, zoning, occupancy, building, occupational and licensure laws,
regulations and orders which affect it.
3.6.1 LICENSES, ETC. Brim holds all rights, permits, authority,
consents, licenses, certificates of need, exemptions, accreditations and the
like, including those necessary to enable it to (i) operate the Hospital as
presently operated and (ii) obtain payment or reimbursement under the Medicare
and Medicaid programs and under all contracts, programs and other arrangements
with third-party payors, insurers or fiscal intermediaries to which Brim is a
party (collectively, the "Licenses"). Brim has provided THC with a complete and
correct list and complete and correct copies of all of the Licenses, showing
their dates of expiration where applicable. The Hospital is duly licensed by the
State of Washington as a hospital, has an existing Medicare Provider Agreement
with the Health Care Finance Administration of the U.S. Department of Health and
Human Services and is certified for participation in the Medicare and Medicaid
programs, all of which licenses, agreements, certifications, contracts and
instruments are in full force and effect. No defaults have occurred thereunder,
and no event has occurred which, with the giving of notice or passage of time or
both, would constitute a material default thereunder.
3.6.2 HAZARDOUS MATERIALS. Except as disclosed in the documents and
reports listed in Schedule 3.6.2, to the best of Seller's knowledge there is and
has been no production, disposal, discharge, release or storage in, on, from,
above, beneath or around the Real Property or the Hospital prior to the
Management Commencement Date of any hazardous or toxic material which would give
rise to liability under any federal, state or local law or regulation or which
would require notification to any authority thereunder. As of the Management
Commencement Date (i) no written notification of a violation of federal, state
or local laws or regulations has been received with respect to the Real Property
or the Hospital, and (ii) there are no proceedings or inquiries, pending or
threatened, before any court, agency, authority or
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tribunal, involving, concerning or affecting the Real Property or the Hospital
in which the violation of any federal, state or local law or regulation
pertaining to hazardous or toxic materials has been determined or is admitted
or is at issue. For purposes of this paragraph 3.6.2, the phrase "hazardous or
toxic materials" includes substances defined as "hazardous substances,"
"hazardous materials," "toxic substances," "hazardous waste," "extremely
hazardous waste," "infectious waste," "reproductively toxic," "biohazardous
waste" or "restricted hazardous waste" when any such substance is improperly
"generated," "stored," "utilized," "heated," "disposed," "discharged,"
"released," "transported," or "managed," as all of those terms are defined by
any federal, state or local statute, ordinance, bylaw, code, rule or regulation
now in effect, applicable to (i) environmental conditions in, on, under,
around, adjacent to or in the vicinity of the Real Property or (ii) any
disposal, discharge, release, transportation or storage, including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, ET SEQ.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.; the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, ET SEQ.; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; and
other federal, state and local laws of similar import or any other substances
having similar effects defined or designated in any regulations adopted and
publications promulgated pursuant to any of those laws as they may have been
amended from time to time on or before the date of this Agreement (collectively,
"Environmental Laws").
Seller further represents and warrants that as of the Management
Commencement Date:
(a) COMPLIANCE. Except with respect to the conditions
that are the subject of the work reflected in that bid dated December 9, 1993,
prepared by Lake Oswego Insulation Company and delivered to Buyer by Seller
(the "Asbestos Work"), Seller and the Real Property are in compliance in all
material respects with all Environmental Laws; and there are no present events
or conditions that are likely to interfere with or otherwise affect continued
compliance by Seller and the Real Property with any Environmental Law;
(b) TANKS. Except as disclosed in Schedule 3.6.2, there
are no underground tanks located at or about the Real Property; and
(c) DISPOSAL. Seller has provided Buyer with complete and
correct information regarding the disposal arrangements used by Seller in
connection with the Hospital.
3.6.3 XXXX-XXXXXX ACT. The Hospital has no obligation to
provide free care pursuant to the Xxxx-Xxxxxx Act (42 U.S.C. Sections 291-2910).
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3.6.4 WARN ACT. Brim has no obligation to provide notice or payments
under the Worker Adjustment and Retraining Notification Act (29 U.S.C. Section
2101 ET SEQ.) and the rules and regulations promulgated thereunder.
3.7 LITIGATION. Except as set forth in Schedule 3.7:
3.7.1 CLAIMS, ACTIONS, ETC. There are no claims, actions, suits,
arbitrations, legal or other proceedings pending or, to the best of Seller's
knowledge, threatened before any court or governmental or administrative body or
agency, or arbitration tribunal, which do, or are reasonably likely to,
adversely affect the Assets or Seller's ability to consummate the transactions
contemplated by this Agreement.
3.7.2 GOVERNMENTAL INVESTIGATIONS. There are no pending or, to the
best of Seller's knowledge, threatened investigations of or claims against (i)
the Hospital or, (ii) any of the Medical Staff members, Board of Directors or
employees of the Hospital by any governmental agency or instrumentality; and
3.7.3 JUDGMENTS. Neither Brim nor BHI is a party to nor is either the
subject of any judgment, order, writ, injunction or decree of any court or
governmental agency or instrumentality which materially affects the Assets or
the condition or operation of the Hospital or the consummation of any of the
transactions described in this Agreement.
3.8 IMPROPER PAYMENTS. Neither Brim nor any of its affiliates, employees
or anyone acting with Seller's authority have, directly or indirectly, since
Brim's acquisition of the Hospital, given or made or agreed to give or make any
illegal commission, payment, gratuity, gift, political contribution or similar
illegal benefit to any customer, supplier, governmental employee or other person
who may be in a position to help or hinder the operation of the Hospital. Brim
has filed no reports with any governmental agency which disclose that it has
participated in any of the foregoing practices or acts giving rise to such
practices.
3.9 EMINENT DOMAIN. There are no pending or, to the best of Brim's
knowledge, threatened proceedings in eminent domain or otherwise affecting any
of the Assets.
3.10 CONTRACTS. Brim has provided THC with a complete and correct list and
complete and correct copies of all material contracts, commitments, leases,
obligations and other agreements applicable to the Hospital or the Assets as of
the Management Commencement Date.
3.11 INSURANCE. Brim has provided THC with a complete and correct list and
a brief description of all policies of fire, extended coverage, liability
(including, without limitation,
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medical malpractice and professional liability) and all other kinds of insurance
held by Seller covering the Assets and the Hospital as of the Management
Commencement Date. These policies are, and will be, maintained in full force and
effect until the Closing Date, subject to Buyer's obligations under the
Management Agreement.
3.12 LABOR ARRANGEMENTS. Except as shown in Schedule 3.12, Brim is not a
party to, bound by or obligated to contribute to, any collective bargaining
agreement or other similar contract with any labor organization, nor is it a
member of or affiliated with any organization, group or association as a result
of which it is bound as to the terms and conditions of employment or its hiring
or termination policies at the Hospital with respect to any of its employees.
Seller has experienced no, and there is no pending or, to the best knowledge of
Seller, threatened labor dispute, strike, work stoppage or slowdown or labor
disturbance affecting the Hospital, nor has there been any labor union
organizing activity at the Hospital within the last three (3) years. There is no
unfair labor practice or other charge or complaint pending, or, to Brim's best
knowledge, threatened against the Hospital, before any court, the National Labor
Relations Board or any other governmental agency.
3.13 PERSONNEL; COMPENSATION. Brim has provided THC with a complete and
correct list showing (i) the names and addresses of all Brim employees at the
Hospital, (ii) the compensation payable to each and (iii) all accrued vacation
time, sick leave and holiday time of each, in each case as of January 31, 1994.
3.14 EMPLOYMENT CONTRACTS AND EMPLOYEE BENEFIT PLANS. Brim has supplied
THC with a complete and correct list and description of all employment contracts
to which Brim is a party or by which it is bound and of all pension, profit
sharing, retirement, savings, deferred compensation, consulting, bonus,
commission, stock option, termination or severance allowance, insurance
(including, without limitation, life, disability, medical, hospitalization and
dental insurance or coverage) and other employee agreements and plans and
benefits, arrangements or other programs providing remuneration or benefits for
employees at the Hospital which are maintained, administered or contributed to
by Brim, including, without limitation, all "employee benefit plans" as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), whether or not funded and whether or not reflected in any
plan documents. To the best of Seller's knowledge, there have been no material
defaults, breaches, omissions or other failings by Seller under any of these
contracts or programs.
3.14.1 NONASSUMPTION. Buyer will have no liability under any of the
arrangements described in paragraph 3.14.
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3.14.2 CERTAIN CONTRIBUTIONS. Neither Brim nor any member of its
controlled group (within the meaning of Section 302(f)(6)(B) of ERISA) presently
has, nor has any such entity ever had, any obligation to contribute to an
employee pension benefit plan referred to in Section 302(a) of ERISA.
3.14.3 CERTAIN PLANS. Neither Brim nor any member of its controlled
group (within the meaning of Section 4001(a)(14) of ERISA) presently are, nor
has any such entity ever been, a contributing sponsor (within the meaning of
Section 4001(a)(13) of ERISA) of a single-employer plan (within the meaning of
Section 4001(a)(15) of ERISA).
3.15 BROKERS. Neither Brim nor BHI has employed, contracted for the services
of, or authorized any broker or finder to find Buyer or to provide services with
respect to the negotiation, execution, delivery or performance of this
Agreement.
3.16 ABSENCE OF CHANGES. Between December 10, 1993 and the Management
Commencement Date there has not been any:
3.16.1 ORDINARY COURSE. Transaction affecting the Assets except in
the ordinary course of the Hospital's business or as contemplated by the
Implementation Plan (as defined in paragraph 5.1.1).
3.16.2 ADVERSE CHANGE. Material adverse change in the Assumed Contracts
or the Assets, except in the ordinary course of business of the Hospital or as
contemplated by the Implementation Plan.
3.16.3 DESTRUCTION, ETC. Destruction, damage or loss (whether or not
covered by insurance) that materially and adversely affects the Assets;
3.16.4 TRANSFER OF ASSETS. Sale, transfer or hypothecation of any of
the Assets except in the ordinary course of the business of the Hospital or as
contemplated by the Implementation Plan;
3.16.5 LITIGATION. Commencement or written notice or, to the best of
Seller's knowledge, threat of any litigation or any governmental proceeding or
investigation which would adversely affect the Assets or the parties' ability to
consummate the transactions contemplated by this Agreement; or
3.16.6 OTHER ADVERSE EVENTS. Other event, occurrence or omission that
has or reasonably might have a material adverse effect on the Assets or Brim's
ability to consummate the transactions contemplated by this Agreement or BHI's
obligations as guarantor.
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3.17 NO UNTRUE REPRESENTATION OR WARRANTY. No representation or warranty
of Seller in this Agreement, and no statement, schedule or certificate
furnished or to be furnished to Buyer pursuant to this Agreement, or in
connection with the transactions described in it, 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.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Seller that:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is, and on the Closing Date, will
be, a corporation duly organized, validly existing and in good standing under
the laws of the State of Washington. CPC is and on the Closing Date will be a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada.
4.2 AUTHORITY. The execution, delivery and performance of this Agreement
and the consummation of the transactions described in it by Buyer and CPC have
been duly authorized and approved by Buyer's and CPC's Boards of Directors,
respectively (either specifically or by appropriate grant of general authority),
and by all other necessary corporate action on their part. Each person who
executes this Agreement on behalf of Buyer and CPC has been duly authorized to
do so by all necessary corporate action by Buyer and CPC's respectively. Buyer
and CPC have the corporate power and authority to enter into, deliver, and
perform this Agreement, and this Agreement, when executed and delivered by Buyer
and CPC, will be a valid and binding obligation of each of them enforceable
against each according to its terms respectively applicable to each, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws, regulations and authorities from time to time in effect affecting
creditors' rights generally and to general principles of equity, whether
considered in a proceeding in equity or at law.
4.3 BROKERS. Neither Buyer nor CPC has employed, contracted for the
services of, or authorized any broker or finder to find Seller or to provide
services with respect to the negotiation, execution, delivery or performance of
this Agreement.
4.4 EFFECT OF AGREEMENT. Neither the execution and delivery of this
Agreement by Buyer or of the guaranty by CPC nor the consummation of the
transactions described herein at the Closing will:
4.4.1 ARTICLES AND BYLAWS. Violate Buyer's or CPC's Certificate of
Incorporation or Restated Bylaws;
4.4.2 BREACH OF AGREEMENTS. Violate, constitute a breach of, cause a
default under, or permit the termination or foreclosure of any agreement,
obligation, liability, mortgage or
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deed of trust, security agreement or either lien, charge or encumbrance, to
which Buyer or CPC is a party;
4.4.3 ACCELERATION OF INDEBTEDNESS. Accelerate or constitute an event
entitling the holder of any indebtedness of Buyer or CPC, to accelerate the
maturity of any such indebtedness or to increase the rate of interest presently
in effect thereon; or
4.4.4 JUDGMENTS, ETC. Violate, conflict with or result in the breach
of any judgment, order, writ, injunction, decree, or, to the best knowledge of
Buyer, any rule or regulation of any court, governmental agency or
instrumentality affecting Buyer or CPC.
4.5 ADVERSE CHANGE. Since December 10, 1993, there has been no material
adverse change in the financial condition of THC or CPC which would affect THC's
ability to consummate the transactions described in this Agreement or CPC's
obligations as guarantor.
4.6 LITIGATION. Except as disclosed in Schedule 4.6, there are no claims,
actions, suits, arbitrations, legal or other proceedings pending, or to the best
of Buyer's knowledge, threatened before any court or governmental or
administrative body or agency, or arbitration tribunal, which adversely affects
THC's ability to consummate the transactions contemplated by this Agreement.
4.7 NO UNTRUE REPRESENTATION OR WARRANTY. No representation or warranty by
Buyer in this Agreement and no statement or certificate furnished or to be
furnished to Seller pursuant to this Agreement, or in connection with the
transactions described in it, 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.
5. COVENANTS OF SELLER. Seller covenants and agrees that:
5.1 CONDUCT OF BUSINESS PENDING THE MANAGEMENT COMMENCEMENT DATE. From the
date of this Agreement to the Management Commencement Date, Seller shall:
5.1.1 OPERATION OF HOSPITAL. Undertake the actions required by the
implementation plan attached to this Agreement as Schedule 5.1.1 (the
"Implementation Plan");
5.1.2 PRESERVATION OF ORGANIZATION. Use its best efforts to preserve the
goodwill of all suppliers, physicians, employees, providers and others with
whom it has business relationships and with whom Buyer has advised Seller that
it intends to have ongoing relationships after the Management Commencement Date;
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5.1.3 MAINTENANCE OF ASSETS. Preserve and maintain the Assets in the
same condition and repair as on the date of this Agreement;
5.1.4 LIABILITIES. Not incur any obligation or liability which
encumbers or is secured by any of the Assets; and
5.1.5 ALIENATION OF ASSETS. Not sell, transfer, distribute or encumber
any of the Assets, except in the ordinary course of business of the Hospital as
it is now conducted.
5.2 PAYMENT OF LIABILITIES. Seller shall timely pay as and when due all
expenses, costs and liabilities arising from the business and operation of the
Hospital prior to the Management Commencement Date. On or before Closing, Seller
shall provide for the payment in full of all liabilities which encumber or are
secured by any of the Assets, other than liabilities created by Buyer after the
Management Commencement Date and liabilities arising after the Management
Commencement Date under any of the Assumed Contracts and Permitted Encumbrances.
Escrow Holder is hereby authorized and directed at the Closing to pay in full,
from funds otherwise payable to Seller on the Closing Date, all of Seller's
Liabilities which are made known to Escrow Holder in a writing signed by Buyer
and Seller as of or prior to the closing, which are secured by any of the Assets
and which Seller is obligated to discharge as of the Closing in accordance with
the terms of this Agreement; provided, however, that such authority of and
direction to Escrow Holder shall not in any way release Seller of Seller's
obligations under the first sentence of this paragraph 5.2.
5.3 MAINTAIN REPRESENTATIONS AND WARRANTIES. Seller shall not take any
action which would disable or prevent it from affirming, pursuant to paragraph
7.1, that the representations and warranties contained in paragraph 3 are true
and correct in all material respects at and as of the Closing Date as if made on
that date.
5.4 LICENSES. Seller shall use all reasonable efforts to assist Buyer in
applying for and obtaining the Certificate of Need Letter and the Licensure
Letter (each as defined in paragraph 6.4). Brim shall be responsible, at its
sole cost, to file a Plan of Correction satisfactory to the Washington
Department of Health, Licensing Administration (the "Licensing Administration")
and to cure all deficiencies cited in the Statement of Deficiencies and Plan of
Correction for the survey of the Hospital conducted by the Licensing
Administration on February 16-17, 1994.
5.5 CONSENTS. Seller shall, at no cost to Buyer, promptly obtain all
waivers, consents and approvals (collectively, the "Consents") necessary to
effect the assignment to and assumption by Buyer of the rights and obligations
of Seller under, and
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contracts included in, the Assumed Contracts and the Permitted Encumbrances.
5.6 LIABILITIES. Seller shall not incur any obligation or liability which
encumbers or is secured by any of the Assets, except in the ordinary course of
business in accordance with the Management Subcontract.
5.7 INSURANCE. Subject to Buyer's obligations under the Management
Agreement, Seller shall maintain in full force and effect through the Closing
Date all policies of insurance relating to the Assets and the Hospital now in
effect and will cooperate with Buyer in the giving of all notices and
presentation of all claims under such policies of insurance in a timely fashion
through the Closing Date.
5.8 TERMINATION OF EMPLOYMENT; PAYMENT OF ACCRUED COMPENSATION.
Effective immediately prior to the Closing Date, Seller shall terminate the
employment of all employees employed by Seller at the Hospital. At Closing,
Seller shall provide for (i) all salary, wages, vacation pay, sick leave and
other benefits, remuneration and emoluments due these employees and (ii) all
liabilities with respect to such employees accruing under any employment or
other contracts, employee benefit plans (including COBRA benefits) or
arrangements providing for payment of compensation or emoluments in any form to
such employees, in each case through the Management Commencement Date, on
account of their employment by Seller; provided that Seller may pay health
insurance claims as and when due; and provided further that any such accrued
vacation pay and sick leave benefits shall be applied to the Balance due from
Buyer at Closing, and Buyer shall assume and pay such amounts as and when due
after the Closing Date, to the extent not used by the employee during the term
of the Management Agreement. Seller shall further provide written notice to each
employee that effective as of the Closing Date, such employee shall accrue no
further compensation or emoluments in any form under any employment or other
contracts, employee benefit plans or arrangements with Seller, but shall instead
be entitled solely to such compensation and emoluments as may be provided
pursuant to such employee's employment by THC, as determined by THC. Seller
shall not be liable, nor shall Buyer be relieved of its obligations under this
Agreement, if any such employee leaves the employ of Seller prior to Closing,
elects not to accept employment from Buyer or terminates employment with Buyer
following Closing (except as a result of a breach by Seller of paragraph
5.12.1(b)).
5.9 FILING OF REPORTS. Seller will cause to be timely filed in the ordinary
course of business after review by Buyer, all cost reports of every kind
whatsoever required by law (including the "Stub Period" Cost Report required to
be filed upon sale of a facility) or required by written or oral contract or
otherwise to have been filed or made relating to services provided by Seller and
Buyer prior to the Closing Date, including without limitation those
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required as a result of this Agreement and those which may be timely filed
after the Closing Date relating to services provided prior to Closing. For the
period prior to the Management Commencement Date, Seller shall assume and shall
indemnify, defend and hold Buyer harmless from any liability shown on or
incurred as a result of such reports and shall be entitled to receive any refund
or other benefit which may result therefrom. For the period following the
Management Commencement Date, Buyer shall assume and shall indemnify, defend
and hold Seller harmless from any liability shown on or incurred as a result of
such report (other than any depreciation recapture due and owing from Seller as
a result of this transaction which shall be and remain the responsibility of
Seller unless otherwise provided in the Management Agreement and the Management
Subcontract) shown on or incurred as a result of such reports and shall be
entitled to receive any refund or other benefit which may result therefrom
except as otherwise provided in the Management Agreement and the Management
Subcontract. The timely filing by Seller of its cost reports, even if filed
after the Closing Date, shall not be deemed a default of this Agreement unless
Buyer is unable to obtain the Certificate of Need Letter or the Licensure Letter
because of Seller's failure to make such filing prior to Closing.
5.10 SATISFACTION OF CONDITIONS PRECEDENT. Seller, in addition to specific
obligations set forth elsewhere in this paragraph 5, shall use its best efforts
to satisfy or cause to be satisfied all of the conditions precedent set forth in
paragraph 7.
5.11 PRELIMINARY TITLE REPORT. Seller shall bear the sole cost and expense
of providing Buyer with a preliminary title report (the "PTR") from Chicago
Title Insurance Company (the "Title Company") together with legible copies of
all documents of record referred to therein, pursuant to which the Title Company
commits, upon payment of its usual and customary premium and satisfaction of any
other Title Company requirements, to issue its Standard Coverage Owner's Title
Insurance Policy (the "Title Policy") covering the Real Property, insuring
Buyer's interest in the Realty, free and clear of all covenants, conditions,
restrictions, rights, rights of way, easements, liens, encumbrances or any other
matters affecting title to or use of the Real Property, except the Permitted
Encumbrances and the customary terms and conditions of such Title Policy.
5.12 NONCOMPETITION AND NONSOLICITATION COVENANTS.
5.12.1 COVENANTS.
(a) NONCOMPETITION COVENANT. Seller and BHI each agree for a period
beginning on the Closing Date and ending on the fifth (5th) anniversary of the
Closing Date (the "Restricted Period"), that within a twenty-five (25) mile
radius of the Hospital (the "Restricted Area") it will not, and will not permit
any person or entity controlling, controlled by or under common
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control with it to, either jointly or individually, directly or indirectly,
compete with THC in the operation of any long-term acute care facility which
primarily provides long-term acute care services for medically complex
conditions including, without limitation, ventilator and respiratory care,
nutritional counseling, oncology support and wound care and other conditions
which require frequent visits by an attending physician, high degrees of
nursing, respiratory, rehabilitative and similarly intensive therapies and care,
or which is defined in section 412.23(e) of Subpart B of Part 412 of Subchapter
B of Chapter IV of Title 42 of the Code of Federal Regulations (individually and
collectively, a "Competing Business"), nor will it own, manage, operate, join,
control, advise, consult with, assist or otherwise participate in the ownership,
operation, management or control (other than as a shareholder owning less than
5% of the capital stock of an entity whose stock is publicly traded on a
national exchange) of any entity or business engaged in a Competing Business or
lease or sell property to a Competing Business in the Restricted Area during the
Restricted Period.
(b) NONSOLICITATION COVENANT. Seller and BHI each agree that
during the Restricted Period it will not, either jointly or individually
solicit any of THC's patients or employees within the Restricted Area.
5.12.2 TRANSFERABILITY. Seller and BHI each agree that each of
the covenants contained in paragraph 5.12.1 (the "Covenants") are personal to
Buyer and shall not inure to the benefit of any person, firm or business entity
to whom the ownership and operation of the Hospital may be transferred except an
Affiliate (as defined in paragraph 12.12) of Buyer.
5.12.3 SEVERABILITY. It is agreed that the scope of each of the
Covenants is reasonable both in time and area, and the Covenants are fairly
necessary to protect the investment of THC and CPC hereunder. Nevertheless, it
is further agreed that the Covenants shall be regarded as severable and shall be
operative as to time and area to the extent that they may be made so operative,
and if any part of them is declared invalid or unenforceable as to time or
area, the validity and enforceability of the remainder shall not be affected.
5.12.4 INJUNCTION. It is further agreed that THC and CPC will suffer
irreparable injury for which they will have no adequate remedy at law as a
result of the breach, of any of the Covenants, and that THC and CPC shall
therefore be entitled to seek specific performance and injunctive relief in the
event of such breach.
5.13 RETENTION OF BOOKS AND FILES. Brim shall maintain all books and files
not included in the Assets as and for the period required by applicable laws and
regulations and shall be
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responsible for responding to any inquiries from THC and any third parties
regarding such books and files, subject to applicable laws of confidentiality
and privacy.
5.14 PATIENT CHARTS. Seller shall use its best efforts to cause the
completion of all incomplete patient charts as of the Management Commencement
Date, if any, as soon as is reasonably possible after the Management
Commencement Date.
5.15 CONSULTING SERVICES. For a period of five (5) years after the
Closing Date, Brim shall provide consulting services to THC and the Hospital, on
an as-needed basis, in connection with the operation of the Hospital.
5.16 SELLER'S CERTIFICATE. At Closing, Seller shall execute and
deliver to Buyer a certificate ("Seller's Certificate") signed by an authorized
officer of Brim, dated as of the Closing Date, to the effect that each of its
representations and warranties set forth in this Agreement are true and correct
in all material respects at and as of the Closing Date and that each of the
covenants, conditions and agreements to be performed or complied with by Seller
and BHI as of the Closing Date have been so performed or complied with in all
material respects, and that, to the best knowledge of such signatory, there is
no fact or condition which would cause Seller to be in material breach of any of
the covenants, representations or warranties as of the Closing Date. The
execution and delivery of the Seller's Certificate by Seller shall not limit its
liabilities and obligations after the Closing Date.
6. COVENANTS OF BUYER. Buyer covenants and agrees that:
6.1 MAINTENANCE OF RECORDS; ACCESS BY SELLER. Subject to the applicable law
of confidentiality and privacy, Buyer shall maintain all business records of the
Hospital and make such records available for use by Seller as needed. Access to
such records shall be during normal business hours, with prior notice to Buyer
of the time when such access shall be needed. Seller's employees,
representatives and agents shall conduct themselves in such a manner as not
unnecessarily or unreasonably to disrupt Buyer's normal business activities.
6.2 SATISFACTION OF CONDITIONS PRECEDENT. Buyer, in addition to specific
obligations set forth elsewhere in this paragraph 6, will use its best efforts
to satisfy or cause to be satisfied all of the conditions precedent which are
set forth in paragraph 8.
6.3 MAINTAIN REPRESENTATIONS AND WARRANTIES. Buyer shall not take any action
which would disable or prevent it from affirming, pursuant to paragraph 8.1,
that the representations and warranties contained in paragraph 4 are true and
correct in all
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material respects at and as of the Closing Date as if made on that date.
6.4 LICENSES. No later than the later of (i) thirty (30) days after Buyer's
receipt from Seller of all documentation and information required from Seller
for Buyer to complete a Certificate of Need application or (ii) May 15, 1994,
Buyer, at its sole cost and expense, will apply to the Washington Department of
Health, Certificate of Need Division ("the CON Division") for a letter stating
that a certificate of need will be granted to operate the Hospital as
contemplated by this Agreement (the "Certificate of Need Letter"), and
thereafter Buyer, at its sole cost and expense, will proceed with all due
diligence to obtain the Certificate of Need Letter and a letter from the
Licensing Administration stating that a hospital license will be issued to THC
for operation of the Hospital as contemplated by this Agreement upon proof of
Closing (the "Licensure Letter").
6.5 BUYER'S CERTIFICATE. At Closing Buyer shall execute and deliver to
Seller a certificate ("Buyer's Certificate") signed by an authorized officer of
Buyer, dated as of the Closing Date, to the effect that each of its
representations and warranties set forth in this Agreement are true and correct
in all material respects at and as of the Closing Date and that each of the
covenants, conditions and agreements to be performed or complied with by THC and
CPC as of the Closing Date have been so performed or complied with in all
material respects, and that, to the best knowledge of such signatory, there is
no fact or condition which would cause Buyer to be in material breach of any of
its covenants, representations or warranties as of the Closing Date. The
execution and delivery of the Buyer's Certificate by Buyer shall not limit any
of Buyer's liabilities and obligations following the Closing Date.
6.6 NAME CHANGE. If Buyer changes the name of the Hospital after Closing,
the words "Fifth Avenue Hospital" shall be part of such name unless otherwise
agreed by Seller.
6.7 ASBESTOS WORK. THC shall assume full responsibility for completion of
and payment for the Asbestos Work.
6.8 REAL PROPERTY. Buyer shall order a survey of the Real Property (the
"Survey") within five (5) business days after mutual execution of this
Agreement. Buyer shall bear the sole cost and expense of the Survey and the
additional cost of extended coverage title insurance, if Buyer elects to obtain
such extended coverage.
7. BUYER'S CONDITIONS PRECEDENT TO CLOSING. Buyer's obligations to purchase the
Assets, pay the Balance and perform its other obligations under this Agreement
are subject to the occurrence of or compliance with each of the following
conditions, all of which are for the sole benefit of and may be waived by
Buyer in its absolute discretion:
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7.1 WARRANTIES TRUE AND CORRECT; PERFORMANCE OF COVENANTS. Each of the
representations and warranties of Seller set forth in this Agreement shall be
true and correct in all material respects at and as of the Closing Date, and the
covenants, agreements and conditions required by this Agreement to be performed
and complied with by Seller and BHI as of the Closing Date shall have been
performed and complied with in all material respects.
7.2 LITIGATION. No litigation or governmental investigation, proposed or
pending, shall have been commenced or threatened by persons other than Buyer,
CPC or their affiliates with regard to the transactions described in this
Agreement, which if successful, would have a material adverse effect on the
operations or financial condition of the Hospital or the Assets or Brim's
ability to consummate the transactions contemplated by this Agreement or BHI's
guaranty hereunder.
7.3 LICENSES. THC shall have obtained the Certificate of Need Letter and all
applicable appeal periods shall have expired, and THC shall have obtained the
Licensure Letter so that, upon proof of Closing, the Licenses shall be obtained
and they shall be in full force and effect.
7.4 REAL PROPERTY. Buyer shall have approved title to the Real Property, and
the Title Company shall have irrevocably committed to issue the Title Policy
pursuant to the following procedure:
7.4.1 BUYER'S OBJECTIONS TO TITLE. Within fifteen (15) days (the
"Approval Period") after actual receipt by Buyer of the Survey, Buyer shall
notify Seller in writing of any exceptions disclosed in the PTR or the Survey
other than the Permitted Encumbrances described in paragraph 7.4.6(i) and (iii),
of which Buyer disapproves. If Buyer fails so to notify Seller of its
disapproval during the Approval Period, Buyer shall be conclusively deemed to
have approved the condition of title to the Real Property.
7.4.2 SELLER'S OPTIONS. In case of any disapproval by Buyer pursuant to
paragraph 7.4.1, Seller shall have five (5) business days from receipt of
Buyer's notice of disapproval to inform Buyer in writing whether Seller will
cure the disapproved item to Buyer's reasonable satisfaction prior to the
Closing Date. The term, "to Buyer's reasonable satisfaction" shall mean, and be
satisfied by, the deletion of or endorsement over any exception with respect to
such matter in the Title Policy.
(a) CURE. If Seller agrees that the disapproved item will be so
cured or fails so to notify Buyer within the requisite five (5) business-day
period, such cure shall be an obligation of Seller and a condition to the
Closing for the benefit of, and at no cost to, Buyer.
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(b) NO CURE. If Seller does not agree so to cure any disapproved
item, Buyer shall have five (5) business days from the expiration of Seller's
five (5) business-day notice period, to inform Seller in writing whether buyer
will waive its disapproval of such disapproved item. If Buyer does not so
notify Seller, such item shall be deemed disapproved and this Agreement may be
terminated pursuant to paragraph 7.4.5.
7.4.3 SUPPLEMENTAL EXCEPTIONS. The procedure described in paragraph
7.4.2 shall apply if exceptions to title are disclosed in supplements to the
PTR, the Survey or otherwise become known to Buyer following the date of this
Agreement (each, a "Supplemental Exception"), except that the Approval Period
shall be five (5) business days from Buyer's receipt of the documents evidencing
and underlying the Supplemental Exception.
7.4.4 MONETARY LIENS. Paragraphs 7.4.1 and 7.4.3 to the contrary
notwithstanding, any exceptions to title shown in the PTR, other than taxes and
assessments not yet due and payable, representing monetary liens or encumbrances
are hereby disapproved and, unless Seller delivers to Escrow Holder evidence of
prior payment thereof, Escrow Holder is hereby authorized and directed at the
Closing to pay in full from funds otherwise payable to Seller on the Closing
Date the obligations underlying such monetary exceptions to title. Nothing in
this paragraph 7.4.4 releases Seller of its obligations pursuant to paragraph
5.2.
7.4.5 EFFECTS OF DISAPPROVALS. If (i) Buyer disapproves any items in
accordance with paragraphs 7.4.1 or 7.4.3, (ii) Seller does not agree and is
not deemed to have agreed to cure them and (iii) Buyer does not waive them,
Buyer or Seller may terminate this Agreement by written notice to the other and
the Escrow Holder, in which event (a) Buyer shall be entitled to the Deposit and
(b) except as otherwise provided in this Agreement, such termination shall be
without prejudice to the rights of the parties as they may appear.
7.4.6 PERMITTED ENCUMBRANCES. "Permitted Encumbrances" means (i) ad
valorem real property taxes which are a lien not yet due and payable, (ii) the
exceptions to title which are approved or deemed approved pursuant to paragraphs
7.4.1 and 7.4.3, and (iii) matters caused, created or expressly approved in
writing by Buyer.
7.4.7 TITLE POLICY. Buyer's title to the Realty shall be insurable
by the Title Policy with liability not less than the value of the
consideration allocated to the Real Property set forth in Schedule 2, free and
clear of all covenants, conditions, restrictions, rights, rights of way,
easements, liens, encumbrances or any other matters affecting title to or use of
the Real Property, except the Permitted Encumbrances. Escrow Holder shall have
delivered a marked up PTR to Buyer at the closing.
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7.5 REIMBURSEMENT. The Hospital shall have been designated as a long-term
care hospital (as defined in section 412.23(e) of Subpart B of Part 412 of
Subchapter B of Chapter IV of Title 42 of the Code of Federal Regulations) and
there shall have been no material change in the manner in which such hospitals
are reimbursed under the Medicare program as of the date of this Agreement;
provided, however, that if this condition is not satisfied, concurrently with
return of the Deposit to Buyer pursuant to paragraph 2.1.1(b), Buyer shall pay
to Seller as full and complete liquidated damages, the sum of Three Hundred
Fifty Thousand Dollars ($350,000), and Seller shall have no further rights or
remedies against Buyer.
7.6 ASSUMPTION AGREEMENT. Buyer and Seller shall have executed an assumption
agreement whereby, as of the Management Commencement Date, Buyer shall assume
all of Seller's rights and obligations under the Assumed Contracts,
substantially in the form of Schedule 7.6 (the "Assumption Agreement").
7.7 DAMAGE OR DESTRUCTION; TAKING. No material portion of the Assets shall
have been destroyed or taken by eminent domain; provided, however, that Buyer
may exercise its option set forth in paragraph 12.7.
8. SELLER'S CONDITIONS PRECEDENT TO CLOSING. Seller's obligation to sell the
Assets is subject to payment at the Closing of the Balance (as adjusted pursuant
to paragraph 2.1.2) and the occurrence of or compliance with each of the
following conditions, all of which are for the sole benefit of Seller and may be
waived by Seller in its absolute discretion:
8.1 WARRANTIES TRUE AND CORRECT; PERFORMANCE OF COVENANTS. Each of the
representations and warranties of Buyer set forth in this Agreement shall be
true and correct in all material respects at and as of the Closing Date, and the
covenants, agreements, and conditions required by this Agreement to be performed
and complied with by Buyer and CPC shall have been performed and complied with
in all material respects.
8.2 ASSUMPTION AGREEMENT. Buyer and Seller shall have executed the
Assumption Agreement.
8.3 LITIGATION. No litigation or governmental investigation, proposed or
pending, shall have been commenced or threatened by persons other than Seller,
BHI or their affiliates with regard to the transactions described in this
Agreement, which if successful, would have a material adverse effect on Buyer's
ability to consummate the transactions contemplated by this Agreement or CPC's
guaranty hereunder.
9. CLOSING. "Closing" means the transfer of all of the Assets from Seller to
Buyer, the payment of the Purchase Price to Seller and assumption of the Assumed
Contracts by Buyer. The Closing
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shall occur at the offices of Riddell, Williams, Bullitt & Walkinshaw, 0000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000 within five (5)
business days after all conditions to Closing have been satisfied or waived by
the appropriate party (the "Closing Date"), unless extended by mutual agreement
of the parties.
9.1 OBLIGATIONS OF SELLER AT CLOSING. At Closing, Seller shall deliver to
Buyer (unless otherwise indicated) all of the following documents and
instruments, in form and substance reasonably satisfactory to THC and its
counsel, against delivery of the items specified in paragraph 9.2;
9.1.1 WARRANTY DEED. To Escrow Holder, a statutory warranty deed in the
form of Schedule 9.1.1 (the "Warranty Deed"), properly executed by Brim and in
recordable form, conveying to Buyer fee simple title to the Real Property in the
condition contemplated by paragraph 3.4.4;
9.1.2 ADDITIONAL DOCUMENTS. To Escrow Holder, such instruments and
documents as are deemed reasonably necessary by the Title Company to deliver the
Title Policy;
9.1.3 XXXX OF SALE. A Xxxx of Sale for the Personal Property in
substantially the form of Schedule 9.1.3, together with such other documents,
duly executed as may be necessary to effect their transfer at Closing;
9.1.4 SELLER'S CERTIFICATE. A duly executed Seller's Certificate;
9.1.5 FIRPTA CERTIFICATE. An Affidavit of Non-Foreign Status duly
executed by Brim pursuant to Section 1445 of the Internal Revenue Code of 1986,
as amended, in the form of attached Schedule 9.1.5 (the "FIRPTA Certificate");
9.1.6 RESOLUTIONS. Copies of the resolutions of the Board of Directors
and shareholders of Brim and the Board of Directors of BHI, duly certified by
their respective secretaries in form reasonably satisfactory to THC's counsel,
authorizing the execution, delivery and performance of this Agreement and all
actions to be taken by Seller and BHI hereunder;
9.1.7 ASSUMPTION AGREEMENT. The Assumption Agreement, duly executed by
Seller;
9.1.8 SELLER'S CLOSING COSTS. Such sums as are necessary to pay the
costs, fees and prorations, if any, owing by Seller pursuant to paragraphs 9.3
and 9.4 (collectively, "Seller's Closing Costs") will be deducted by Escrow
Holder from the Balance and used for immediate distribution to the appropriate
parties on the Closing Date. Seller shall provide or cause the Title Company
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to provide Buyer with a closing statement in customary form at least one (1)
day prior to Closing; and
9.1.9 INSTRUCTIONS TO ESCROW HOLDER. To the Escrow Holder, written
instructions, duly executed by Seller, instructing Escrow Holder to disburse the
Deposit to Seller.
9.2 OBLIGATIONS AT CLOSING. Buyer shall deliver to Seller (unless otherwise
indicated) all of the following against delivery of the items specified in
paragraph 9.1:
9.2.1 BALANCE OF PURCHASE PRICE. To Escrow Holder, the Balance (as
adjusted pursuant to paragraph 2.1.2) in funds immediately available in Seattle,
Washington;
9.2.2 BUYER'S CERTIFICATE. A duly executed Buyer's Certificate;
9.2.3 RESOLUTIONS. Copies of resolutions of the Boards of Directors of
Buyer and CPC, duly certified by their respective Secretaries in form reasonably
satisfactory to counsel for Seller, authorizing the execution, delivery and
performance of this Agreement and all actions to be taken by Buyer and CPC
hereunder;
9.2.4 ASSUMPTION AGREEMENT. The Assumption Agreement, duly executed by
Buyer;
9.2.5 BUYER'S CLOSING COSTS. To Escrow Holder, such sums as are
necessary to pay the costs, fees and prorations, if any, owing by Buyer pursuant
to paragraphs 6.8, 9.3 and 9.4 (collectively, "Buyer's Closing Costs") for
immediate distribution to the appropriate parties on the Closing Date. Buyer
shall provide or cause the Title Company to provide Seller with a closing
statement in customary form at least one (1) day prior to Closing; and
9.2.6 INSTRUCTIONS TO ESCROW HOLDER. To the Escrow Holder, written
instructions, duly executed by Buyer, instructing Escrow Holder to disburse the
Deposit to Seller.
9.3 COSTS AND EXPENSES. All costs and expenses with respect to the
transactions described in this Agreement shall be borne as follows and paid on
or before Closing:
9.3.1 TRANSFER, EXCISE AND SALES TAX. Seller shall pay the cost of any
documentary stamp, transfer or excise tax imposed on the conveyance of the Real
Property and Buyer shall pay any sales tax imposed on the conveyance of the
Personal Property, in each case based on the value of the consideration
allocated to the Real Property and the Personal Property, respectively, as set
forth in Schedule 2.
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9.3.2 PTR AND TITLE POLICY COSTS. Seller shall pay any costs to issue
the PTR and the Title Policy. Buyer shall pay the additional cost of
extended coverage, if it desires such extended coverage.
9.3.3 RECORDING COSTS. Buyer shall pay the cost of recording the
Warranty Deed and any other instrument or document required to be recorded.
9.3.4 OTHER COSTS. Any other costs shall be allocated in accordance with
customary procedures in King County, Washington.
9.4 PRORATIONS. All nondelinquent real property taxes on the Real
Property and personal property taxes shall be prorated on the Closing Date as of
the Management Commencement Date. Seller shall pay any assessments on the Real
Property arising or relating to the period prior to the Management Commencement
Date. Buyer shall pay any assessments on the Real Property arising or relating
to the period on or after the Management Commencement Date. All delinquent real
property taxes and assessments on the Real Property as of the Management
Commencement Date shall be paid by Seller prior to the Closing Date.
9.5 OBLIGATIONS OF ESCROW HOLDER AT CLOSING. At the Closing, Buyer and
Seller shall cause Escrow Holder to do all of the following:
9.5.1 RECORDATION OF DOCUMENTS. Record the Warranty Deed and any
other documents required to be recorded in the Official Records of King County,
Washington.
9.5.2 DELIVERIES TO SELLER. Deliver to Seller (i) the Deposit and the
Balance (less Seller's Closing Costs and less such sums as are necessary to pay
in full all obligations underlying the monetary exceptions to title described in
paragraph 7.4.4 and all Seller's Liabilities described in paragraph 5.2) by
confirmed wire transfer or cashier's check drawn on a bank reasonably acceptable
to Seller.
9.5.3 DELIVERIES TO BUYER. Deliver to Buyer (i) any remaining funds
(less Buyer's Closing Costs), (ii) the marked up PTR, (iii) a photocopy of the
Warranty Deed, and (iv) copies of any other documents to be recorded.
9.5.4 PAYMENTS TO THIRD PARTIES. Pay to the appropriate third parties
prorated payments, as applicable and payments described in paragraphs 5.2 and
7.4.4.
9.6 DUTIES OF ESCROW HOLDER. The parties agree that Escrow Holder shall
act in such capacity, subject to the following terms and conditions:
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9.6.1 DISBURSEMENT. In the event of an occurrence wherein either party
is entitled to the Deposit, then upon written demand by that party for
disbursement (the "Disbursement Demand"), Escrow Holder shall, within five
(5) business days thereafter, cause to be delivered to the other party such
Disbursement Demand. In the event that Escrow Holder does not receive an
objection to disbursement from the other party within five (5) business days
after such party's receipt of the Disbursement Demand, then Escrow Holder is
authorized to disburse the Deposit to the party making the Disbursement Demand.
In the event Escrow Holder receives conflicting instructions, or in the event
of any dispute under this Agreement between the parties concerning the Deposit,
Escrow Holder may either (i) bring an interpleader action in the Superior Court
of King County, Washington or (ii) retain the Deposit in the Escrow pending
settlement of the dispute between the parties; provided, however, that if any
such dispute has not been resolved within ten (10) days of Escrow Holder's
receipt of a Disbursement Demand, Escrow Holder must file its interpleader
action within five (5) business days thereafter unless Escrow Holder receives
written instructions from Buyer and Seller to retain the Deposit in the Escrow,
which instructions may specify a period of time during which Escrow Holder shall
continue to hold the Deposit in the Escrow. Either Buyer or Seller subsequently
may give written instructions to Escrow Holder to file its interpleader action
so long as any time period specified in prior written instructions has expired.
The interpleading of the Deposit into the registry of the Superior Court shall
release Escrow Holder from any further or continuing liability with respect to
the disposition of the Deposit.
9.6.2 INDEMNIFICATION. Seller and Buyer, jointly and severally, agree to
defend, indemnify and hold Escrow Holder harmless from and against any and all
damages, liabilities and expenses, including court costs and attorneys' fees,
incurred by Escrow Holder as a result of the exercise of its duties as Escrow
Holder, unless such damages, liabilities and expenses arise out of Escrow
Holder's gross negligence or willful misconduct.
9.6.3 INVESTMENT. Escrow Holder is authorized and directed to invest the
Deposit as instructed by Buyer. Seller and Buyer agree that Escrow Holder is not
liable or responsible for any loss of the Deposit, in whole or in part, whether
principal or interest, which occurs due to a failure of the institution in which
Escrow Holder is directed to invest the Deposit, a decline in the market value
of the investment Escrow Holder is directed to make, the failure of the
Federal Deposit Insurance Corporation, or any other insuring governmental
entity, or its inability or refusal to replace the Deposit pursuant to
applicable regulations, or the misappropriation or defalcation of the Deposit by
any person who is not an employee of Escrow Holder.
9.6.4 ESCROW FEE. Escrow Holder's fee will be paid by Buyer and Seller
in equal shares.
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9.6.5 AUTHORIZED DISCLOSURE. Escrow Holder may disclose the respective
interests of Buyer and Seller in the Deposit to persons authorized by state or
federal law to obtain such information.
9.7 "DROP DEAD" DATE. Notwithstanding anything to the contrary
contained herein, this Agreement shall terminate in the event that Closing has
not occurred on or before May 1, 1996 (the "Drop Dead Date"); provided,
however, that the parties shall extend the Drop Dead Date for a reasonable
period of time if THC is then involved in litigation or other proceedings with
respect to obtaining the Certificate of Need Letter or the Licensure Letter or
if THC otherwise is actively engaged in the Certificate of Need or licensure
approval process; and provided further that the Drop Dead Date may, in any
event, be extended by mutual agreement.
10. INDEMNIFICATION.
10.1 INDEMNIFICATION.
10.1.1 BY SELLER. Seller shall, on demand in accordance with this
paragraph 10, indemnify, defend and hold Buyer, CPC and their respective
employees, agents, representatives, successors and assigns, harmless from,
against and in respect of any and all claims, losses, costs, expenses,
liabilities and damages, including without limitation interest, penalties,
reasonable attorneys' fees and costs of suit (the "Claims" and each a "Claim"),
that any of them shall incur or suffer in connection with (i) the claims of
any third party, including but not limited to Seller's employees, against any of
them for Seller's Liabilities, including without limitation those described in
paragraphs 3.3.1 through 3.3.6; (ii) the termination by Seller of employment,
employment contracts and employment benefit plans pursuant to paragraph 5.8 and
any other employment termination claim, and (iii) the material breach by Seller
or BHI of any warranty, covenant or agreement or the untruth in any material
respect of any representation made by Seller in this Agreement.
10.1.2 BY BUYER. THC shall, on demand in accordance with this
paragraph 10, indemnify, defend and hold Seller, BHI and their respective
employees, agents, representatives, successors and assigns, harmless from,
against and in respect of any and all Claims that any of them shall incur or
suffer in connection with (i) the claims of any third party for alleged
liabilities or obligations of Seller arising out of Buyer's operation of the
Hospital on or after the Management Commencement Date and not attributable to
any act or omission of Seller; (ii) any liability for salary, severance pay or
other benefits arising from the employment by THC of any former employee of
Seller and attributable to any period following the Management Commencement Date
and not attributable to any act or omission of Seller; (iii) the material breach
by Buyer or CPC of any covenant, agreement or warranty or
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the untruth in any material respect of any representation made by THC herein;
or (iv) any liabilities of Buyer arising after the Management Commencement and
not attributable to any act or omission of Seller.
10.2 LIABILITY LIMITATION. The indemnities contained in paragraphs
10.1.1 and 10.1.2 shall be limited, however, to the amount in excess of
insurance coverage for the respective claim so that neither Seller nor Buyer
shall have liability or responsibility for amounts that are covered by any
insurance policy. Nothing in this Agreement shall be construed to limit the
liability of Buyer and Seller under the Management Agreement or the Management
Subcontract.
10.3 NO LIMITATION OF OTHER REMEDIES. The indemnities in paragraphs 10.1.1
and 10.1.2 shall not foreclose or prejudice any other rights or remedies the
parties may have to enforce the provisions of this Agreement, subject to the
monetary limitation set out in paragraph 10.2.
10.4 NOTICE AND RIGHT TO DEFEND. If any claim arises with respect to which
Buyer or Seller may be liable under paragraphs 10.1.1 or 10.1.2, the indemnitee
shall notify the indemnitor within a reasonable time after the indemnitee
receives written notice of such Claim, and shall give the indemnitor a
reasonable opportunity to settle or defend the Claim; provided, however, that
the indemnitee's failure to give such notice or opportunity shall not impair or
otherwise affect the indemnitor's obligation to indemnify against such Claim
except to the extent that the indemnitor demonstrates actual damage caused by
such failure; and provided further that the indemnitee may commence to settle or
defend the Claim as circumstances warrant, but any settlement shall require the
prior written consent of the indemnitor. The expenses of all proceedings,
contests or lawsuits with respect to Claims shall be borne by the indemnitor. If
an indemnitor wishes to assume the defense of a Claim, it shall give written
notice to the indemnitee within five (5) days after notice from the indemnitee
of such Claim, and the indemnitor shall thereafter defend the Claim, employing
counsel reasonably satisfactory to the indemnitee, provided that the indemnitee
may thereafter participate in the defense at its own expense.
If the indemnitor does not assume the defense of, or if after so
assuming it fails to defend, any such Claim, the indemnitee may continue to
defend the Claim in such manner as it may reasonably deem appropriate, and the
indemnitee may settle such Claim on such terms as it may reasonably deem
appropriate. The indemnitor shall promptly pay or reimburse the indemnitee for
all reasonable expenses, legal and otherwise, and all amounts paid in
settlement of or in satisfaction of judgments on Claims as such costs and
amounts are incurred by the indemnitee in the defense, appeal, settlement or
satisfaction of Claims. If no settlement of such a
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Claim is made, the indemnitor shall satisfy any judgment rendered with respect
to it before the indemnitee is required to do so.
If a judgment is rendered against the indemnitee on any Claim, or any lien
attaches to any of the assets of any indemnitee, the indemnitor shall
immediately upon such entry or attachment pay such judgment in full or discharge
such lien unless, at the expense and direction of the indemnitor, an appeal is
taken under which the execution of the judgment or satisfaction of the lien is
stayed. If and when a final judgment is rendered in any such action, the
indemnitor shall forthwith pay such judgment or discharge such lien before any
indemnitee is compelled to do so.
11. GUARANTEES.
11.1 BY CPC. CPC hereby irrevocably and unconditionally guarantees to Seller
the due and prompt performance by THC of all of its obligations and duties under
this Agreement. CPC waives any requirement that Seller institute any action or
proceeding at law or in equity against THC or against any other party as a
condition precedent to bringing any action against CPC under this Guaranty. CPC
agrees that it shall not be released from its obligations of Guaranty by reason
of any amendment or alteration of the terms and conditions of this Agreement or
by any delay or waiver by Seller in enforcing the terms of this Agreement or by
virtue of any other defense which may be available to it as a guarantor.
11.2 BY BHI. BHI hereby irrevocably and unconditionally guarantees to Buyer
the due and prompt performance by Brim of all of its obligations and duties
under this Agreement. BHI waives any requirement that Buyer institute any action
or proceeding at law or in equity against Brim or against any other party as a
condition precedent to bringing any action against BHI under this Guaranty. BHI
agrees that it shall not be released from its obligations of Guaranty by reason
of any amendment or alteration of the terms and conditions of this Agreement or
by any delay or waiver by Buyer in enforcing the terms of this Agreement or by
virtue of any other defense which may be available to it as a guarantor.
12. MISCELLANEOUS.
12.1 NOTICES. Any notice provided for in this Agreement and any other
notice, demand or communication required or permitted to be given hereunder or
which any party may wish to send to another ("Notice" or "Notices") shall be in
writing and shall be deemed to have been properly given if served by (i)
personal delivery or (ii) registered or certified U.S. mail, or by comparable
private carrier, First Class, return receipt requested in a sealed envelope,
postage or other charges prepaid, or (iii) telegram, telecopy, facsimile, telex
or other similar form of communication, addressed to the party for whom the
Notice is intended as follows:
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If to Buyer or CPC:
Xxxxx X. Xxxxxxxx, President
c/o Transitional Hospitals Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
FAX: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
FAX: (000) 000-0000
If to Seller:
Xxxx X. Xxxxxx, President
Brim Hospitals, Inc.
000 X.X. 000xx Xxxxxx
Xxxxxxxx, XX 00000-0000
FAX: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxxx, Esq.
The Xxxxxxxxx Group
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
FAX: (000) 000-0000
or such other address as any person may request by notice given as aforesaid.
12.1.1 CHANGE OF ADDRESS. Any party to this Agreement may change its
address for Notice from time to time by notice given in accordance with the
foregoing provisions.
12.1.2 EFFECTIVE TIME. All notice given as pursuant to this paragraph
shall be deemed given and effective when received if personally delivered or
sent by telegram, telecopy, telex or similar form of communication or, if
mailed on the date shown on the return receipt or if a receipt has not then been
received, five (5) days after mailing.
12.2 PAYMENT OF EXPENSES. Except as specifically provided for herein,
each of the parties shall pay its own expenses, including without limitation,
the disbursements and fees of all its attorneys, accountants, advisors, agents
and other representatives, incidental to the preparation and carrying out of
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this Agreement, whether or not the transactions contemplated hereby are
consummated.
12.3 TAX REPORTING AND CHALLENGES The Purchase Price shall be allocated
among the Assets and the Covenants in compliance with applicable federal tax
laws and as provided in Schedule 2. If any of the parties' tax reporting or
treatment of the transactions described in this Agreement is challenged or
questioned by any taxing authority, such party shall immediately give written
notice to the others, describing the nature of such challenge or question,
whereupon any party may file such protective or other return amendments as it or
they deem appropriate. The parties agree to cooperate in providing information
necessary or appropriate to preparation and filing of their respective tax
returns.
12.4 SCHEDULES. Seller agrees to provide at Closing such materials,
documents, and information as may be necessary to update the information
contained in any Schedule attached to this Agreement, but Seller's obligations
under this Agreement shall not be mitigated or eliminated thereby.
12.5 CONFIDENTIALITY. The parties recognize and agree that all information,
instruments, documents and details concerning the business of Buyer and Seller
are strictly confidential, and Seller and Buyer expressly covenant and agree
with each other that they will use their best efforts to prevent any of their
respective officers, directors, employees or agents from disclosing any matters
relating to the business of the other or to this Agreement, its negotiation,
terms, provisions or conditions, including the Purchase Price except as may be
reasonably necessary to effectuate the transactions contemplated hereby;
provided, however, neither party shall be prohibited from making any legally
required public announcement or other disclosure of the sale and purchase of the
Assets, including such details as to price, terms and the like as may be
required. Seller and Buyer shall consult with each other prior to any public
announcement to discuss the content of any such announcement.
12.6 RETURN OF PAPERS, ETC. If the Closing should fail to occur, Buyer
will return to Seller, and Seller will return to Buyer, upon request, the
respective materials, information, documents, instruments and records supplied
by the other party in respect of such party's business operations and shall keep
confidential all information which that party has gathered with respect to the
business of the other.
12.7 RISK OF LOSS. Risk of loss or damage by fire or other casualty to the
Assets or their taking by eminent domain before Closing is assumed by Seller. In
the event of a material loss, damage to or taking of the Assets, Buyer shall
have the option of either (i) terminating this Agreement or (ii) closing on the
purchase of the Assets, in which event Seller shall assign to Buyer all of
Seller's rights against third persons and under any
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applicable insurance policy and any condemnation awards and pay over to Buyer
any sums received as a result of such loss, damage or taking.
12.8 WAIVER. The failure of any party to insist, in any one or more
instances, on performances of any of the terms and conditions of this Agreement
shall not be construed as a waiver or relinquishment of any rights granted
hereunder or of the future performance of any such term, covenant or condition,
but the obligations of the parties with respect thereto shall continue in full
force and effect.
12.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.10 ENTIRE AGREEMENT. This Agreement (including the Schedules hereto) and
all other documents executed in connection herewith constitute the entire
agreement between the parties hereto with respect to the subject hereof and
supersede all prior agreements, understandings, negotiations and discussions of
the parties, whether oral or written, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof, except as specifically set forth herein or therein. No
amendment, alteration or modification of this Agreement shall be valid unless in
each instance such amendment, alteration or modification is expressed in a
written instrument duly executed by the parties.
12.11 ATTORNEYS' FEES. If any action at law or in equity shall be brought on
account of any breach of, or to enforce or interpret, any of the covenants,
terms or conditions of this Agreement or arising out of the untruth of any
representation or warranty contained in this Agreement, the prevailing party, or
the party against whom a dismissal is not granted, shall be entitled to recover
from the other party as part of the prevailing party's costs, reasonable
attorneys' fees, the amount of which shall be fixed by the court rendering the
decision and shall be made a part of any judgment or decree rendered.
12.12 ASSIGNMENT. THC shall not have the right to assign this Agreement,
except that THC shall have the right to assign this Agreement to any entity
controlling, controlled by or under common control with THC (an "Affiliate")
with the prior written consent of Brim, which shall not be unreasonably withheld
or delayed; provided that any such assignment to an Affiliate shall have no
effect on the guaranty by CPC pursuant to paragraph 11.1.
12.13 SUCCESSORS AND ASSIGNS. Subject to the restrictions on assignment set
forth in this Agreement, all the terms and provisions of this Agreement shall be
binding upon and inure to
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the benefit of and be enforceable by the respective successors and assigns of
the parties hereto.
12.14 FURTHER ASSURANCES. Both before and after the Closing Date, the
parties will exercise good faith with the others and will take all appropriate
action and execute any documents, instruments or conveyances of any kind which
may be reasonably necessary or advisable to carry out any of the transactions
contemplated hereunder.
12.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties contained in this Agreement and in any certificate delivered
pursuant hereto shall survive the Closing for a period of one (1) year. All
covenants and agreements of both parties to be performed after Closing shall
survive the Closing.
12.16 INTERPRETATION. Unless the context requires otherwise, all words used
in this Agreement in the singular number shall extend to and include the plural,
all words in the plural number shall extend to and include the singular and all
words in any gender shall extend to and include all genders.
12.17 SEVERABILITY. If any provision, clause or part of this Agreement, or
the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
12.18 GOVERNING LAW; VENUE. This Agreement is to be governed by, and
interpreted under, the laws of the State of Washington. Any litigation arising
from this Agreement shall be brought in King County, Washington.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the date first above written.
THC-SEATTLE, INC., a Washington
corporation
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx, President
BRIM FIFTH AVENUE, INC., an Oregon
corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
-----------------------------------
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Brim, Inc. hereby agrees to be bound by paragraphs 5.12 and ll.2 of this
Agreement.
BRIM HOSPITALS, INC., an Oregon
corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
-----------------------------------
CPC hereby agrees to be bound by paragraph 11.1 of this Agreement.
COMMUNITY PSYCHIATRIC CENTERS, a
Nevada corporation
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx, Chief Executive
Officer
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