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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 13, 1995
Champion Healthcare Corporation
- - --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter
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Delaware 0-11851 59-2283872
- - ------------------------------------------------------------------------------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation) Number)
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14340 Torrey Chase, Suite 320, Houston, Texas 77014
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number and Area Code: (713) 583-5491
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Item 2. Acquisition or Disposition of Assets
On April 13, 1995, the Registrant purchased substantially all of the
assets that comprised the operations of Salt Lake Regional Medical Center
("SLRMC"), a 200 bed tertiary hospital, and five associated clinics in Salt
Lake City, Utah. The purchase was made pursuant to an Asset Purchase
Agreement, as amended, dated January 25, 1995, among the Registrant, CHC-Salt
Lake City, Inc., a Utah corporation and wholly owned subsidiary of the
Registrant (collectively, the "Company"), Healthtrust, Inc.- The Hospital
Company ("HTI"), a Delaware Corporation, and Medical Services of Salt Lake
City, a Utah Corporation and wholly owned subsidiary of HTI. The Company paid
total consideration of approximately $56,353,000 in cash, which included
approximately $11,353,000 for certain working capital components and
reimbursement of certain capital expenditures made previously by the seller.
The purchase price was arrived at through an arms length negotiation. The
Company funded the asset purchase from available cash and borrowings under its
revolving credit agreement. Consummation of the Asset Purchase Agreement had
been subject to approval by the Federal Trade Commission, which was received on
April 7, 1995.
In connection with the merger, the Company entered into a Provider
Agreement with HTI on April 13, 1995, whereby HTI granted the Company the right
to participate in HTI's Utah provider network, as defined, for the purpose of
entering into future managed care contracts with third party payors on the same
terms as apply to HTI's Utah facilities.
Item 7. Financial Statements and Exhibits
It is impracticable to provide all the required financial statements
and pro forma financial information at this time. The information not
included will be filed within 60 days of the date this Form 8-K must be filed,
which is June 27, 1995.
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c) Exhibits:
10.1 Asset Purchase Agreement, as amended, dated January 25, 1995,
among Medical Services of Salt Lake City, Inc., Healthtrust,
Inc. - The Hospital Company, CHC - Salt Lake City, Inc. and
Champion Healthcare Corporation.
10.2 Utah Provider Agreement, dated April 13, 1995, by and between
Champion Healthcare Corporation and Healthtrust Inc. - The
Hospital Company.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
Champion Healthcare Corporation
(Registrant)
By: /s/ James G. VanDevender
------------------------
James G. VanDevender, Executive Vice
President and Chief Financial Officer
DATED: April 21, 1995
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EXHIBIT INDEX
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Exhibit No. Description
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10.1 Asset Purchase Agreement, as amended, dated January 25, 1995,
among Medical Services of Salt Lake City, Inc., HealthTrust,
Inc.-The Hospital Company, CHC - Salt Lake City, Inc. and
Champion Healthcare Corporation.
10.2 Utah Provider Agreement, dated April 13, 1995, by and between Champion
Healthcare Corporation and Healthtrust Inc. - The Hospital Company.
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EXHIBIT 10.1
________________________________________
ASSET PURCHASE AGREEMENT
AMONG
MEDICAL SERVICES OF SALT LAKE CITY, INC.,
HEALTHTRUST, INC. - THE HOSPITAL COMPANY,
CHC - SALT LAKE CITY, INC.
AND
CHAMPION HEALTHCARE CORPORATION
_________________________________________
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TABLE OF CONTENTS
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1. SALE OF ASSETS AND CERTAIN RELATED MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Assets Free and Clear; Assignment
and Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Purchase Price; Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Allocation of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.6 Adjustments to Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.7 Other Calculations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.8 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.9 Earnest Money Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Action of Seller at Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Action of Buyer at Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 Corporate Capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Corporate Powers; Absence of Conflicts
With Other Agreements, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.4 Post-Balance Sheet Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.5 Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.6 Certain Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.7 Certain Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.8 Title to Properties and Related Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.9 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.10 Litigation or Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.11 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.12 Seller's Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.13 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.14 Certain Representations With Respect
to the Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.15 Reimbursement Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.16 Hill-Burton Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.18 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.19 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.20 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.21 No Misleading Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 Buyer Capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 Corporate Authorization/Contract Binding. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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5. COVENANTS OF SELLER AND HEALTHTRUST PRIOR
TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.2 Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.4 Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.5 Title Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.6 Best Efforts to Close. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.7 Insurance Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.8 Notice; Efforts to Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.9 Cooperation with Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Indemnity by Buyer and Champion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.2 Indemnity by Seller and Healthtrust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.4 Limitation on Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.5 Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.1 Representations/Warranties; Compliance
with Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.2 Opinion of Seller's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.3 Pre-Closing Confirmations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.4 Action/Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.5 Utah Provider Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.6 Title Policies and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.7 Conveyances and Delivery of Title Policies . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.8 Delivery of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.9 Information Systems Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.10 Certificate of Non-Foreign Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.11 FTC Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.13 Healthtrust Board Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND
HEALTHTRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1 Representations/Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.2 Opinion of Buyer's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.3 Action/Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.4 Delivery of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.5 FTC Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.6 Utah Provider Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.7 Healthtrust Board Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9. PARTICULAR COVENANTS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.1 Best Efforts to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.2 Employment of Employees of Seller;
Additional Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.3 Chapel and Gardens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.4 Consents and Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.5 Change of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.6 Buyer's Payment of the Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.7 Office Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.8 Preservation and Access to Books and
Records After the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.9 Notice; Efforts to Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.10 Power of Attorney for D.E.A.
Registration Number(s) and Utah
Controlled Substance License(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10. PARTICULAR COVENANTS OF SELLER AND HEALTHTRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.1 Reimbursement of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.1 Optional Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.2 Notice of Abandonment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.1 Exhibits, Schedules and Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.2 Pre-Closing Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.3 Terminating Cost Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.4 Additional Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.5 Consents, Approvals and Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.6 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.7 Benefit/Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.8 Costs of Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.10 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.11 Tax Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.12 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.13 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
12.15 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
12.16 Divisions and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
12.17 Consented Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
12.18 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
12.19 Entire Agreement/Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
12.20 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.21 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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TABLE OF SCHEDULES AND APPENDICES
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I. SCHEDULES
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1.1(a) Real Property
1.1(c) Licenses, Permits, etc.
1.1(d) Leases
1.1(e) Contracts
1.1(f) Prepaid Expenses; Excluded Prepaid Expenses
1.1(j) Premier Care Group, Inc. Stock
1.2(ii) Excluded Receivables
1.2(ix) Miscellaneous Excluded Property
1.3 Contracts and Leases Assumed by Buyer
1.4(a) Approved Capital Expenditures
1.5 Purchase Price Allocation
3.1(b) Certificates of Incorporation and Bylaws - Seller and Healthtrust
3.2 Necessary Consents; Conflicts with Other Agreements, etc. - Healthtrust and Seller
3.3 Financial Statements
3.5 Licenses, etc.
3.6 Certain Contracts
3.7 Certain Leases
3.8(a) Liens and Encumbrances
3.8(b) Title Insurance Policies, Commitments or Binders - Real Property
3.8(c) UCC Search
3.8(d) Construction in Progress
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3.9 Employee Benefit Plans
3.10 Litigation
3.11 Insurance Policies
3.12 Seller's Employees; WARN Act Matters
3.14(j) Copy of Hospital License
4.1 Certificates of Incorporation and Bylaws of Buyer and Champion
4.2 Necessary Consents; Conflicts with Other Agreements; Etc. - Champion and Buyer
II. APPENDICES
----------
1.3 Form of Assignment and Undertaking
5.5 Form of Deeds
7.2 Form of Opinion of Waller Lansden Dortch & Davis
7.5 Form of Utah Provider Agreement
7.9 Form of Information Systems Agreement
7.10 Form of Certificate of Non-Foreign Status
7.12 Form of Medicare Reconciliation Note
8.2 Form of Opinion of Michner, Larimore, Swindle, Whitaker, Flowers, Sawyer, Reynolds
& Chalk, L.L.P.
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ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
January 25, 1995, among Medical Services of Salt Lake City, Inc., a Utah
corporation ("Seller"), Healthtrust, Inc. - The Hospital Company, a Delaware
corporation ("Healthtrust"), CHC-Salt Lake City, Inc., a Utah corporation
("Buyer"), and Champion Healthcare Corporation, a Delaware corporation
("Champion").
W I T N E S S E T H:
This Agreement provides for the sale by Seller, a wholly owned
subsidiary of Healthtrust, to Buyer, a wholly owned subsidiary of Champion, of
substantially all of the assets, real and personal, tangible and intangible,
used in the operation of Seller's health related businesses (collectively, the
"Business"). Seller wishes to sell substantially all of its properties and
assets used in connection with the operation of the Business, and Buyer wishes
to purchase such properties, assets and interests.
NOW, THEREFORE, for and in consideration of the foregoing
premises and the agreements, covenants, representations and warranties
hereinafter set forth and other good and valuable consideration, the receipt
and adequacy of all of which are acknowledged and agreed, the parties hereto
agree as follows:
1. SALE OF ASSETS AND CERTAIN RELATED MATTERS.
1.1 Sale of Assets. Subject to the terms and conditions
of this Agreement, at the Closing (as hereinafter defined), Seller shall sell,
transfer, convey, assign and deliver to the Buyer, and Buyer shall purchase from
Seller, the following assets and properties:
(a) all real property, leasehold interests in real
property and other real property interests used in connection with the
operation of the Business or owned by Seller, including, without limitation,
the operations of the hospital known as Salt Lake Regional Medical Center (the
"Hospital") and all health care clinics operated by Seller (the "Clinics");
together with all buildings, improvements and fixtures located thereupon and
all construction in progress (such real property is referred to herein as the
"Real Property"), such Real Property being more specifically described in
Schedule 1.1(a);
(b) all tangible personal property (excluding cash)
owned by Seller and used in connection with the Business, including, without
limitation, all equipment, furniture, fixtures, machinery, vehicles, office
furnishings, instruments, leasehold improvements, spare parts, and, to the
extent assignable or
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transferable by Seller, all rights in all warranties of any manufacturer or
vendor with respect thereto (the "Personal Property"), but excluding the
personal property described in Section 1.2(ix) hereof;
(c) all rights, to the extent assignable or
transfer-able, to all licenses, certificates of need, certificates of
exemption, franchises, accreditations and registrations and other licenses or
permits issued in connection with the Business (the "Licenses"), including,
without limitation, the Licenses described in Schedule 1.1(c);
(d) all of Seller's interest, to the extent assignable
or transferable by it, in and to those real property and personal property
leases relating to the Business described in Schedule 1.1(d) (all of such
leases being referred to collectively as the "Leases");
(e) all of Seller's interest, to the extent assignable
or transferable by it, in, to and under those contracts and agreements relating
to the Business set forth in Schedule 1.1(e) (the "Contracts");
(f) any deposits, escrows, prepaid taxes or other
advance payments relating to any expenses of the Business, as identified on
Schedule 1.1(f) as prepaid expenses to be transferred to Buyer (the "Prepaid
Expenses"), but excluding the prepaid expenses of Seller described in Section
1.1(f) hereof as prepaid expenses to be retained by Seller ("Excluded Prepaid
Expenses");
(g) all inventories of supplies, drugs, food, janitorial
and office supplies and other disposables and consumables owned by Seller on
the Closing Date (as hereinafter defined) and located at the premises of Seller
or purchased by Seller for use in connection with the Business (the "Operating
Inventory");
(h) all accounts receivable with respect to the
Business, including all accounts receivable arising from the rendering of
services to inpatients and outpatients at the Hospital or the Clinics, billed
and unbilled, recorded or unrecorded, accrued and existing in respect of
services up to the effective date of the Closing, including those from any
source, excluding, however, the Excluded Receivables, as defined below (the
"Accounts Receivable");
(i) all documents, records, operating manuals and files,
and computer software owned by Seller, pertaining to or used in connection with
the Business, including, without limitation, all patient records, medical
records, financial records, equipment records, construction plans and
specifications, and medical and administrative libraries, but excluding
Seller's corporate minute
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books, minutes, tax records and any other records of Seller required to be
maintained as a matter of law;
(j) all of Seller's interest in the stock of Premier
Care Group, Inc. listed in Schedule 1.1(j) hereof; and
(k) except as expressly excluded herein, all other
property owned by Seller, whether tangible or intangible, located at the
premises of Seller or used in connection with the Business whether or not
reflected on the balance sheet of Seller.
The foregoing, which (except for the Excluded Assets, as
defined in Section 1.2) are hereafter referred to, collectively, as the
"Assets", comprise substantially all of the property and assets used in the
conduct and operation of the Business as of December 31, 1994, including
without limitation, those assets reflected on the unaudited balance sheet of
Seller dated December 31, 1994 (the "Balance Sheet"), and all assets acquired
by Seller between December 31, 1994 and the Closing.
1.2 Excluded Assets. The following items which are
related to the Assets are not intended by the parties to be a part of the sale
and purchase contemplated hereunder and are excluded from the Assets
(collectively, the "Excluded Assets"): (i) all cash and cash equivalents; (ii)
(a) all amounts payable or to become payable to Seller from third party payors
in respect of periods prior to the Cut-Off Point in respect of third party payor
cost reports, including, without limitation, Medicare and Medicaid cost reports,
filed or to be filed by Seller (the "Cost Report Receivables"), (b) all accounts
receivable from Medicare with respect to the Business arising from the rendering
of services to inpatients and outpatients at the Hospital or the Clinics, billed
and unbilled, recorded and unrecorded, accrued and existing in respect of
services up to the effective date of Closing (such accounts receivable,
excluding the Cost Report Receivables, are referred to herein as the "Medicare
Receivables"), and (c) the accounts receivable set forth on Schedule 1.2(ii)
hereto, (such receivables referred to in clauses (a), (b) and (c) above, the
"Excluded Receivables"); (iii) Seller's corporate minute books, minutes, tax
records and other records of Seller required to be maintained as a matter of law
(it being understood that patient medical records of the Hospital and the
Clinics are not intended to be excluded); (iv) all Excluded Prepaid Expenses of
Seller identified in Schedule 1.1(f) hereto; (v) all supplies, drugs, food and
other disposables and consumables disposed of prior to the Closing; (vi) the
names "Healthtrust", "HTI", "HealthWorks", "HomeMed", "HomeMed of Utah",
"Continuing Care", "FirstMed" and "Life After Breast Cancer" and all variations
thereof; (vii) all rights and privileges under contracts, agreements and leases
not listed on Schedules 1.1(d) or 1.1(e) hereto; (viii) any claims by Seller
against third parties whether known or unknown, contingent
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or otherwise, except those expressly described in Section 1.1(b); and (ix) the
property described in Schedule 1.2(ix) hereto.
1.3 Assets Free and Clear; Assignment and Undertaking.
(a) Notwithstanding any other provision hereof to the
contrary, the Assets shall be sold free and clear of all liabilities, liens and
encumbrances, except for Permitted Encumbrances (as hereinafter defined). At
Closing, Buyer (or, with respect to all or a portion of the Contracts and
Leases, another wholly-owned subsidiary of Champion designated by Buyer) will
execute and deliver to Seller an assignment and undertaking (the "Assignment
and Undertaking"), in the form of Appendix 1.3, pursuant to which Seller shall
assign to Buyer its future rights, and Buyer shall assume from Seller its
future obligations, under those Contracts and Leases described in Schedule 1.3;
pursuant to which Buyer shall assume from Seller Seller's future obligations in
respect of the Holy Cross Leave (as defined at Section 9.2(e) hereof) with
respect to all Hired Employees (as defined at Section 9.2(a) hereof) (but only
to the extent provided in Section 9.2(e) hereof); pursuant to which Buyer shall
assume from Seller Seller's obligations with respect to all purpose leave
("APL") benefits existing as of the Cut-Off Point (as defined below) with
respect to all Hired Employees (to the extent provided in Section 9.2(f)
hereof); and pursuant to which Buyer also shall assume from Seller its future
obligations with respect to credit balances on account with Seller as of the
Cut-Off Point as and to the extent such credit balances are reflected in the
value of the Accounts Receivable being purchased by Buyer from Seller in
accordance with this Agreement or in the book value of the Medicare Receivables
that are reflected in the Medicare Reconciliation Note. Except as provided in
the Assignment and Undertaking, (i) neither Buyer nor Champion is undertaking,
and neither shall assume, and under no circumstances shall either be obligated
to pay, assume or be responsible for (nor shall any of the Assets be or become
liable for or subject to), any other leases, contracts, liabilities,
indebtedness or obligations incurred by Seller or otherwise incurred in
connection with the Assets or the Business prior to the Cut-Off Point, fixed or
contingent, disclosed or undisclosed at the Closing, or otherwise, including,
but not limited to, any repayment or other amount owed (including, without
limitation, recapture of depreciation) to Medicare, Medicaid or other third
party payors; any violation by Seller of or its non-compliance with any
Environmental Law (as hereinafter defined) by Seller; any and all liabilities
or obligations of Seller for personal injury (including sickness, trauma,
disease, pain and suffering, loss of future earnings, death, punitive damages
and the like), property damage and other damage and injury claims arising out
of Seller's conduct of business (including without limitation the Business)
whether or not any claim or litigation has been instituted with respect
thereto, whether or not any claim is covered, partially or fully,
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by insurance and whether or not any claim or litigation has been disclosed to
Buyer; any federal, state or local taxes now or hereafter owed by Seller; any
wages, salary, other benefits and all related tax obligations (other than
vacation, holiday, short-term sick, paid time off ("PTO") and grandfathered
long-term sick day liabilities to the extent provided in Section 9.2(e) hereof,
and other than, APL and related tax liabilities to the extent provided in
Section 9.2(f) hereof) now or hereafter owed by Seller; and any operating
expenses (other than those expressly assumed by Buyer); and (ii) Seller shall
pay, perform, satisfy (when due), and discharge any and all of Seller's
liabilities, indebtedness and obligations in respect of or affecting any of the
Assets or the Business not assumed by Buyer pursuant to the Assignment and
Undertaking; provided, however, Seller shall have the right to contest in good
faith any such liability, indebtedness or obligation which Seller considers to
be in dispute.
(b) With respect to any indebtedness, or other liability
or obligation, secured by a lien on, or security interest in, any of the
Assets, Seller shall pay, perform, satisfy and discharge any such indebtedness,
liability or obligation and cause any such lien or security interest to be
released prior to or at the Closing.
(c) With respect to any capitalized lease to be assumed
by Buyer pursuant to the Assignment and Undertaking, the Purchase Price (as
hereinafter defined) shall be reduced by an amount equal to the liability with
respect to such lease as of the Cut-Off Point (as hereinafter defined) as
reflected on the Closing Balance Sheet (as hereinafter defined).
1.4 Purchase Price; Prorations. (a) The purchase
price of the Assets (the "Purchase Price") shall be cash in the amount of
FORTY-FIVE MILLION DOLLARS ($45,000,000); (i) plus the amount of any capital
expenditures made by Seller from and after December 31, 1994 until the Cut-Off
Point (as defined at Section 2.1); (ii) plus the book value (as reflected on the
Closing Balance Sheet, as such term is defined below) as of the Closing Date of
the Operating Inventory and Prepaid Expenses; (iii) plus an amount equal to 90%
of the book value as of the Closing Date of the Accounts Receivable, net of the
allowance for doubtful accounts and contractual adjustments related thereto, all
as reflected on the Closing Balance Sheet; (iv) less 90% of the aggregate amount
of the Holy Cross Leave as of the Cut-Off Point with respect to all Hired
Employees as and to the extent Buyer assumes such liabilities in accordance with
Section 9.2(e) hereof; (v) less 100% of the aggregate amount of APL liabilities
as of the Cut-Off Point with respect to all Hired Employees as and to the extent
Buyer assumes such liabilities in accordance with Section 9.2(f) hereof; and
(vi) less any adjustment in respect of capitalized leases made in accordance
with Section 1.3(c) hereof. Notwithstanding the provisions of Section
1.4(a)(i), no increase to the Purchase Price
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shall be effected with respect to any single item involving a capital
expenditure in excess of $25,000 unless Seller shall have obtained Buyer's
prior written consent to such expenditure. Buyer hereby acknowledges that it
has consented to the capital expenditures described in Schedule 1.4(a), but
such consent is limited as to scope and dollar amount as described in Schedule
1.4(a).
(b) At Closing, the Earnest Money Deposit delivered to
Healthtrust by Champion pursuant to Section 1.10 hereof will be applied against
the Purchase Price.
(c) Buyer and Seller shall prorate, if possible, real
estate and personal property lease payments, payments under any construction
contracts assumed by Buyer pursuant to the Assignment and Undertaking,
interest, real estate and personal property taxes, real estate lease deposits
and escrows, other assessments, plus all other revenues and expenses with
respect to the Business which are normally prorated upon the sale of assets of
a going concern; provided, however, that the parties will not prorate any
Prepaid Expenses. Seller shall order final readings of all power and other
utility charges to be made as of the Cut-Off Point and shall pay when due all
charges in respect thereof. All prorations contemplated by this Section 1.4(b)
shall be made as of the Cut-Off Point.
1.5 Allocation of Purchase Price. For income tax
purposes, the Purchase Price shall be allocated as follows: (a) an amount equal
to the net book value as of the Cut-Off Point of the Operating Inventory and
Prepaid Expenses shall be allocated to such Assets; (b) an amount equal to 90%
of the book value as of the Closing Date of the Accounts Receivable, net of the
allowance for doubtful accounts and contractual adjustments related thereto,
shall be allocated to such Accounts Receivable; and (c) the remainder of the
Purchase Price shall be allocated as provided in Schedule 1.5 hereto.
1.6 Adjustments to Purchase Price. (a) For purposes of
determining adjustments to the Purchase Price on the Closing Date and the
amount of cash to be delivered by Buyer to Seller at the Closing in accordance
with Sections 1.4(a) and 2.3(a)(i) hereof, such adjustments shall be made
initially on or prior to the Closing Date using Seller's latest regularly
prepared balance sheet in respect of the Business (the "Interim Balance
Sheet"). Such initial calculations shall be set forth on a schedule delivered
by Seller to Buyer with a copy of the Interim Balance Sheet not less than two
days prior to the Closing. The Interim Balance Sheet also will be used for
purposes of determining the initial principal balance of the Medicare
Reconciliation Note (as defined below) pursuant to Section 7.12 hereof and the
amount of cash to be
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delivered by Buyer to Seller with respect to the Medicare Reconciliation Note
in accordance with Section 2.3(a)(ii) hereof.
(b) Subject to the provisions of Section 1.6(d) below, within
ninety (90) days after the Closing Date (or as soon thereafter as possible),
the parties shall make final adjustments to the Purchase Price (the "Post
Closing Adjustments"). Seller shall use its reasonable best efforts, and Buyer
shall fully cooperate with Seller in such efforts, to prepare and deliver to
Buyer not later than sixty (60) days after Closing a balance sheet of Seller
with respect to the Business as of the Cut-Off Point (the "Closing Balance
Sheet"). The Closing Balance Sheet will be used to determine any final Post
Closing Adjustments to the Purchase Price relating to the value of the
Operating Inventory, Prepaid Expenses and Accounts Receivable acquired by
Buyer, the amount of any deductions to the Purchase Price to which Buyer is
entitled with respect to capitalized leases, Holy Cross Leave or holiday
benefit liabilities assumed by Buyer, and any adjustments to the principal
amount of the Medicare Reconciliation Note required pursuant to the terms
thereof.
(c) Simultaneously with Seller's delivery of the Closing
Balance Sheet to Buyer, Seller shall deliver a schedule to Buyer detailing (i)
any Post Closing Adjustments and detailing the difference between the Purchase
Price and the Interim Purchase Price, and (ii) detailing any required
adjustments to the principal amount of the Medicare Reconciliation Note.
(d) Should Buyer dispute the Post Closing Adjustments or
the adjustments to the principal amount of the Medicare Reconciliation Note
proposed by Seller or the accuracy of the Closing Balance Sheet, Buyer shall
notify Seller in writing within thirty (30) days after receipt of the schedule
of Post Closing Adjustments and principal adjustments, or else Buyer shall be
deemed to have waived all rights to object to the accuracy of the Post Closing
Balance Sheet and to the Post Closing Adjustments and principal adjustments
proposed by Seller. If within thirty (30) days after Seller has received
Buyer's objection, Buyer and Seller are unable to agree upon the amount of the
Post Closing Adjustments and principal adjustments, Seller and Buyer shall
engage certified public accountants mutually selected by Ernst & Young and
Coopers & Lybrand (the "Accountants"), to review the proposed Post Closing
Adjustments and principal adjustments and determine the amount thereof, such
determination to be made as soon as practicable. In making such review and
determination, the Accountants shall utilize the terms and provisions of this
Agreement (including the provisions of Sections 1.6(f) and 3.3 hereof) and the
terms and provisions of the Medicare Reconciliation Note together with
accounting policies and procedures consistent with those utilized by Seller, in
preparing the Balance Sheet and the Closing Balance Sheet. The decision of the
Accountants shall be binding on both
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Seller and Buyer. Each of Buyer and Seller shall pay one-half the reasonable
expenses of engagement of the Accountants pursuant to this Section 1.6(d) and
shall cooperate in all reasonable respects with the Accountants.
(e) Within thirty (30) days of Buyer's receipt of the
required schedule of proposed Post Closing Adjustments and principal
adjustments (or, if Buyer disputes the Post Closing Adjustments or principal
adjustments, within ten (10) days of the resolution or determination of the
adjustments in accordance with Section 1.6(d) above), (i) either (A) Seller
shall pay Buyer in cash or in other immediately available funds the net amount
by which the Interim Purchase Price exceeds the Purchase Price, as adjusted, or
(B) Buyer shall pay Seller in cash or other immediately available funds the
amount by which the Interim Purchase Price is less than the Purchase Price, as
adjusted, and (ii) appropriate adjustments will be made to the principal amount
of the Medicare Reconciliation Note and either (A) Seller will pay Buyer the
amount of any required decrease in such principal amount or (B) Buyer will pay
Seller the amount of any required increase in such principal amount.
(f) The Interim Balance Sheet and the Closing Balance
Sheet will comply with and be prepared in accordance with the requirements set
forth in Section 3.3.
1.7 Other Calculations. All accounts payable for personal
property and inventory delivered in respect of the Business prior to the
Cut-Off Point shall be paid by Seller, and all accounts payable for personal
property and inventory delivered after the Cut-Off Point shall be paid by
Buyer. On or before the Closing Date, Seller shall calculate, as of the
Cut-Off Point, the salary and other pay owed to its employees who are employed
in connection with the Business and whose employment by Seller will terminate
as of the Closing (other than the vacation, holiday, short- term sick, PTO, APL
and grandfathered long-term sick day benefits as and to the extent such
benefits are to be assumed by Buyer pursuant to Sections 9.2(e) and (f)
hereof), and Seller shall distribute such amounts to such employees promptly
following the Cut-Off Point.
1.8 Receivables. Seller shall promptly remit to Buyer any
payments it may receive which constitute payments of accounts receivable of
Buyer, including any of the Accounts Receivable purchased pursuant to this
Agreement. Seller also shall promptly remit to Buyer any payments it may
receive which constitute payments with respect to the Medicare Receivables that
Seller is obligated to pay to Buyer pursuant to the Medicare Reconciliation
Note. Buyer shall promptly remit to Seller any payments it may receive that
constitute payments of the Excluded Receivables except payments it may receive
which constitute payments with respect to
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the Medicare Receivables that Seller is obligated to pay to Buyer pursuant to
the Medicare Reconciliation Note.
1.9 Earnest Money Deposit. (a) On the date this Agreement
is executed and delivered by the parties hereto, Champion will deposit with
Healthtrust the amount of Three Million Dollars ($3,000,000) as an "Earnest
Money Deposit" to be held and disbursed by Seller pursuant to the terms and
conditions of this Agreement. In the event the sale of the Assets contemplated
by this Agreement is consummated, the Earnest Money Deposit shall be applied at
Closing to the Purchase Price (and the Interim Purchase Price to be delivered
at the Closing). If the sale of the Assets contemplated by this Agreement is
not consummated, the Earnest Money Deposit will be distributed by Healthtrust
as provided in Sections 1.9(b) through (i) below; and if the Earnest Money
Deposit is distributed to Champion pursuant to Sections 1.9(c), (e), (g), (h)
or (i), then the amount paid to Champion will be increased by an amount equal
to interest from the date that Champion funds the Escrow Deposit to the date of
payment at the annual rate equal to the 30-day certificate of deposit rate as
published in the Wall Street Journal on the date of this Agreement. Otherwise,
no interest shall accrue or be payable to Champion with respect to the Earnest
Money Deposit.
(b) If this Agreement is terminated by mutual agreement
of the parties hereto, then the entire Earnest Money Deposit shall be
distributed pursuant to the agreement of the parties.
(c) If this Agreement shall have been terminated by
Buyer or Champion (i) pursuant to and in accordance with Sections 11.1(b) or
11.1(d), or (ii) because Healthtrust's Board of Directors (or the Executive
Committee thereof) shall not have approved this Agreement and the transactions
contemplated hereby on or before the date on which the FTC (as defined below)
shall have given its consent as contemplated by Sections 7.11 and 8.5 hereof
(such consent, the "FTC Consent"). Healthtrust shall promptly repay the
Earnest Money Deposit to Champion.
(d) If this Agreement shall have been terminated by
Healthtrust or Seller pursuant to Section 11.1(d), Healthtrust shall retain the
Earnest Money Deposit.
(e) If Seller or Healthtrust refuses to close the
transactions contemplated by this Agreement after satisfaction of all of the
conditions precedent to their obligation to close hereunder as set forth in
this Agreement and after receipt of Buyer's and Champion's written confirmation
of their willingness to close, then Healthtrust shall promptly repay the
Earnest Money Deposit to Champion.
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(f) If Buyer or Champion refuses to close the transactions
contemplated by this Agreement after satisfaction of all of the conditions
precedent to their obligation to close hereunder as set forth in this Agreement
and after receipt of Seller's and Healthtrust's written confirmation of their
willingness to close, then Healthtrust shall retain the Earnest Money Deposit.
(g) If either party shall have terminated this Agreement
pursuant to Section 11.1(c), then Healthtrust shall promptly repay the Earnest
Money Deposit to Champion; provided, however, if the order, decree, ruling or
other action that shall have given rise to the termination of this Agreement is
based in whole or in part upon facts or circumstances that have resulted from
an act or omission on the part of Champion or any of its affiliates, then in
any such case Healthtrust shall retain the Earnest Money Deposit (it being
understood and agreed upon by the parties that neither the execution nor the
delivery of this Agreement by Buyer and Champion, in and of itself, will
constitute such an "act" or "omission" on the part of Champion or any of its
affiliates).
(h) If either party shall have terminated this Agreement
pursuant to Section 11.1(e), then Healthtrust shall promptly repay the Earnest
Money Deposit to Champion; provided, however, if a condition to closing that
has not been satisfied or waived as of the termination date is a condition that
is within the control of Champion, Buyer or their counsel, then in any such
case Healthtrust shall retain the Earnest Money Deposit.
(i) If either party shall have terminated this Agreement
pursuant to Section 11.1(f), then Healthtrust shall promptly repay the Earnest
Money Deposit to Champion, unless as of the time of such termination,
Healthtrust or Seller would be entitled to terminate this Agreement and
Healthtrust would be entitled to retain the Escrow Money Deposit, in which case
Healthtrust shall retain the Escrow Money Deposit.
1.10 Disclaimer of Warranties. The Assets will be sold by
Seller and purchased by Buyer in their condition at Closing, "AS IS", WITH NO
WARRANTY OF HABITABILITY OR FITNESS FOR HABITATION, with respect to the Real
Property, and WITH NO WARRANTIES, INCLUDING THE WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, with respect to the Personal Property and
Operating Inventory, any and all of which warranties (both express and implied)
Seller hereby disclaims. Nothing in this Section 1.10 shall be construed to
limit the scope or effect of the express representations and warranties
contained in Article III hereof.
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2. CLOSING.
2.1 Closing. Subject to the conditions set forth in Articles
7 and 8 hereof, the consummation of the sale and purchase of the Assets
contemplated by and described in this Agreement (the "Closing") shall take
place in Nashville, Tennessee at the offices of Waller Lansden Dortch & Davis,
511 Union Street, Suite 2100, Nashville, Tennessee or other agreed upon
location, at 10:00 A.M. local time (a) on March 31, 1995 (if the parties shall
have obtained the FTC Consent on or before March 31, 1995), (b) on a mutually
agreeable date within five business days of the date on which the parties shall
have obtained the FTC Consent, but in no event later than May 31, 1995 (if the
parties shall have obtained the FTC Consent after March 31, 1995), or (c) on
such other date as the parties may mutually designate in writing, but in no
event later than May 31, 1995. The date on which the Closing occurs is
referred to herein as the "Closing Date." The Closing of the transactions
shall be deemed to be effective as of 11:59 P.M. (Salt Lake City, Utah time) on
the Closing Date or such other time which the parties may mutually designate in
writing. The time at which the Closing shall be deemed to be effective is
referred to herein as the "Cut-Off Point."
2.2 Action of Seller at Closing. At the Closing, Seller or
Healthtrust shall deliver to Buyer the following:
(a) a special warranty deed or deeds in recordable form,
conveying to Buyer fee title to the Real Property interests
that are designated in Schedule 1.1(a) as parcels that are
owned in fee simple by Seller, subject only to Permitted
Encumbrances;
(b) the Assignment and Undertaking;
(c) bills of sale and assignments conveying and
assigning to Buyer all other Assets;
(d) copies of corporate resolutions duly adopted by the
respective Boards of Directors of Seller and Healthtrust and by
the shareholders of Seller authorizing and approving each such
corporation's performance of the transactions contemplated
hereby and the execution and delivery of the documents
described herein, certified as true and of full force as of
Closing by appropriate officers of each such corporation;
(e) certificates, dated as of the Closing Date, of
appropriate officers of each of Seller and Healthtrust
certifying that, to the best of such officer's knowledge and
belief, as of Closing all of the respective representations and
warranties by or on behalf of Seller
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and/or Healthtrust contained in this Agreement are true and
correct and all respective covenants and agreements of Seller
and/or Healthtrust to be performed prior to or as of Closing
pursuant to this Agreement have been performed;
(f) certificates of incumbency, dated as of the Closing
Date, for the officers of each of Seller and Healthtrust making
certifications for Closing, or executing deeds, the Assignment
and Undertaking, the bill of sale, the Information Systems
Agreement (as hereinafter defined), the Utah Provider Agreement
(as hereinafter defined), the Medicare Reconciliation Note or
this Agreement;
(g) certificates of corporate existence or good standing
certificates of each of Seller and Healthtrust from the States
of Utah or Delaware, respectively, dated the most recent
practical date prior to Closing;
(h) subject to Section 1.2 hereof, all of Seller's
Contracts, Leases, commitments, books, records and other data
relating to the Assets, and simultaneously with such delivery
and Seller will take all such steps as may reasonably be
required to put Buyer in actual possession and operating
control of the Assets;
(i) the Information Systems Agreement;
(j) the Utah Provider Agreement;
(k) any documents required by the Title Company (as
defined herein) in order for the Title Company to deliver the
Title Policies (as defined herein) subject only to the
Permitted Encumbrances; and
(l) the Medicare Reconciliation Note.
2.3 Action of Buyer at Closing. At the Closing, Buyer or
Champion shall deliver to Seller the following:
(a) payment in cash or immediately available funds of
an amount equal to (i) the Purchase Price (less the amount of
the Earnest Money Deposit), plus (ii) the principal amount of
the Medicare Reconciliation Note;
(b) the Assignment and Undertaking;
(c) copies of corporate resolutions duly adopted by the
respective Boards of Directors of Buyer and Champion and by
the shareholders of Buyer authorizing and
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approving Buyer's and Champion's performance of the
transactions contemplated hereby and the execution and
delivery of the documents described herein, certified as true
and of full force as of Closing by appropriate officers of
Buyer and Champion;
(d) certificates, dated as of the Closing Date, of
appropriate officers of each of Buyer and Champion certifying
that, to the best of such officers' knowledge and belief, as of
Closing all of the respective representations and warranties by
or on behalf of the Buyer and/or Champion contained in this
Agreement are true and correct and all respective covenants and
agreements of Buyer and/or Champion to be performed prior to or
as of Closing pursuant to this Agreement have been performed;
(e) a certificate of incumbency, dated as of the Closing
Date, for the officers of Buyer and Champion making
certifications for Closing or executing the Assignment and
Undertaking, the Information Systems Agreement, the Utah
Provider Agreement or this Agreement;
(f) a certificate of corporate existence of Buyer from
the State of Utah and a certificate of good standing of
Champion from the State of Delaware, dated the most recent
practical date prior to Closing;
(g) the Information Systems Agreement; and
(h) the Utah Provider Agreement.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
As of the date hereof, Seller represents and warrants to Buyer
and Champion that:
3.1 Corporate Capacity. (a) Seller and Healthtrust are
corporations duly organized, validly existing and in good standing under the
laws of Utah and Delaware, respectively, with all requisite corporate power and
authority to own, operate and lease their respective properties and to carry on
their businesses as now being conducted.
(b) Schedule 3.1(b) contains complete and correct copies
of the Certificates of Incorporation and all amendments thereto to the date
hereof and the Bylaws as presently in effect of Seller and Healthtrust.
3.2 Corporate Powers; Absence of Conflicts With Other
Agreements, etc. (a) The execution and delivery by Seller and
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Healthtrust of this Agreement and the performance of this Agreement and the
other agreements and transactions contemplated hereby to be executed and
performed by Seller and Healthtrust:
(i) are within Seller's and Healthtrust's respective
corporate powers, are not in contravention of the terms of
Seller's or Healthtrust's Certificates of Incorporation, Bylaws
or any amendments thereto and have been duly authorized by the
board of directors of Seller; and
(ii) except as set forth on Schedule 3.2, on the
Closing Date, (A) will not result in any breach of any
indenture, agreement, lease or instrument to which Seller or
Healthtrust is a party or by which Seller, Healthtrust or any
of the Assets is bound, (B) will not constitute a violation of
any judgment, decree, or order of any court of competent
jurisdiction applicable to Seller or Healthtrust, (C) will not
violate any law, rule or regulation of any governmental
authority applicable to the Seller, Healthtrust, the Business
or any of the Assets and (d) will not require any consent,
approval or authorization of, or notice to, or declaration,
filing or registration with, any governmental or regulatory
authority.
(b) This Agreement has been duly and validly executed
and delivered by Seller and Healthtrust, and, as of the Closing, the other
agreements and instruments contemplated hereby to be executed and delivered by
Seller and/or Healthtrust will have been duly and validly executed and
delivered by Seller and, where applicable, Healthtrust. Upon approval of this
Agreement and the other agreements and instruments contemplated hereby by the
Board of Directors of Healthtrust (or the Executive Committee thereof), this
Agreement will constitute, and upon such approval and their execution and
delivery, the other agreements and instruments contemplated hereby to be
executed and delivered by Seller and/or Healthtrust will constitute, the valid,
legal and binding obligation of each of Seller and, where applicable,
Healthtrust, enforceable against each of them in accordance with their
respective terms except as such enforceability may be limited by bankruptcy,
reorganization, insolvency, or other laws affecting the enforcement of
creditors' rights generally or the availability of equitable remedies.
3.3 Financial Statements. Schedule 3.3 hereto consists of
true, correct and complete copies of the unaudited income statement of Seller
for the four months ended December 31, 1994 (the "Income Statement"), and the
Balance Sheet (the Income Statement and the Balance Sheet are referred to
collectively as the "Financial Statements"). The Income Statement has been
prepared
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from and is in accordance with the books and records of Seller; is true,
complete and accurate; fairly presents the operations of Seller for the period
indicated, except (a) as indicated by the notes thereto, (b) that the
depreciation expense reflected on the Income Statement is based upon the fixed
asset balances from the financial statements of Holy Cross (as described
further below), and (c) with respect to any changes which would result from
year-end audit adjustments which in the aggregate are not materially adverse to
the business or financial condition of Seller. Insofar as the Balance Sheet
reflects Seller's current assets, current liabilities and capitalized leases,
the Balance Sheet has been prepared from and is in accordance with the books
and records of Seller; is true, complete and accurate; and fairly presents the
assets and liabilities of Seller addressed thereby as of the date indicated.
The dollar amounts of fixed assets reflected on the Balance Sheet are the
amounts of fixed assets derived from the financial statements of Holy Cross and
do not give effect to any increase or decrease in the valuation of such fixed
assets resulting from Seller's acquisition of the Assets. Consequently, Seller
makes no representations regarding the accuracy of the valuation of either the
fixed assets or the shareholders' equity as reflected on the Balance Sheet.
Any financial statements of Seller prepared as of a date after December 31,
1994 and delivered to Buyer pursuant to this Agreement shall be subject to and
prepared in accordance with the preceding representation and the standards set
forth therein.
3.4 Post-Balance Sheet Results. Since December 31, 1994,
with respect to the Assets there has not been:
(a) any damage, destruction or loss (whether or not
covered by insurance) materially adversely affecting the
Assets, taken as a whole;
(b) any sale, lease, transfer or disposition by Seller
of the Assets except sales of inventories, supplies or
accounts receivable and except for sales, leases, transfers
or dispositions of non-material portions of the Assets in the
ordinary course of Seller's business; or
(c) any change or the occurrence of any fact or
condition which may be reasonably expected to have a material
adverse effect on the Business or the value of the Assets,
other than such changes, facts and conditions, if any,
generally affecting the hospital service area in which the
Hospital is located, generally affecting the healthcare
industry, or resulting from the announcement of the
transactions contemplated hereby.
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3.5 Licenses. Seller has all licenses and permits relating
to the ownership of the Assets and operation of the Business as are necessary
and required for such ownership and operation except where the failure to
obtain such licenses or permits would not have a material adverse effect on the
ownership of the Assets or the operation of the Business. Schedule 3.5 hereto
contains a complete description of all material licenses, permits, franchises,
certificates of need, certificate of need applications, and PRO memos, if any,
and their respective dates of termination or renewal, owned or held by Seller
relating to the ownership, development or operation of the Assets or the
Business, together with any formal and specific notices or directives received
by Seller from the agency responsible for such Schedule 3.5 item, for which
noncompliance with such notice or directive would likely cause the revocation,
suspension or diminution in term for such item, all of which are, to Seller's
knowledge, in good standing.
3.6 Certain Contracts. Schedule 3.6 lists all contracts that
Seller agreed to assume from Holy Cross (as hereinafter defined) at the closing
of Seller's acquisition of the Assets from Holy Cross or to which Seller
otherwise is a party involving obligations in respect of the Business for
payment, performance of services or delivery of goods in excess of $5,000 or
which require Seller to continue to perform for a period of longer than twelve
(12) months ("Scheduled Contracts"). Seller has delivered or made available to
Buyer true and correct copies of all Scheduled Contracts. Except as set forth
in Schedule 3.6, all of the Contracts which Buyer has agreed to assume pursuant
to the Assignment and Undertaking are valid and binding obligations of the
parties thereto, are in full force and effect, and are enforceable against the
parties thereto in accordance with their respective terms. To the best of
Seller's knowledge, none of the other parties to those Contracts which Buyer
has agreed to assume pursuant to the Assignment and Undertaking (i) are in
default under such contracts or (ii) consider Seller to be in default
thereunder. Except as expressly noted in Schedule 3.6, to the best of Seller's
knowledge, no party to any of those Contracts which Buyer has agreed to assume
pursuant to the Assignment and Undertaking intends to terminate or adversely
modify its agreement(s) with respect thereto, or adversely change the volume of
business done thereunder.
3.7 Certain Leases. Schedule 3.7 lists all leases that
Seller agreed to assume from Holy Cross at the closing of Seller's acquisition
of the Assets from Holy Cross or to which Seller otherwise is a party in
respect of the Business involving annual obligations on the part of Seller for
the payment of rent in excess of $5,000 or involving rental of real property by
Seller as lessor, lessee, sublessor or sublessee ("Scheduled Leases"). Seller
has delivered or made available to Buyer true and correct copies of all
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Scheduled Leases. All of the Leases which Buyer has agreed to assume pursuant
to the Assignment and Undertaking are valid and binding obligations of the
parties thereto, are in full force and effect, and are enforceable against the
parties thereto in accordance with their terms; and to the best of Seller's
knowledge, no event has occurred including, but not limited to, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby which (whether with or without notice, lapse
of time or both) would constitute a default thereunder. To the best of
Seller's knowledge, none of the other parties to any of those Leases which
Buyer has agreed to assume pursuant to the Assignment and Undertaking (i) is in
default under any such Lease or (ii) considers Seller to be in default
thereunder.
3.8 Title to Properties and Related Matters. On the Closing
Date Seller will hold good, valid and marketable title to all of the Assets
free and clear of all title defects, liens, pledges, claims, charges, rights of
first refusal (or other claims of interest), security interests or other
encumbrances except as otherwise hereinafter provided. On the Closing Date,
the Real Property owned by Seller or designated in Schedule 1.1(a) as a Real
Property interest for which a Title Policy shall be obtained, will not be
subject to any recorded mortgages, deeds of trust, easements, rights of way,
claims, charges, equities, covenants, conditions, restrictions, reservations,
limitations or other matters affecting such Real Property or Real Property
interest except (i) those matters set forth in Schedule 3.8(a); (ii) unrecorded
leases as set forth in Schedule 1.1(d); (iii) liens for current taxes and
assessments; (iv) zoning and building laws, ordinances, resolutions and
regulations; (v) such inchoate unfiled mechanics', carriers', workmen's,
repairman's and other statutory liens, if any, which liens are not substantial
in amount; (vi) those matters set forth in the standard or printed exceptions
on the title insurance commitments for the Real Property issued by the Title
Company (as hereinafter defined); (vii) rights-of-way, building or use
restrictions, exceptions, variances, reservations or other limitations or
matters which do not materially impair the current use of the Real Property or
for which title insurance coverage is being obtained; (viii) such easements,
rights-of-way, covenants, conditions, restrictions, reservations, limitations
and other encumbrances as do not materially interfere with the present use of
the Real Property; and (ix) such minor defects, irregularities, encumbrances,
easements, rights-of-way, encroachments and clouds on title as typically exist
with respect to properties similar in character to such Real Property and as do
not (A) materially interfere with or impair the present use and operation or
any reasonably foreseeable future development or operation of the Real Property
or any part thereof, or (B) materially impair the value of the Real Property,
any part thereof or Seller's interest therein (collectively "Permitted
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Encumbrances"). Schedules 1.1(a) and 1.1(d) include true and accurate
descriptions of all Real Property owned or leased by Seller and all tangible
personal property (excluding cash, property with an aggregate value in a
non-material amount and the other Excluded Assets) leased by Seller and
reflected on Seller's financial statements. Set forth on Schedule 3.8(b) is a
list of the most current title insurance policies, commitments or binders
issued to Seller with respect to any of the Real Property or any portion
thereof, and true and accurate copies thereof have been supplied to Buyer.
Seller has not received any written notice from any governmental agency of any
violation of any building, zoning or other law, ordinance or regulation in
respect of such property or structures or their use by Seller. To the best
knowledge of Seller, no portion of the Assets is subject to a condemnation or
similar proceeding. The Assets consisting of owned personal property are
subject to no liens or encumbrances except the security interests of record set
forth on Schedule 3.8(c), which Schedule is a copy of a Uniform Commercial Code
("UCC") search duly obtained by Seller in the last thirty (30) days and which
search shows security interests of record relating to such Assets in the State
of Utah. Seller agrees to remove all security interests relating to property
interests of Seller included in the Assets reflected on such UCC search, if
any, prior to the Closing (except those approved by Buyer in writing) and to
remove any other security interests filed with respect to such Assets between
the date of such UCC search and the date of Closing. Schedule 3.8(d) describes
all construction work, if any, which Seller or its predecessors have contracted
for and which is presently in progress in respect of the Business, and also
contains a good faith estimate, as of the date of this Agreement, of the cost
to complete each such project.
3.9 Employee Benefit Plans. Schedule 3.9 lists any "employee
benefit plans" that are described in the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations promulgated thereunder
("ERISA"), that cover one or more employees of Seller and that are sponsored or
contributed to by Seller (other than any defined contribution "employee pension
benefit plan" as defined in ERISA, that does not require any contribution by
Seller, any paid time-off policy or vacation/holiday/sick leave policy, and any
"employee welfare benefit plan" as defined in ERISA, that is sponsored by
Healthtrust). Neither Seller nor, to the best knowledge of Seller and
Healthtrust, any other person has engaged in a transaction with respect to any
employee benefit plan listed or required to be listed on Schedule 3.9 which
could subject Buyer or Champion to a penalty under ERISA or a tax under the
Internal Revenue Code of 1986, as amended (the "Code"). Each of the employee
benefit plans listed or required to be listed on Schedule 3.9 has been operated
and administered in accordance with applicable law, including without
limitation ERISA, except for any such failure which would
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not subject Champion or Buyer to any penalty or other liability. Seller has
not incurred nor presently expects to incur any liability under Title IV of
ERISA that could result in liability to Buyer or Champion. Each employee
benefit plan listed or required to be listed on Schedule 3.9 that is a group
health plan within the meaning of Section 5000(b)(1) of the Code is in
compliance with the provisions of Section 4980B(f) of the Code, except for any
such non-compliance which would not subject Champion or Buyer to any penalty or
liability.
3.10 Litigation or Proceedings. Schedule 3.10(a) contains a
list of each lawsuit or legal proceeding to which Seller is a party and which
arose out of or in connection with the Business or, to Seller's and
Healthtrust's knowledge, which has been threatened against Seller or
Healthtrust in connection with the Business. Except as disclosed on Schedule
3.10(b), neither Seller nor Healthtrust has received notice of any formal or
informal investigations or proceedings of the Utah Department of Health, the
United States General Accounting Office, the Health Care Financing
Administration, the Department of Justice, the Federal Trade Commission or
other similar governmental agencies (except for any investigations being
conducted in the ordinary course of business and applicable to all hospitals)
with respect to the Business. There are no such claims, actions, proceedings
or investigations of which Seller or Healthtrust has received written notice
pending or, to the best knowledge of Seller and Healthtrust, threatened
challenging the validity or propriety of the transactions contemplated by this
Agreement. Except as disclosed in Schedule 3.10(b), neither Seller nor
Healthtrust is now, nor has either of them been, a party to any injunction,
order, or decree restricting the method of the conduct of the Business or the
marketing of any of the Business' services, nor, except as disclosed on
Schedule 3.10(b), has any governmental agency investigated or requested (other
than on a routine basis) information with respect to such methods of business
or marketing of services; neither Seller nor Healthtrust has received any claim
that Seller currently violates any federal, state, or local law, ordinance,
rule or regulation, which could have an adverse effect on the Business and, to
the best of Seller's and Healthtrust's knowledge, no such claim is or has been
threatened; and there have been no developments materially adverse to Seller
with respect to any pending or threatened claim, action or proceeding of an
administrative or judicial nature, including but not limited to those referred
to in Schedules 3.10(a) and (b), and including without limitation any such
pending or threatened claim, action or proceeding arising from or relating to
(i) the assertion by any governmental authority of any retroactive adjustment
of the sums which Seller was entitled to receive pursuant to government or
third party reimbursement programs such as (but not limited to) Medicare and
Medicaid, or (ii) any allegation by any governmental authority of fraud or
abuse by any current or former officers or
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employees of Seller in connection with the making of any application for
reimbursement pursuant to the government or third party reimbursement programs
referred to in the preceding clause (i) while such individuals were officers or
employees of Seller.
3.11 Insurance. Schedule 3.11 summarizes the professional
and general liability insurance policies covering the Business, and the
property insurance policies covering the Assets, which Schedule 3.11 reflects
the policies' numbers, terms, identity of insurers, amounts and coverage.
3.12 Seller's Employees. (a) Schedule 3.12 contains a list
of all of Seller's employees as of December 27, 1994, which list includes the
then current estimated annualized salaries based on then current hourly wage
rates and scheduled hours worked, department and job title or other summary of
the responsibilities of such employees. Since December 27, 1994, there has not
been any increase in the compensation payable or to become payable by Seller to
any of its officers, employees or agents, or any bonus payment or arrangement
made to or with any such person, nor has there been any change in Seller's
personnel policies, except (in either case) in the ordinary course of Seller's
business in accordance with established personnel policies or except as
described in Schedule 3.12.
(b) Except as set forth on Schedule 3.12, none of Seller's
employees are employed by Seller pursuant to an employment agreement. Schedule
3.12 includes a list of all employees of Seller (other than "part-time
employees" as such term is defined in the Worker Adjustment and Retraining
Notification Act, hereinafter referred to as the "WARN Act") who have been
terminated or laid-off or whose employment with Seller otherwise has ceased
since December 1, 1994.
3.13 Labor Matters. Seller does not have any collective
bargaining agreements with any labor union and there are no current
negotiations with a labor union. Seller is in compliance with all applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor practice
except where such non-compliance would not have a material adverse effect on
the Business or the Assets. Seller has not received any notice of an unfair
labor practice complaint against Seller pending before the National Labor
Relations Board. There is no labor strike, dispute, slowdown or stoppage
actually pending against or affecting Seller, nor has Seller received notice of
any threatened labor strike, dispute, slowdown or stoppage. No grievance which
might have an adverse effect on Seller or any such arbitration proceeding
arising out of or under collective bargaining agreements is pending and Seller
has no knowledge that any claim therefor exists. Seller has not experienced
any employee strikes since the date it acquired the
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Business. Seller will advise Buyer of any such labor dispute which shall arise
before the Closing.
3.14 Certain Representations With Respect to the Business.
(a) The Hospital has current contractual arrangements
with Blue Cross. A complete and accurate copy of the existing Blue Cross
contract of the Hospital has been furnished or made available to Buyer. The
Hospital is presently in compliance with all of the terms, conditions and
provisions of such contract except where failure to be in compliance would not
have a material adverse effect on the Business or the Assets.
(b) The Hospital is accredited as a general hospital by
the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO") and
complete and accurate copies of its most recent survey report, list of
deficiencies, if any, and Certificate of Accreditation relating to the Hospital
have been furnished or made available to Buyer.
(c) The Hospital is qualified for participation in the
Medicare program. A complete and accurate copy of such existing Medicare
contract has been furnished or made available to Buyer. The Hospital is
presently in compliance with all of the terms, conditions and provisions of
such contract except where failure to be in compliance would not have a
material adverse effect on the Business or the Assets.
(d) The Hospital is qualified for participation in the
Medicaid program. A complete and accurate copy of Seller's existing Medicaid
contract has been furnished or made available to Buyer. The Hospital is
presently in compliance with all of the terms, conditions and provisions of
such contract except where failure to be in compliance would not have a
material adverse effect on the Business or the Assets.
(e) The Hospital participates in the CHAMPUS program.
The Hospital is presently in compliance in all material respects with all of
the terms and conditions of such participation except where failure to be in
compliance would not have a material adverse effect on the Business or the
Assets.
(f) Complete and accurate copies of all fire marshall
reports in Seller's possession or, to the best of Seller's and Healthtrust's
knowledge, available to Seller with respect to the Hospital or the Clinics
after January 1, 1991, have been furnished to Buyer.
(g) Neither Seller nor Healthtrust has received any
written notification from any applicable governmental agency that
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the Hospital or any Clinic is in violation of local building codes, ordinances
or zoning laws.
(h) Copies of all licensure survey reports of the Hospital
by the Utah Department of Health issued from and after January 1, 1988, that are
in Seller's possession have been supplied or made available to Buyer.
(i) Copies of the Bylaws of the medical staff of the
Hospital, together with copies of minutes of meetings thereof since January 1,
1990, that are in Seller's possession have been supplied or made available to
Buyer. No proceedings are pending or, to the best of Seller's or Healthtrust's
knowledge, threatened, seeking to remove or limit the privileges of any member
of the Hospital's medical staff or appealing any such decision of such medical
staff.
(j) The Hospital is licensed by the Utah Department of
Health as a general acute care hospital authorized to operate 200 beds in its
existing location in Salt Lake City, Utah. The Hospital is presently in
compliance with all the terms, conditions and provisions of such license except
where failure to be in compliance would not have a material adverse effect on
the Business or the Assets. Schedule 3.14(j) contains a copy of such license.
The facilities, equipment, staffing and operations of the Hospital satisfy the
applicable hospital licensing requirements of the State of Utah except where
failure to be in compliance would not have a material adverse effect on the
Business or the Assets.
(k) The Hospital has entered into a memorandum of
understanding with the appropriate peer review organization, and complete and
accurate copies of all such memoranda of understanding have been furnished or
made available to Buyer.
3.15 Reimbursement Matters. Seller has not filed any
Medicare cost reports with respect to the Business. Seller has delivered or
made available to Buyer complete copies of all Medicare cost reports and
related forms that Holy Cross (as defined in Section 9.2(a)(ii) hereof)
represented to Buyer as having been filed during the past three years. Seller
has not received any written notices that either Medicare or Medicaid has any
claims against it which may reasonably be expected to result in consolidated
net offsets against future reimbursement in excess of that provided for in such
Financial Statements. Seller has not been indicted, convicted or, to the best
of Seller's knowledge, subject to an investigation of the Office of Inspector
General of the Department of Health and Human Services (the "OIG"), or received
a notice from the OIG, with respect to a violation or an alleged violation of
the Medicare and Medicaid fraud and abuse provisions of the federal Social
Security Act or the physician ownership and referral provisions of the Ethics
in Patient Referral
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Act, and to the best of Seller's knowledge, has Seller committed a violation of
any of such provisions.
3.16 Hill-Burton Funds. No funds have been received by or on
behalf of Seller or, to the best knowledge of Seller and Healthtrust, any
predecessor of Seller to construct, improve or acquire any of the Assets under
the "Hill-Burton" Act as a result of which Buyer may be required to pay, or
otherwise satisfy, any amounts for which there shall be any "recovery" as a
result of the consummation of the transactions contemplated by this Agreement.
3.17 Taxes. Seller has filed all tax returns required by law
to be filed by it and has paid all taxes, assessments and other governmental
charges shown thereon as due and payable, other than those presently payable
without penalty or interest or those being contested in good faith by
appropriate procedures. There are no liens with respect to taxes (except for
liens with respect to real property taxes not yet due) upon any of the Assets.
Seller has not conducted the Business or engaged in any transaction which would
cause the transaction contemplated hereby to be taxable under the Utah sales
and use tax laws.
3.18 Environmental. Except as disclosed in any report of
Law Engineering, Inc. to Buyer or Champion delivered on or before the date of
this Agreement relating to the Assets (the "Environmental Reports"):
(a) Seller is currently in compliance with all
Environmental Laws (as defined below) except where failure to comply with such
Environmental Laws would not have a material adverse effect on the Business;
(b) Seller has not generated, stored, disposed of or
released any Hazardous Substance (as defined below) on any of the Real Property,
except in compliance with applicable Environmental Laws except where failure to
comply with such Environmental Laws would not have a material adverse effect on
the Business;
(c) Seller has not received any communication (written
or oral), whether from a governmental authority, citizens group, employee or
otherwise, that alleges that Seller is not in full compliance with Environmental
Laws. There is no Environmental Claim (as defined below) pending or threatened
against Seller or with respect to the Assets.
(d) There are no present or, to the best of Seller's
knowledge, past actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the generation, storage, release,
emission, discharge, presence or disposal of any Hazardous Substance, that could
form the basis of
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any Environmental Claim against Seller under any Environmental Law in effect at
any time at or prior to the Closing.
(e) The inclusion of any item disclosed in Schedule
3.18 and the inclusion of the reference to the Environmental Reports hereinabove
does not constitute an admission by Seller, Healthtrust, Champion or Buyer that
any matters disclosed in such schedule or Environmental Report constitutes a
violation of any Environmental Law.
The following terms shall have the following meanings:
"Environmental Claim" means any claim, action, cause of
action, investigation or notice (written or oral) by any person or entity
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or release into
the environment, of any Hazardous Substances at any location, whether or not
owned or operated by the Seller or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means the federal, state (including
specifically, but not by way of limitation, the State of Utah), and local
environmental, health or safety laws, regulations, ordinances, rules and
policies and common law in effect on the date hereof and the Closing Date
relating to the generation, use, refinement, handling, treatment, removal,
storage, production, manufacture, transportation, disposal, arranging for
disposal, emissions, discharges, releases or threatened releases of Hazardous
Substances, or otherwise relating to protection of human health, worker safety
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), as the same may be amended or
modified to the date hereof and the Closing Date, including, without
limitation, the statutes and regulations listed below:
Federal Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901, et seq.
Federal Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. Section 9601, et seq.
Federal Clean Air Act, 42 U.S.C. Section 7401, et seq.
Federal Water Pollution Control Act, Federal Clean Water Act
of 1977, 33 U.S.C. Section 1251, et seq.
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Federal Insecticide, Fungicide, and Rodenticide Act, Federal
Pesticide Act of 1978, 7 U.S.C. Section 136, et seq.
Federal Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.
Federal Toxic Substances Control Act, 15 U.S.C. Section 2601,
et seq.
Federal Safe Drinking Water Act, 42 U.S.C. Section 300f, et
seq.
Federal Occupational Safety & Health Act of 1970, 29 U.S.C.
Section 651, et seq.
Medical Waste Tracking Act of 1988, 42 U.S.C. Section 6992,
et seq.
Marine Protection Research & Sanctuaries Act of 1972, 33
U.S.C. Section 1401, et seq.
The Act to Prevent Pollution from Ships, 33 U.S.C. Section
1901, et seq.
Utah Environmental Quality Code, Utah Code Ann. Section
19-1-101 et seq.
Utah Environmental Quality, Solid & Hazardous Waste
Regulations, Section R315-316.
Nuclear Regulatory Commission Regulations, 10 C.F.R. Part 20
and 10 C.F.R. Part 61.
Public Health Service Regulations, 42 C.F.R. Part 72.
Food & Drug Administration Regulations, 21 C.F.R. Parts 58 and
211.
U.S. Department of Transportation Regulations, 49 C.F.R. Parts
171-179.
U.S. Department of Agricultural Regulations, 9 C.F.R. Parts
50-56.
U.S. Postal Service Regulations, 39 Part III.
"Hazardous Substances" means any toxic or hazardous waste,
pollutants or substances, explosives, radioactive materials, or Medical Waste
(as defined below), including, without limitation, friable asbestos, PCBs,
petroleum products and byproducts, substances defined or listed as "hazardous
substance", "toxic
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substance", "toxic pollutant", or similarly identified substance or mixture, in
or pursuant to any Environmental Law.
"Medical Waste" means any substance, pollutant, material, or
contaminant listed or regulated under the Medical Waste Tracking Act of 1988,
42 U.S.C. Section 6992, et seq., 49 C.F.R. Section 173, 186, and/or Utah Code
Annotated, Section 19-6-102 (9).
3.19 Absence of Undisclosed Liabilities. Except as and to
the extent reflected or specifically reserved against (which reserves are
believed adequate in amount) in the Financial Statements, to the best of
Seller's and Healthtrust's knowledge, Seller did not have, at the date of such
Financial Statements, any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise and whether due or to become due)
required to be reflected thereon or included therein, except for any
liabilities which have been incurred since the dates of such Financial
Statements in the ordinary course of business consistent with past practice or
which have been discharged or paid in full prior to the date hereof.
3.20 Brokerage. Neither Seller nor Healthtrust has engaged
any financial advisor, broker or similar entity in respect of the transactions
contemplated hereby which may be entitled to a fee or commission in connection
with such transactions.
3.21 No Misleading Statements. No representation or warranty
by Seller contained in this Agreement, and no statement contained in any
Schedule (including any supplement or amendment thereto) and the documents to
be delivered at the Closing by or on behalf of Seller to Buyer or any of its
representatives in connection with the transactions contemplated hereby (the
Schedules, including any supplement or amendment thereto, and such Closing
documents are herein referred to, collectively, as the "Additional Documents"),
contains or will contain any untrue statement of a material fact, or, to the
best knowledge of Seller and Healthtrust, omits or will omit to state any
material fact necessary, in light of the circumstances under which it was or
will be made, in order to make the statements herein or therein not misleading.
Copies of all documents described on any Schedule hereto which have been
furnished, provided or made available to Buyer or are hereafter furnished,
provided or made available to Buyer are or shall be, to the best of Seller's
knowledge, true, correct and complete.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
As of the date hereof, Buyer represents and warrants to Seller
and Healthtrust the following:
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4.1 Buyer Capacity. (a) Buyer and Champion are corporations
duly organized, validly existing and in good standing under the laws of the
States of Utah and Delaware, respectively, with all requisite corporate power
and authority to own, operate and lease their respective properties.
(b) Schedule 4.1 contains complete and correct copies of
the Certificate of Incorporation and all amendments thereto to the date hereof
and the Bylaws as presently in effect of each of Buyer and Champion.
4.2 Corporate Authorization/Contract Binding. (a) The
execution, delivery and performance by Buyer and Champion of this Agreement and
the other agreements and transactions contemplated hereby to be executed and
performed by Buyer and Champion:
(i) are within Buyer's and Champion's corporate
powers, are not in contravention of the terms of Buyer's or
Champion's Certificates of Incorporation, Bylaws or any
amendments thereto and have been duly authorized by the
respective boards of directors of Buyer and Champion and by the
stockholder of Buyer and, to the extent required, by the
stockholders of Champion; and
(ii) except as set forth on Schedule 4.2, on the
Closing Date, (A) will not result in any breach of any
indenture, agreement, lease or instrument to which Buyer or
Champion is a party or by which Buyer or Champion is bound,
(B) will not constitute a violation of any judgment, decree or
order of any court of competent jurisdiction applicable to
Buyer or Champion, (C) will not violate any law, rule or
regulation of any governmental authority applicable to the
Buyer or Champion and (d) will not require any consent,
approval or authorization of, or notice to, or declaration,
filing or registration with, any governmental or regulatory
authority.
(b) This Agreement has been duly and validly executed
and delivered by Buyer and Champion, and, as of the Closing, the other
agreements and instruments contemplated hereby will have been duly and validly
executed and delivered by Buyer and, where applicable, Champion. This
Agreement constitutes, and upon their execution and delivery, the other
agreements and instruments contemplated hereby will constitute, the valid,
legal and binding obligations of each of Buyer and, where applicable, Champion,
enforceable against each of them in accordance with their respective terms
except as such enforceability may be limited by bankruptcy, reorganization,
insolvency, or other laws affecting the enforcement of creditors' rights
generally or the availability of equitable remedies.
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4.3 Brokerage. Neither Buyer nor Champion has engaged any
financial advisor, broker or similar entity in respect of the transactions
contemplated hereby which may be entitled to a fee or commission in connection
with such transactions.
5. COVENANTS OF SELLER AND HEALTHTRUST PRIOR TO CLOSING.
Between the date of this Agreement and the Closing Date:
5.1 Information. Seller and Healthtrust shall afford, to the
officers and authorized representatives of Buyer and Champion access to the
Assets, including without limitation the Hospital and the Clinics, and will
furnish to Buyer such additional financial data and other information relating
to the Assets or the Business as Buyer or Champion may from time to time
reasonably request; provided such access shall occur at such time or times as
will not disrupt delivery of care to patients. Each of Seller and Healthtrust
agrees to cooperate reasonably with Buyer and Champion in their efforts (i) to
make any required filings and to obtain any governmental approvals necessary in
order to consummate the transactions contemplated hereby, (ii) to respond to
any governmental investigation of such transactions, and (iii) to defend any
legal or administrative proceedings challenging such transactions. Each of
Seller and Healthtrust will, upon reasonable request, cooperate with Buyer and
Champion, their representatives and counsel in the preparation of any document
or other material which may be required by any governmental agency as a
predicate to or result of the transaction herein contemplated. Furthermore, to
the extent the parties hereto believe their respective legal interests are in
common, special antitrust counsel to Healthtrust shall be primarily responsible
for representing the parties' interests before the Federal Trade Commission
and/or the Department of Justice.
5.2 Operations. With respect to the ownership of the Assets
and the operation of the Business, Seller will use its reasonable best efforts
to:
(a) carry on the Business in substantially the same
manner as it has been conducted heretofore and not make any
change in personnel (other than in the ordinary course of
business) or operations, and not make any change in finance or
accounting policies;
(b) maintain the Assets in as good working order and
condition as at present, ordinary wear and tear excepted;
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(c) perform in all material respects Seller's
obligations under agreements relating to or affecting the
Assets or the Business;
(d) keep in full force and effect present insurance
policies or other comparable insurance coverage;
(e) use commercially reasonable efforts to maintain and
preserve the business organization of Seller intact, retain
their present employees and maintain their relationship with
suppliers, customers and others having business relations with
Seller; and
(f) within a reasonable time prior to Closing, permit
Buyer to make offers to any of the personnel who work at the
Hospital or otherwise in the Business for employment by Buyer
subsequent to the Closing, which personnel shall be allowed by
Seller to accept or reject such offers without penalty (for the
purpose of this Section 5.2(f), "penalty" shall not be
interpreted to refer to the availability, or lack of
availability of any severance benefit).
5.3 Certain Changes. Without the prior written consent of
Champion, which consent will not be unreasonably withheld, Seller will not:
(a) sell or agree to sell any of the Assets except for
the depletion of inventories in the ordinary course of
business; or
(b) engage in any transaction out of the ordinary
course of business, including any sale, transfer, lease,
encumbrance or granting of a lien upon or a security interest
in any portion of the Assets (except as provided in Section
5.3(a) above).
5.4 Casualty. If the Hospital is damaged so as to be
rendered unusable as a general acute care hospital or destroyed prior to
Closing, Champion may elect to terminate this Agreement and all obligations of
the parties hereunder. In the event the Hospital is destroyed or damaged, but
such destruction or damage does not entitle Champion or Champion does not elect
to terminate this Agreement, or if any other portion of the Assets is destroyed
or damaged, then Seller shall be entitled to all insurance proceeds paid or
payable in respect of such damage or destruction and the Purchase Price payable
by Buyer at the Closing shall be credited by an amount equal to the insurance
proceeds paid or payable in respect of such damage or destruction and neither
Seller nor Healthtrust shall have any obligation to repair any such damage or
destruction.
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5.5 Title Matters.
(a) At the Closing, Seller shall convey to Buyer (i)
good, marketable and insurable fee simple title to all of the Real Property
designated in Schedule 1.1(a) as parcels that are owned by Seller, and all
rights, privileges and easements appurtenant thereto, and (ii) good, marketable
and insurable leasehold title to the Real Property designated in Schedule
1.1(a) as a Real Property leasehold interest for which a Title Policy shall be
obtained. Such conveyances shall be made by duly executed and acknowledged
special warranty deeds (or assignments with respect to the portions of the Real
Property leased to Seller) which deeds shall be in the form of Appendix 5.5
hereto (such deeds and assignments are herein collectively referred to as
"Seller's Deeds"). Evidence of delivery of such good, marketable and insurable
title shall be the issuance of one or more ALTA Owner's or Leasehold, as the
case may be, Policies of Title Insurance (10-17-92), in an aggregate amount
equal to $33,000,000 (the "Title Policies") which Seller shall deliver to Buyer
at the Closing. In the event Seller delivers more than one Title Policy at
Closing, each such Title Policy shall be in an amount requested by Buyer,
subject, however, to the above limitation on the aggregate amount of such Title
Policies. The Title Policies will be issued by First American Title Insurance
Company (such company hereinafter called the "Title Company"), and shall insure
fee simple or leasehold (as applicable) title to the Real Property, and the
appurtenant rights, privileges and easements, in the Buyer, subject only to
Permitted Encumbrances and such other exceptions as Buyer shall approve in
writing. The policies for the Real Property for which "as built" surveys are
obtained pursuant to Section 5.5(b)(ii) below shall contain endorsements
insuring over all printed or typed general exceptions for which insurance may
be obtained by the delivery of such surveys. All such policies shall contain a
zoning endorsement and such other endorsements as specified herein.
(b) Seller has furnished to Buyer or will furnish to
Buyer within 60 days prior to the Closing Date all of the following:
(i) Title Insurance Commitments. With respect to all
of the Real Property that is either (A) designated in Schedule
1.1(a) as parcels that are owned in fee simple by Seller or (B)
designated in Schedule 1.1(a) hereto as a Real Property
leasehold interest for which a Title Policy shall be obtained,
a currently dated commitment or commitments for the Title
Policies issued by the Title Company in accordance with the
requirements set forth in Section 5.5(a) above. All
examination fees, title premiums and other costs and expenses
relating to such commitments and the Title Policies shall be
paid by Seller.
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(ii) ALTA Surveys. An "as built" survey with respect
to the Hospital and each Real Property designated in Schedule
1.1(a) hereto as a Real Property for which an as-built survey
shall be obtained. Such surveys shall be prepared by surveyors
licensed in the State of Utah who prepared surveys for Seller
in connection with Seller's acquisition of the Real Property
and shall be in accordance with ALTA-ASCM standards for Class A
urban-commercial surveys, shall be dated as of a date within 60
days prior to the Closing Date, shall be certified in favor of
Buyer and the Title Company, and shall be in sufficient detail
to provide the basis for the Title Company to issue the Title
Policies without survey exceptions.
(iii) Boundary Surveys. Boundary surveys for each Real
Property designated in Schedule 1.1(a) as a Real Property
for which a boundary survey shall be obtained. Such surveys
shall be prepared by surveyors licensed in the State of Utah
who prepared surveys for Seller in connection with Seller's
acquisition of the Real Property.
5.6 Best Efforts to Close. Each of Seller and Healthtrust
shall use its best efforts to proceed toward the Closing and to cause the
conditions to Closing to be met as soon as practicable and consistent with
other terms contained herein. Seller and/or Healthtrust shall notify Buyer as
soon as practicable of any event or matter which comes to Seller's or
Healthtrust's attention which may reasonably be expected to prevent the
conditions to Seller's or Healthtrust's obligation being met.
5.7 Insurance Ratings. Seller shall take all action
reasonably requested by Buyer to enable Buyer to succeed to the Workmen's
Compensation and Unemployment Insurance ratings, insurance policies, deposits
and other interests of Seller and other ratings for insurance or other purposes
established by Seller; provided, however, that the covenants contained in this
sentence shall not require Seller to expend its own funds to satisfy such
obligations, nor shall such covenants permit Buyer to acquire Seller's deposits
without compensation to Seller. Buyer shall not be obligated to succeed to any
such rating, insurance policy, deposit or other interest, except as it may
elect to do so.
5.8 Notice; Efforts to Remedy. Seller and Healthtrust will
notify Buyer and Champion promptly in writing of, and contemporaneously will
provide Buyer and Champion with true and complete copies of any and all
information and documents relating to, and will use their best efforts to cure
as soon as practicable (or by any subsequent date agreed upon by the parties),
any event, transaction or circumstance occurring that causes or would cause
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any covenant or agreement of Seller or Healthtrust under this Agreement to be
breached, or that renders or would render untrue any representation or warranty
of Seller or Healthtrust contained in this Agreement as if the same were made
on or as of the date of such event, transaction or circumstance. Seller and
Healthtrust also will use their best efforts to cure, as soon as practicable
(or by any subsequent date agreed upon by the parties), any violation or breach
of any representation, warranty, covenant or agreement made by either of them
in this Agreement. Seller and Healthtrust shall have a reasonable time within
which to effect a cure of such breach or misrepresentations before Buyer or
Champion may terminate this Agreement (to the extent such remedy is available
to Buyer or Champion pursuant to Section 11.1(d) hereof); provided, however,
that after the date established by the parties for Closing, Buyer or Champion
may terminate this Agreement (to the extent such remedy is available to Buyer
or Champion pursuant to Section 11.1(d) hereof) unless such breach or
misrepresentation has been cured to the reasonable satisfaction of Buyer or
Champion. Furthermore, Seller and Healthtrust shall notify Buyer and Champion
promptly in writing of any event, transaction or circumstance occurring that
causes or would cause any covenant or agreement of Buyer or Champion under this
Agreement to be breached, or that renders or would render untrue any
representation or warranty of Buyer or Champion contained in this Agreement as
if the same were made on or as of the date of such event, transaction or
circumstance. Buyer and Champion shall have a reasonable time in which to
effect a cure of such breach or misrepresentation before Seller or Healthtrust
may terminate this Agreement (to the extent such remedy is available to Seller
or Healthtrust pursuant to Section 11.1(d) hereof); provided, however, that
after the date established by the parties for Closing, Seller or Healthtrust
may terminate this Agreement (to the extent such remedy is available to Seller
or Healthtrust pursuant to Section 11.1(d) hereof) unless the breach or
misrepresentation has been cured to the reasonable satisfaction of Seller and
Healthtrust. The failure of Seller or Healthtrust to notify Buyer and Champion
of any such discovered event, transaction or circumstance shall not release
Buyer and Champion from any liability to Seller or Healthtrust resulting from
the breach attendant to such discovered event, transaction or circumstance;
provided, however, that, unless Buyer or Champion had independent knowledge of
such event, circumstance or condition, Champion's and Buyer's liability shall
be limited to the damages that would have nonetheless resulted to Seller and/or
Healthtrust had Seller or Healthtrust disclosed such discovered event,
transaction or circumstance to Buyer and Champion prior to Closing.
5.9 Cooperation with Buyer. Seller shall cooperate in all
reasonable respects with Buyer in connection with Buyer's efforts to obtain
regulatory consents to and approvals of the transfer of the Licenses described
in Schedule 3.5 hereof. Seller also agrees that upon the written request of
Buyer, Seller will use
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its reasonable best efforts to obtain any consents necessary for the assignment
of the contracts and leases to be assumed by Buyer pursuant to the Assignment
and Undertaking. The parties agree that Buyer will be primarily responsible
for obtaining all such approvals and consents.
6. INDEMNIFICATION.
6.1 Indemnity by Buyer and Champion. From and after Closing,
Buyer and Champion, jointly and severally, shall indemnify, defend and hold
harmless Seller and Healthtrust and their respective officers, employees,
affiliates and agents (collectively, "Buyer Indemnified Parties") from and
against any and all liabilities, losses, damages, demands, claims, suits,
actions, judgments, causes of action, assessments, costs and expenses,
including, without limitation, interest, penalties, reasonable attorneys' fees,
any and all expenses incurred in investigating, preparing and defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation (collectively,
"Damages"), asserted against, resulting to, imposed upon, or incurred or
suffered by any of them, directly or indirectly, as a result of or arising from
the following:
(i) any inaccuracy in or breach or nonfulfillment of
any of the representations, warranties, covenants or agreements
made by Buyer or Champion in this Agreement or the other
agreements contemplated hereby;
(ii) any liability imposed on any Buyer Indemnified
Party to the extent such liability has been expressly assumed
by Buyer pursuant to the Assignment and Undertaking;
(iii) any misrepresentation in or any omission from
any certificate or other document (collectively, the "Buyer
Additional Documents") furnished or to be furnished by or on
behalf of Buyer or Champion at Closing under this Agreement;
(iv) any liability, obligation or indebtedness of
Buyer or Champion or any alleged liability, obligation or
indebtedness of Buyer or Champion, including without
limitation those relating to contractual obligations,
liabilities to Medicare or Medicare programs, tax liabilities
or professional malpractice or general liability claims,
arising out of the operation of the Business after the Closing
which is imposed on or made against any Buyer Indemnified
Party, except to the extent such liability or alleged
liability arises out of a
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liability of Seller that has not been expressly assumed by
Buyer pursuant to the Assignment and Undertaking;
(v) any claims for fees or commissions of a broker,
agent or similar entity employed or alleged to have been
employed by or on behalf of Buyer or Champion in connection
with the transactions contemplated hereby; and
(vi) any liability imposed on any Buyer Indemnified
Party arising out of the use by Buyer (or its assignees) of
Seller's Drug Enforcement Agency Registration Numbers pursuant
to the powers of attorney delivered in accordance with Section
9.10 of this Agreement.
6.2 Indemnity by Seller and Healthtrust. From and after the
Closing, Seller and Healthtrust, jointly and severally, shall indemnify, defend
and hold harmless Buyer and Champion and their respective officers, directors,
employees, shareholders, affiliates and agents (collectively, the "Seller
Indemnified Parties") from and against any and all Damages asserted against,
resulting to, imposed upon, or incurred or suffered by any of them, directly or
indirectly, as a result of or arising from the following:
(i) any inaccuracy in or breach or nonfulfillment of
any of the representations, warranties, covenants or agreements
made by Seller or Healthtrust in this Agreement or the other
agreements contemplated hereby;
(ii) any liability, obligation or indebtedness of Seller
or Healthtrust or any alleged liability, obligation or
indebtedness of Seller or Healthtrust, including without
limitation those relating to contractual obligations,
liabilities (including recapture of depreciation) to the
Medicare or Medicaid programs, tax liabilities or professional
malpractice or general liability claims, arising out of the
operation of the Business prior to the Closing which is imposed
on or made against any Seller Indemnified Party, except to the
extent certain contractual obligations have been expressly
assumed by Buyer pursuant to the Assignment and Undertaking;
(iii) any misrepresentation in or any omission from any
certificate or other document (collectively, the "Seller
Additional Documents") furnished or to be furnished by or on
behalf of Seller or Healthtrust at Closing under this
Agreement; and
(iv) any claims for fees or commissions of a broker,
agent or similar entity employed or alleged to have been
employed by or on behalf of Seller or
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Healthtrust in connection with the transactions contemplated
hereby.
6.3 Claims Procedure. (a) If a party to this Agreement
("Claiming Party") learns of a circumstance giving rise to a claim for another
party to this Agreement ("Performing Party") to make payment, performance, or
indemnity under this Agreement, then the Claiming Party shall give the
Performing Party written notice thereof within a reasonable time considering
the circumstances. No delay in giving notice to the Performing Party shall
work a forfeiture of the rights of Claiming Party or shall limit the Performing
Party's obligations under this Agreement. If, however, a delay in giving
notice within a reasonable time prejudices the Performing Party and materially
impairs its ability to mitigate loss, then the Performing Party shall have no
obligation to pay that part of a loss caused by the delay.
(b) The Performing Party shall defend, and shall have
the right to settle, claims or suits by third parties that are payable or that
are to be indemnified by the Performing Party under this Agreement. The
Claiming Party shall reasonably cooperate with the Performing Party in the
defense of claims and suits that the Performing Party defends, and the
Performing Party shall reimburse the Claiming Party for out-of-pocket expenses
incurred in cooperating at the Performing Party's request. The Claiming Party
shall not settle such claims or suits defended by the Performing Party without
the Performing Party's prior consent, which shall not be unreasonably withheld.
The Claiming Party shall have the right to approve defense counsel selected by
the Performing Party, which approval shall not be unreasonably withheld, and
the right fully to participate in the defense of such claims and suits at the
Claiming Party's sole cost and expense. The Claiming Party shall have the
right to defend and settle claims or suits without prejudice to any of their
rights against the Performing Party under this Agreement if the Performing
Party declines or is unable to undertake the defense of a claim or suit within
a reasonable time after the Performing Party's receipt of notice thereof. If
the Performing Party disputes the Claiming Party's entitlement to indemnity and
asserts the right to defend a claim or suit, and if the Claiming Party
reasonably believes that the Performing Party's control of the defense of a
claim or suit might prejudice the Claiming Party, then the Claiming Party shall
have the right to defend such claim or suit. Performing Party shall have the
right fully to participate in the defense of such claim or suit, and Claiming
Party shall not settle such claim or suit without the Performing Party's prior
consent, which Performing Party shall not unreasonably withhold.
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6.4 Limitation on Claims.
(a) No Seller Indemnified Party nor Buyer Indemnified
Party shall make any claim for indemnification pursuant to Sections 6.1 or 6.2
with respect to any matter unless and except to the extent that:
(i) the amount of the Damages arising out of such
matter is in excess of $25,000 (a "Relevant Claim"); and
(ii) the aggregate amount of all Damages with respect to
which a Relevant Claim is being made by an Indemnified Party
against any or all of the applicable Indemnifying Parties
(together with all such Relevant Claims previously made by the
applicable Indemnified Parties against the applicable
Indemnifying Parties) exceeds $250,000.
(b) Notwithstanding the provisions of Section 6.4(a),
any indemnified claim having its basis in any of the following shall not be
subject to the thresholds established by such provisions: (A) a breach of the
representations, warranties, covenants and agreements made in 3.16, 3.17, 3.18,
3.20 and 4.3, (B) fraud or intentional misrepresentation, (C) a breach by Buyer
to pay or observe any obligation of Seller assumed by Buyer pursuant to the
Assignment and Undertaking, (D) a breach by Seller of its obligations under
Section 1.3 hereof to pay or observe any of its obligations for trade payables,
contracts, leases or other liabilities reflected on Seller's financial
statements (other than those assumed by Buyer pursuant to the Assignment and
Undertaking) and to satisfy prior to Closing all obligations secured by a lien
on, or a security interest in, the Assets, (E) any breach by Buyer or Champion
to pay the Purchase Price hereunder, (F) a breach by Buyer or Seller of its
obligation under Section 1.6(c) to pay any post-Closing adjustment to the
Purchase Price required by such Section, or (G) a breach by Buyer or Seller of
its obligation under Section 1.8 to pay any amounts with respect to Straddle
Patients.
(c) Neither Seller nor Healthtrust shall be under any
liability and no claim under Section 6.2 of this Agreement shall be made to the
extent that any Damages may be recovered under a policy of insurance, except
that (subject to the other limitations set forth in this Agreement) Seller and
Healthtrust shall be liable to the extent of any deductibles under such
insurance policy.
(d) Neither Champion nor Buyer shall be under any
liability and no claim under Section 6.1 of this Agreement shall be made to the
extent that Healthtrust or Seller discovered such breach prior to the Closing
Date and failed to disclose such breach to Champion or Buyer as provided in
Section 5.8 hereof, except that Champion and Buyer shall be liable to the
extent Champion or Buyer
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had knowledge of such breach or to the extent Healthtrust or Seller would have
nonetheless suffered damages had such breach been disclosed to Champion or
Buyer prior to the Closing Date.
(e) Neither Seller nor Healthtrust shall be under any
liability and no claim under Section 6.2 of this Agreement shall be made to the
extent that Buyer or Champion discovered such breach prior to the Closing Date
and failed to disclose such breach to Healthtrust and Seller as provided in
Section 9.9 hereof, except that Healthtrust and Seller shall be liable to the
extent either Healthtrust or Seller had knowledge of such breach or to the
extent Buyer or Champion would have nonetheless suffered damages had such
breach been disclosed to Healthtrust or Seller prior to the Closing Date.
(f) If an Indemnifying Party is liable to an Indemnified
Party for breach of any representation, warranty or undertaking, the liability
of the Indemnifying Party shall be reduced and any amount paid by such
Indemnifying Party shall be refunded to the extent that the Indemnified Party
is eligible to obtain a reduction in its liability for tax (whether by way of
credit or otherwise and calculated assuming that the Indemnified Party is taxed
at the maximum rate applicable to such entity) which it would not have been
eligible for had the breach which gave rise to liability of the Indemnifying
Party not arisen.
(g) Each Indemnified Party shall cooperate in all
reasonable respects with the reasonable requests of its applicable Indemnifying
Parties in the conduct of litigation, the making of settlements and the
enforcement of any right of contribution to which the Indemnified Parties may
be entitled from any person or entity in connection with the subject matter of
any litigation subject to indemnification hereunder. In addition, the
Indemnified Parties shall, upon the reasonable requests by their applicable
Indemnifying Parties or counsel selected by such Indemnifying Parties, attend
hearings and trials, assist in the securing and giving of evidence, assist in
obtaining the presence or cooperation of witnesses, make available its own
personnel, and assist in effecting settlements; and shall take such action as
is reasonably necessary and appropriate in connection with such litigation.
Seller Indemnified Parties shall not, except at their own cost, voluntarily
make any payment, assume any obligation, incur any expense, or settle or
compromise any claim without the express approval of Seller Indemnifying
Parties in connection with any matter that is subject to indemnification
hereunder.
(h) The indemnification provided under Sections 6.1 and
6.2 shall survive the execution and delivery of this Agreement, the closing of
the transactions contemplated hereby and the satisfaction of all other
obligations of any party hereto under this Agreement. In respect of the
indemnification provided under
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Section 6.1(i) and 6.2(i) relating to or arising out of a breach of a
representation or warranty, and with respect to the indemnification provided
under Sections 6.1(iii) and 6.2(iii) relating to or arising out of a
misrepresentation in or omission from a Buyer Additional Document or a Seller
Additional Document and which constitutes a "bring down" of a party's
representations and warranties made in this Agreement, no indemnification may
be asserted under this Agreement unless the party making the claim gives the
party against whom the claim is to be made notice of such claim before the end
of the applicable Survival Period (as defined in Section 12.18 hereto);
provided, that such claim shall survive the expiration of the Survival Period
if notice thereof, as required by Section 6.3, was given prior to the
expiration of the Survival Period. In respect of the other indemnification
provided under Sections 6.1 and 6.2, there shall be no limitation on when a
claim for indemnification hereunder may be sought other than as set forth in
Section 6.1 or 6.2, and the parties hereby waive any such limitation which may
be imposed by law.
(i) If a Performing Party pays a claim to a Claiming
Party pursuant to this Agreement, then such party shall be subrogated to all
rights of the party to or for whom the claim was paid against others for
recovery of the loss, except affiliates, employees, officers, directors,
successors or assigns of the party to or for whom the claim was paid.
6.5 Jurisdiction; Service of Process. (a) Each of the
parties hereto severally agrees that any legal action or proceeding with
respect to this Agreement or to enforce any judgment obtained against any
party hereto in connection with this Agreement may be brought by any other
party hereto or any Seller Indemnified Party or Buyer Indemnified Party in the
courts of the State of Utah or in the United States District Courts which are
located in the City of Salt Lake City, Utah, or any other court to the
jurisdiction of which such party hereto or any of its respective properties is
or may be subject. In connection with any action or proceeding relating to
this Agreement, each of the parties hereto severally irrevocably submits to the
jurisdiction of the courts of the State of Utah and of the United States
District Courts located in the city of Salt Lake City, Utah, and irrevocably
waives any present or future objection to venue in any such court, and any
present or future claim that any such court is an inconvenient forum. Nothing
herein shall affect the right of the District to serve process in any manner
permitted by law or to bring any civil suit, action or proceeding against any
party hereto or its respective property in the courts of any jurisdiction in
which venue may be granted.
(b) For the purposes of any legal action or proceeding
brought by any party hereto or by any Seller Indemnified Party or any Buyer
Indemnified Party with respect to this Agreement, each party hereto hereby
irrevocably designates and appoints CT
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Corporation System, currently located at 50 West Broadway, Salt Lake City, Utah
84101, as its authorized agent for service of process in the State of Utah.
Each party hereto and each Seller Indemnified Party and each Buyer Indemnified
Party shall for all purposes be entitled to treat such designee of each party
hereto as the authorized agent to receive for and on its behalf service of
writs or summons or other legal process in the State of Utah. In the event
that, for any reason, such agent or his successor shall no longer serve as
agent of any party hereto to receive service or process in the State of Utah,
such party shall appoint a person in the State of Utah as a successor so to
serve and advise the other parties hereto so that at all times each party
hereto will maintain an agent to receive service of process in the State of
Utah on its behalf with respect to this Agreement. In the event that, for any
reason, service of legal process cannot be made in the manner described above,
such service may be made in such other manner as permitted by law.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND CHAMPION.
The obligations of Buyer and Champion hereunder are subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
unless waived in writing by Buyer or Champion:
7.1 Representations/Warranties; Compliance with Covenants.
The representations and warranties of Seller contained in this Agreement shall
be true and correct in all material respects when made and on and as of the
Closing Date, as though such representations and warranties had been made on
and as of such Closing Date; and the covenants and conditions of this Agreement
to be complied with or performed by Seller or Healthtrust on or before the
Closing Date pursuant to the terms hereof shall have been duly complied with
and performed in all material respects.
7.2 Opinion of Seller's Counsel. Buyer and Champion shall
have received an opinion from Waller Lansden Dortch & Davis, counsel to Seller
and Healthtrust, dated as of the Closing Date, substantially in the form of
Appendix 7.2.
7.3 Pre-Closing Confirmations. Buyer and Champion shall have
obtained reasonable assurances that the Utah Department of Health and all other
applicable agencies or licensing authorities shall issue to Buyer promptly
after the Closing a license to operate the Hospital and licenses or permits to
provide all presently authorized supplemental and special services, each of
which licenses and permits shall be effective as of the Closing Date (or, in
the case of any such license or permit which must be obtained on or before the
Closing Date, Buyer shall have received such license or permit).
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7.4 Action/Proceeding. No action, proceeding, investigation
or administrative hearing before a court or any other governmental agency or
body shall have been instituted against any party hereto (and remain
unresolved) which seeks injunctive relief in anticipation of the sale of the
Assets and may reasonably be expected to prohibit the sale of the Assets to
Buyer or seeks damages in a material amount by reason of the consummation of
such sale; nor shall any party hereto have received notification from any
governmental agency of the United States of America or the State of Utah of
such agency's current intent to seek injunctive relief in anticipation of the
sale of the Assets to prohibit the sale of the Assets to Buyer or the parties'
execution and delivery of the Provider Agreement.
7.5 Utah Provider Agreement. The applicable subsidiaries of
Healthtrust shall have entered into a provider agreement in substantially the
form attached hereto as Appendix 7.5 pursuant to which the Hospital and the
Clinics will become providers within the managed care network operated by
certain Healthtrust subsidiaries in the State of Utah (the "Utah Provider
Agreement").
7.6 Title Policies and Surveys. Buyer and its counsel shall
have received:
(a) The form of the Title Policies which shall be issued
on ALTA Owner's or Leasehold, as the case may be, Policy
(10-17-92) form and contain the endorsements described in
Section 5.5(a).
(b) The surveys described in Section 5.5.
7.7 Conveyances and Delivery of Title Policies. Seller shall
have delivered to Buyer all of Seller's Deeds and the title insurance
commitments in accordance with Section 5.5(a).
7.8 Delivery of Certain Documents. At the Closing, the
Seller shall have delivered to Buyer all documents, agreements and instruments
contemplated by Section 2.2.
7.9 Information Systems Agreement. Healthtrust and Buyer
shall have executed and delivered an Information Systems Agreement (the
"Information Systems Agreement"), in substantially the form attached hereto as
Appendix 7.9.
7.10 Certificate of Non-Foreign Status. Seller shall have
duly executed and delivered to Buyer a Certificate of Non-Foreign Status in the
form attached hereto as Appendix 7.10.
7.11 FTC Approval. The Federal Trade Commission (the
"FTC") shall have approved the purchase and sale of the Assets in
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accordance with this Agreement as required by the Agreement Containing Consent
Order, dated as of July 8, 1994, between Healthtrust and the FTC (the "Consent
Agreement").
7.12 Medicare Reconciliation Note. Seller shall have
delivered to Buyer a promissory note in the form of Appendix 7.12 hereto (the
"Medicare Reconciliation Note"). The original principal balance of the
Medicare Reconciliation Note will be an amount equal to 90% of the book value
of the Medicare Receivables, net of the allowance for doubtful accounts and
contractual adjustments related thereto, all as reflected on the Interim
Balance Sheet. As provided in such Medicare Reconciliation Note and in Section
1.6 hereof, the principal balance of such note will be adjusted to reflect
changes in such 90% of net book value amount between the date of the Interim
Balance Sheet and the date of the Closing Balance Sheet.
7.13 Healthtrust Board Approval. The Board of Directors
of Healthtrust (or the Executive Committee thereof) shall have approved this
Agreement and the transactions contemplated hereby.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND HEALTH
TRUST.
The obligations of Seller and Healthtrust hereunder are
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions unless waived in writing by Seller or Healthtrust:
8.1 Representations/Warranties; Compliance with Covenants.
The representations and warranties of Buyer contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date as
though such representations and warranties had been made on and as of such
Closing Date; the covenants and conditions of this Agreement to be complied
with or performed by Buyer and/or Champion on or before the Closing Date
pursuant to the terms hereof shall have been duly complied with and performed
in all material respects.
8.2 Opinion of Buyer's Counsel. Seller shall have received
from Michener, Larimore, Swindle, Whitaker, Flowers, Sawyer, Reynolds & Chalk,
L.L.P., counsel to Buyer and Champion, an opinion dated as of the Closing Date
and addressed to Seller and Healthtrust, substantially in the form of Appendix
8.2.
8.3 Action/Proceeding. No action, proceeding, investigation
or administrative hearing before a court or any other governmental agency or
body shall have been instituted against any party hereto (and remain
unresolved) which seeks injunctive relief in anticipation of the sale of the
Assets and may reasonably be expected to prohibit the sale of the Assets to
Buyer or seeks
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damages in a material amount by reason of the consummation of such sale; nor
shall any party hereto have received notification from any governmental agency
of the United States of America or the State of Utah of such agency's current
intent to seek injunctive relief in anticipation of the sale of the Assets to
prohibit the sale of the Assets to Buyer or the parties' execution and delivery
of the Provider Agreement.
8.4 Delivery of Certain Documents. At the Closing, the Buyer
shall have delivered to Seller and/or Healthtrust all documents, agreements and
instruments contemplated by Section 2.3.
8.5 FTC Approval. The FTC shall have approved the purchase
and sale of the Assets in accordance with this Agreement as required by the
Consent Agreement.
8.6 Utah Provider Agreement. Buyer shall have entered into
the Utah Provider Agreement.
8.7 Healthtrust Board Approval. The Board of Directors
of Healthtrust (or the Executive Committee thereof) shall have approved this
Agreement and the transactions contemplated hereby.
9. PARTICULAR COVENANTS OF BUYER AND CHAMPION.
9.1 Best Efforts to Close. Each of Buyer and Champion shall
use its best efforts to proceed toward the Closing and to cause the conditions
to Closing to be met as soon as practicable and consistent with other terms
contained herein. Buyer or Champion shall notify Seller as soon as practicable
of any event or matter which may reasonably be expected to prevent the
conditions to Buyer's or Champion's obligations being met.
9.2 Employment of Employees of Seller; Additional Employee
Matters. (a) (i) Prior to Closing, Buyer shall offer, effective as of the
Cut-Off Point, employment to all employees of Seller (except as provided in
subsection (d) below) who are on the active payroll of Seller on the Closing
Date (including for this purpose any employee of Seller who elects to be
treated as a retiree of Seller as of the Cut-Off Point for the purpose of
qualifying for certain employee benefits). Buyer shall give the same offer of
employment to any employee who is in paid or unpaid inactive status as of the
Closing, and who is available for return to active status within 90 days after
Closing (or at such later date as may be required by applicable law). All such
employees who accept Buyer's offer of employment shall be referred to as the
"Hired Employees."
(ii) Each offer of employment under paragraph 9.2(a)(i)
shall be for a substantially equivalent position, and at a substantially
similar wage or salary, as provided by Seller to the
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Hired Employee immediately prior to the Closing Date (or, as to any employee
who is in paid or unpaid inactive status as of the Closing Date who receives an
offer of employment from Buyer upon becoming available to return to active
status, immediately prior to the first day of such employee's paid or unpaid
leave from Seller or, in the case employees who were on leave as of the date
that Buyer acquired the Assets from Holy Cross Health System Corporation, an
Indiana not- for-profit corporation ("Holy Cross"), and its Utah subsidiaries
(Holy Cross and its Utah subsidiaries are referred to collectively as "Holy
Cross"), immediately prior to the first day of such employee's paid or unpaid
leave from Holy Cross). As to each Hired Employee, Buyer shall also provide
employee welfare benefits, paid time-off and other terms and conditions of
employment that are commensurate with those of other employees of Champion
subsidiaries having similar positions. Buyer agrees that, for the purpose of
determining welfare benefits coverage and other related matters (including
eligibility and participation, but not vesting or benefit accrual, under any
Buyer or Champion pension benefit plan), each Hired Employee will be considered
to have commenced employment with Buyer on the date such Hired Employee
commenced uninterrupted employment with Seller or Holy Cross (whichever is
earlier). Notwithstanding the preceding sentence, Buyer shall not be obligated
to provide Hired Employees any accrued sick or vacation days upon hiring them
except as and to the extent provided in Sections 9.2(e) and (f) hereof. For
the purpose of determining vesting and benefit accrual under all Buyer or
Champion pension benefit plans, each Hired Employee will be considered to have
commenced employment with Buyer on the Employment Commencement Date (as defined
below). Health benefits coverage provided by Buyer for Hired Employees (and
any dependents thereof) shall apply to covered expenses incurred on and after
the Employment Commencement Date, and Buyer agrees to waive any limitations for
pre-existing conditions with respect to any conditions affecting any Hired
Employees (and any dependents thereof); subject to the following limitations:
(x) the pre-existing condition provisions of Seller's health benefit plans
shall apply in lieu of the pre-existing condition provisions of Buyer's plans
to all Hired Employees (and their dependents) who are eligible for benefits
under Seller's health benefits plans as of the Closing Date but who are subject
to pre-existing condition limitations as of the Closing Date and (y) the
pre-existing conditions limitations under Buyer's medical benefits plans shall
apply to any Hired Employee (and his or her dependents) who is not eligible for
benefits under Seller's health benefits plans as of the Closing Date, and any
such Hired Employee shall be treated as having been hired by Buyer on the date
such employee commenced employment with Seller for purposes of applying such
pre-existing condition limitations to such Hired Employee (and such Hired
Employee's dependents).
(iii) The term "Employee Commencement Date" shall mean the day
immediately following the Cut-Off Point; provided, however,
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that with respect to any employee who is in paid or unpaid inactive status as
of the Closing Date and to whom Buyer offers employment pursuant to this
Section 9.2(a) the term "Employee Commencement Date" shall mean such employee's
first day of employment with Buyer.
(b) Subject to the accuracy of Seller's and Healthtrust's
representations and warranties in Section 3.12 and Schedule 3.12, (i) on and
after the Closing Date, Buyer shall be responsible for any and all notices
required with respect to Buyer's termination of employees, and (ii) any
liabilities or obligations arising under the WARN Act on or after the Closing
Date shall be those of Buyer and not Seller.
(c) After the Closing, Buyer will, upon reasonable
request, give assistance to human resources personnel of Healthtrust, Seller
and/or Holy Cross in the post-closing administration of the respective employee
benefit plans of Seller and Holy Cross as they apply to Hired Employees. For
this purpose, "assistance" includes reasonable access to the pre-Closing
personnel records of Hired Employees (except that Holy Cross shall not have the
right to have access to personnel records for any time after August 15, 1994).
(d) Notwithstanding the provisions of Section 9.2(a),
Buyer shall not be required to offer employment to (i) any person whom Buyer
could otherwise terminate for cause, or (ii) the President and Chief Executive
Officer, the Chief Financial Officer or the Chief Operating Officer of Seller.
(e) Buyer agrees that it shall assume, from and after
the Cut-Off Point, the accrued liability of Seller (expressed as a dollar
amount) for vacation, holiday, short-term sick, PTO and grandfathered long-term
sick days that relates to the Hired Employees and that was assumed by Seller
from Holy Cross in connection with Seller's acquisition of the Assets (the
"Holy Cross Leave"). The Holy Cross Leave shall be calculated as of the
Cut-Off Point and shall be in a specified dollar amount (and not an amount of
days, hours or other units of time), which amount shall be Seller's liability
for such matters as of the Cut-Off Point, and such liability shall not increase
after the Cut-Off Point due to employment with Buyer, increases in wage rates
or salary or otherwise. Buyer agrees that (i) Hired Employees will be entitled
to use Holy Cross Leave in accordance with the generally applicable policies
and procedures established by Buyer for use of paid leave, (ii) that the Holy
Cross Leave will be in addition to any holidays, vacation days, sick days or
other paid leave earned by the Hired Employees after the Cut-Off Point as
employees of Buyer, and (iii) that the Holy Cross Leave will not be eliminated
by Buyer without payment in full to the Hired Employees. Seller agrees that it
will furnish to Buyer at Closing a schedule (dated as of the
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most recent date practicable prior to Closing) showing the name of each Hired
Employee (and each employee of Seller on inactive status) and as to each such
person the amount of accrued Holy Cross Leave as of such date. As soon as
possible after the Closing, Seller will furnish to Buyer a schedule showing
such information as of the Cut-Off Point.
(f) Buyer agrees that it shall assume, from and after
the Cut-Off Point, the accrued liability of Seller for APL benefits and related
taxes that relate to the Hired Employees and that have arisen since Seller
acquired the Assets from Holy Cross. Buyer agrees that (i) Hired Employees
will be entitled to use such APL benefits in accordance with the generally
applicable policies and procedures established by Buyer for use of paid leave,
(ii) that such APL benefits will be in addition to any holidays, vacation days,
sick days or other paid leave earned by the Hired Employees after the Cut-Off
Point as employees of Buyer, and (iii) that such APL benefits will not be
eliminated by Buyer without payment in full to the Hired Employees. Seller
agrees that it will furnish to Buyer at Closing a schedule (dated as of the
most recent date practicable prior to Closing) showing the name of each Hired
Employee (and each employee of Seller on inactive status) and as to each such
person the amount of accrued APL that such person has as of such date. As soon
as possible after the Closing, Seller will furnish to Buyer a schedule showing
such information as of the Cut-Off Point.
9.3 Chapel and Gardens. Champion and Buyer acknowledge that
they intend to maintain the chapel located on the campus of the Hospital as an
inter-denominational place of worship. Champion and Buyer further acknowledge
that they are committed to the maintenance and preservation of the gardens
located at the campus of the Hospital, including all statuary and fountains
located therein.
9.4 Consents and Regulatory Approvals. Buyer and Champion
acknowledge that except as provided in Section 5.9 hereof, neither Seller nor
Healthtrust shall have any responsibility for obtaining any regulatory consents
to and approvals of the transfer of the Licenses described in Schedule 3.5
hereof or for obtaining any necessary consents to the assignment of the
contracts and leases. Buyer agrees to use its reasonable best efforts to
secure such approvals and consents as soon as practicable and prior to the
Closing.
9.5 Change of Name. Buyer agrees that it will cause all
signs, if any, incorporating the names "Healthtrust", "HTI", "HealthWorks",
"HomeMed", "HomeMed of Utah", "Continuing Care", "First Med" and "Life After
Breast Cancer" (and all variations thereof) which are located at any of the
Real Property or the improvements thereto to be removed or modified as soon as
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reasonably practicable after the Closing Date and in any event within 30 days
after the Closing Date, such that such names are no longer used at such Real
Property or upon such improvements.
9.6 Buyer's Payment of the Purchase Price. Subject to the
conditions to Closing set forth in this Agreement, Champion shall cause Buyer
to pay the Purchase Price for the Assets in accordance with Section 2.3(a).
9.7 Office Space. For a period of six months from and after
the Closing, Buyer will make three offices at the Hospital available to
representatives of Seller and Healthtrust (or their designees) at no charge.
9.8 Preservation and Access to Books and Records After the
Closing. (a) After the Closing, Buyer shall keep and preserve all medical
records and medical charts existing as of the Closing of patients of the
Hospital or any of the Clinics for so long as Buyer is required by law to
maintain such records (but in no event less that seven years, beginning on the
Closing Date). Buyer acknowledges that as a result of entering into this
Agreement and operating the Business, it will gain access to patient and other
information which is subject to rules and regulations concerning
confidentiality. Buyer agrees to abide by any such rules and regulations
relating to the confidential information it acquires. Buyer agrees after
Closing to maintain the patient records at the Business in accordance with
applicable law (including, if applicable, Section 1861(v)(i)(I) of the Social
Security Act (42 U.S.C. Section 1395x(v)(1)(I)) and requirements of relevant
insurance carriers. Buyer will afford to the representatives of Seller or Holy
Cross, including their respective counsel and accountants, full and complete
access to, and copies of, the records transferred to Buyer at the Closing
(including, without limitation, access to patient records in respect of
patients treated by Seller or Holy Cross at the Hospital or any of the Clinics)
during normal business hours after the Closing Date. In addition, Seller and
Holy Cross shall be entitled to remove from the Hospital any such patient
records, but only for purposes of pending litigation involving a patient to
whom such records refer, as certified in writing prior to removal by counsel
retained by Seller or Holy Cross in connection with such litigation; provided,
however, that to the extent Healthtrust or Holy Cross are not required to use
originals of the patient records for such purposes, Healthtrust shall use its
best efforts (a) to use copies of patient records, where appropriate and (b) to
cause Holy Cross to use copies of patient records, where appropriate. Any
original patient records so removed from the Business shall be promptly
returned to Buyer following its use by Seller or Holy Cross. Notwithstanding
the foregoing provisions, Holy Cross shall not be entitled to review, have
access to, have copies of or remove from the premises of the
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Business any medical records or patient charts relating to any period after
August 15, 1994.
(b) After the Closing, Buyer shall keep and preserve all
other records of the Business existing as of the Closing which are delivered to
Buyer by Seller for a period of seven (7) years or such longer period (if any)
as such records are required to be kept and preserved by any federal or state
law or regulation. After the Closing, upon reasonable written notice by Seller
to Buyer, Seller shall be entitled, during regular business hours, to have
access to and make copies of all records pertaining to the operation of the
Business (other than medical records which shall be governed by the provisions
of Section 9.8(a) hereof) prior to the Closing for any lawful corporate
purpose.
(c) Should Buyer decide to dispose of any books or
records which they have been obligated to maintain pursuant to Section 9.8,
Buyer shall advise Seller in writing of such intention and Seller shall have
not less than sixty (60) days after receipt of such notice to elect in writing
to have Buyer deliver such records to Seller.
9.9 Notice; Efforts to Remedy. Buyer and Champion will
notify Seller and Healthtrust promptly in writing of, and contemporaneously
will provide Seller and Healthtrust with true and complete copies of any and
all information and documents relating to, and will use their best efforts to
cure as soon as practicable (or by any subsequent date agreed upon by the
parties), any event, transaction or circumstance occurring that causes or would
cause any covenant or agreement of Buyer or Champion under this Agreement to be
breached, or that renders or would render untrue any representation or warranty
of Buyer or Champion contained in this Agreement as if the same were made on or
as of the date of such event, transaction or circumstance. Buyer and Champion
also will use their best efforts to cure, as soon as practicable (or by any
subsequent date agreed upon by the parties), any violation or breach of any
representation, warranty, covenant or agreement made by either of them in this
Agreement. Buyer and Champion shall have a reasonable time within which to
effect a cure of such breach or misrepresentations before Seller or Healthtrust
may terminate this Agreement (to the extent such remedy is available to Seller
or Healthtrust pursuant to Section 11.1(d) hereof); provided, however, that
after the date established by the parties for Closing, Seller or Healthtrust
may terminate this Agreement (to the extent such remedy is available to Seller
or Healthtrust pursuant to Section 11.1(d) hereof) unless such breach or
misrepresentation has been cured to the reasonable satisfaction of Seller or
Healthtrust. Furthermore, Buyer and Champion shall notify Seller and
Healthtrust promptly in writing of any event, transaction or circumstance
occurring that causes or would cause any covenant or agreement of Seller or
Healthtrust under this Agreement to be breached, or that
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renders or would render untrue any representation or warranty of Seller or
Healthtrust contained in this Agreement as if the same were made on or as of
the date of such event, transaction or circumstance. Seller and Healthtrust
shall have a reasonable time in which to effect a cure of such breach or
misrepresentation before Buyer or Champion may terminate this Agreement (to the
extent such remedy is available to Buyer or Champion pursuant to Section
11.1(d) hereof); provided, however, that after the date established by the
parties for Closing, Buyer or Champion may terminate this Agreement (to the
extent such remedy is available to Buyer or Champion pursuant to Section
11.1(d) hereof) unless the breach or misrepresentation has been cured to the
reasonable satisfaction of Buyer and Champion. The failure of Buyer or
Champion to notify Seller and Healthtrust of any such discovered event,
transaction or circumstance shall not release Seller and Healthtrust from any
liability to Buyer or Champion resulting from the breach attendant to such
discovered event, transaction or circumstance; provided, however, that, unless
Seller or Healthtrust had independent knowledge of such event, circumstance or
condition, Healthtrust's and Seller's liability shall be limited to the damages
that would have nonetheless resulted to Buyer and/or Champion had Buyer or
Champion disclosed such discovered event, transaction or circumstance to Seller
and Healthtrust prior to Closing.
9.10 Power of Attorney for D.E.A. Registration Number(s) and
Utah Controlled Substance License(s). Buyer covenants that it shall promptly
apply for all necessary United States Department of Justice Drug Enforcement
Agency ("D.E.A.") registration(s) or Utah Controlled Substance License(s) with
respect to Seller, the Hospital and the Clinics, as applicable, as soon as
possible. At or prior to Closing, Seller shall execute in favor of Buyer one
or more Powers of Attorney for Order Forms authorizing Buyer or a
representative of Buyer to execute applications for books of official order
forms and to sign such order forms, under Seller's D.E.A. Registration
Number(s) or Seller's Utah Controlled Substance License(s) in requisition for
all necessary controlled substances on an interim basis until such time as
Buyer shall receive approval of all necessary D.E.A. registration(s) or Utah
Controlled Substance License(s). Seller covenants that it shall cooperate with
Buyer and provide such information as Buyer may reasonably request in making
all such applications for registration or licensing.
9.11 Agreement Regarding Disposition of the Hospital.
Buyer agrees that for a period of ten years from the Closing Date, without the
prior approval of the FTC, Buyer will not sell (directly or indirectly, through
partnerships or otherwise) the Hospital to any person who operates, or will
operate immediately following the sale, any other acute care hospital in any of
the following three Utah counties: Salt Lake County, Davis County and
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Weber County. Buyer and Champion acknowledge and agree that the foregoing
agreement in this Section 9.11 is a requirement of the FTC to the FTC's consent
to the transactions contemplated by this Agreement. Buyer and Champion also
agree that, if required by the FTC as a condition to its approval of the
transactions contemplated by this Agreement, Buyer and Champion will enter into
an agreement with the FTC in substance similar to that of this Section 9.11.
10. PARTICULAR COVENANTS OF SELLER AND HEALTHTRUST.
10.1 Reimbursement of Buyer. In addition to the foregoing,
if any third party payor deducts any amount from payments due Buyer in respect
of claims against or amounts owed by Healthtrust or Seller, then Healthtrust
and/or Seller will promptly reimburse Buyer for the amounts so deducted within
ten (10) days after written demand therefor by Buyer. Buyer agrees to give
prompt notice to Seller and Healthtrust of the assertion of any claim, formal
or informal, by any third party payor for which, if deducted by such third
party payor, Buyer would be entitled to reimbursement by Healthtrust and/or
Seller hereunder and will cooperate in good faith, at no out-of-pocket cost to
Buyer, so as to permit Healthtrust and/or Seller to mitigate the amount of any
such claim by any such third party payor.
11. TERMINATION.
11.1 Optional Termination. This Agreement may be terminated
at any time prior to the Closing as follows:
(a) by the mutual agreement of Champion and Healthtrust;
(b) by Buyer or Champion in accordance with the
provisions of Section 5.4;
(c) by either Champion or Healthtrust, if any court of
competent jurisdiction in the United States or other United
States governmental body shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby and
such order, decree, ruling or other action shall have become
final and non-appealable;
(d) in the event either Seller or Healthtrust, on one
hand, or Buyer or Champion, on the other hand, commits a
material breach of any representation, warranty, covenant or
agreement made herein, which breach, if left uncured, would
result in a material adverse effect on the condition or value
of the Assets or the operation of the Business, by either
Champion or
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Healthtrust, provided such terminating party is a
non-breaching party and not an affiliate of a breaching party,
and provided further that this right to terminate shall be
subject to the parties' rights to cure set forth herein; and
(e) by either Champion or Healthtrust if the Closing
has not occurred by May 31, 1995, because a condition to the
terminating party's obligation to close set forth, in respect
of Buyer and Champion in Article 7, and, in respect of Seller
and Healthtrust in Article 8, was not satisfied on such date,
unless the date for Closing has been extended by the mutual
agreement of the parties hereto; and
(f) by either party if Healthtrust shall not have
received, on or before the Closing Date, the written consent
of the FTC to the consummation of the transactions as, and in
the form, contemplated hereby.
11.2 Notice of Abandonment. In the event of any termination
pursuant to Section 11.1, written notice shall forthwith be given to the other
parties hereto except with respect to a termination pursuant to Section
11.1(a).
11.3 Effect of Termination. Except for the obligations
contained in Sections 6.1(v), 6.2(v), 12.8, 12.9 and 12.21 hereof, upon the due
termination of this Agreement pursuant to Section 11.1(a), (b), (c), (e) or
(f), this Agreement shall forthwith become null and void, and neither party
hereto nor any of its officers, directors, trustees, members or shareholders
shall have liability hereunder; provided, however, that in no event shall a
party hereto be released from liability for damages under this Agreement or
otherwise in the event such party's breach resulted in the failure to close by
any such termination date and such breaching party was not otherwise excused
from its obligation so to close under this Agreement.
12. GENERAL.
12.1 Exhibits, Schedules and Other Instruments. Each
Exhibit, Certificate and Schedule, if any, to this Agreement shall be
considered a part hereof as if set forth herein in full.
12.2 Pre-Closing Access. In addition to Seller's and
Healthtrust's covenants in Section 5.1, Seller and Healthtrust shall give Buyer
and Champion, their accountants, their counsel, and other representatives
access to the premises and offices of the Hospital and the Clinics, and make
such information in respect thereof as Buyer and/or Champion may reasonably
request available to Buyer and Champion, as may be necessary for Buyer and/or
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Champion to examine the Assets and Business being acquired. No such inspection
by Buyer or Champion shall unreasonably interfere with Seller's conduct of
business in the ordinary course.
12.3 Terminating Cost Report. Seller agrees to file a
terminating cost report in connection with third party receivables of the
Business with applicable agencies.
12.4 Additional Assurances. The provisions of this Agreement
shall be self-operative and shall not require further agreement by the parties
except as may be herein specifically provided to the contrary; provided,
however, at the request of either party, the other party shall execute such
additional instruments and take such additional acts as are reasonably
necessary to effectuate this Agreement.
12.5 Consents, Approvals and Discretion. Whenever this
Agreement requires any consent or approval to be given by either party or
either party must or may exercise discretion, the parties agree that such
consent or approval shall not be unreasonably withheld or delayed and such
discretion shall be reasonably exercised.
12.6 Choice of Law. THE PARTIES AGREE THAT THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF UTAH.
12.7 Benefit/Assignment. Subject to the provisions herein to
the contrary, this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective legal representatives, successors and
assigns; provided, however, that no party may assign this Agreement without the
prior written consent of the other party.
12.8 Costs of Transaction. Subject to the other terms and
provisions hereof, whether or not the transactions contemplated hereby shall be
consummated, the parties agree as follows: (i) Seller and/or Healthtrust will
pay the fees, expenses, and disbursements of Seller and/or Healthtrust and
their respective agents, representatives, accountants, and counsel incurred in
connection with the subject matter hereof and any amendments hereto; and (ii)
Buyer and/or Champion shall pay the fees, expenses and disbursements of Buyer
and/or Champion and their respective agents, representatives, accountants and
counsel incurred in connection with the subject matter hereof and any
amendments hereto. Buyer shall pay any transfer taxes and recording fees
resulting from the consummation of the transactions contemplated hereby.
12.9 Confidentiality. With respect to Confidential
Information provided by Healthtrust or Seller in connection with
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<PAGE> 58
and relative to the transactions contemplated by this Agreement, each of Buyer
and Champion agrees to use reasonable best efforts to cause its officers,
employees, representatives and agents to hold all such Confidential Information
in strict confidence and only to disclose such Confidential Information to such
duly authorized persons as are necessary to effect the transactions
contemplated hereby, and, if requested, to return all originals and copies of
any such written Confidential Information to Seller or Healthtrust in the event
for any reason the sale of the Assets is not consummated. Nothing in this
Section shall prohibit the use of such Confidential Information for such
governmental filings as are required by law or governmental regulations or the
disclosure of such Confidential Information if such disclosure is compelled by
judicial or administrative process or, in the opinion of Buyer's or Champion's
counsel, other requirements of law. Subject to Buyer's and Champion's
disclosure obligations under federal securities laws, any release to the public
of information with respect to the transactions contemplated hereby will be
made only in the form and manner approved by the parties and their respective
representatives. Each of Buyer and Champion agrees that it will not use, and
will not knowingly permit others to use, any Confidential Information in a
manner detrimental to the Business, Healthtrust or Seller or to their
competitive disadvantage. Buyer and Champion for themselves, their officers,
employees and agents recognize that any breach of this Section would result in
irreparable harm to Seller and Healthtrust and that therefore either Seller or
Healthtrust shall be entitled to an injunction to prohibit any such breach by
Buyer, Champion and their officers, employees and agents in addition to all of
their other legal and equitable remedies. For the purposes hereof,
"Confidential Information" shall mean all information of any kind concerning
Healthtrust or Seller obtained, directly or indirectly, from Healthtrust or
Seller in connection with the transactions contemplated by this Agreement
except information (i) ascertainable or obtained from public or published
information, (ii) received from a third party not known by Buyer or Champion to
be under an obligation to keep such information confidential, (iii) which is or
becomes known to the public (other than through a breach of this Agreement), or
(iv) which was in Buyer's or Champion's possession prior to disclosure thereof
to Buyer or Champion in connection herewith.
12.10 Waiver. The waiver by either party of a breach or
violation of any term or provision of this Agreement shall not operate as, or
be construed to be, a waiver of any subsequent breach of the same provision by
any party or of the breach of any other term or provision of this Agreement.
The delay or a failure of a party to transmit any written notice hereunder
shall not constitute a waiver by such party of any default hereunder or of any
other or further default under this Agreement except as may expressly be
provided for by the terms of this Agreement.
52
<PAGE> 59
12.11 Tax Allocation. The allocation of the Purchase Price
for tax purposes shall be set forth in a statement prepared in accordance with
Section 1060 of the Internal Revenue Code of 1986, as amended, which statement
shall be prepared in a manner generally consistent with the form of Internal
Revenue Service Form 8594 and a manner consistent with the Purchase Price
allocation provided under Section 1.5. Buyer and Seller shall cooperate in the
preparation of such statement of allocation and each party hereto shall file a
copy of such statement as, and if, required by applicable law.
12.12 Interpretation. Each of the parties has agreed to the
use of the particular language of the provisions of this Agreement including
all attached Exhibits and Schedules and any questions of doubtful
interpretation shall not be resolved by any rule or interpretation against the
draftsman but rather in accordance with the fair meaning thereof, having due
regard to the benefits and rights intended to be conferred upon the parties
hereto and the limitations and restrictions upon such rights and benefits
intended to be provided. Whenever any matter herein is represented, warranted
or stated herein to be to the "knowledge of," to the "best knowledge of" or to
the "best knowledge and belief of" Seller or Healthtrust, or words of similar
import, such representation, warranty or statement shall mean all matters with
respect to which (a) Seller has received written notice or (b) any of the
following persons has knowledge or with reasonable inquiry under the
circumstances would have knowledge: any director or officer of Seller, or any
administrator, assistant administrator or controller at the Hospital.
12.13 Notice. Any notice, demand or communication required,
permitted, or desired to be given hereunder shall be in writing and shall be
deemed effectively given when personally delivered, when received by
telegraphic or other electronic means (including telefax and telex) or
overnight courier, or five days after being deposited in the United States
mail, with postage prepaid, certified mail, return receipt requested, addressed
as follows:
Buyer or
Champion: Champion Healthcare Corporation
14340 Torrey Chase, Suite 320
Houston, Texas 77014
Attn: Chief Financial Officer
With a
copy to: Michener, Larimore, Swindle, Whitaker, Flowers,
Sawyer, Reynolds & Chalk, L.L.P.
3500 City Center Tower II
301 Commerce Street
Fort Worth, Texas 76102
Attn: Wayne Whitaker
53
<PAGE> 60
Seller or
Healthtrust: Medical Services of Salt Lake City, Inc.
c/o Healthtrust Inc. - The
Hospital Company
4525 Harding Road
Nashville, Tennessee 37205
Attention: President
With a
copy to: Waller Lansden Dortch & Davis
Nashville City Center
511 Union Street
Nashville, Tennessee 37219-1760
Attention: G. Scott Rayson
or to such other address, and to the attention of such other person or officer
as any party may designate, with copies thereof to the respective counsel
thereof as notified by such party.
12.14 Severability. In the event any provision of this
Agreement is held to be invalid, illegal or unenforceable for any reason and in
any respect, such invalidity, illegality, or unenforceability shall in no event
affect, prejudice or disturb the validity of the remainder of this Agreement,
which shall be in full force and effect, enforceable in accordance with its
terms, including, without limitation, those terms which contemplate or require
the further agreements of the parties. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically as a
part of this Agreement a provision as similar in terms to such illegal, invalid
or unenforceable provision as may be possible and still be legal, valid or
enforceable.
12.15 Gender and Number. Whenever the context of this
Agreement requires, the gender of all words herein shall include the masculine,
feminine and neuter, and the number of all words herein shall include the
singular and plural.
12.16 Divisions and Headings. The divisions of this
Agreement into sections and subsections and the use of captions and headings in
connection therewith are solely for convenience and shall have no legal effect
in construing the provisions of this Agreement.
12.17 Consented Assignment. Anything contained herein to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any claim, right, contract, license, lease, commitment, sales order or
purchase order if an attempted assignment thereof without the consent of
another party thereto would constitute a breach thereof or in any material way
affect the rights of Seller thereunder, unless such consent is obtained. If
such consent is not obtained, or if an attempted assignment would be
ineffective or would materially affect Seller's
54
<PAGE> 61
rights thereunder so that Buyer would not in fact receive all such rights,
Seller shall cooperate in any reasonable arrangement designed to provide for
Buyer during the Contract Period (as defined below) the benefit under any such
claims, rights, contracts, licenses, leases, commitments, sales orders or
purchase orders, including, without limitation, enforcement, at no
out-of-pocket cost to Seller, of any and all rights of Seller against the other
party or parties thereto arising out of the breach or cancellation by such
other party or otherwise. To the extent that any claim, right, contract,
license, lease, commitment, sales order or purchase order to be assigned to or
acquired by Buyer pursuant to this Agreement also applies to facilities or
operations other than those being sold pursuant hereto, then Healthtrust also
agrees that during the Contract Period, upon the written request of Buyer, it
will use its reasonable best efforts to cause the services, property or other
benefits provided or made available under such claim, right, contract, license,
lease, commitment, sales order or purchase order to continue to be available to
Buyer on terms and conditions substantially similar to those presently in
effect. The term "Contract Period" shall mean with respect to any contract or
other right the period beginning on the Closing Date and ending on the earlier
of (a) the expiration of the term of the given contract or other right and (b)
the third anniversary of the Closing Date.
12.18 Survival. The representations, warranties, covenants
and agreements made by the parties herein shall survive the Closing; provided,
however, that the representations and warranties made by the parties herein
shall expire on the first anniversary of the Closing Date, except with respect
to the representations and warranties set forth in Sections 3.1, 3.2, 3.17,
3.18, 3.20, 4.1, 4.2 and 4.3 (and the indemnities with respect thereto), which
shall survive for the applicable statute of limitations periods (collectively,
the "Survival Period").
12.19 Entire Agreement/Amendment. Except for the
Confidentiality Agreement between Buyer and Healthtrust, dated July 28, 1994
(which Confidentiality Agreement will survive the execution and delivery of
this Agreement), this Agreement supersedes all prior contracts, understandings
and agreements, whether written or oral, and constitutes the entire agreement
of the parties respecting the within subject matter and no party shall be
entitled to benefits other than those specified herein. As between or among
the parties, no oral statements or prior written material (other than the
Confidentiality Agreement) not specifically included herein shall be of any
force and effect; the parties specifically acknowledge that in entering into
and executing this Agreement, the parties rely solely upon the representations
and agreements contained in this Agreement and no others. No terms,
conditions, warranties, or representations, other than those contained herein
(or in the Confidentiality Agreement) and no amendments or modifications
hereto, shall be
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<PAGE> 62
binding unless made in writing and signed by the party to be charged.
12.20 Counterparts. This Agreement may be executed in
multiple originals or counterparts, each and all of which shall be deemed an
original and all of which together shall constitute but one and the same
instrument.
12.21 Risk of Loss. Notwithstanding any other provision
hereof to the contrary, the risk of loss in respect of casualty to the Assets
shall be borne by Seller through the time of Closing and by the Buyer
thereafter.
12.22 Public Announcement. Healthtrust and Seller, on one
hand, and Buyer and Champion, on the other hand, mutually agree that, prior to
the Closing, no party shall issue any press release or make any public
announcement of the transaction which is the subject of this Agreement without
the prior consent of each other party, except where a public announcement is
required by law as reasonably determined by such party. Additionally,
Healthtrust and Seller, on one hand, and Buyer and Champion, on the other hand,
each agrees that, prior to the Closing, it will not, and will cause its
officers, directors, partners, employees, counselors and representatives not
to, discuss any aspects of this Agreement with any third party (other than
their respective representatives, lenders, prospective underwriters and
counselors) without the prior written consent of the other party hereto.
[The next page of this Agreement is the
signature page, which is page number "S-1."]
56
<PAGE> 63
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in multiple originals by their duly authorized
officers and their corporate seals duly affixed hereto, all as of the day and
year first above written.
MEDICAL SERVICES OF SALT
LAKE CITY, INC.
By: _______________________________
Title: ____________________________
HEALTHTRUST, INC. - THE
HOSPITAL COMPANY
By:________________________________
Title:_____________________________
CHAMPION HEALTHCARE CORPORATION
By: _______________________________
James G. VanDevender,
Executive Vice President
CHC - SALT LAKE CITY, INC.
By: ________________________________
James G. VanDevender,
Vice President
S-1
<PAGE> 64
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement (this "Amendment"),
dated as of April 13, 1995, among Medical Services of Salt Lake City, Inc., a
Utah Corporation ("Seller"), Healthtrust, Inc. - The Hospital Company, a
Delaware corporation ("Healthtrust"), CHC - Salt Lake City, Inc., a Utah
corporation ("Buyer"), and Champion Healthcare Corporation, a Delaware
corporation ("Champion").
W I T N E S S E T H
The parties hereto have entered into an Asset Purchase Agreement,
dated as of January 25, 1995 ("the Original Agreement"), which provides for the
sale by Seller to Buyer of substantially all of the assets used in the
operation of Seller's health related businesses. The parties hereto desire to
amend the Original Agreement in accordance with this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing premises and
the agreements, covenants, representations and warranties hereinafter set forth
and other good and valuable consideration, the receipt and adequacy of all of
which are acknowledged and agreed, the parties hereto agree as follows:
1. Definitions. The Original Agreement, as amended by this
Amendment, is referred to herein as the "Agreement". All capitalization terms
used herein, and not otherwise defined herein, shall have the meanings given to
such terms in the Original Agreement.
2. Modification of Certain Provisions.
(a) Section 1.1(j) of the Original Agreement is hereby amended by
deleting the word "and" from the end of such section.
(b) Section 1.1(k) of the Original Agreement is hereby amended by
deleting the period (".") from the end of such section and replacing it with ";
and ".
(c) Section 1.1 of the Original Agreement is hereby amended by
adding the following subsection (l) to such section, immediately following
subsection 1.1 (k):
"(l) all of the following assets of HTI Utah Data
Corporation, a Utah corporation and a subsidiary of Healthtrust ("Data
Corporation"), all of which either will be transferred to Buyer at the
Closing from Data Corporation or will be transferred to Seller prior
to Closing and, in such case, will be transferred to Buyer at Closing
from Seller:
<PAGE> 65
(i) all tangible personal property (excluding cash) owned by Data
Corporation and used in connection with Data Corporation's processing
of information relating to the Business, including without limitation
all computer and data processing hardware, (ii) all operating manuals,
files and computer software owned by Data Corporation and used in
connection Data Corporation's processing of information relating to
the Business, and (iii) all of Data Corporation's interest, to the
extent assignable or transferable by it, in, to and under the
Transition Services Agreement (the "Transition Services Agreement"),
dated as of August 15, 1994, between Data Corporation and Holy Cross
Health System Corporation, an Indiana not-for-profit corporation
("Holy Cross"), the agreement entitled "Professional Services for HTI
Utah Data Corp." ( such agreement, the "InfoPartners Agreement"),
dated as of August 14, 1994, between Data Corporation and
InfoPartners, and all computer software license agreements to which
Data Corporation is a party and which Data Corporation uses in
connection with Data Corporation's processing of information relating
to the Business."
(d) The following subsection 1.4(d) is added to the Agreement
immediately following subsection 1.4(c) of the Original Agreement:
(d) In addition to the other adjustments to the Purchase
Price provided for in subsection 1.4(a) above, the Purchase Price
shall be reduced by an amount equal to (i) the HCHSC Fee (as defined
below), plus (ii) the Service Charge (as defined below). The amount
of such reduction to the Purchase Price will be determined by the
parties prior to the Closing and the amount of cash to be delivered at
Closing will be reduced accordingly. For purposes of this subsection
1.4(d), the following terms shall have the following meanings:
(i) "HCHSC Fee" shall mean 50% of the aggregate amount of
the monthly fees that will become payable to Holy Cross pursuant to
the Transition Services Agreement for the period beginning on the
Closing Date and ending on
2
<PAGE> 66
September 30, 1995; provided, however, if Seller, Data Corporation or
Healthtrust agrees to increase the amount of such monthly fees without
the consent of Champion or Buyer, the HCHSC Fee will be increased by
100% of the increased amount of the monthly fees paid pursuant to the
Transition Services Agreement during such period.
(ii) "Service Charge" shall mean 50% of the aggregate
amount of the monthly fees that will become payable to InfoPartners
pursuant to the InfoPartners Agreement for the period beginning on the
Closing Date and ending on September 30, 1995; provided, however, if
Seller, Data Corporation or Healthtrust agrees to increase the amount
of such monthly fees without the consent of Champion or Buyer, the
Monthly Fee will be increased by 100% of the increased amount of the
monthly fees paid pursuant to the InfoPartners Agreement during such
period.
In calculating the HCHSC Fee and the Service Charge, any payments
relating to any partial monthly periods under the Transition Services
Agreement or the InfoPartners Agreement between the Closing Date and
September 30, 1995 will be prorated.
(e) Section 2.2 of the Original Agreement in amended by deleting
subsection 2.2(i) and renumbering subsections 2.2(j), (k) and (l) as
subsections (i), (j) and (k), respectively.
(f) Section 2.3 of the Original Agreement is amended by adding the
word "and" to the end of subsection 2.3(f), deleting subsection 2.3(g), and
renumbering subsection 2.3(h) as subsection 2.3(g).
(g) Section 7.9 of the Original Agreement is hereby amended in its
entirety by deleting such Section 7.9 and replacing it with the following
"Section 7.9 - [Intentionally Omitted]".
(h) Appendix 7.9 to the Original Agreement is hereby deleted.
3. Data Processing Employees. Buyer and Champion hereby consent
to Seller's hiring of the data processing personnel currently employed by Data
Corporation.
3
<PAGE> 67
4. Miscellaneous.
(a) Save and except as amended by this Amendment, the Original
Agreement shall remain in full force and effect.
(b) This Amendment may be executed in any number of counterparts,
each of which, when so executed and delivered, shall be an original; but such
counterparts shall together constitute but one and the same instrument.
(c) This Amendment shall inure to the benefit of and shall be
binding upon the parties hereto and their permitted successors and assigns.
(d) If any provision hereof shall be held invalid or unenforceable
by any court of competent jurisdiction, such holdings shall not invalidate or
render unenforceable any other provision hereof or of the Original Agreement.
(e) The captions and headings herein are for convenience only and
in no way define, limit or describe the scope or intent of any provisions
hereof.
(f) This Amendment shall be governed by and construed in
accordance with, the laws of the State of Utah.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed in multiple originals by their duly authorized officers as of the
date and year first above written.
SELLER:
MEDICAL SERVICES OF SALT LAKE
CITY, INC.
By: /s/ Richard E. Francis
----------------------
Title: Vice President
HEALTHTRUST, INC. - THE
HOSPITAL COMPANY
By: /s/ Richard E. Francis
----------------------
Title: Senior Vice President
4
<PAGE> 68
BUYER:
CHC - SALT LAKE CITY, INC.
By: /s/ James G. VanDevender
-------------------------
Title: Vice President
CHAMPION HEALTHCARE CORPORATION
By: /s/ James G. VanDevender
-------------------------
Title: Executive Vice President
and Chief Financial
Officer
5
<PAGE> 1
EXHIBIT 10.2
UTAH PROVIDER AGREEMENT
This Agreement ("Agreement") is made and entered into this 13th day of
April 1995, by and between Champion Healthcare Corporation ("Champion"), a
Delaware corporation, and Healthtrust Inc. - The Hospital Company
("Healthtrust"), a Delaware corporation.
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as
of January 25, 1995, by and among Healthtrust, Medical Services of Salt Lake
City, Inc. ("MSSLC"), a Utah corporation and a wholly-owned subsidiary of
Healthtrust, Champion and CHC-Salt Lake City, Inc. ("Buyer"), a Utah
corporation and a wholly-owned subsidiary of Champion, as amended by that
certain First Amendment to Asset Purchase Agreement, dated as of the date
hereof, among such parties (such Asset Purchase Agreement, as so amended, the
"Asset Purchase Agreement"), Buyer is acquiring Salt Lake Regional Medical
Center (the "Hospital") and the related clinics listed in Schedule A hereto
(the "Clinics") from MSSLC; and
WHEREAS, it is Healthtrust's and Champion's intent under the Asset
Purchase Agreement that the Hospital and the Clinics be provided the
opportunity to participate in HTI Utah Provider Networks (as defined below) for
the purpose of entering into Managed Care Contracts (as defined below) with
Third Party Payors (as defined below) on a fair and equitable basis, as
provided for under this Agreement; and
WHEREAS, the obligation of Buyer to acquire the Hospital and the
Clinics pursuant to the Asset Purchase Agreement is conditioned upon the
execution by Healthtrust and Champion of this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereto agree as follows:
1. In addition to the words and terms elsewhere defined herein,
the following words and terms used in this Agreement shall have the following
meanings unless the context or use clearly indicates another or different
meaning or intent:
(a) "Capitated Managed Care Contracts" means Managed Care
Contracts under which the Third Party Payor agrees to pay the participating
healthcare providers a predetermined amount per enrollee, per month, without
regards to the amount of services rendered or utilization incurred by the
healthcare providers (or pursuant to a similar system).
(b) "Case Rate Managed Care Contracts" means Managed Care
Contracts under which the Third Party Payor has agreed to
<PAGE> 2
reimburse participating healthcare providers based upon a predetermined fee
scheduled for the services rendered by such healthcare providers (including per
diem rates, DRG-type rates or other similar flat-rate structures).
(c) "Champion Affiliates" means corporations, partnerships,
limited liability companies and other entities controlled by, or under common
control with, Champion.
(d) "Existing Managed Care Contracts" means Managed Care Contracts
that exist as of the date of this Agreement and which were entered into prior
to the date of this Agreement.
(e) "Future Managed Care Contracts" means Managed Care Contracts
entered into on or after the date of this Agreement, including (i) any renewal
or extension made on or after the date hereof of any Existing or Future Managed
Care Contract and (ii) any amendment or modification of any Existing or Future
Managed Care Contract under which the Hospital or any of the Clinics is a
provider as of the time the amendment or modification is proposed.
(f) "HTI Affiliates" means corporations, partnerships, limited
liability companies and other entities controlled by, or under common control
with, Healthtrust or under the common control of any entity that controls
Healthtrust.
(g) "HTI Utah Facilities" means hospitals and clinics in Utah that
are owned or operated by HTI Affiliates.
(h) "HTI Utah Provider Network" means healthcare provider networks
organized by Healthtrust or any HTI Affiliate and made up of all or
substantially all of the HTI Utah Facilities or any two hospitals, one of which
is a HTI Utah Facility located in the Three County Area. The parties
acknowledge that Healthtrust currently has no contractual network arrangement
among its HTI Utah Facilities, but that such HTI Utah Facilities negotiate
collectively for Managed Care Contracts in various groups. The parties agree
that the term "HTI Utah Provider Network" includes any informal arrangement
meeting the definition set forth above whereby two or more HTI Utah Facilities
(including not less than one HTI Utah Facility located in the Three County
Area) collectively negotiate to provide services to a Third Party Payor's
enrollees, whether through a single managed care contract or multiple managed
care contracts that are substantially similar to one another in all material
respects, and that the term "Managed Care Contract" includes any such single
contract or series of contracts.
(i) "Managed Care Contracts" means any contract or series of
contracts between Healthtrust or any HTI Affiliates and a Third Party Payor
under which any HTI Utah Facility in an HTI
2
<PAGE> 3
Utah Provider Network is obligated to provide healthcare services to persons
eligible to receive such services by, through or under health care plans
administered by such Third Party Payor.
(j) "PPO Managed Care Contracts" means Managed Care Contracts
under which the Third Party Payor agrees to reimburse participating providers a
predetermined portion of the fees customarily charged by such healthcare
providers for services rendered.
(k) "Services" means those healthcare services provided by the
Hospital or the Clinics and identified to Healthtrust in writing pursuant to
Section 4 hereof.
(l) "Third Party Payor" means, collectively, insurance companies,
health maintenance organizations, preferred provider organizations, health
insurance purchasing cooperatives, self-insured employers, multiple employer
benefit plans and trusts and other similar organizations or entities.
(m) "Three County Area" means the area consisting of the following
three Utah counties: Salt Lake County, Davis County and Weber County.
(n) "Unique Services" means, with respect to any particular
Managed Care Contract or HTI Utah Provider Network in which the Hospital is a
participating provider, Services provided by the Hospital or the Clinics and
not provided by any other healthcare provider located in the Three County Area
that is participating in such Managed Care Contract or HTI Utah Provider
Network.
2. Healthtrust will offer, or cause its applicable HTI Affiliates
to offer, the Hospital and the Clinics the right to participate in any HTI Utah
Provider Networks for the purpose of entering into Future Managed Care
Contracts with Third Party Payors on the same terms as apply to HTI Utah
Facilities located in the Three County Area that are participating in such
networks. In accordance with the forgoing covenant, prior to entering into any
Future Managed Care Contracts, Healthtrust or its applicable HTI Affiliates
will notify Champion of Healthtrust's intent to enter into such a Future
Managed Care Contract or to submit a proposal to a Third Party Payor with
respect to a Future Managed Care Contract. Such notification will include the
identity of the Third Party Payor, a description of whether such proposal
involves a Capitated, PPO or Case Rate Managed Care Contract and a description
of whether such proposal will involve hospitals only, clinics only or hospitals
and clinics. If, within three business days after such notice has been given
to Champion, Champion notifies Healthtrust that Champion desires that the
Hospital and the Clinics participate in such Managed Care Contract (the date on
which Healthtrust
3
<PAGE> 4
receives such notice is referred to as the "Notification Date"), then
subsections 2(a) through 2(i) below shall apply. If Champion has not notified
Healthtrust within such three business day period that Champion desires that
the Hospital and the Clinics participate in such Managed Care Contract,
Healthtrust shall have no further obligation to Champion, the Champion
Affiliates, the Hospital or the Clinics regarding such Managed Care Contract.
(a) During the period beginning on the date Champion so
notifies Healthtrust and ending on the Exclusivity Termination Date
(as defined below), neither Champion nor any Champion Affiliate will
(i) negotiate with the applicable Third Party Payor regarding a
managed care contract for the Hospital or any of the Clinics, (ii)
authorize any other party to negotiate on its behalf with such Third
Party Payor regarding such a managed care contract (including a
managed care contract between such Third Party Payor and a network in
which the Hospital or any of the Clinics are or would become members),
or (iii) enter into such a managed care contract with such Third Party
Payor or participate in any network other than a HTI Utah Provider
Network which supplies healthcare services to such Third Party Payor.
Clauses (i) through (iii) above shall apply only to the category of
managed care product covered by the Managed Care Contract between the
applicable Third Party Payor and the applicable HTI Utah Provider
Network (or proposed to be entered into between such Third Party Payor
and such HTI Utah Provider Network. Therefore, for example, if a
hospital-only Capitated Managed Care Contract is entered into between
a HTI Utah Provider Network (including the Hospital) and a given Third
Party Payor, the Hospital would not be precluded from negotiating with
such Third Party Provider regarding a preferred provider contract or a
case rate managed care contract, and the Clinics would not be
precluded from negotiating with such Third Party Provider regarding
any type of managed care contract. The term "Exclusivity Termination
Date" as used in this Section 2(a) means (1) if the proposed Managed
Care Contract is not entered into with the proposed Third Party Payor
with respect to the Hospital and the applicable HTI Utah Facilities,
the date on which Healthtrust or Champion is notified by the Third
Party Payor that such Third Party Payor does not intend to enter into
the proposed Managed Care Contract with the proposed HTI Utah Provider
Network; or (2) if the proposed Managed Care Contract is entered into
with the proposed Third Party Payor with respect to the Hospital and
any HTI Utah Facility, the date on which such Managed Care Contract
terminates, is terminated or expires. Notwithstanding the provisions
of subsection (2) above, if any such Managed Care Contract
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expires, is terminated or terminates during the term of the Agreement
and Champion has notified Healthtrust that Champion will not include
the Hospital and the Clinics in a proposed renewal, extension or
amendment of such Managed Care Contract, the Exclusivity Termination
Date will be the date that is three months before the expiration date
of such Managed Care Contract. Additionally, if such Managed Care
Contract expires or terminates after the term of this Agreement, the
Exclusivity Termination Date will be the date that is three months
before the expiration date of such Managed Care Contract.
(b) Neither Champion nor the Champion Affiliates will be
permitted to review or comment on such proposed Managed Care Contracts
prior to their final execution, except as provided in Section 4
hereof.
(c) Subject to the provisions of Sections 2(d), 2(e) and
4 hereof, the Hospital, the Clinics and the Champion Affiliates that
own the Hospital and the Clinics will thereafter be bound by any
Managed Care Contract entered into between Healthtrust or HTI
Affiliates and such Third Party Payor pursuant to such disclosed
negotiations or proposal. Subject to the provisions of Sections 2(d),
2(e) and 4 hereof, Healthtrust shall have the right to enter into
Managed Care Contracts in the name of, on behalf of, and as agent and
attorney-in-fact for, the Champion Affiliates that own and/or operate
the Hospital and/or the Clinics. Champion will cause on the effective
date hereof Healthtrust or a Healthtrust Affiliate designated by
Healthtrust to be appointed as the attorney-in-fact of such Champion
Affiliates with the authority to enter into Managed Care Contracts in
accordance with this Section 2; provided, however, that such power of
attorney will be subject to the provisions of Sections 2(d), 2(e) and
4 hereof.
(d) Healthtrust will not enter into a Managed Care
Contract as agent for the applicable Champion Affiliate with respect
to the Hospital or the Clinics which includes reimbursement rates for
the Hospital or the Clinics which are lower than the reimbursement
rates for comparable services for the HTI Utah Facilities located in
the Three County Area that are participating in such Managed Care
Contract.
(e) Healthtrust will not knowingly enter into a Case Rate
Managed Care Contract as agent for the applicable Champion Affiliate
with respect to the Hospital or the Clinics which include case rate,
per diem
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or similar flat rate reimbursement provisions with respect to a Unique
Service without Champion's prior written consent.
(f) Healthtrust will use its best efforts to cause all
Third Party Payors with which Healthtrust is negotiating a Future
Managed Care Contract (or with which Healthtrust negotiates a Future
Managed Care Contract during the term of this Agreement) to include
the Hospital and the Clinics in such Managed Care Contract.
Accordingly, Healthtrust will include the Hospital and the Clinics in
every HTI Utah Network presented to Third Party Payors with respect to
proposed Managed Care Contracts. However, if any such Third Party
Payor refuses to permit the Hospital or the Clinics to participate in
such Managed Care Contract, and representatives of Champion are
permitted to discuss such decision with the Third Party Payor, then
Healthtrust will not be in breach of this Agreement if HTI Affiliates
subsequently enter into Managed Care Contracts with such Third Party
Payor under which the Hospital and the Clinics are not participating
providers.
(g) Champion will cause its applicable Champion
Affiliates to execute and deliver all contracts reasonably required by
Healthtrust or Third Party Payors in connection with the participation
of the Hospital and the Clinics in such Managed Care Contracts.
(h) Champion will cooperate with Healthtrust in all
reasonable respects in Healthtrust's efforts to negotiate any such
Managed Care Contract, including, without limitation, promptly
providing Healthtrust with all information reasonably requested of
Champion by Healthtrust or the Third Party Payor regarding the
Hospital or the Clinics except as prohibited by law (including
applicable antitrust laws).
(i) The parties contemplate that certain Managed Care
Contracts may apply only to HTI Utah Facilities that are clinics or to
HTI Utah Facilities that are hospitals, and that, in such cases,
Healthtrust's obligations under this Section 2 will apply only to the
Clinics or the Hospital, respectively.
3. (a) Healthtrust agrees to use its best efforts to cause
the Third Party Payors who are signatories to Existing Managed Care Contracts
under which the Hospital is a participating provider as of the date of this
Agreement to consent to the assignment to Buyer of that portion of such Managed
Care Contracts
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as apply to the participation of the Hospital and the Clinics under such
Managed Care Contracts.
(b) Healthtrust agrees to use its best efforts to cause Third Party
Payors who are signatories to Existing Managed Care Contracts under which the
Hospital is not a participating provider as of the date of this Agreement to
offer the Hospital and the Clinics the opportunity to participate in such
Managed Care Contracts on the same terms as Healthtrust's participating HTI
Utah Facilities located in the Three County Area. With respect to those
Existing Managed Care Contracts, if any, under which the Hospital is not a
participating provider as of the date hereof, Healthtrust represents and
warrants that it has advised Champion of the existence of all such contracts as
of the date of this Agreement. Within 30 days of the date of this Agreement,
Champion will notify Healthtrust in writing of those contracts, if any, in
which Champion desires that the Hospital and the Clinics participate. As soon
thereafter as reasonably possible, Healthtrust will contact the Third Party
Payors who are signatories to such contracts and will use its best efforts to
cause such Third Party Payors to agree to permit the Hospital and the Clinics
to participate in such contracts, under the same terms as Healthtrust's
participating HTI Utah Facilities. Nothing in this Section 3(b) will require
Healthtrust to agree to any material changes to any of such existing Managed
Care Contracts in order to permit the Hospital or the Clinics to become
providers under such Managed Care Contracts.
4. (a) Simultaneously with the execution and delivery of this
Agreement, Champion has provided to Healthtrust a list of all Services
currently provided by the Hospital and by each Clinic. Champion agrees that it
will notify Healthtrust promptly of any Services that are no longer offered by
the Hospital or any Clinic. Champion may update such list of Services for
additional Services as and when new Services are offered by the Hospital or any
of the Clinics.
(b) Prior to entering into a Case Rate Managed Care Contract under
which the Hospital or a Clinic will offer a Unique Service, Healthtrust will
advise Champion of the Unique Service that will be included in such Managed
Care Contract. Thereafter, Champion (i) will advise Healthtrust promptly (and
in no event later than three business days later) whether it wishes to include
such Unique Service in the proposed Case Rate Managed Care Contract, and (ii)
will negotiate diligently and in good faith with the Third Party Payor
regarding the reimbursement rates that will be applicable to such Unique
Services. After notifying Champion of the Unique Services that apply to a
proposed Case Rate Managed Care Contract, Healthtrust will be authorized to
enter into a Case Rate Managed Care Contract on behalf of the Hospital and the
Clinics that excludes such Unique Service and Champion will be permitted to
enter into agreements with the applicable Third Party Payor with
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respect to such Unique Services (which agreement may be incorporated into or
separate from the Case Rate Managed Care Contract).
5. With respect to Capitated Managed Care Contracts under which
the Hospital and the Clinics are providers, Healthtrust and Champion will
negotiate in good faith to determine the portion of the payments to be made to
the applicable participants by the Third Party Payor that will be allocated to
the Hospital and the Clinics. If, within 30 days after such negotiations have
begun, the parties are unable to agree upon such allocation, Healthtrust and
Champion will hire a qualified independent consultant to determine such
allocation. The decision of such consultant will be binding on the parties.
Healthtrust and Champion each will pay one-half of the fees and expenses of
such consultant.
6. Champion agrees to comply, and to cause the Hospital, the
Clinics and the applicable Champion Affiliates to comply, with all applicable
terms and requirements of each Managed Care Contract to which any Champion
Affiliate is a party or by which any Champion Affiliate is bound. Champion
acknowledges and agrees that Hospital's and Clinics' continued participation in
any Managed Care Contract for which they have been accepted for participation
is contingent on Hospital's and Clinics' compliance with the requirements of
such Managed Care Contract, and Healthtrust shall not be deemed or construed to
be in violation of this Agreement if a Third Party Payor terminates Hospital's
and/or Clinics' participation under such Managed Care Contract because of
Hospital's and Clinics' non-compliance with the terms of such Managed Care
Contract.
7. Champion will use its best efforts to cause the Hospital and
any Clinics eligible for JCAHO accreditation to maintain at all times their
JCAHO accreditation. Champion will notify Healthtrust promptly if the Hospital
or any such Clinic loses its JCAHO accredited status during the term of this
Agreement.
8. Champion will use its best efforts to cause the Hospital and
any Clinics which must be licensed to maintain at all times all required
licenses and permits which relate to the provision of healthcare services under
any Managed Care Contract to which any Champion Affiliate is a party or by
which any Champion Affiliate is bound. Champion will notify Healthtrust
promptly if any such required license or permit is suspended, terminated,
unrenewed or otherwise not in place at any time during the term of this
Agreement.
9. Champion shall secure or shall cause Hospital to secure, on
behalf of Hospital and Clinics, at its or their expense, professional liability
insurance coverage that complies in all
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respects with the insurance requirements of each Managed Care Contract under
which the Hospital or any of the Clinics is a provider. Champion shall
immediately notify MSSLC in writing of any termination or proposed termination
and any material changes or proposed material changes in such insurance
policies or coverage.
10. This Agreement shall have an initial term of two years.
Champion shall have an option to renew this Agreement for one additional two
year term. To exercise such option, Champion must give Healthtrust written
notice of its exercise of this option not less than 60 days prior to the end of
the initial term of this Agreement. The termination or expiration of this
Agreement pursuant to this or any other section of this Agreement shall not
cause the termination of (i) any Managed Care Contracts existing as of the time
of such termination or expiration or (ii) Champion's right to participate in,
and Champion's obligations under, Managed Care Contracts in effect at such
time.
11. In the event that Champion determines that participation of
the Hospital and the Clinics in the HTI Utah Provider Networks and Managed Care
Contracts in which the Hospital and the Clinics are participating providers has
resulted in undue financial harm (i.e., operating losses to the Hospital and
Clinics on a consolidated basis from the provision of patient care to patients
pursuant to such Managed Care Contracts during any consecutive six-month
period), Champion thereafter may terminate this Agreement and the participation
of the Hospital and the Clinics in the Managed Care Contracts in which the
Hospital and the Clinics are participating by giving 30 days prior written
notice to Healthtrust and the signatories to the Managed Care Contracts of such
termination. Notwithstanding the foregoing, Champion acknowledges that as a
condition of the participation of the Hospital and the Clinics in Managed Care
Contracts, Third Party Payors may require that the Hospital and/or Clinics
agree to termination provisions other than those described in this Section 10.
Champion agrees that the termination provisions of the Managed Care Contracts
which require a longer termination notice period or which impose ongoing duties
on providers (e.g. with respect to patients of such providers on the
termination date) will supersede the provisions of this Section 11.
12. (a) In the event of a breach of this Agreement by either
party hereto, the other party may give written notice of termination to the
defaulting party (the "Default Notice"). Such Default Notice shall specify the
breach alleged to have occurred and shall specify that this is a Default Notice
under this Section 12(a). In the event that such breach is not cured to the
reasonable satisfaction of the non-breaching party within thirty (30) days
after the giving of the Default Notice, this Agreement shall terminate upon the
giving of a second written notice of
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termination (the "Termination Notice") by the non-breaching party to the
breaching party.
(b) Healthtrust shall have the right to terminate this Agreement
immediately upon written notice to Champion upon the occurrence of any of the
following events:
1. The Hospital's hospital license or authorization to
administer controlled substances is suspended, revoked or in any material
respect restricted;
2. The liability coverage as required under Section 9
hereof is reduced below the level necessary to satisfy the Hospital's
obligations under this Agreement or is no longer in effect;
3. The JCAHO accreditation of the Hospital is revoked or
suspended; or
4. Violations of any reasonable policies and procedures
or other requirements of any Managed Care Contract or Contracts by the
applicable Champion Affiliate resulting in the termination of a Managed Care
Contract by the Third Party Payor that is signatory thereto insofar as the
participation of the Hospital or any Clinic is concerned if Champion shall have
had a reasonable opportunity to cure any such violations.
(c) Upon termination or expiration of this Agreement pursuant to
this or any other section of this Agreement, all rights and obligations of the
parties under this Agreement shall immediately cease, except the obligations of
the respective parties under Sections 10, 12(d) and 13 hereof; provided,
however, that termination of this Agreement shall not relieve either party of
any obligation which has arisen or liability with respect to breaches which
have occurred prior to the termination; and provided further, however, that the
termination of this Agreement shall not terminate Champion's right to
participate in, and Champion's obligations under, Managed Care Contracts in
effect on the date this Agreement terminates.
(d) The termination provisions included in this Agreement are not
intended to be the parties' exclusive remedy hereunder, but shall be in
addition to any other remedy provided in this Agreement or otherwise available
to the parties hereto at law or in equity.
13. (a) Except as otherwise required by applicable law, Champion
agrees to keep confidential and not disclose, and shall cause Buyer and all
other Champion subsidiaries, Hospital and Clinics and its and their employees,
agents, officers and directors (collectively, the "Champion Affiliates") to
keep confidential and
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not disclose, any financial, operating, propriety or business information
relating to Healthtrust, any of its affiliates, or any of its or their
businesses, subsidiaries, affiliates, or owners which becomes available to
Champion or any Champion Affiliate in connection with this Agreement and which
is not otherwise public information ("Confidential Information"). Champion
agrees that Confidential Information shall be deemed to include, without
limitation, all non-public information relating to any of the Managed Care
Contracts. Champion further agrees not to use, and shall cause all Champion
Affiliates not to use, any Confidential Information in connection with the
formulation of any proposals for managed care contracts submitted to, or any
negotiations over managed care contracts with, Third Party Payors independent
of Healthtrust or its subsidiaries. The provisions of this Section 13(a) shall
survive the termination of this Agreement.
(b) Except as otherwise required by applicable law,
Healthtrust agrees to keep confidential and not disclose, and shall cause its
subsidiaries and its and their employees, agents, officers and directors
(collectively, the "Healthtrust Affiliates"), to keep confidential and not
disclose any financial, operating, proprietary or business information relating
to Champion, the Buyer, Hospital or Clinics which becomes available to
Healthtrust or any Healthtrust Affiliate in connection with this Agreement and
which is not otherwise public information. The provisions of this Section
13(b) shall survive the termination of this Agreement.
14. This Agreement shall inure to the benefit of, and be binding
upon, Healthtrust, Champion and their respective successors and permitted
assigns. No other parties are intended to be beneficiaries under this
Agreement and no action to enforce the terms of this Agreement may be brought
against any party hereto by any person who is not a party hereto.
15. Neither party may assign or transfer its rights or obligations
under this Agreement without the prior written consent of the other party,
except that Healthtrust may assign or transfer its rights and obligations
hereunder to any company directly or indirectly owned by, which owns or is
under common ownership with, Healthtrust without Champion's prior written
consent and that Champion may assign or transfer its rights and obligations
hereunder to any company directly or indirectly owned by, which owns, or is
under common ownership with, Champion without Healthtrust's prior written
consent. No such assignment shall relieve the assignor from its obligations
under this Agreement.
16. Notices. Any and all notices, requests, demands, approvals,
consents and other communications, required or permitted hereunder, shall be in
writing and delivered personally, mailed by certified or registered mail,
postage prepaid, return receipt
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requested or mailed via overnight service (e.g., Federal Express) to the
addresses set forth below or to such other addresses as the parties hereto may
specify by notice in accordance with this Section 16. Notices shall be deemed
effective when delivered if personally delivered, or, if mailed, four (4)
business days after deposit in the United States mail or the date indicated on
the return receipt as the delivery date, whichever is earlier, or, if sent via
overnight service, the next business day or the date indicated on the receipt,
whichever is later.
If to Champion:
Champion Healthcare Corporation
c/o Salt Lake Regional Medical Center
1050 East South Temple
Salt Lake City, Utah 84102
Attention: Chief Executive Officer
If to Healthtrust:
Healthtrust, Inc. - The Hospital Company
c/o HTI Utah
420 East South Temple
Suite 200
Salt Lake City, Utah 84111
Attention: Managed Care Director
17. Severability. The invalidity or unenforceability of any term
or provision hereof shall not affect the validity or enforceability of any
other term(s) or provision(s) of this Agreement.
18. Waiver of Breach. The waiver of any breach of this Agreement
by either party shall not constitute a continuing waiver or a waiver of any
preceding or subsequent breach of either the same or any other provision of
this Agreement.
19. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Utah.
20. Entire Agreement and Amendments. This Agreement, contains the
entire agreement between the parties hereto concerning the subject matter
hereof and supersedes any and all prior agreements, either oral or in writing,
with respect to such subject matter. Unless otherwise specifically provided
herein, this Agreement may be amended or changed only by mutual written consent
of the parties' duly authorized representatives.
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IN WITNESS WHEREOF, the parties have executed this Utah Provider
Agreement as of the day and year first written above.
HEALTHTRUST, INC. - THE CHAMPION HEALTHCARE CORPORATION:
HOSPITAL COMPANY:
By: /s/ Richard E. Francis By: /s/ James G. VanDevender
---------------------- ------------------------
Richard E. Francis James G. VanDevender
Title: Senior Vice President - Title: Executive Vice President
Development
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