ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE
AGREEMENT (“
Agreement ”) is made and entered into this 1st day of
September, 2005 (the “ Agreement Date ”) by and
between PACER HEALTH MANAGEMENT CORPORATION OF GEORGIA , a
Georgia corporation (“ Purchaser ”), and
GREENE COUNTY HOSPITAL AUTHORITY , a Hospital Authority
created under Georgia law (“ Seller ”).
STATEMENT OF BACKGROUND
INFORMATION
1.
Seller owns and operates a general acute
care hospital known as the Minnie G. Boswell Memorial Hospital and
a skilled nursing facility known as the Boswell Parker Nursing
Center, both of which are located at 1201 Siloam Road, Greensboro,
Greene County, Georgia 30642 (collectively, the “
Hospital ”).
2.
Seller desires to sell and transfer to
Purchaser all of the Assets which are a part of, relate to or are
used in the operation of the Hospital.
3.
Seller’s decision to sell the
Assets to Purchaser rather than to another potential purchaser is
based on Purchaser’s representation that it will continue to
operate the Boswell Parker Nursing Center, the Emergency Department
and the Hospital.
4.
Purchaser is in the business of owning
and operating hospitals and desires to purchase and acquire from
Seller all of the Assets and to operate the Hospital.
5.
Purchaser is committed to serving the
health needs of the residents of Greene County, Georgia, and the
communities served by the Hospital, and in the furtherance thereof,
the parties have determined that the needs of its community will be
promoted by Purchaser’s acquisition of the Hospital on the
terms set out herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for and in consideration
of the foregoing recitals (which are hereby made a part of this
Agreement), the mutual representations, warranties, covenants, and
agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Article 1 -
Definitions
1.1
Definitions . For purposes of this Agreement, in addition
to other terms defined in this Agreement, the following terms shall
have the meanings ascribed to such terms below:
“ Business of the Hospital
” or “ Business ” shall mean the business
of providing inpatient and outpatient hospital services, skilled
nursing services, and related medical, nursing, and healthcare
services, as well as other operations of Seller conducted at or
through the Hospital.
“ Code ” shall mean
the Internal Revenue Code of 1986, as amended, or any successor
law; and regulations issued by the Internal Revenue Service
pursuant to the Internal Revenue Code or any successor
law.
“ ERISA ” shall mean
the Employee Retirement Income Security Act of 1974, as amended, or
any successor law; and regulations and rules issued pursuant to
that act or any successor law.
“ Georgia Hospital Acquisition
Act” shall mean O.C.G.A. § 31-7-400 et
seq.
“ Governmental Body ”
shall mean any federal, state, local, municipal, or other
government or governmental or quasi-governmental authority of any
nature, including any governmental agency, bureau, board,
commission, branch, department, official, entity, or other
instrumentality, and any court or other tribunal.
“ Includes ,” “
including ,” and their variant forms are illustrative
and not limitative and are synonymous with the phrases
“includes but is not limited to,” “including but
not limited to,” and “including without
limitation.”
“ Liens ” shall mean
any and all liens, claims, charges, judgments, deeds to secure
debt, security interests, and encumbrances of any kind or nature
whatsoever.
“ Person ” shall mean
any individual, corporation (including any nonprofit corporation),
general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or
other entity or Governmental Body.
“ Schedule ” shall
mean those schedules annexed hereto and referenced herein which are
incorporated in their entirety by reference in this
Agreement.
Article 2 - Purchase and Sale of
Assets
2.1
Purchase of Assets
. On and subject to the terms and
conditions of this Agreement, at the Closing, Purchaser shall
purchase and Seller shall sell, assign, transfer, and convey to
Purchaser the Assets as described in Section 2.2 hereof, free and
clear of any and all Liens other than Permitted
Exceptions.
2.2
Description of Assets
. As used herein, the term “
Assets ” means the following assets, properties and
rights owned by Seller and used in the conduct of, or generated by
or constituting, the Business of the Hospital, except for the
“ Excluded Assets ” set forth in Section 2.5
hereof:
(a)
Good, marketable and indefeasible fee
simple title to the real property more particularly described in
Schedule 2.2(a) hereto, including without limitation all
easements appurtenant thereto and buildings and improvements
thereon, plants, fixed assets, buildings, structures, fixtures
(including fixed machinery and fixed equipment), mechanical
systems, and parking areas located thereon and all rights,
easements and appurtenances thereto and all air, mineral or other
rights related thereto (collectively, the “ Real
Property ”). The Real Property shall be conveyed to
Purchaser by Seller by a warranty deed, subject to no Liens,
easements or restrictions except for the “Permitted
Exceptions” which are listed in Schedule 2.2(a)
;
(b)
All tangible business and personal
property; medical equipment, together with related parts,
accessories and the like; and all other equipment, machinery,
furniture, furnishings, fixtures, telephones and telephone systems,
computer equipment (including hardware and software), copiers,
facsimile machines, tools, instruments and other similar tangible
personal property, which are owned by Seller and used or maintained
or operated by Seller in connection with the Hospital, wherever
located;
(c)
Working capital, including: (i) all
prepaid items and prepaid expenses relating to the Assets
(including without limitation rents, subscriptions, and the like);
and (ii) all inventories of supplies, purchased goods, and other
disposable or consumables used or maintained in connection with or
located in the Hospital on the Closing Date, including without
limitation food, cleaning materials, disposables, linens,
consumables, office supplies, drugs and medical
supplies;
(d)
All accounts receivable, receipts, cash,
bank accounts, negotiable securities, certificates, deposits, and
other cash equivalents or receivables;
(e)
To the extent transferable under
applicable laws and regulations, all certificates, certificates of
need (or exemptions or waivers therefrom issued by the agency or
other Governmental Body), licenses, permits, accreditations,
waivers, and governmental authorizations which are owned and used
by Seller to operate the Hospital or otherwise use the Assets and
to conduct the Business of the Hospital;
(f)
All books and records relating to the
Assets and the Business of the Hospital, including computerized and
other data and databases, files, papers, correspondence, purchase
orders, warranties, patient and vendor lists, telephone numbers
(including mobile and cellular telephone numbers and pager
numbers), telecopier numbers, personnel records, manuals related to
the Assets, patient medical records and other patient information,
records relating to third party payors and managed care plans and
contracts, documents pertaining to financing of the Hospital or
Assets, and all other books, records, manuals, files and papers
relating to the Assets and the Business of the Hospital;
(g)
All intangible assets associated with the
Assets and the Business of the Hospital, including Seller’s
rights, title and interest, if any, to trademarks, trade names,
trade styles, service marks and copyrights, all trade secrets or
processes, all confidential or proprietary information, and all
other items of intellectual property, all to the extent either
owned or licensed by Seller listed on Schedule 2.2(g) ; and
rights, judgments, causes of action, claims and demands of Seller,
whether or not liquidated, related to the Assets including, without
limitation, rights or causes in action under express or implied
warranties relating to the Assets, and goodwill of and associated
with the Assets and the operation of the Business of the
Hospital;
(h)
All rights of Seller, including deposits
and prepayments, under the leases listed in Schedule 2.2(h)
(collectively, the “ Leases ”);
(i)
All rights under the contracts (including
contracts for purchase or lease of real property, rights of first
refusal, and options) listed in Schedule 2.2(i)
(individually a “ Contract ” and collectively,
the “ Contracts ”);
(j)
All insurance proceeds (including
deductibles, co-payments or self-insured requirements) arising in
connection with damage to the Assets and any claims of Seller
against third parties relating to the Assets, or the Business,
known or unknown, contingent or otherwise;
(k)
The motor vehicles of Seller listed in
Schedule 2.2(k ); and
(l)
Refunds, credits and rebates with respect
to purchases made by Seller or the Hospital under any of
Seller’s purchasing programs or group purchasing
contracts.
2.3
Information Systems
. The parties intend that Seller
transfer to Purchaser to the extent practicable the existing
information processing capabilities, including hardware and
software. Subject to receipt of any necessary third party
consents as described below, Seller agrees to assign and transfer
information systems and associated licenses, maintenance and
support agreements to Purchaser. To the extent that
Seller’s rights to any of the affected information systems or
associated licenses or contracts, or the use or benefit thereof,
may not be assigned or transferred without the consent of another
Person, Seller and Purchaser shall cooperate with each other in
attempting to obtain such consents as are necessary to authorize
the actions contemplated by this Agreement.
2.4
Certain Consents
. Schedule 2.4 lists the
consents that Seller must obtain prior to Closing. To the
extent that Seller’s rights to any of the Assets to be
assigned and transferred to Purchaser hereunder may not be assigned
or transferred without the consent of another person or entity,
which consent is not required to be obtained prior to Closing, or
may not be assigned or transferred under applicable laws and
regulations, this Agreement shall not constitute an agreement to
assign or transfer the same if an attempted or actual assignment or
transfer would constitute a breach thereof or be unlawful, and
Seller, to the maximum extent permitted by law and any terms of or
limitations relating to such Asset, shall use its best efforts to
obtain for Purchaser the benefits thereunder, and shall cooperate
with Purchaser in any reasonable arrangement designed to provide
such benefits to Purchaser.
2.5
Excluded Assets
. Notwithstanding Section 2.2, the
Assets shall not include any assets identified in Schedule
2.5 , and such assets shall be excluded from and shall not be
sold or transferred to the Purchaser (the “ Excluded
Assets ”).
2.6
Assumed Liabilities
. Except as provided in Section
2.7, at Closing, Purchaser shall assume and will become liable for
all liabilities and obligations of Seller or the Hospital, whether
known, unknown, absolute, contingent, or otherwise (the “
Assumed Liabilities ”).
2.7
Excluded Liabilities
.
Purchaser shall not assume and will not
be or become liable for any debt of the Hospital associated
with bond issuances listed in Schedule 2.7 (the “
Excluded Liabilities” ).
Article 3 - Purchase Price and
Closing
3.1
Purchase Price . On the Closing Date, provided that all
conditions of Closing as set out in this Agreement are met, the
amount due to Seller will be determined as follows:
(a)
The total purchase price due to Seller
for the Assets shall be One Million Dollars ($1,000,000) (the
“ Purchase Price ”).
(b)
The amount due to Purchaser from Seller,
as provided in the Interim Services Agreement between Seller and
Purchaser, is set out in Schedule 3.1(b) , which amount
shall taken as a credit against the Purchase Price at Closing.
Seller and Purchaser acknowledge and agree that for the
purposes of Closing, the amount of the credits or offsets to the
Purchase Price set forth on this Schedule 3.1(b) are to be used.
The parties further agree that Seller shall have the right,
upon notice to Purchaser, to have an audit or review of the amounts
set forth as Offsets on this schedule performed by Draffin &
Tucker, LLP, Seller’s accounting firm, at the expense of
Purchaser. Seller and Purchaser shall have the opportunity to
review a draft of such audit prior to it being finalized and shall
have the right to question any preliminary findings and to produce
additional information or documents. Seller and Purchaser
agree that, should the final audit or review by Draffin &
Tucker reflect that the amounts set forth above are inaccurate, the
amounts on Schedule 3.1(b) shall be adjusted to reflect the final
report of Draffin & Tucker and any amounts payable by Purchaser
shall be promptly paid to Seller. The parties agree that any
such audit or review will be conducted in accordance with relevant
provisions of this Agreement and the Interim Services Agreement and
in accordance with the definitions set forth in Section 5(a) of the
Interim Services Agreement.
(c)
After deducting the amount set out in
Schedule 3.1(b) from the Purchase Price, the remaining
balance due for the Purchase Price, if any, is payable by Purchaser
to Seller at Closing in immediately available funds, either by
official bank check or wire transfer to an account designated by
Seller in writing. In the event that the amount set forth in
Schedule 3.1(b) is greater that the Purchase Price,
Purchaser waives any payment of such amount from Seller.
3.2
Allocation of Purchase
Price . The Purchase
Price shall be allocated among the Assets as set forth in
Schedule 3.2 . Each of the parties agrees and
covenants to report this transaction in accordance with this
allocation and not to take a position before any Governmental Body
in any way inconsistent with the terms this allocation.
3.3
The Closing . The closing of the purchase and sale of the
Assets pursuant to this Agreement (the “ Closing
”) shall be held at 10:00 a.m. on September 1, 2005, or at
such earlier time and date as is mutually acceptable to the parties
(the “ Closing Date ”), at a mutually acceptable
location, subject to the satisfaction or appropriate waiver of all
conditions precedent as set forth in this Agreement. The
Closing Date shall be September 1, 2005, but shall be deemed to be
effective as of 11:59 p.m. on August 31, 2005. The Closing
Date may be extended by agreement of Seller and Purchaser. In
no event shall the Closing Date be set prior to the time that the
parties have received from the Attorney General of Georgia a
favorable report following review of the proposed purchase and sale
of the Assets pursuant to the Georgia Hospital Acquisition Act.
At the Closing, the parties shall deliver or cause to be
delivered, or perform the following:
(a)
Seller shall convey or cause to be
conveyed to Purchaser by limited warranty deed good and marketable
fee simple title to the Real Property subject only to the Permitted
Exceptions. Further, Seller shall deliver to Purchaser: (i)
all instruments necessary or appropriate to convey good and
marketable fee simple title to the Assets, free and clear of all
Liens except the Permitted Exceptions; (ii) possession of the
Assets; (iii) written consents and agreements to the assignment of
the Leases and the Contracts, and such other consents, waivers,
releases and other agreements pertaining to the Assets as required
in this Agreement; and (iv) such other certificates, instruments,
affidavits and other documents as Purchaser or its counsel may
reasonably request. Notwithstanding the foregoing, Purchaser
acknowledges and agrees that certain portions of the Real Property
are currently titled in the name of Greene County and that Seller
shall cause to be provided to Purchaser a Quit Claim Deed on or
within five (5) days after the Closing Date transferring title to
such Property to Purchaser.
(b)
Seller shall pay any applicable Georgia
property transfer tax.
(c)
Purchaser shall deliver (or cause to be
delivered) to Seller: (i) the Purchase Price as determined in
Section 3.1; and (ii) such other documents as Seller or its counsel
may reasonably request.
(d)
Any ad valorem, personal property, and
excise taxes payable with respect to the Assets, which relate to
the 2005 tax year, shall be pro-rated between Purchaser and Seller,
and when actual information is available, the final adjustments and
pro-rations shall be determined and settlement shall be made
between the parties.
(e)
Seller and Purchaser shall each bear
their own fees and expenses for legal, financial, accounting and
consulting, as well as any other fees and expenses incurred by such
party, whether or not the Closing occurs.
3.4
Further Assurances
. From and after the Closing Date,
Seller agrees, without further consideration, to execute and
deliver promptly to Purchaser such further consents, waivers,
assignments, and other documents and instruments, and to take all
such further actions as Purchaser may from time to time reasonably
request with respect to the consummation in full of the
transactions provided for herein. The foregoing shall survive
the Closing.
Article 4 - Representations and
Warranties of Seller
Purchaser acknowledges that it is buying
the Assets “as is/where is” and managed the operations
of the Hospital prior to Closing. Accordingly, Purchaser
agrees not to claim that Seller breached a representation or
warranty when Purchaser knew the representation or warranty was not
accurate as of Closing. In addition, Purchaser and Seller
acknowledge that the record keeping procedures of the Hospital have
been inadequate. Accordingly, Purchaser agrees to waive
breaches of representations or warranties if the inaccuracy was not
uncovered or could not have been uncovered in the conduct of
reasonable diligence. Subject to the foregoing, Seller hereby
represents and warrants to Purchaser the following:
4.1
Organization . Seller is nonprofit corporation duly
organized, validly existing, in good standing, and is qualified to
do business in the State of Georgia.
4.2
Qualification . Seller has the power and authority to own and
operate the Hospital offering all of the services offered by the
Hospital as of the date of execution of this Agreement, to conduct
the Business of the Hospital, and to own, lease, and use the
Assets.
4.3
Authority; Execution and
Delivery .
(a)
Seller has the power and authority to
enter into this Agreement and all other agreements contemplated
herein (collectively, the “ Closing Documents ”)
to which it is a party and to consummate the transactions
contemplated thereby. The execution, delivery, and
performance of the Closing Documents by Seller has been authorized
and approved by all necessary action on the part of Seller and each
of the Closing Documents executed by Seller is the legal, valid,
and binding obligation of Seller enforceable against Seller in
accordance with its terms, except as enforceability may be limited
by applicable equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally, and to the exercise of judicial
discretion in accordance with general equitable principles.
(b)
Neither the execution nor delivery of
this Agreement or any of the other Closing Documents executed by
Seller, nor the consummation or performance by Seller of any of the
transactions contemplated hereby will, directly or indirectly (with
or without notice or lapse of time or both):
(i)
violate the articles of incorporation,
bylaws or other governing document or agreement of
Seller;
(ii)
violate, contravene or conflict with, any
federal, state, local, municipal or other administrative
constitution, law, statute, ordinance, regulation, principle of
common law, or policy, or any award, decision, injunction,
judgment, order, subpoena or verdict entered, made or rendered by
any court, administrative agency, department, official, or other
Governmental Body, to which Seller is subject or by which the
Hospital or any of the Assets or Business of the Hospital may be
bound;
(iii)
contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
Governmental Body or other Person the right to challenge, revoke,
withdraw, suspend, cancel, terminate, or modify, any permit,
license or approval that is held by Seller relating to the Hospital
or to the Business of the Hospital or to any of the
Assets;
(iv)
conflict with, result in a breach of, or
constitute a default under any indenture, mortgage, lease,
agreement, or other instrument to which Seller is a party or by
which Seller, the Hospital or any of the Assets may be
bound;
(v)
result in the imposition or creation of
any Lien upon any of the Assets; or
(vi)
violate any material term or provision
of, or result in a default, give rise to any right of termination,
cancellation or acceleration, or cause the loss of any right or
option, under any of the Contracts.
4.4
Title to Assets
. Except as described in Section
3.3(a) hereof:
(a)
Seller has, and on the Closing Date will
have, good, valid, marketable, indefeasible and insurable title to
the Assets, free and clear of any and all Liens, except for the
Permitted Exceptions;
(b)
the Real Property is accurately described
in Schedule 2.2(a) and includes all real estate owned by
Seller;
(c)
Seller is the sole and exclusive legal
and equitable owner of all right, title and interest in and has
good, marketable, indefeasible and insurable title in fee simple,
and is in possession of all of the Real Property, free and clear of
any and all Liens, except for the Permitted Exceptions.
4.5
Miscellaneous Representations Relating
to Real Property .
(a)
To Seller’s knowledge, no part of
the Real Property is currently subject to condemnation proceedings,
and no condemnation or taking is threatened or known by Seller to
be contemplated.
(b)
There are no parties (other than Seller)
in possession of any parcel of the Real Property, other than
tenants under the Leases, full and complete copies of which have
been provided by Seller to Purchaser prior to Closing.
(c)
To Seller’s knowledge, all material
components of all of the Assets: (i) are free from material
structural (including electrical and mechanical) defects; and (ii)
are in good working order sufficient for maintaining the operations
of the Hospital substantially at their current levels. There
are no physical conditions of the Real Property and improvements
which Seller is aware that could have a material adverse effect on
Purchaser or Purchaser’s operation of the Hospital in the
manner currently being used and operated.
(d)
The Hospital has all easements and
related rights necessary to continue operation of its business as
currently conducted.
4.6
Environmental Matters
.
(a)
As used in this Agreement, the term
“ Environmental Law(s) ” means any federal,
state or local law, statute, ordinance, code, rule, regulation,
license, authorization, decision, order, injunction, decree, or
rule of common law, and any judicial interpretation of any of the
foregoing, which pertains to health, safety, any Hazardous
Material, or the environment (including but not limited to ground,
air, water or noise pollution or contamination, and underground or
above-ground storage tanks) and shall include without limitation:
the Solid Waste Disposal Act, 42 U.S.C. § 6901 et
seq. ; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601
et seq. (“ CERCLA ”), as
amended by the Superfund Amendments and Reauthorization Act of 1986
(“ SARA ”); the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801 et
seq. ; the Federal Water Pollution Control Act, 33 U.S.C.
§ 1251 et seq. ; the Clean Air Act, 42
U.S.C. § 7401 et seq. ; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et
seq. ; the Safe Drinking Water Act, 42 U.S.C.
§ 300f et seq. and any other state or
federal environmental statutes, and all rules, regulations, orders
and decrees now promulgated under any of the foregoing. The
term “ Hazardous Material(s) ” means: (i) any
petroleum or petroleum products, petroleum constituents,
petroleum-derived substances or wastes, flammable materials,
explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls (PCBs); and (ii) any
other chemical or other material, constituent or substance,
exposure to which is prohibited, limited or regulated by any
Governmental Body under any Environmental Law, or which could give
rise to liability under any Environmental Law. “
Release ” means any release, spill, escaping,
emission, leaking, pouring, dumping, seepage, filtration, pumping,
disposal, discharge, leaching or migration into the indoor or
outdoor environment, including, without limitation, the movement of
Hazardous Materials through ambient air, soil, surface water,
groundwater, wetlands, land or subsurface strata. “ On
” or “ In ” when used with respect to the
Real Property or any property adjacent to the Real Property, means
“on, in, under, upon, above or about.”
(b)
All operations or activities upon, or any
use or occupancy of the Real Property, or any portion thereof, by
Seller, and any agent, contractor or employee of Seller (“
Agents ”), or, to the best knowledge of Seller, any
tenant or subtenant of Seller of any part of the Real Property, are
and have been in all respects in compliance with all Environmental
Laws except as would not have a material adverse effect on the
Assets or the Business of the Hospital.
(c)
Seller and Agents have kept the Real
Property free of any Lien imposed pursuant to any Environmental
Law.
(d)
Except for use, generation, treatment,
temporary storage and disposal of Hazardous Materials reasonably
necessary to the customary operation of a hospital and in full
compliance with all applicable Environmental Laws, neither Seller,
nor Agents nor, to Seller’s knowledge, any prior owners,
operators, or occupants of the Real Property have allowed the
Release, manufacture, use, storage or presence of any Hazardous
Materials On the Real Property that would have a material adverse
effect on the Assets or the Business of the Hospital. Seller
has obtained all environmental permits and other authorizations and
approvals necessary for the operation of a hospital and related
activities except where failure to obtain such permits,
authorizations and approvals would not result in a material adverse
effect on the Assets or the Business of the Hospital, all such
permits, authorizations and approvals are in good standing and
Seller is in compliance with all terms and conditions of such.
Seller has no knowledge of any proceedings to substantially modify
or revoke any such permits, authorizations or approvals.
(e)
Neither Seller nor Agents have received
any written communication that alleges that Seller is not or was
not in compliance with all applicable Environmental Laws.
Neither the Real Property, nor any part thereof, nor Seller
is subject to any pending or, to the best knowledge of Seller,
threatened investigation or inquiry by any Governmental Body or
other third party, or any remedial or removal obligations under any
applicable Environmental Law.
(f)
Neither Seller nor Agents have installed
or permitted to be installed or have knowledge of friable asbestos
or any substance containing asbestos or any other Hazardous
Material On the Real Property that would result in a material
adverse effect on the Assets or the Business of the
Hospital.
(g)
Seller and its Agents have not at any
time engaged in, permitted or have knowledge of, nor to the best
knowledge of Seller, has any tenant or subtenant engaged in or
permitted any Release (whether legal or illegal, accidental or
intentional) of Hazardous Materials On the Real Property that would
result in a material adverse effect on the Assets or the Business
of the Hospital. Seller has not used the Real Property as a
landfill, garbage or refuse dump site, waste disposal facility,
transfer station or other type of facility for the treatment or
disposal of solid waste or Hazardous Materials.
(h)
To the best knowledge of Seller, no
material work, repairs, remedies, construction, or capital
expenditure is required by any Environmental Law or land use laws
or regulations with respect to the Real Property in order for the
continued lawful use of the Real Property as a hospital or nursing
facility.
(i)
To Seller’s knowledge, there are no
above-ground or underground storage tanks, or related pipes on any
portion of the Real Property.
(j)
Seller shall promptly notify Purchaser in
writing of any order of which it is aware, receipt of any request
for information or any notice of violation or noncompliance with
any applicable law, rule, regulation, standard or order, any
threatened or pending action of which it is aware by any regulatory
agency or other Governmental Body, or any claims made by any third
party of which it is aware relating to Hazardous Materials on,
Releases on or from, or threats of Releases on or from any of the
Real Property which relate to the period prior to Closing; and
shall promptly furnish Purchaser with copies of any correspondence,
notices, or legal pleadings in connection therewith.
4.7
Litigation and Absence of Undisclosed
Liabilities . Except as
listed and described on Schedule 4.7 , there are no claims,
charges, arbitrations, grievances, actions, suits, proceedings, or
investigations pending or threatened against Seller or affecting
the Hospital or any of the Assets or the Business of the Hospital
at law or in equity, or before or by any Governmental Body, which
involve the likelihood of any adverse judgment or liability,
whether or not fully covered by insurance, nor is there any basis
known to Seller for such claims.
4.8
Permits; Certificate of Need
Exemption .
(a)
Seller has all permits, consents,
licenses and approvals required to operate the Hospital except
where the failure to have such permits, consents, licenses and
approvals would not result in a material adverse effect on the
Assets or the Business of the Hospital, the Business of the
Hospital or any of the Assets, and each such permit, consent,
license or approval is valid and in full force and effect.
The Hospital is being operated, the Assets are being used,
and the Business of the Hospital is being conducted in material
compliance with the terms of all permits, consent, licenses and
approvals and Seller has received no notice of and has no knowledge
of any alleged violation of the terms of such.
(b)
The Hospital and the Business of the
Hospital operate under a valid certificate of need or exemption
from certificate of need review and are otherwise in material
compliance with the certificate of need laws.
4.9
Taxes . Seller has timely filed all federal income
tax returns and all state, county and local income, franchise,
property, sales, use, and other tax returns relating to Seller, the
Hospital, the Assets and the Business of the Hospital required to
be filed (including any information return, report, statement,
schedule, notice, form, or other document or information required
to be filed with or submitted to any Governmental Body in
connection with the determination, assessment, collection, or
payment of any tax). Seller has paid all federal, state,
county and local income, franchise, property, sales, use and all
other taxes and imposed, assessed or collected by or under the
authority of any Governmental Body that have become or are due with
respect to Seller, the Hospital, the Assets or the Business of the
Hospital regarding any period ended on or prior to the Closing
Date. No tax Liens have been filed against Seller, the
Hospital, the Assets or the Business of the Hospital, and no claim
for any additional tax or assessment is being asserted against
Seller or against or with respect to the Assets or the Hospital or
the Business of the Hospital by any taxing authority.
4.10
Employees; Employee Benefit
Plan .
(a)
For purposes of this Agreement, the term
“ Company Plans ” shall mean collectively each
and every plan, program, arrangement, fund, policy, practice, or
contract which, through which, or under which the Seller provides
benefits or compensation to or on behalf of employees or former
employees of Seller and dependents of such employees or former
employees, whether formal or informal and whether or not
written.
(b)
Except as set forth on Schedule
4.10 , Seller does not maintain and never has maintained any
“employee welfare benefit plan” (within the meaning of
Section 3(1) of ERISA) or any “employee pension benefit
plan” (within the meaning of Section 3(2)(A) of ERISA.
Seller further warrants that it maintains, administers, or
contributes only to those sick leave, vacation pay, severance pay,
salary continuation for disability, deferred compensation, bonus,
incentive compensation, life insurance, and scholarship programs
for the benefit of its employees that have been disclosed on
Schedule 4.10 .
(c)
No Company Plan is subject to Title IV of
ERISA. No contingent or other liability with respect to which
Seller has or could have liability exists under Title IV of ERISA
to the Pension Benefit Guaranty Corporation or to any Company Plan
or any plan sponsored by an employee organization that provides or
provided benefits to the Seller’s employees and no assets of
Seller are subject to a lien under Section 4064 or 4068 of
ERISA.
(d)
Seller has delivered to or made available
for inspection by Purchaser true and complete copies of all plan
documents, handbooks, IRS documents and filings, trusts agreements,
contracts, correspondence, financial documents and other documents
or instruments with respect to each Company Plan.
(e)
To the knowledge of Seller, all Company
Plans have been administered in compliance with their respective
terms in all material respects, and are in compliance with the
applicable provisions of ERISA, the Code, and all other applicable
laws. To the best of Seller’s knowledge, Seller is not
liable for any excise taxes under the Code or penalties under ERISA
with respect to the Company Plans for any act or omission that
occurred before the Closing Date.
(f)
To the knowledge of Seller, none of the
Company Plans have engaged in “prohibited
transactions” within the meaning of Section 4975 of the Code
or Section 406 of ERISA for which there is no exemption that has
not been corrected or in relation to which appropriate excise taxes
have not been paid.
(g)
To the knowledge of Seller, the
consummation of the transactions contemplated by this Agreement
will not, alone or together with any other event, entitle any
person to severance pay, unemployment compensation or any other
payment under any Company Plan.
(h)
Seller has no obligation to provide
postretirement medical or other benefits to Seller’s
employees or former employees or their survivors, dependents, and
beneficiaries, except as may be required under Section 4980B of the
Code or Part 6 of Title I of ERISA or applicable state medical
benefits continuation law, and Seller may terminate any such
postretirement medical or other benefits upon thirty (30) days
notice or less without any liability thereunder.
4.11
Labor and Employment
Matters . Seller is not
a party to, nor does Seller have any obligation pursuant to, any
oral or written agreement, collective bargaining agreement or
otherwise, with any party regarding the rates of pay or working
conditions of any of the employees of the Hospital, nor is Seller
obligated under any agreement to recognize or bargain with any
labor organization or union on behalf of such employees.
Seller is in compliance with all applicable federal, state,
and local laws and regulations concerning the employer-employee
relationship. Seller is not liable for any unpaid wages,
bonuses, or commissions (other than those not yet due) or any tax,
penalty, assessment, or forfeiture for failure to comply with any
of the foregoing.
4.12
Insurance . The following have been maintained
continuously in full force and effect with respect to the Hospital,
the Assets and the Business of the Hospital for the period Seller
has owned such Assets: professional liability and comprehensive
general liability and property damage insurance coverage in the
minimum amounts and of the types generally maintained for similar
businesses in the industry; and all necessary insurance for the
protection of employees of Seller as required of employers by the
State of Georgia or otherwise, including unemployment and
workers’ compensation coverage.
Schedule 4.12 sets forth a summary of the Seller’s
current insurance coverage in connection with the Hospital (listing
type, carrier, limits, self-insured retention limits, prior acts
date, and expiration dates). Schedule 4.12 also
includes a list of any pending insurance claims relating to the
operations, personnel and assets of Seller, including, without
limitation, the Hospital.
4.13
Brokers and Finders
. Neither Seller nor any affiliate
of Seller ha
