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EXHIBIT 2.2
AMENDMENT NO. 1 TO ASSET SALE AGREEMENT
This Amendment No. 1 to Asset Sale Agreement (the "Amendment") is made
and entered into as of September 29, 1999, by and between Xxxxx Healthcare
Corporation, a Nevada corporation ("Seller") and Province Healthcare Company, a
Delaware corporation ("Purchaser").
RECITALS
A. Seller and Purchaser have entered into that certain Asset
Sale Agreement dated as of July 23, 1999 (the "Agreement") pursuant to which
Purchaser is acquiring substantially all of the assets with respect to the
operation of the Hospitals from the Subsidiaries.
B. Seller and Purchaser desire to amend the Agreement to address
certain matters that have arisen since the Effective Date of the Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises and covenants contained in this Agreement, and for their mutual
reliance, the parties hereto agree as follows:
1. Defined Terms. Except to the extent it is specifically
indicated to the contrary in this Amendment, defined terms used in this
Amendment shall have the same meanings as in the Agreement.
2. Purchase Price. The first portion of Section 1.2 of the
Agreement shall be deleted in its entirety up to item (a) and replaced with the
following: "Subject to the terms and conditions of this Agreement, the
aggregate purchase price to be paid by Purchaser to Seller for the purchase of
the Assets, including the purchase of a fee interest in the Birthing Center (as
hereinafter defined), shall be".
3. Items to be Delivered by Seller at Closing. A new Section
1.6.12 of the Agreement shall read as follows: "the Employee Leasing
Agreements, which shall be in the form of Exhibit 1.6.12 attached hereto (the
"Employee Leasing Agreements"), pursuant to which Seller, one of the
Subsidiaries or an affiliate of Seller shall lease the Hospital Employees to
Purchaser, as contemplated by Section 5.3(a) of this Agreement".
4. Items to be Delivered by Purchaser at Closing. A new Section
1.7.9 of the Agreement shall read as follows: "the Employee Leasing
Agreements."
5. Transfer of Seller Assets. Section 1.9 of the Agreement shall
be amended by adding the following to the end of paragraph (b): ", except that
Seller shall sublease that certain Leased Real Property more commonly known as
the Birthing Center (the "Birthing Center"), 0000 Xxxxx Xxxx 000, Xxxxxxxxx,
Xxxxx, as
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more fully described at Exhibit 1.9(b)-1 hereto, to Purchaser or its designated
affiliate in accordance with that certain Sublease Agreement, substantially in
the form attached hereto as Exhibit 1.9(b)-2 (the "Sublease Agreement"), until
such time as Seller (a) shall acquire fee title to the Birthing Center and
shall transfer such fee interest to Purchaser or its designated subsidiary, or
(b) shall cause the owner of the Birthing Center to convey the Birthing Center
to Purchaser or Purchaser's designated affiliate, subsequent to the Closing
Date as set forth more fully herein at Section 1.9.1. Seller and Purchaser
shall use commercially reasonable efforts to act expeditiously to enter into
the Sublease Agreement as soon after the Closing Date as practicable and until
the Sublease Agreement is so executed shall be entitled to the material
benefits and subject to the material obligations contemplated in Exhibit
1.9(b)-2. If the owner of the Birthing Center refuses to execute the Sublease
Agreement based on any provision of the Sublease Agreement, Seller and
Purchaser shall modify the Sublease Agreement as required by the owner provided
such modifications do not materially alter Seller's or Purchaser's rights or
obligations under the Sublease Agreement.
6. Transfer of the Birthing Center. A new Section 1.9.1 shall be
added to the Agreement as follows: "Seller shall use commercially reasonable
efforts to act expeditiously in (a) acquiring fee title to the Birthing Center
or (b) causing the owner of the Birthing Center to convey fee title of the
Birthing Center to Purchaser or Purchaser's designated affiliate. In either
event, Purchaser will succeed to fee simple ownership of the Birthing Center at
no additional cost or expense to Purchaser. If Seller acquires fee title to the
Birthing Center, within thirty (30) days of acquiring such title, or as
otherwise agreed to by the parties to this Agreement, Seller shall transfer fee
title to the Birthing Center to Purchaser. This transfer, or a conveyance by
the current owner, shall occur in accordance with the terms and conditions of
the Agreement, as though the Birthing Center were Owned Real Property prior to
the original Closing Date except that the Closing Date shall be defined, for
purposes of the sale of the Birthing Center, as the date of Purchaser's or
Purchaser's designated affiliate's acquisition of fee title to the Birthing
Center, or as otherwise agreed to by the parties. Any and all representations
and warranties as to Owned Real Property under this Agreement shall pertain to
the Birthing Center upon such transfer or conveyance. Any and all prorations
pertaining to such transfer or conveyance shall be calculated using the new
Closing Date".
7. Assumed Obligations. Section 1.11(d) of the Agreement shall
be amended by deleting subsections (i), (ii) and (iii) in their entirety and
replacing them with the following: "(i) the acts of Purchaser or any affiliate
of Purchaser after the Transition Date or (ii) Purchaser's breach of its
covenant with respect to the Hired Employees as set forth in Section 5.3".
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8. Excluded Liabilities.
(a) Section 1.12(e) of the Agreement shall be deleted in
its entirety and replaced with the following: "subject to
reimbursement by Purchaser to the extent contemplated by the Employee
Leasing Agreement, all liabilities of Seller or any of the
Subsidiaries with respect to its or their 401(k) plans, Section 125
plans and other Seller Plans and all administrative costs associated
with such welfare benefit plans arising on or prior to the Transition
Date;".
(b) A new Section 1.12(i) of the Agreement shall be
added as follows: "any financial impact on Seller's Subsidiaries',
Purchaser's or either of Purchaser's Partnerships' Disproportionate
Share payments from Medicare resulting from the failure to maintain a
minimum number of beds at Minden Medical Center prior to the Effective
Time".
9. Termination of Hospitals' Employees.
(a) The phrase "Upon the Effective Time" contained in
the first sentence of Section 4.10 of the Agreement shall be replaced
in its entirety with the phrase "Upon 12:01 a.m. (determined by
reference to the local time zone in which the Hospital is located) on
January 1, 2000 (the "Transition Time")".
(b) The phrase "the Effective Time" shall be replaced
with the phrase "the Transition Time" each time it appears in the
second and third sentences of Section 4.10 of the Agreement.
10. Certain Employee Matters. Section 5.3 of the Agreement shall
be deleted in its entirety and replaced with the following:
"5.3 Certain Employee Matters.
(a) During the period (the "Transition Period")
commencing at the Effective Time and ending immediately prior
to January 1, 2000 (such date being the "Transition Date"),
each Hospital Employee (as defined in paragraph (b) of this
Section 5.3) shall remain an employee of its employer as of
the Effective Time (whether such employer is Seller, one of
the Subsidiaries or an affiliate of Seller), subject to
normal personnel actions occurring in the ordinary course of
business. During the Transition Period, or until such earlier
time as any such Hospital Employee ceases to be an employee
of such employer, each such Hospital Employee shall be leased
to Purchaser from Seller or the employing Subsidiary or
affiliate, on substantially the terms and conditions as are
set forth in the Employee Leasing Agreements. During the
Transition Period, each leased Hospital Employee shall
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continue to participate in all Seller Plans on the same basis
as in effect immediately prior to the Effective Time, subject
to the terms of the Employee Leasing Agreements.
(b) Purchaser covenants and agrees that it
shall make offers of employment effective as of the
Transition Date (in substantially equivalent positions) to
all of the persons who are employees of (i) the Subsidiaries
with respect to the operation of the Hospitals or (ii) any
affiliate of Seller which employs individuals at any of the
Hospitals as of the Transition Time (whether such employees
are full time employees, part-time employees, on short-term
disability or on leave of absence pursuant to Seller's
policies, the Family and Medical Leave Act of 1993 or other
similar local law, but excluding those employees who have
been granted long-term disability benefits as of the Closing)
(the "Hospitals' Employees"). Notwithstanding the foregoing,
Purchaser acknowledges that Seller has the right, but is not
required, to retain any management-level Hospital Employee
who does not accept Purchaser's employment offer made under
this Section 5.3(b), which individuals will remain employed
by Seller or its applicable affiliate as of the Transition
Time (the "Retained Management Employees"). Any of the
Hospitals' Employees who accept an offer of employment with
Purchaser as of or after the Transition Time shall be
referred to herein as the "Hired Employees." Purchaser
covenants and agrees that it shall continue to employ in
comparable positions that number of the Hired Employees as
shall be necessary to avoid any liability of Seller or any of
its affiliates under WARN. Purchaser shall ensure that the
terms and conditions of employment (including level of
compensation and benefits, including without limitation
health insurance plans containing a waiver of pre-existing
conditions clause) of each of the Hired Employees on and
after the Transition Date are substantially equivalent to
that provided the Hospitals' Employees as of the Effective
Date.
(c) Purchaser shall give all Hired Employees
full credit for accumulated sick pay as reflected by the Sick
Pay Amount and for all of the accrued vacation and holiday
pay of such employees, either by (i) crediting such employees
the accrued time off reflected in the employment records of
Seller as of day immediately prior to the Transition Date or
(ii) by making full payments to such employees of the amounts
which such employees would have received had they taken their
accrued or accumulated holiday or vacation time, provided,
however, that no payment to such employees shall be required
with respect to accumulated sick time except to the extent
required by Seller's policies with respect to accumulated
sick time.
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(d) On and after the Transition Date, Hired
Employees shall be eligible for a medical and hospital plan
sponsored by Purchaser. Hired Employees shall be given credit
for periods of employment with the Subsidiaries and Seller's
affiliates, as applicable, on or prior to the Transition Date
for purposes of determining eligibility to participate and
amount of benefits (including without limitation vesting of
benefits), and preexisting condition limitations will be
waived with respect to Hired Employees and their covered
dependents unless such preexisting condition limitations were
applicable prior to the Transition Date. In addition, if
prior to the Transition Date a Hired Employee or his covered
dependents paid any amounts towards a deductible or
out-of-pocket maximum in Seller's (or its affiliate's)
medical and health plan's current fiscal year, such amounts
shall be applied toward satisfaction of the deductible or
out-of-pocket maximum in the current fiscal year of
Purchaser's medical and health plan that covers Hired
Employees on and following the Transition Date.
(e) Within two (2) years after Closing,
Purchaser's Plan shall (i) be amended to provide for a
plan-to-plan transfer from Seller's (or its affiliate's) plan
with respect to the Hospitals' Employees (other than the
Retained Management Employees) that is qualified under
Section 401(a) and 401(k) of the Code, (ii) accept a transfer
of assets from the above plan, (iii) file any required
returns relating to the transfer with the Internal Revenue
Service, and (iv) be amended to provide protected withdrawal
and distribution rights relating to the transferred assets in
accordance with Section 411(d)(6) of the Code. For purposes
of this Agreement, "Purchaser's Plan" shall mean a retirement
plan qualified under Section 401(a) of the Code that is
sponsored by Purchaser or one of its controlled group or
affiliated service group members, as defined in Section 414
of the Code.
(f) Any applicable employee of Seller or any
Subsidiary with respect to the operation of the Hospitals who
is identified as a current or former participant (and any
eligible dependent thereof) of the Seller Plans who is
eligible to receive continuation coverage (within the meaning
of Section 4980B of the Code and Part 6 of Subtitle B of
Title 1 of ERISA) will remain covered through Seller's and
its affiliates' COBRA provider. On and immediately following
the Transition Date and as a result of the transactions
contemplated by this Agreement, Seller, its affiliates and
the Subsidiaries shall not offer COBRA benefits with respect
to any of the Seller Plans to former employees (and their
dependents) who are employed by Purchaser at any Hospital as
of the date such Hired Employees become eligible for
Purchaser's medical and dental plans. Seller, its affiliates
and the Subsidiaries
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will thereby be released of COBRA responsibility and
liability for such employees.
(g) On and after the Transition Date,
Purchaser's human resources department will give reasonable
assistance to Seller's (and its affiliates') human resources
department with respect to Seller's, Seller's affiliates' and
the Subsidiaries' post-Transition Date administration of
Seller's, Seller's affiliates' and the Subsidiaries'
pre-Transition Date employee pension benefit plans and
employee health or welfare benefit plans for the Hospitals'
Employees (other than the Retained Management Employees)."
11. Indemnification of Purchaser by Seller.
(a) Section 10.2.1 of the Agreement shall be amended by
adding the following after the phrase "attorneys' fees" in the first
sentence of the Agreement: "and, only for the purposes of any
indemnification claim triggered by Section 1.12(i), interest actually
paid on any indebtedness incurred directly in connection with an event
triggering indemnification."
(b) The phrase "Section 1.12(a), (e), (f) or (h)"
contained in Section 10.2.2(a)(viii) of the Agreement shall be
replaced in its entirety with the phrase "Section 1.12(a), (e), (f),
(h) or (i)".
12. Indemnification of Seller by Purchaser. Section 10.3.1 of the
Agreement shall be amended by changing the term "Closing Date" in subsection
(viii) to the term "Transition Date".
13. Governing Law. Section 12.3 of the Agreement shall be
amended by changing the phrase "New York" to "California" throughout.
14. Arbitration. Section 12.17 of the Agreement shall be amended
by changing the phrase "New York" to "California" throughout, except that the
first phrase "New York" in Section 12.17.1 shall be changed to "Los Angeles".
15. Effect on Agreement; General Provisions. Except as set forth
in this Amendment, the terms and provisions of the Agreement are hereby
ratified and declared to be in full force and effect. This Amendment shall be
governed by the provisions of the Agreement regarding choice of law, attorneys'
fees, and successors and assigns. This Amendment shall become effective upon
its execution, which may occur in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Captions and paragraph headings are used herein for
convenience only, are not a part of this Amendment or the Agreement as amended
by this Amendment and shall not be used in construing either document. Other
than the reference to the Agreement contained in the first recital of this
Amendment, each reference to the Agreement
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and any agreement contemplated thereby or executed in connection therewith,
whether or not accompanied by reference to this Amendment, shall be deemed a
reference to the Agreement as amended by this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed in multiple originals by their authorized officers, all as of the day
and year first above written.
PURCHASER:
PROVINCE HEALTHCARE COMPANY,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxx, III
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Name: Xxxxxx X. Xxxx, III
Title: Vice President
SELLER:
XXXXX HEALTHCARE
CORPORATION, a Nevada corporation
By: /s/ Xxxx X'Xxxxx
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Name: Xxxx X'Xxxxx
Title: Vice President
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