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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 30, 1997
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Date of Report (date of earliest event reported)
NEWCARE HEALTH CORPORATION
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Exact name of Registrant as Specified in its Charter
Nevada 0-24110 86-0594391
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State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
6000 Lake Forrest Drive, Suite 315, Atlanta, Georgia 30328
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Address of Principal Executive Offices, Including Zip Code
(404) 252-2923
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Registrant's Telephone Number, Including Area Code
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ITEM 5. OTHER EVENTS
On September 30, 1997, NewCare Hospital Corporation ("NHC"), a majority-owned
subsidiary of NewCare Health Corporation (the "Company"), signed an agreement
to manage Princeton Hospital, a 150 licensed-bed hospital located in Orlando,
Florida. In addition, concurrently with the execution of the management
agreement, NHC paid $25,000 for a five year option to purchase the Princeton
Hospital for a price equal to the debt on the hospital at such time as the
option is exercised. The balance of this debt is currently approximately $45
million.
The hospital is a private, non-profit general acute medical/surgical hospital.
The management agreement has a five year term commencing October 1, 1997, and
either party may terminate the agreement without cause or penalty, effective
September 30, 2000, by giving 90 days prior written notice. The agreement
provides for a base fee of $75,000 per month plus a performance incentive in
an amount not to exceed a cumulative total of three percent (3%) of net
revenues billed per month. The performance incentive will be based on the
accomplishment of certain performance criteria to be worked out by the
parties.
NHC is obligated to provide a hospital administrator and a controller during
the term of the agreement, and such persons will be employees of NHC. The
hospital will reimburse NHC for the costs and expenses associated with NHC's
provision of these key personnel.
NHC also agreed to loan to the hospital during the term of the management
agreement an amount not to exceed $2 million for the purpose of making capital
improvement expenditures and paying its accounts payable, payroll and other
operating expenses. The repayment of principal and interest on this loan will
be subordinate to the payment of principal and interest on any tax exempt or
taxable bond debt of the hospital then outstanding.
In addition, NHC has agreed to guarantee payment in an aggregate amount not to
exceed $4,100,000 of the interest payments due in January 1998 and July 1998
by the hospital on its existing tax exempt bond debt and due in October 1997
and January, April and July 1998 by the hospital on its taxable bonds. Any
funds advanced by NHC pursuant to this obligation will be added to and
increase the maximum amount of the capital improvement/working capital loan
described above.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
Exhibit 10.1 Management Agreement with Princeton Hospital, Inc.
Exhibit 10.2 Option Agreement with Princeton Hospital, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
NEWCARE HEALTH CORPORATION
Dated: November 10, 1997 By/s/ James H. Sanregret
James H. Sanregret
Chief Financial Officer
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MANAGEMENT AGREEMENT
This Agreement is entered into this 30th day of September, 1997, by and
between NEWCARE HOSPITAL CORPORATION, or its assigns, a Georgia corporation
("NewCare"), and PRINCETON HOSPITAL, INC., (the "Hospital"), a Florida
non-profit corporation located in Orlando, Florida.
RECITALS:
WHEREAS, NewCare is a corporation which provides management assistance
and other administrative services to health care institutions; and
WHEREAS, the Hospital is a private, non-profit hospital comprised of a
150 licensed bed general acute medical/surgical hospital, and Hospital is
seeking management assistance which will enhance revenue, decrease costs,
improve cash flow, and generally improve the operational efficiency of the
Hospital; and
WHEREAS, the Hospital, through its Board of Directors, wishes to engage
NewCare, and NewCare wishes to provide services to the Hospital under the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties agree as follows:
1. TERM. The term of this Agreement ("Term") shall commence on
October 1, 1997 and shall terminate on September 30, 2002. Either NewCare or
Hospital may terminate this Agreement without cause or penalty, effective
September 30, 2000, by giving written notice of termination to the other party
at least ninety (90) days prior to that date.
2. RETENTION OF AUTHORITY BY HOSPITAL; REPRESENTATIONS AND
WARRANTIES.
(a) Control Retained by Hospital. In providing services and
expertise hereunder, NewCare shall from time to time make recommendations to
the Hospital's Board of Directors (the "Board") regarding the business,
policies, operations, and assets of the Hospital; provided, however, that the
Hospital, through the Board, shall retain all decision-making authority and
shall exercise control over the business, policies, operation, and assets of
the Hospital, in accordance with the Hospital's Charter and Bylaws. NewCare
shall perform the services described in this Agreement in accordance with such
of the policies and directives of the Hospital as may be from time to time
provided to it in writing.
(b) NewCare Reliance on Board Policies. The Board shall
communicate in writing all policies and directives to NewCare, and NewCare
shall rely on and assume the validity of communications from, and shall report
to, the Board. All matters requiring professional medical judgments shall
remain the responsibility of the Hospital's Board and the Hospital's Medical
Staff and allied health professionals. NewCare may rely on the
recommendations of the Hospital's Medical Staff (and their designated
committees and departmental chairmen) relative to the quality of professional
services provided by individuals with clinical privileges, and on the Board
and the Medical Staff, or any jointly appointed or Board appointed committee
or representative as to the adequacy and proper state of repair of all medical
equipment and the professional competency, training, and requisite supervision
of nurses, medical technicians, and other Medical Staff. NewCare shall have
no responsibility for such judgments.
The relationship between NewCare and the Hospital created by this
Agreement is one of principal and agent. The Hospital and NewCare are not
partners, joint venturers, or independent contractors, and it is agreed that
NewCare is acting solely as the agent of the Hospital in performing services
to be provided by NewCare within the scope of this Agreement.
(c) Representations of the Hospital. The Hospital represents
the following to be true:
i) This Agreement has been duly authorized, executed, and
delivered by the Board as the governing body of the Hospital and represents
the legal, valid, and binding agreement of the Hospital and is enforceable
against the Hospital in accordance with its terms.
ii) The execution, delivery, and performance of this
Agreement by the Hospital and consummation by it of the transactions
contemplated hereby do not: (a) require the consent, waiver, approval,
license, or authorization of any person or public authority which has not
heretofore been obtained; (B) violate any provision of law applicable to
Hospital; (C) conflict with or result in a default under, or create, any lien
upon any of the property or assets of Hospital pursuant to any agreement or
instrument; or (D) violate any judicial or administrative decree, regulation,
or any other restriction of any kind or character to which Hospital or Board
is a party or by which Hospital or any of its assets may be bound.
3. MANAGEMENT ASSISTANCE OF NEWCARE. NewCare, through its CEO and
CFO, and working with the personnel and resources of the Hospital, will
provide the following management assistance during the Term of this Agreement.
NewCare shall follow the policies and directives of the Board or any committee
thereof in discharging its duties hereunder. Nothing in this Agreement is
intended to alter, weaken, displace, or modify the responsibility of the Board
of the Hospital's direction and control as set forth in the Hospital's Charter
and Bylaws.
(a) Hospital Personnel Matters. Except for the Key Personnel
described in Section 4 below, all Hospital personnel shall be employees or
independent contractors of the Hospital and shall be subject to the Hospital's
personnel policies. NewCare, as agent for the Hospital, shall assist in the
enforcement and administration of the personnel policies established by the
Hospital and communicated in writing to NewCare in hiring, managing, and
discharging Hospital employees; provided, however, that matters with respect
to professional competency shall be determined with the assistance of the
appropriate Hospital or Medical Staff committee. Furthermore, NewCare shall
assist the Hospital and its personnel director in determining the number and
qualifications of employees required for the efficient operation of the
Hospital and in establishing and revising wage scales, employee benefit
packages, in-service training programs, staffing schedules, and job
descriptions, all in order to accomplish the goals and objectives of the
Hospital and in accordance with policies and procedures established by the
Board.
(b) Budgets. If requested by the Board during the Term of this
Agreement, NewCare shall assist with the preparation of an annual operating
budget, annual capital expenditures budget (if appropriate), and annual cash
flow projections, all designed to meet the goals and objectives of the Board.
In addition, as requested by the Board, NewCare will supply any appropriate
revisions to the foregoing to reflect material changes during the fiscal year.
If applicable, NewCare shall also compile, subject to the review of the Board,
any information the Hospital may be required to provide for the purpose of
rate review. Once the Board approves said operating budget, NewCare shall be
entitled to proceed with expenditures contemplated thereby without further
Board approval; provided, however, that the Board may modify said budget from
time to time by written resolution, which modification shall then become the
new authorization for expenditures.
(c) Accounting. NewCare shall supervise the Hospital's
accounting system and shall supervise the preparation of monthly and annual
balance sheets and statements of income and loss. Annual statements shall be
due following the close of each fiscal year during the Term of this Agreement.
Any fees charged by the Hospital's independent auditors shall be the
responsibility of the Hospital.
(d) Charges. NewCare shall supervise the issuance of bills and
the collection of accounts, in accordance with charge schedules and collection
policies established by the Board. NewCare shall be entitled to obtain on
behalf of the Hospital the assistance of one or more collection agencies, as
approved by the Board. NewCare shall carry out Board policy and exercise
reasonable care in managing the accounts and available cash of the Hospital by
maintaining accounts and/or certificates of deposit with a financial
institution or institutions authorized by the Hospital and by informing the
Hospital of the availability of any excess cash. The permitted investment of
any excess cash shall be made by NewCare only upon the written direction of
the Board.
(e) Payments. NewCare shall exercise reasonable care in
supervising the application of the Hospital's funds to the timely payment of
Hospital's liabilities and other obligations. It is specifically agreed and
understood, however, that NewCare's obligations under this paragraph are
subject to availability of funds to make such payments. Nothing contained
herein shall obligate NewCare to make any such payments from its own funds or
resources or to advance any monies whatsoever to the Hospital other than as
provided in Section 3(j). NewCare shall not be liable either primarily or as
guarantor for debts of the Hospital.
(f) Expenditures. NewCare may reasonably rely on
recommendations given to NewCare by the Board or its designee as to the
ordering of medical equipment and supplies used in the diagnosis and treatment
of patients. Under purchasing policies established by the Board, NewCare
shall have the authority to commit the Hospital's funds for the purchase or
lease of supplies, goods, and services reasonably necessary to the operation
of the Hospital and to cause the Hospital to negotiate, enter into,
administer, and terminate contracts therefor.
(g) Purchasing Program.
i) Access. NewCare will offer the Hospital access to any
volume purchasing program in which NewCare participates (the "Purchasing
Program"), subject to the requirements of the Purchasing Program. Under the
Purchasing Program, participating hospitals may have access to discounted
prices on goods and services. The Hospital may choose to participate in the
Purchasing Program or not, but if the Hospital chooses to participate in the
Purchasing Program, the Hospital must execute a written letter of
understanding with the Purchasing Program under which the Hospital agrees to
comply with the requirements of the Purchasing Program.
ii) Administrative Fees. The Hospital acknowledges that
NewCare and the Purchasing Program may receive administrative fees from
vendors in connection with certain products that are purchased, licensed or
leased by Hospital under the Purchasing Program, including, without
limitation, administrative fees for providing marketing, distribution and
promotion services to the Hospital. Such administrative fees will equal 3% or
less of the purchase price of the goods or services provided by the
participating vendor. NewCare shall disclose to the Hospital in writing, on
an annual basis, and to the Secretary of Health and Human Services upon his or
her request, the administrative fees NewCare and the Purchasing Program
receive as a result of Hospital's purchases.
iii) LIMITATION OF WARRANTIES. NewCare MAKES NO AND HEREBY
DISCLAIMS ANY WARRANTIES WHATSOEVER, AND EXPRESSLY DISCLAIMS ALL
IMPLIED WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, WITH REGARD TO ANY GOODS OR SERVICES PURCHASED OR USED BY
THE HOSPITAL UNDER THE PURCHASING AGREEMENTS.
(h) Management Plan and Report. NewCare shall submit to the
Board for its review and approval an annual management plan (the "Management
Plan") designed to implement the goals and objectives of the Hospital which
will set forth the efforts, methods, and resources to be used by NewCare and
the timetable to be observed to achieve such goals and objectives. Upon
acceptance of any Management Plan, the Board hereby agrees to use its best
efforts, and to cause the Medical Staff to use their best efforts, to take or
cooperate with the actions recommended (to the extent such actions are within
the control of the Hospital, the Board, or the Medical Staff and not wholly
within the control of NewCare).
(i) Limitations on NewCare's Duties. NewCare shall not have the
authority to:
i) enter into or terminate contracts with physicians on
behalf of the Hospital, except as the Board may specifically authorize from
time to time, but NewCare shall have the authority on behalf of the Hospital
to negotiate and administer such contracts.
ii) enter into or terminate contracts with outside
consultants on behalf of the Hospital, except as the Board may specifically
authorize from time to time, but NewCare shall have the authority on behalf of
the Hospital to negotiate and administer such contracts.
iii) purchase capital assets without the prior approval of
the Board unless such approval is deemed granted as part of an approved annual
budget or within Board policies and procedures.
iv) enter into any leases which extend beyond the then
current initial or renewal term of this Agreement without the prior approval
of the Board unless such approval is deemed granted as part of an approved
annual budget.
v) enter into collective bargaining agreements covering or
purporting to cover employees of the Hospital without approval of the Board.
(j) Capital Improvement Loan. NewCare agrees to loan to Hospital
all amounts necessary to enable Hospital to make capital improvement
expenditures and to pay its accounts payable, payroll and other operating
expenses (excluding depreciation and amortization, debt service on the
Hospital's bonds or under loans made pursuant to this paragraph and management
fees accrued hereunder) during the term of this Agreement, provided, that
NewCare's obligations for such loan shall be limited to a maximum principal
amount of TWO MILLION DOLLARS ($2,000,000). Any such amounts so advanced will
be evidenced by a promissory note bearing interest at a rate equal to the rate
paid by NewCare when borrowing funds (such rate currently being prime plus 3%)
and be repayable in full within sixty (60) months. The repayment of principal
and interest related to the Capital Improvement/Working Capital Loan shall be
subordinate to the payment of operating expenses of the Hospital (excluding
any management fees accrued hereunder) principal and interest on any tax
exempt or taxable bond debt of the Hospital then outstanding. In addition,
NewCare guarantees payment, in aggregate amount not to exceed $4,100,000, of
the interest payments due in January 1998 and July 1998 by the Hospital on its
existing tax exempt bond debt and due in October 1997 and January, April and
July 1998 by the Hospital on its taxable bonds. In the event Hospital has not
generated sufficient funds during the course of its business operations to
make such payments, NewCare will make such payments or any portion of such
payments necessary to result in a full payment to the bondholders of interest
on the Hospital's tax-exempt bonds. Any funds so advanced by NewCare shall be
added to and increase the maximum principal amount of the Capital
Improvement/Working Capital Loan hereinabove described.
4. KEY PERSONNEL
(a) Obligation to Provide. NewCare shall provide the Hospital
with the services of a hospital administrator ("CEO") and, beginning on the
20th day of this Agreement (or earlier, if the Board so agrees), a controller
("CFO"), each of whom shall be acceptable to the Hospital on a continuing
basis. All persons employed by NewCare whose full-time services are furnished
to the Hospital under this section are referred to as "Key Personnel". All
Key Personnel shall be employees of NewCare throughout the Term of this
Agreement. NewCare shall determine the amount and nature of and shall pay
compensation (as hereinafter described) to the Key Personnel for all services
rendered by them in connection with this Agreement. Nevertheless, the
selection of Key Personnel and their replacements shall be subject to the
Board's approval, which shall not be unreasonably withheld.
(b) Covenant Not to Hire. Until one year following the
termination or expiration of the Term of this Agreement, the Hospital will
not, and will not permit any of its Affiliates to, employ or offer to employ
any individual who has been employed, at any time during the Term of this
Agreement, by NewCare unless (i) such Key Personnel were employees of the
Hospital immediately prior to their becoming Key Personnel or (ii) NewCare
gives its written consent thereto, which consent shall be within the sole
discretion of NewCare. Likewise, NewCare will not, and will not permit any of
its Affiliates to, employ or offer to employ any Hospital personnel, other
than the Key Personnel, until one year following the termination or expiration
of the Term of this Agreement unless the Hospital gives its written consent
thereto. The parties recognize and agree that monetary damages are not an
adequate remedy for a breach by a party of this covenant not to hire employees
of the other party. The parties agree that irreparable damage will result to
a party and its business from a breach of this covenant by the other party and
that in the event of a breach or a threatened breach of this covenant, in
addition to monetary damages, the injured party shall be entitled to an
injunction enjoining the other party from violating this covenant.
(c) Reimbursement of Compensation. In addition to NewCare's
management fee hereunder, the Hospital shall, upon receipt of invoice,
reimburse NewCare for the costs and expenses associated with NewCare's
provision of the Key Personnel, including their salaries, taxes, fringe
benefits, and business expenses. The amount of salary reimbursable hereunder
shall be subject to the Board's approval, which shall not be withheld if the
salary is within the range for similar hospitals covered by the NewCare
compensation program. The term "fringe benefits" as used herein shall include
all fringe benefits which are or may become standard for administrative or
managerial personnel of NewCare (such as health insurance, disability
insurance, life insurance, retirement plans and, with respect to the CEO,
automobile and automobile expenses). The Hospital shall also reimburse
NewCare for the interim living expenses of the CEO and CFO, which include
local lodging, food, local transportation, other out-of-pocket expenses, and
two trips home per month.
It is specifically understood and agreed that reimbursable
compensation for Key Personnel shall be considered a payroll obligation of the
Hospital for purposes of setting priorities for payments of Hospital
obligations.
5. FEES AND EXPENSES.
(a) Amount. The Hospital shall pay NewCare a base fee of
$75,000 per month during the term of this Agreement. In addition, the
Hospital shall pay NewCare a performance incentive during the term of this
Agreement, if earned, in an amount not to exceed a cumulative total of three
percent (3%) of net revenues billed per month, which will be based upon the
accomplishment of various objective measures of NewCare's performance which
comply in all respects with the requirements of U.S. Treasury Rev. Proc.
93-19.
(b) Expenses. In addition to NewCare's fee, the Hospital shall
reimburse NewCare for the expenses of the Key Personnel described in Section
4, as well as the actual expenses of travel, lodging, meals, local
transportation, and other out-of-pocket expenses incurred by all NewCare other
personnel and consultants providing services under this Agreement. The
Hospital shall have no obligation to reimburse NewCare for entertainment
expenses incurred by its employees which are not related to the business of
the Hospital. NewCare shall use all reasonable measures to control expenses
(such as using Holiday Inn-level accommodations) and will submit detailed
documentation to the Hospital for all such expenses.
(c) When Due. The base fees will be paid in equal monthly
installments in advance. Any performance incentive earned by NewCare during
the term of this Agreement shall be due and payable within 30 days of
NewCare's presentation to the Board of documentation of the accomplishment of
the required goals. All reimbursable expenses shall be due and payable within
14 days of the date of invoice. The Hospital agrees to pay NewCare interest,
at the rate of twelve percent (12%) per annum, on all fees and reimbursable
expenses not paid when due, said interest to accrue from the date originally
due until payment is made. The Hospital agrees to be responsible for payment
of all reasonable legal fees and collection fees incurred by NewCare for
collection of all past due fees and reimbursable expenses. The base fee and
performance incentive shall be subordinate to the payment of principal and
interest on any tax exempt debt of the Hospital then outstanding.
6. DUTY TO COOPERATE. The parties acknowledge that the parties'
mutual cooperation is critical to the ability of NewCare to perform its duties
hereunder successfully and efficiently. Accordingly, each party agrees to
cooperate with the other fully in formulating and implementing goals and
objectives which are in the Hospital's best interest.
7. OWNERSHIP OF INFORMATION; CONFIDENTIALITY.
(a) NewCare Systems. NewCare retains all ownership and other
rights in all systems, manuals, computer software, materials, and other
information, in whatever form, provided by or developed by NewCare in the
performance of its obligations hereunder (hereinafter collectively referred to
as "Systems"). The Hospital shall maintain the confidentiality of the Systems
and shall not duplicate or permit the duplication of any portion of the
Systems. Any Systems specifically developed for, or tailored for, the
Hospital may be retained by the Hospital following the termination of this
Agreement.
(b) NewCare Purchasing Agreements. The Hospital will not
disclose the terms or prices of any NewCare Purchasing Agreement to any third
party unless specifically authorized in writing to do so by NewCare.
(c) Hospital Information. During the Term of this Agreement the
Hospital shall give NewCare full access to the Hospital, its facilities, and
its records. NewCare shall maintain the confidentiality of patient records,
charges, wages, marketing strategies, and other confidential information
regarding the Hospital, its patients, employees, and physicians, except to the
extent that disclosure is required by law. Further, NewCare will maintain the
confidentiality of the Hospital's proprietary computer systems, manuals, and
other proprietary information owned by or licensed to the Hospital and will
not disclose or permit disclosure of such information without the Hospital's
consent.
8. LICENSING; ACCREDITATION. The Hospital shall take all steps
reasonably necessary to keep the Hospital fully licensed and, if eligible,
duly accredited by the Joint Commission for Accreditation of Healthcare
Organizations or the American Osteopathic Association, and NewCare shall
cooperate in said endeavors. The Hospital shall do nothing willful to
jeopardize Medicare, Medicaid, or other third-party reimbursement
arrangements. Both the Hospital and NewCare shall use all reasonable efforts
to abide by all relevant laws, ordinances, rules, and regulations of state,
local, or federal governments.
9. INSURANCE.
(a) Hospital. The Hospital has and shall maintain throughout
the Term of this Agreement the following minimum insurance coverage:
Comprehensive General Liability $10,000,000 per occurrence
$10,000,000 aggregate
Hospital Professional Liability $10,000,000 per occurrence
$10,000,000 aggregate
Directors' and Officers' Liability $5,000,000
Fidelity Bond $ 500,000
Immediately upon the effective date of this Agreement, the Hospital shall
cause NewCare to be named as an additional insured, with respect to this
Agreement, under the comprehensive general and hospital professional liability
policies. Its rights to invoke the protection of such policies shall be
severable from and independent of the Hospital's rights, and these policies
shall not be terminable or non-renewable except upon thirty (30) days prior
written notice to NewCare. Upon request, the Hospital shall give to NewCare a
copy of the endorsements naming NewCare as an additional insured. Such
insurance policies shall also contain endorsements which reflect the primary
liability of the Hospital's insurance carrier for all covered losses provided
for in this Section 9, notwithstanding any insurance which may be maintained
by NewCare or any Affiliate thereof covering such loss and provide for
extended coverage or "tail" insurance.
(b) NewCare. NewCare has and shall maintain throughout the Term
of this Agreement, insurance with at least the limits of coverage listed in
subsection 9(a) above, including Fidelity Insurance in an amount no less than
$500,000 insuring against dishonesty and other wrongdoing by its employees,
officers and directors. Upon request, NewCare will furnish evidence of such
insurance to the Board.
10. ACCESS TO BOOKS AND RECORDS. Upon the written request of the
Secretary of Health and Human Services, the Comptroller General, or any of
their duly authorized representatives, NewCare will make available those
contracts, books, documents, and records necessary to certify the nature and
extent of the costs of providing services under this Agreement. Such
inspection shall be available up to 4 years after the rendering of such
services. If NewCare carries out any of the duties of this Agreement through
a subcontract with a value of $10,000 or more over a 12-month period with a
related individual or organization, NewCare agrees to include this requirement
in any such subcontract. This section is included pursuant to and is governed
by the requirements of Public Law 96-499, Sec. 952, and the regulations
promulgated thereunder.
11. BREACH. In the event of a breach of any obligation or covenant
under this Agreement, other than the obligation to pay money, the nonbreaching
party shall give the breaching party written notice of the specifics of the
breach, and the breaching party shall have a 30 day cure period (the "Cure
Period") in which to cure the breach. Only if the breach is not cured within
the applicable Cure Period shall the nonbreaching party be entitled to pursue
any remedies it may have by reason of the breach. A waiver of any breach of
this Agreement shall not constitute a waiver of any future breaches of this
Agreement, whether of a similar or dissimilar nature.
12. TERMINATION OF AGREEMENT. This Agreement may be terminated prior
to the expiration of the Term only as follows and as set forth in Section 1
above, and any such termination shall not affect any rights or obligations
arising prior to the effective date of termination:
(a) Breach. In the event of a breach of this Agreement which is
not cured within the Cure Period set forth in Section 11, "Breach", or in the
event of a breach as to which no Cure Period is provided by this Agreement,
the nonbreaching party may terminate this Agreement upon no less than 30 days'
notice; provided that in the event that the Hospital fails to make any payment
to NewCare when due, NewCare may terminate this Agreement immediately upon
notice to the Hospital and may cease providing services to the Hospital unless
such failure to pay is solely the result of those certain subordination
provisions contained herein. These remedies shall be in addition to any other
remedy available at law or in equity. Failure to terminate this Agreement
shall not waive any breach of this Agreement.
(b) Representations. Either party may terminate this Agreement
upon 30 days written notice in the event any representation made by the other
party herein is found to be untrue in any respect which would have a material
adverse effect upon the financial condition or business operations of the
other party or would have a material adverse effect upon the ability of the
Hospital or NewCare to perform under this Agreement.
(c) Casualty. In the event that the physical plant housing the
Hospital is destroyed or is so damaged that it is reasonably anticipated that
the Hospital will not within 90 days commence repair or reconstruction with a
view toward resuming full operation, then either party may terminate this
Agreement upon no less than 30 days notice, provided that such notice is given
within 30 days following the destruction or damage.
(d) Insolvency. NewCare may terminate this Agreement upon 30
days notice in the event the Hospital becomes insolvent or fails to pay, or
admits in writing its inability to pay, its debts as they mature; or a
trustee, receiver or other custodian is appointed for the Hospital for all or
a substantial part of the Hospital's property and is not discharged within 30
days; or any bankruptcy reorganization, debt, arrangement, or other proceeding
under any bankruptcy or insolvency law or any dissolution or liquidation
proceeding is instituted by or against the Hospital and if instituted against
the Hospital is consented to or acquiesced in by the Hospital or remains for
60 days undismissed; or any warrant or attachment is issued against any
substantial portion of the property of the Hospital which is not released
within 30 days of service.
(e) Reorganization. In the event that the Hospital undergoes a
reorganization which materially alters NewCare's duties or is reasonably
anticipated to have a material effect on NewCare's ability to perform
satisfactorily its duties hereunder, then NewCare may terminate this Agreement
upon no less than 30 days notice given no later than 60 days following the
effective date of the reorganization.
(f) Litigation. NewCare may terminate this Agreement upon 30
days written notice in the event there is entered against the Hospital one or
more judgments or decrees which would have a material adverse effect upon the
financial condition or business operations of the Hospital or the Hospital's
ability to perform under this Agreement.
(g) Licenses. NewCare may terminate this Agreement upon 30 days
written notice in the event any material license or certification required by
Hospital to operate cannot be obtained or is suspended, terminated, or
revoked.
13. EFFECTS OF TERMINATION. In the event of the termination of this
Agreement for any reason, NewCare shall immediately be paid all fees
theretofore earned and reimbursed for all expenses incurred for which
reimbursement is required under this Agreement and otherwise. This remedy
shall be in addition to any other remedy available at law or in equity. The
termination of this Agreement for any reason shall be without prejudice to any
payments or obligations which may have accrued or become due hereunder prior
to the date of termination or which may become due after such termination. If
either party commences legal action alleging any violation of this Agreement,
the non-prevailing party shall pay all costs and reasonable attorneys' fees
incurred by the prevailing party in connection with such action.
14. INDEMNIFICATION AND HOLD HARMLESS. The provisions of this Section
14 shall survive the termination or expiration of this Agreement. The
Hospital shall defend, indemnify, and save NewCare and its directors,
officers, employees, representatives, agents and attorneys harmless from and
against any and all liability and expenses of any kind, including without
limitation attorneys fees and expenses arising from claims by third parties in
connection with the activities or operation of the Hospital unless such
liability resulted from (1) the sole negligence of NewCare outside the scope
of its authority under this Agreement or (2) the willful misconduct or gross
negligence of NewCare in the provision of services under this Agreement. Such
defense will be carried out by counsel satisfactory to NewCare.
15. NOTICES. All notices permitted or required by this Agreement
shall be deemed given when in writing and delivered personally or deposited in
the United States mail, postage prepaid, return receipt requested, addressed
to the other party at the address set forth below or such other address as the
party may designate in writing:
To NewCare: NewCare Hospital Corporation
6000 Lake Forrest Drive, Suite 200
Atlanta, Georgia 30328
Attn: President
To the Hospital: Princeton Hospital, Inc.
1800 Mercy Drive
Orlando, Florida 32808
Attn: Chairman, Board of Directors
16. ASSIGNMENT. NewCare may assign its rights hereunder without the
prior written consent of the Hospital.
17. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their heirs, executors,
administrators, assigns, subtenants, successors in interest, and successors in
ownership, operation, or control of the Hospital.
18. LIMITATION OF LIABILITY. NewCare's liability, if any, for loss or
damages arising out of any breach by NewCare of the provisions hereof shall in
no event exceed the aggregate fees paid NewCare by Hospital hereunder.
19. WAIVER OF TRIAL BY JURY. Each party hereto hereby irrevocably
waives any and all rights it may have to demand that any action, proceeding or
counterclaim arising out of or in any way related to this Agreement or the
relationships of the parties hereto be tried by jury. This waiver extends to
any and all rights to demand a trial by jury arising from any source
including, but not limited to, the Constitution of the United States or any
state therein, common law or any applicable statute or regulations. Each
party hereto acknowledges that it is knowingly and voluntarily waiving its
right to demand trial by jury.
20. CONFIDENTIALITY OF AGREEMENT. NewCare and the Hospital agree that
the terms and conditions of this Agreement shall remain confidential, except
with regard to the parties' attorneys. Neither NewCare nor the Hospital shall
distribute this Agreement, or any part thereof, to any third party unless
required by law to do so.
21. MISCELLANEOUS.
(a) Headings. Section heading are for convenience of reference
only and shall not be used to construe the meaning of any provision of this
Agreement.
(b) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, and all of which shall
together constitute one agreement.
(c) Severance. Should any part of this Agreement be invalid or
unenforceable, such invalidity or unenforceability shall not affect the
validity and enforceability of the remaining portions.
(d) Authority. Each individual signing this Agreement warrants
that such execution has been duly authorized by the party for which he or she
is signing. The execution and performance of this Agreement by each party has
been duly authorized by all applicable laws and regulations and all necessary
corporate action, and this Agreement constitutes the valid and enforceable
obligation of each party in accordance with its terms.
(e) Law. This Agreement shall be construed in accordance with
the laws of the State of Florida.
(f) Amendment. This Agreement may not be modified except in a
written document executed by the party to be charged.
(g) Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto and supersedes all prior agreements and
representations with respect to the subject matter hereof.
ATTEST: PRINCETON HOSPITAL, INC.
By:/s/ Jeff Andrews By: /s/ Joe L. Collins
Jeff Andrews Joe L. Collins
Title: ________________________ Title: President
NEWCARE HOSPITAL CORPORATION
By: /s/ Philip M. Rees By: /s/ Arthur Doloresco
Philip M. Rees Arthur Doloresco
Title: Secretary Title: President
THE OBLIGATIONS OF NEWCARE HOSPITAL CORPORATION HEREUNDER ARE
HEREBY UNCONDITIONALLY GUARANTEED BY NEWCARE HEALTH CORPORATION.
NEWCARE HEALTH CORPORATION
By: /s/ Chris Brogdon
Chris Brogdon
Title: Chairman
Date: September 30, 1997
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement"), dated September 30, 1997, is
entered into between PRINCETON HOSPITAL, INC., a Florida not-for-profit
corporation, ("Seller"), and NEWCARE HOSPITAL CORPORATION OR ITS ASSIGNS, a
Georgia corporation ("Purchaser"); collectively called the Parties.
RECITALS
A. Seller owns certain land, improvements, tangible personal
property, furniture, fixtures, equipment, cash and cash accounts, accounts
receivable, inventory, supplies, licenses and all other tangible and
intangible property situated in Orange County, Florida, and utilized in the
operation of Princeton Hospital, a 150 licensed bed acute care hospital whose
address is 1800 Mercy Drive, Orlando, Florida, 32808 and its accompanying
facilities (collectively called the "Hospital Property").
B. Seller desires to grant to Purchaser and Purchaser is desirous of
purchasing and obtaining from Seller an exclusive option to purchase such
Hospital Property from Seller under the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the Parties hereby agree as
follows:
ARTICLE 1: OPTION TO PURCHASE
1.1 Grant Of Option. Subject to the terms and conditions of this
Agreement, Seller hereby grants to Purchaser the exclusive, irrevocable option
(the "Option") to purchase from Seller all of the Hospital Property whether
now existing or hereafter acquired, free and clear of all liens, encumbrances
or liabilities.
1.2 Consideration, Expiration and Exercise of Option.
(a) In consideration of the grant of the Option to Purchaser
from Seller, the Purchaser shall pay to the Seller TWENTY-FIVE THOUSAND AND
NO/100 DOLLARS ($25,000.00). Payment made by Purchaser for the option shall
be non-refundable to the Purchaser.
(b) Unless sooner exercised, the Option shall expire on
September 30, 2002 (the "Expiration Date").
(c) Purchaser may exercise the Option by giving written notice
to Seller on or before the Expiration Date of Purchaser's intent to purchase
the Hospital Property (the "Notice of Exercise").
(d) If Purchaser fails to give notice to Seller as provided in
this Section 1.2, then Purchaser shall be deemed to have irrevocably waived
all of its rights under this Agreement, and the option shall automatically
expire without need for further documentation.
1.3 Purchase Price. If the Option is exercised, then the purchase
price ("Purchase Price") for the Hospital Property shall be an amount equal to
the aggregate indebtedness of the Seller at such time as the Option is
exercised (including tax-exempt and taxable bonds, capital leases, accounts
payable, that certain capital improvement/working capital loan described in
the Management Agreement of even date herewith or other debt), which shall be
payable by Purchaser at the Closing (hereafter defined) by extinguishment or
assumption of all such indebtedness then outstanding, provided that assumption
of Seller's tax-exempt and/or taxable bonds shall only be accomplished upon
the express written consent of the bondholders of said bonds.
1.4 Adjustments and Costs.
(a) All accounts for water, sewer, gas, electrical, telephone
and other public utilities payable by Seller shall be transferred to
Purchaser's name effective as of the Closing Date.
(b) Seller and Purchaser shall each pay their own costs and
expenses (such as attorneys' and consultants' costs and expenses) incurred by
such party in connection with the transactions contemplated by this Agreement
not adjusted or allocated as set forth in this Section 1.4 or otherwise
provided for in this Agreement.
1.5 Independent Contract Consideration. Purchaser has delivered to
Seller TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000.00) cash (the
"Independent Contract Consideration"), which amount has been bargained for and
agreed to as consideration for Purchaser's exclusive option to purchase the
Hospital Property and for Seller's execution and delivery of this Agreement.
The Independent Contract Consideration is in addition to and independent of
all other consideration provided in this Agreement and is nonrefundable in all
events.
1.6 Management Agreement. The execution of this Option Agreement is
expressly conditioned upon the execution of that certain Management Agreement
of even date herewith by and between the parties hereto.
ARTICLE 2: CLOSING
2.1 Closing. The closing of the transaction contemplated by this
Agreement shall occur at the offices of the Seller in Orlando, Florida, or
such other place, as agreed to by the Parties, at 10:00 a.m. on the first
business day which is not less than 60 days after the date on which Purchaser
delivers the Notice of Exercise to Seller, or on such other date as may be
agreed by the Parties (the "Closing Date").
2.2 Closing Obligations of the Parties. The Parties shall execute and
deliver the following documents (the "Closing Documents") and otherwise cause
the following events to occur at the Closing, each being a condition precedent
to the others but all being deemed to have occurred simultaneously (and all
Closing Documents shall be in form and substance reasonably acceptable to
Seller and Purchaser):
(a) Seller shall execute, have acknowledged where appropriate,
and deliver to Purchaser the following items with respect to the Hospital
Property:
(i) a special warranty deed (the "Deed"), conveying to
Purchaser title to the Hospital Property, subject only to the Permitted
Exceptions.
(ii) a bill of sale and assignment (the "Bill of Sale")
conveying to Purchaser all of Seller's interests in the Hospital Property;
(iii) all the original leases and unrecorded agreements
affecting the Hospital Property;
(iv) an affidavit of Seller stating that Seller is not a
foreign person in compliance with the requirements of Section 1445(b)(20) of
the Internal Revenue Code; and
(v) such affidavits and other documents as may be required
or reasonably requested by Purchaser or its attorneys to effect the
consummation of the transactions contemplated hereby.
(b) Purchaser shall execute, have acknowledged where
appropriate, and deliver to Seller the following items:
(i) instruments necessary to provide the Purchase Price;
and
(ii) such affidavits and other documents as may be required
or reasonably requested by Seller, its attorneys to effect the consummation of
the transactions contemplated hereby.
(c) Purchaser and Seller shall each execute settlement
statements showing payment of the costs of Closing. Prorated items and costs
shall be charged or credited to Seller and Purchaser as provided in Section
1.4.
(d) Seller shall surrender possession of the Hospital Property
to Purchaser.
(e) Seller shall, at its sole cost and expense, cause a title
company acceptable to both Parties to issue and deliver to Purchaser an
Owner's Policy of Title Insurance Form T-1 (the "Title Policy") in the full
amount of the Purchase Price, dated as of the Closing Date, insuring
Purchaser's fee simple title to the Hospital Property to be good and
indefeasible subject only to the Permitted Exceptions and the standard printed
exceptions, except as otherwise to be deleted as described herein, contained
in the usual form of the Title Policy except that:
(i) the exception as to area and boundaries shall be
deleted except for "any shortages in area" and such deletion shall be an
expense of Purchaser;
(ii) the exception as to restrictive covenants shall be
endorsed to show those restrictive covenants currently filed of record, or if
there are none, shall be deleted;
(iii) the exception as to taxes shall be limited to standby
fees and taxes for the current year and subsequent years, and subsequent
assessments for prior years due to changes in land usage or ownership endorsed
"Not yet due and payable"; and
(iv) the exception as to mechanics liens shall be deleted.
ARTICLE 3: TITLE
3.1 Owner's Title Evidence. Within 20 days after the date of the
Notice of Exercise, Seller shall deliver to Purchaser at Seller's expense the
following items relating to the Hospital Property:
(a) A preliminary title insurance commitment (the "Commitment")
showing the status of record title to the Hospital Property, together with
legible copies of all documents evidencing exceptions to title shown therein
or otherwise affecting the Hospital Property. Such preliminary title
insurance commitment shall commit the title company to insure title in the
Hospital Property in Purchaser in the amount of the Purchase Price. The
Commitment shall affirmatively provide for the deletion, at Seller's sole
expense, of all standard printed exceptions of Schedule B-2 thereof. On or
before Closing, Seller shall cause the Commitment to be endorsed so as to
change the effective date to a date not earlier than 3 days prior to closing;
(b) Two copies of a current ALTA survey (the "Survey") of the
Hospital Property, prepared by a registered Florida professional surveyor
("Surveyor") acceptable to the Parties. The Survey shall certify to Purchaser
that: (i) the Survey was made and staked on the ground by the Surveyor; (ii)
the Survey shows the location and dimensions of all improvements, highways,
streets, roads, railroads, rivers, creeks, or other waterways, fences, any
easements, and rights-of-way visible on the ground or reflected in the
Commitment, on or adjacent to the Hospital Property, if any; (iii) there are
no visible discrepancies, conflicts, or encroachments except as shown on the
Survey; (iv) the Hospital Property does or does not lie in the 100-year flood
plain as established by the U.S. Army Corp of Engineers or any other
governmental body; (v) the Survey is a true, correct, and accurate
representation of the Hospital Property; and (vi) the Survey sets forth the
number of total acres/square feet (whichever is applicable) comprising the
Hospital Property, together with a metes and bounds description thereof. All
easements and right-of-way shall be referenced to the recording information
applicable to the documents creating such easements or rights-of-way which
have been recorded with the County Clerk of Orange County, Florida. The
Survey shall locate and mark all corners and angles of the Hospital Property's
perimeter on the ground with permanent, buried iron surveyor's stakes. The
Survey shall: (i) meet the requirement of a Category IA Survey, as promulgated
by the F Society of Professional Surveyors; and (ii) be sufficient to cause
the title company to delete (except for "shortages in area") the printed
exception for "discrepancies, conflicts or shortages in area or boundary
lines, or encroachments, or any overlapping of improvements" in the Title
Policy; and (iii) shall be acceptable to the title company for the purpose of
deleting the survey exception from the Title Policy.
(c) A certificate or certificates of taxes due covering the
Hospital Property prepared by the Treasurer of Orange County, Florida
3.2 Title Defects. If Purchaser objects to any matter contained in
the Commitment, or on the Survey or if Purchaser asserts the existence of any
encumbrance, encroachment or defect in or objection to title which renders
title to any portion of the Hospital Property unmarketable (any of which is
called a "Defect of Title"), Purchaser shall give written notice to Seller of
all Defects of Title within 15 days after the delivery of the Commitment and
the Survey or any updates to the Commitment or the Survey disclosing a Defect
of Title, but in no event later than Closing. Any item to which Purchaser
does not object shall be deemed accepted by Purchaser (the "Permitted
Exceptions") . After receipt of such notice, Seller shall immediately proceed
to remove or cure all Defects of Title specified in the notice from Purchaser.
If all such Defects of Title are not removed or cured prior to or within ten
days after the receipt of such notice, Purchaser may elect: (a) to accept
title to the Hospital Property subject to the uncured Defects of Title; or (b)
to terminate this Agreement.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
4.1 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser as follows:
(a) Seller is a not-for-profit corporation duly organized,
validly existing and in good standing under the laws of the State of Florida
and has full power and authority to enter into this Agreement and to fulfill
its obligations hereunder.
(b) Seller is a not-for-profit corporation duly organized,
validly existing and in good standing under the laws of the State of Florida
and has full power and authority to enter into this Agreement and to fulfill
its obligations hereunder.
(c) Except for a potential right of first refusal that may be
claimed or asserted by Affiliated Princeton Physicians, LLC, Seller has the
full right, power and authority to sell and convey the property, and has taken
all action necessary to authorize the execution and delivery of this Agreement
by Seller and the performance of its obligations hereunder.
(d) Except for a potential right of first refusal that may be
claimed or asserted by Affiliated Princeton Physicians, LLC, Seller has the
full right, power and authority to sell and convey the property, and has taken
all action necessary to authorize the execution and delivery of this Agreement
by Seller and the performance of its obligations hereunder.
(e) This Agreement and all documents contemplated hereby have
been or will be duly authorized and executed (and acknowledged where
necessary) by the Parties named as signatories in those documents, and all
other necessary actions have been or will be taken, so that this Agreement and
all documents contemplated herein are valid and binding upon Seller.
(f) This Agreement and all documents contemplated hereby have
been or will be duly authorized and executed (and acknowledged where
necessary) by the Parties named as signatories in those documents, and all
other necessary actions have been or will be taken, so that this Agreement and
all documents contemplated herein are valid and binding upon Seller.
(g) The Hospital Property does not contain asbestos or material
containing asbestos.
(h) The Hospital Property does not contain asbestos or material
containing asbestos.
(i) The Hospital Property does not contain PCBs or PCB Items, as
those terms are defined in 40 C.F.R. Part 761.
(j) The Hospital Property does not contain PCBs or PCB Items, as
those terms are defined in 40 C.F.R. Part 761.
(k) The Hospital Property does not contain above ground or
underground storage tanks, as those terms are defined in 42 U.S.C. 691 et
seq. the Resource Conservation Recovery Act ("RCRA").
(l) The Hospital Property does not contain above ground or
underground storage tanks, as those terms are defined in 42 U.S.C. 691 et
seq. the Resource Conservation Recovery Act ("RCRA").
(m) There is and has been no release of petroleum into the
environment from an above ground or underground storage tank at the Hospital
Property, as those terms are defined in RCRA.
There is and has been no release of petroleum into the environment from
an above ground or underground storage tank at the Hospital Property, as those
terms are defined in RCRA.
There is and has been no release or threatened release, other than
federally permitted releases, of hazardous substances or pollutants or
contaminants into the environment from or through the Hospital Property as
those terms are defined in 42 U.S.C. ____ et seq. of the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA");
There is and has been no release or threatened release, other than
federally permitted releases, of hazardous substances or pollutants or
contaminants into the environment from or through the Hospital Property as
those terms are defined in 42 U.S.C. ____ et seq. of the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA");
The Hospital Property is in compliance with all applicable federal,
state and local environmental statutes, regulations, ordinances, and any
permits, approvals, or judicial or administrative orders issued thereunder.
The Hospital Property is in compliance with all applicable federal,
state and local environmental statutes, regulations, ordinances, and any
permits, approvals, or judicial or administrative orders issued thereunder.
The Hospital Property contains no conditions that could result in
recovery by any governmental or private party of remedial or removal costs,
natural resource damages, property damages, damages for personal injuries,
other costs, expenses or damages, or could result in injunctive relief,
arising from any alleged injury or threat of injury to health, safety, or the
environment relating to the Hospital Property.
The Hospital Property has full and free access to and from public
highways, streets and/or roads adjacent to the Hospital Property and Seller
has no actual knowledge of any fact or condition which would result in the
termination of such access.
Seller has not received any notices or demands from any mortgagee of the
Hospital Property or from any state, municipal or county government or any
agency thereof with regard to the Hospital Property, except notices relating
to Sellers present default on its bond debt.
Seller has not received any notice of, and has no other knowledge or
information of, any pending or contemplated change in any applicable law,
ordinance or restriction, or of any pending or threatened or judicial or
administrative action; or of any action pending or threatened by adjacent
landowners; or of any natural or artificial condition upon the Hospital
Property, or any party thereof, any of which would result in any material
change in the condition of the Hospital Property, or any part thereof, or in
any way limited or impede the operation of the Hospital Property, or any part
thereof, for any purpose.
4.2 Purchaser's Representations and Warranties. Purchaser represents
and warrants as follows:
(a) Purchaser has full power and authority to enter into this
Agreement and to fulfill its obligations hereunder.
(b) This Agreement and all documents contemplated hereby have
been duly authorized and executed (and acknowledged where necessary) by the
Parties named as signatories in those documents, and all other necessary
actions have been taken, so that this Agreement and all documents contemplated
herein are valid and binding upon Purchaser.
4.3 Pre-Closing Covenants of Seller. Following execution of this
Agreement and prior to Closing, Seller shall:
(a) pay all taxes and assessments affecting the Hospital
Property prior to the date such taxes and assessments are legally due and
owing.
(b) not encumber or permit to be encumbered the Hospital
Property in any manner that would materially impact the use of the Hospital
Property.
(c) not engage in or permit any action on the Hospital Property
that would materially impact the value or use of the Hospital Property.
(d) not sell or otherwise dispose of the Hospital Property
outside of the ordinary course of business without the consent of NewCare.
ARTICLE 5: RISK OF LOSS
If, between the date of this Agreement and the Closing Date, any
material part of the Hospital Property is materially damaged or destroyed by
fire or other casualty, or if any material part of the Hospital Property is
taken in condemnation or under the right of eminent domain, whether material
or not, or proceedings for such taking shall be pending or threatened,
Purchaser shall have the right to terminate this Agreement by notice given to
Seller within 10 days after receiving notice thereof. Seller shall promptly
notify Purchaser of each occurrence of the kind specified above and shall give
Purchaser such information relating thereto as Purchaser may thereafter
reasonably request. Alternatively, Purchaser may elect to purchase the
Hospital Property notwithstanding the damage or taking, without any abatement
or diminution of the Purchase Price, in which case Seller shall, on the
Closing Date, deliver to Purchaser any insurance proceeds or condemnation
awards received by Seller as a result of any occurrence specified herein and
assign to Purchaser all of Seller's right, title and interest in and to any
insurance proceeds or condemnation awards resulting from any such occurrence
that have not yet been received by Seller on that date. Seller shall
cooperate with and assist Purchaser in collecting any such proceeds or awards.
ARTICLE 6: INDEMNIFICATION
Seller shall, immediately and on demand, indemnify, defend and hold
harmless Purchaser and its (partners, officers, shareholders, directors),
together with all of their agents, affiliates, officers, directors, insurers
and employees (individually "Indemnified Party" and collectively "Indemnified
Parties") from and against any and all liabilities, judgments, injunctive
relief, costs and expenses, including without limitation legal fees and
disbursements, consultant fees, and costs and expenses incurred in
investigating, responding to discovery, or defending, involving claims,
demands, actions and causes of action, whether rightfully or wrongfully
brought or filed, to which any Indemnified Party may be subject arising out of
or relating in whole or in part to (i) ownership of the Hospital Property by
Seller, (ii) any actual or alleged contamination of the Hospital Property or
adjacent or neighboring land of, any hazardous or toxic substance, pollutant
or contaminant, petroleum, gasoline or diesel fuel, crude oil or any fraction
thereof, or any other substance regulated by or defined under any federal,
state, or local environmental statute (collectively referred to herein as
"Hazardous Substances"), (iii) any alleged injury or threat of injury to
health, safety or the environment relating to the Hospital Property or
adjacent or neighboring land, (iv) any actual or alleged noncompliance with
any federal, state or local environmental statutes, regulations, ordinances or
any permits, approvals or judicial or administrative orders issued thereunder,
giving rise to liability under any federal, state or local environmental
statutes or ordinances, or (v) any claim by any governmental or private party
for remedial or removal costs, natural resource damages, property damages,
damages for personal injuries, or corrective action costs under common law or
any federal, state, or local environmental statute. The foregoing indemnity
shall be binding upon Seller whether or not any contamination by or presence
or release of Hazardous Substances was caused by Seller, whether or not Seller
has knowledge of such contamination, presence or release, whether or not such
contamination, presence or release was foreseeable or unforeseeable or whether
or not such contamination, presence or release is disclosed in or acknowledged
by any report, document, study or information obtained by or submitted or
provided to Purchaser.
ARTICLE 7: DEFAULT AND REMEDIES
In the event that Purchaser or Seller fails to perform or comply with
any of its obligations or the terms contained in this Agreement, the injured
party shall have all rights and remedies available at law or in equity,
including damages, specific performance and termination of this Agreement,
which remedies shall be cumulative and not exclusive, except for circumstances
where an exclusive remedy is otherwise specified elsewhere in this Agreement.
ARTICLE 8: MISCELLANEOUS MATTERS
8.1 Recording. Neither party shall record this Agreement or any
memorandum of it without the consent of the party hereto, and any recording
without such consent shall be a material default hereunder.
8.2 Assignment. Purchaser may assign its rights hereunder without the
prior written consent of the Seller.
8.3 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
on the date of delivery, if delivered personally on the party to whom notice
is given, or if made by telecopy directed to the party to whom notice is to be
given at the telecopy number listed below, or (b) on receipt, if mailed to the
party to whom notice is to be given by first class mail, registered or
certified, return receipt requested, postage prepaid and properly addressed as
follows:
To Seller:
Princeton Hospital, Inc.
1800 Mercy Drive
Orlando, Florida 32808
Attn: Chairman of the Board
To Purchaser:
NewCare Hospital Corporation
6000 Lake Forrest Drive, Suite 200
Atlanta, Georgia 30328
Attn: President
8.4 Attorneys' Fees. Should any litigation be commenced between the
Parties concerning the Hospital Property, this Agreement or the rights and
duties of either Seller or Purchaser in relation thereto, whether it be an
action for damages, or equitable or declaratory relief, or to collect any
indemnity provided for herein, the prevailing party in such litigation, in
addition to such other relief as may be granted by the court, shall also be
entitled to collect all of its costs in such action, including the costs of
investigation, settlement, expert witnesses and reasonable sums as and for
attorneys' fees together with all additional costs incurred in enforcing or
collecting any judgment rendered.
ARTICLE 9: INTERPRETATION OF AGREEMENT
9.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
9.2 Headings. The article and section headings in this Agreement are
for convenience only and shall not be used in its interpretation or considered
part of this Agreement.
9.3 Effect of Agreement. The entire agreement of the Parties is
herein written and the Parties are not bound by any agreements,
understandings, conditions or inducements otherwise than are expressly set
forth and stipulated hereunder. No provision of this Agreement shall be
altered, amended, revoked or waived except by an instrument in writing signed
by the party to be charged with such amendment, revocation or waiver. This
Agreement shall be binding upon and shall inure to the benefit of the Parties
and their respective successors and assigns.
9.4 Severability. If any clause or provision of this Agreement is
illegal, invalid or unenforceable under applicable present or future laws,
then it is the intention of the Parties that the remainder of this Agreement
shall not be affected but shall remain in full force and effect.
9.5 Survival and Benefit. The following provisions shall survive the
closing: Article 4, Article 6, Section 8.4, and Article 9. Seller
acknowledges that all of the conditions to this Agreement are for the sole
benefit of Purchase and that Purchaser may unilaterally waive the same.
9.6 Time. Time is of the essence of this Agreement. If any of the
conditions or obligations in this Agreement are not timely met by Purchaser or
Seller (including but not limited to tendering funds and signing of closing
documents on or before the Closing Date), then Purchaser or Seller, as the
case may be, shall be deemed to be in default hereunder, and the
non-defaulting party may, at its option, exercise its rights under Article 7.
9.7 Additional Instruments. Each Party hereto shall, from time to
time, execute and deliver such additional instruments and documents as the
other Party or its counsel may reasonably request to effectuate the intent of
this Agreement.
9.8 Compliance with Laws, Ordinances and Regulations. In performing
the obligations, covenants and conditions of this Agreement, Seller and
Purchaser shall comply with all applicable laws, ordinances and regulations.
IN WITNESS WHEREOF, the Parties have duly executed it as of this day and
year first above written.
SELLER:
PRINCETON HOSPITAL, INC.
By: /s/ Joe L. Collins
Joe L. Collins
Title: President
PURCHASER:
NEWCARE HOSPITAL CORPORATION
By: /s/ Arthur Doloresco
Arthur Doloresco
Title: President
THE OBLIGATIONS OF NEWCARE HOSPITAL CORPORATION HEREUNDER ARE
HEREBY UNCONDITIONALLY GUARANTEED BY NEWCARE HEALTH CORPORATION.
NEWCARE HEALTH CORPORATION
By: /s/ Chris Brogdon
Chris Brogdon
Title: Chairman
Date: September 30, 1997
