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AFFILIATION AGREEMENT by and among …

EXECUTION COPY AFFILIATION AGREEMENT by and among ANDROSCOGGIN VALLEY HOSPITAL, littleton HOSPITAL ASSOCIATION, INC., UPPER CONNECTICUT VALLEY HOSPITAL ASSOCIATION, and WEEKS MEDICAL CENTER Executed by all Parties June 30, 2015 EXECUTION COPY Table of Contents ARTICLE 1 STATEMENT OF COMMON PURPOSE .. 2 Statement of Purpose of AFFILIATION .. 2 Statement of Common Objectives .. 2 ARTICLE 2 TERMS OF AFFILIATION .. 3 Establishment and Organization of System Parent .. 3 Hospitals as Participants in AFFILIATION .. 6 Coordinated Management Services and Activities .. 7 ARTICLE 3 CLOSING .. 8 Closing .. 8 Transactions to be Effected at the Closing.

execution copy . affiliation agreement . by and among . androscoggin valley hospital, littleton hospital association, inc., upper connecticut valley hospital association,

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Transcription of AFFILIATION AGREEMENT by and among …

1 EXECUTION COPY AFFILIATION AGREEMENT by and among ANDROSCOGGIN VALLEY HOSPITAL, littleton HOSPITAL ASSOCIATION, INC., UPPER CONNECTICUT VALLEY HOSPITAL ASSOCIATION, and WEEKS MEDICAL CENTER Executed by all Parties June 30, 2015 EXECUTION COPY Table of Contents ARTICLE 1 STATEMENT OF COMMON PURPOSE .. 2 Statement of Purpose of AFFILIATION .. 2 Statement of Common Objectives .. 2 ARTICLE 2 TERMS OF AFFILIATION .. 3 Establishment and Organization of System Parent .. 3 Hospitals as Participants in AFFILIATION .. 6 Coordinated Management Services and Activities .. 7 ARTICLE 3 CLOSING .. 8 Closing .. 8 Transactions to be Effected at the Closing.

2 8 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF EACH HOSPITAL .. 9 Organization and Good Standing .. 9 Authorization; Valid and Binding AGREEMENT .. 9 10 No Conflicts; Consents .. 10 Financial Statements .. 10 Taxes .. 11 Compliance with Law; Permits .. 11 Personal Property; Equipment .. 12 Real Property .. 12 Intellectual Property .. 13 Absence of Certain Changes or Events .. 13 Material Contracts .. 13 Litigation .. 15 Employee Benefits .. 15 Labor and Employment Matters .. 15 Environmental .. 16 Insurance .. 19 Non-Exclusion .. 19 Condition of Healthcare Facilities .. 19 Medicare and Medicaid Participation.

3 19 Affiliates .. 20 ARTICLE 5 COVENANTS .. 20 Establishment of AFFILIATION Working Group .. 20 Conduct of Business .. 20 Access to Information .. 22 Public Announcements .. 22 Maintenance of Books and Records .. 23 Further Assurances .. 23 Governmental Consents and Conditions .. 23 Representations and Warranties; Notices .. 23 Negotiation and Execution of Employment Agreements with Initial Officers .. 24 ARTICLE 6 CONDITIONS TO CLOSING .. 24 ARTICLE 7 TERMINATION .. 25 Termination of AFFILIATION AGREEMENT Prior to Closing .. 25 EXECUTION COPY Effect of Termination .. 25 ARTICLE 8 LIMITED RIGHT OF WITHDRAWAL AFTER CLOSING.

4 26 General Rule .. 26 Withdrawal Notice .. 26 Withdrawal Payment .. 26 Review and Payment .. 26 Effectiveness of Withdrawal .. 27 Use/Disbursement of Withdrawal 27 ARTICLE 9 SURVIVAL AND INDEMNIFICATION .. 27 Survival .. 27 Indemnification by Each Hospital .. 28 Limits on Indemnification .. 28 Procedures for Indemnification .. 29 Right of Setoff .. 30 ARTICLE 10 CONFIDENTIALITY AND PRIVACY .. 30 Confidentiality AGREEMENT .. 30 Publicity .. 30 ARTICLE 11 GENERAL PROVISIONS .. 31 Expenses .. 31 Entire AGREEMENT .. 31 Successors and Assigns .. 31 Notices .. 31 Counterparts; Delivery .. 32 Section and Paragraph Headings.

5 32 No Third-Party Beneficiary .. 33 Waiver .. 33 Severability .. 33 ARTICLE 12 DEFINITIONS .. 33 Exhibits Exhibit A: Incorporators of System Parent Exhibit B: Articles of Formation of System Parent Exhibit C: Organizational Actions of Incorporators of System Parent Exhibit D: Bylaws of System Parent Exhibit E: Amendments to Articles of Formation of Each Hospital Exhibit F: Required Amendments to Hospital Bylaws Exhibit G: North Country Healthcare Governance Principles Exhibit H: Revised AVH Organizational Structure Exhibit I: Management Services AGREEMENT Disclosure Schedules of Each Hospital EXECUTION COPY AFFILIATION AGREEMENT This AFFILIATION AGREEMENT (the AGREEMENT ) is made as of this 30th day of June, 2015, by and among Androscoggin Valley Hospital, a New Hampshire voluntary corporation located in Berlin, NH ( AVH ), littleton Hospital Association, Inc.

6 , d/b/a littleton Regional Healthcare, a New Hampshire voluntary corporation located in littleton , NH ( LRH ), Upper Connecticut Valley Hospital Association, a New Hampshire voluntary corporation located in Colebrook, NH ( UCVH ), and Weeks Medical Center, a New Hampshire voluntary corporation located in Lancaster, NH ( WMC ) (AVH, UCVH, LRH and WMC are each referred to individually as a Hospital and collectively as the Hospitals ). WHEREAS, each of the Hospitals is a non-profit, Critical Access Hospital and shares the common mission of providing high quality, efficient and cost-effective care in the respective communities of the North Country of New Hampshire that they serve.

7 WHEREAS, the Hospitals entered into a letter of intent dated July 21, 2014 (the Letter of Intent ), in which they acknowledged the many challenges arising from the rapidly changing health service environment and determined to carry out their respective charitable missions by further developing a highly coordinated health care network that will seek to improve the quality, increase the efficiencies and lower the costs of health care delivery in the respective communities served by the Hospitals as well as throughout the entire North Country region. WHEREAS, in accordance with the Letter of Intent, representatives from the four Hospitals have worked over a period of many months to develop solutions that would permit the Hospitals to realize available opportunities for cost savings, efficiencies and quality improvement that will benefit their patients and the larger North Country community that they all serve.

8 WHEREAS, in order to implement these solutions, each of the Hospitals wishes to join together in an AFFILIATION transaction that will establish an integrated regional hospital healthcare system in the North Country of New Hampshire (the AFFILIATION ), through the establishment of a new New Hampshire voluntary, non-profit corporation which shall serve as the sole member of each of the Hospitals (the System Parent ) in accordance with the terms, conditions and exhibits of this AGREEMENT . WHEREAS, the AFFILIATION will protect and enhance the ability of each Hospital to continue to carry out its respective charitable mission in the rapidly changing health service environment and will improve the quality and reduce the cost of healthcare for all North Country residents, through a combination of management, administrative and clinical integration and coordination.

9 NOW THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the Hospitals agree as follows: 1 EXECUTION COPY ARTICLE 1 STATEMENT OF COMMON PURPOSE Statement of Purpose of AFFILIATION Each of the Hospitals is a health care charitable trust and has long served its own respective and distinct rural community within northern New Hampshire. These North Country communities share certain geographic, economic, and social challenges that pose serious threats to the long-term ability of each Hospital to continue to perform its stated community health care mission in the absence of the AFFILIATION . Further, rapid changes in the health care federal and state regulatory and reimbursement regimes also pose serious challenges for the Hospitals.

10 After careful review and due diligence regarding these and other conditions, including engagement of experts on various aspects of the federal and state health care regulatory environment, the Hospitals have identified opportunities for cost savings, efficiencies and quality improvement in the provision of health care services to the communities that they serve that can be achieved through a more formal integration of certain administrative, clinical and other functions of the four Hospitals pursuant to the AFFILIATION . Statement of Common Objectives The principal objectives of the AFFILIATION , to be achieved through the execution of this AGREEMENT , are as follows: (a) Furtherance of Charitable Missions.


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