new jersey department ofhealth and seniorservices /^s- · secaucus has seen agrowth in condo...

New Jersey Department of Health and Senior Services

APPLICATION - CERTIFICATE OF NEEDFOR HOSPITAL-RELATED PROJECTS

Name of Hospital

Meadowlands Hospital Medical Center FOR STATE USE ONLY

/^s-

Street Address

55 Meadowlands ParkwayCity State Zip Code

J* \y&fCQi-cPi-o IAppl. No.|

Review Cycle •^J<£]OG'0,Secaucus

County

HudsonType of Hospital

General Acute CareName of Chief Executive Officer

Felicia Karsos

Name of Contact Person

John GrywalskiTitle

Acting CFOTelephone Number

201-392-3200

A. Project Cost:

1. Total Capital Cost:

2. Financing Cost:

3. Total Project Cost (1 + 2):

4. Equity Contribution:

5. Construction Cost:

NJ

$12,200,000, °°

Type of C/N:

CH Change in Bed Capacity

I I New Health Care Service

LJ Modernization/Renovation

LJ Major Movable Equipment

LJ Construction/Acquisition

Date Received:

~7-/-/6

$12,200,00

$5,000,000

Method of Financing: Note from Seller

Type Square Feet Construction/ CapitalLease Cost

Construction/Capital Lease Cost

Per Square Foot

New Construction N/A

Renovation N/A

Lease N/A

6. Will this project result in any permanent change in licensed or planning bed category or capacity of the existing facility?•Yes I^No

7. Provide a brief (50 words) description ofthe project:

This project involves the Transfer of Ownership of Meadowlands Hospital MedicalCenter from MHA, LLC to NJMHMC, LLC. Upon completion ofthe Transfer ofOwnership, the hospital will continue to maintain all of the services currently availableatthe facility. There will be no change in the licensed capacity or reduction in thescope ofservices currently provided by Meadowlands Hospital Medical Center

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B. PROJECT COST

;JSl2V,h0Ul? b(;.submitted j" those dollars whi<* would be needed to complete the project over the anticipated period of-construction if construction were to begin at the time of submission of the Certificate of Need proposal to the Department

?n°n£n°nin2Ude ,conftin9e™y- The Department will calculate a construction cost allowance for the project in lieu of providing acontingency factor for the time period from Certificate of Need submission to the start of construction proviaing

Capital Costs

Studies and/or Surveys

Site Survey and Soil Investigation

Architect and Engineer Fees

Legal and Other Special Services

Plans and Specifications

Demolition

Renovations

Asbestos Abatement

New Construction

Fixed Equipment Not in Construction Contracts(New Construction)

Fixed Equipment Not in Construction Contracts(Renovations)

Major Movable Equipment

Supervision and Inspection ofSite and Building(s)

Purchase of Land

Purchase of Building(s)

Capital Value ofLease (true operating leases should beincluded in operating budget and details identified)

Developmental and/or Start-UpCosts

Department ofHealth andSenior Services ApprovedConstruction Cost Allowance

Other (Specify) (Do NOT include contingency)

Saleof assets of Meadowlands. 12,200,000Please refer to attached ~Asset Purchase Agreement.

Total Capital Costs $12,200,0002. Financing Costs

Capitalized Interest

Debt Service Reserve Fund

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FEB 07

Other Financing Costs (Include fees assessed by anyfinancing agency, bond counsel fees, trustees bankfeesand/or othercosts related to sale ofbonds)

Total Financing Costs

Total Project Cost $12,200,000

of 19 Pages.

C. PROPOSED METHOD OF FINANCING THE TOTAL PROJECT COST:

£lWiC2?lN^^rnanon-°Perati'n9 ass* contribution which will reduce the size oTthehi Lin!' .L f yi J 0t er "quld aSsetSl and the fair aPPraised market value of land owned by an applicant which is^^ °< *• «-» P^iect cost, inching Sfina^1.

2.

3.

4.

5.

6.

Available Cash (include source ofcontribution in D-1) $Mortgage (provide details in D-2)

Loans(provide details in D-2)

Capital Leases (provide details in D-2)

Net fund raising (include documentation)

Other (Specify)

$5,000,000

$7,200,000

Total $ $12,200,000

EQUITY CONTRIBUTION

1. Indicate source of equitycontribution:

Available funds

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FEB 07

Mortgages/Loans/Capital Lease Agreements -Attach acopy of any mortgage, loan or capital lease agreements.

Lender/Lending Institution AmountRate of

InterestAnnual

Payment Maturity Date

New Construction

Renovation

Loan$7,200,000 2.49% $1,293,114 2024

of 19 Pages.

E. EQUIPMENT

1. MajorMoveable Equipment

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FEB 07

Qty.

N/A

Description

TOTAL

Addition/

Replacement

Purchase/

Lease/

Donation

Total PurchaseCost/ Donation

Annual LeaseCost

of 19 Pages.

E. EQUIPMENT

2. Fixed Equipment

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FEB 07

Qty.

N/A

Description

TOTAL

Addition/

Replacement

Purchase/

Lease/

Donation

Total Purchase

Cost/ DonationAnnual Lease

Cost

of 19 Pages.

E. EQUIPMENT

3. Minor Moveable Equipment (For information purposes only; do not include in project cost.)

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FEB 07

Qty. Description Addition/

Replacement

Purchase/

Lease/

Donation

Total PurchaseCost/ Donation

Annual Lease

Cost

N/A

TOTAL

of 19 Pages.

F. PROJECT SUMMARY

(A written summary of your project is required. Please do so on Pages 7through 9of the Certificate of Need Applicationform. The summary must becomprehensive and not exceed three pages.

This application involves the transfer of ownership of Meadowlands Hospital Medical Center inSecaucus,Hudson County from MHA, LLC (d/b/a Meadowlands Hospital Medical Center), aNew Jersey Limited Liability Corporation to NJMHMC, LLC, a New Jersey Limited LiabilityCorporation. The prospective owner will continue to provide the same number of licensed bedsand scope of services currently provided at Meadowlands Hospital Medical Center.

Meadowlands Hospital Medical Center is licensed by the New Jersey Department of Health (the"Department") as a General Acute Care Hospital. The facility is located at 55 MeadowlandsParkway in the City of Secaucus in Hudson County. The licensed bed capacity of MeadowlandsHospital Medical Center is as follows:

Service BedsMedical / Surgical beds 138OB / GYN beds 22

Pediatric beds 26

Adult ICU / CCU beds 14

Intermediate bassinets 4

Total 204

Applicant

NJMHMC, LLC is owned 100% by Yan Moshe. Mr. Moshe currently owns Excel SurgeryCenter in Hackensack ( License #24739). Mr. Moshe does not own, operate or manage any otherhealth care facilities in New Jersey or any other state, other than Excel Surgery Center. It is theintent of the prospective owner to retain substantially all of the current staff employed atMeadowlands Hospital Medical Center.

MHA, LLC purchased Meadowlands Hospital Medical Center in 2010 from Liberty HealthSystem, Inc.

Transaction Terms

The transaction involves the acquisition by the applicant of the rights to the Hospital and relatedinventory and assets such as furniture and equipment. The applicant will also acquire the rightsto the Leasehold Agreement with Rosdev Development, Inc. Rosdev Development, Inc.acquired the ownership of the land through a sale/leaseback in 2012.

The aggregate purchase price for the Assets is $12,200,000.

Project Description

Meadowlands is located in Secaucus, New Jersey in Northwestern Hudson County, the mostdensely populated county in New Jersey. Access to Meadowlands is relatively easy with major

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FEB 07Page 8 of 19 Pages.

PROJECT SUMMARY, Continued

highways (Route 3to Lincoln Tunnel, New Jersey Turnpike and Garden State Parkway) as-well-as bus and rail lmes (the recently opened Frank Lautenberg station). This transportation hubprovides access throughout the tri-state New York metropolitan area. As aresult of the locationSecaucus has seen agrowth in condo development and has become a location of choice foryoung executives commuting to Manhattan. The facility is located inthe HackensackMeadowlands which is home to many large international companies, the MetLife SportsComplex, as-well-as the soon to be developed American Dream complex. It should be noted thatMHMC has negotiated aNon Irrevocable Letter Of Intent (LOI) with the developers of theAmerican Dream Mall complex to provide certain healthcare services as well as providing anetwork for the employees ofthe retail stores that will occupy the mall. This LOI and its termsare part ofthe assets that will be acquired. MHMC's Primary Core Service Area includesLyndhurst, West New York, North Bergen, Union City, Bayonne, Secaucus, Hoboken andportions of Jersey City. The secondary service areas of Meadowlands include Kearny HarrisonNorth Arlington, Rutherford and East Rutherford. MHMC serves arelatively highly insured 'population.

The hospitals in Hudson County and the distance from Meadowlands Hospital Medical Center(Meadowlands) are as follows:

Hospital Distance from Meadowlands Travel Time

from MeadowlandsBayonne Medical Center 12.78 miles 22 minutesChrist Hospital 6m miles 14 minutesJersey City Medical Center 8.36 miles 17 minutesPalisade Medical Center 6.34 miles 13 minutesHoboken University Medical Center 5.86 miles 13 minutes

Since the application is limited to achange of ownership, with no change in the scope of beds orservices, there will be no impact on any of the area hospitals as aresult of this project. Theredoes not appear to be a duplication ofavailable services in the service area.

The applicant does not anticipate any changes in the administrative functions of the Hospital andefficiencies will be realized through the continued availability of acute care services at the existinglocation, as opposed to closure ofthe Hospital. Acopy ofthe current and anticipated organizationalchart is mcluded in the application.

MHA, LLC has owned and operated Meadowlands since 2010. Prior to ownership by MHAMeadowlands had suffered losses of approximately $4.7 million for 2008 and $5 8million for2009. Moreover, the pace of such losses had accelerated. Liberty Health had been committed tofinding an alternative to closure to meet its accepted obligation to the residents of the area servedby Meadowlands. Since 2010, MHA has successfully stabilized the operations at Meadowlands.

Prior to the sale to MHA, Liberty entertained proposals from other potential purchasers ofMeadowlands. The proposal from MHA, LLC was viewed as the best alternative since itincluded keeping Meadowlands open as ageneral acute care hospital and was economicallysuperior to theothers.

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FEB 07 Page 9 of 19 Pages.

F. PROJECT SUMMARY, Continued

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The hospital is served by aNJ Transit Bus route with stop BG5 at Meadowlands Parkway andCove Court. Also, train service to Lautenberg Station and aconnection on NJT bus #129 to stopBG5.

Meadowlands has Spanish-speaking staff for translation and has access to alanguageinterpretation service.

This application is limited to a transfer ofownership ofMeadowlands in Secaucus. It is theintent of the prospective buyer to maintain all existing beds and services currently provided byMeadowlands. No significant changes in the physical plant or equipment is anticipated by theapplicant, however the applicant has made a commitment to invest aminimum of$3 million infacility and equipment upgrades within the first 60 months ofownership. Acopy of the facilityFloor Plans are included in the application.

Meadowlands will be owned by NJMHMC, LLC. NJMHMC, LLC is aNew Jersey LimitedLiability Corporation with Yan Moshe as the Sole Member. Mr. Moshe's address is 32Farmstead Lane in Brookville, New York. Mr. Moshe also owns Excel Surgery Center inHackensack, New Jersey.

The present owners have had a successful strategy to develop a "Center ofExcellence forOrthopedic Surgery on both an inpatient and outpatient basis ". NJMHMC, LLC will continuethis strategy along with committing to operate all current services, but in addition, plans toincrease utilization and occupancy levels in all other service areas. In preparing the projections,itwas determined that aconservative approach be employed. As such, no volume increases wereincluded and only athree percent (3% )price increase was included for each projection period .

Asummary of certain anticipated steps the new owner plans to employ to accomplish additionalperformance is a follows:

Recruit additional primary care physicians. This strategy will lead to additional medicalservices utilization as-well-as additional referrals for surgical services including but notlimited to the current spinal cases.

Meet with managed care and commercial insurance carriers to develop an appropriate in-network strategy. For example, it is believed that an appropriate strategy will lead toadditional utilization especially since the hospital will be one of two remaining in-network providers in Hudson County for a major carrier.

The appropriate in-network strategy will increase our outpatient private referral volumesfor Lab and Radiology Services,

Develop arelationship with the North Bergen FQHC to provide OB services for theirclients.

Page 10 of 19 Pages.

G. GRANTS

Attach a copy of grant budget submitted.

Source Amount Current Status of Grant

N/A

TOTAL

H. VOLUME OF ACTIVITY IN COST CENTERS RELATED TO PROJECT

1. Admissions or Cases

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FEB 07

Routine and Emergency Service Current Year

2016Projected Year 1 Projected Year 2

Medical/Surgical Admissions * 2,325 2,235 2,235

Same Day Surgery Admissions 2,169 2,169 2,169

Pediatric 219 219 219

Acute Psychiatric N/A

Long-Term Psychiatric N/A

Obstetric 213 213 213

Burn Unit N/A

Intensive Care Unit 297 297 297

Neonatal Intensive Care N/A

Coronary Care Unit N/A

Newborn Nursery 214 214 214

TOTAL 5,437 5,437 5,437

'Exclude Same Day Surgery Admissions.


Visits

Cost CenterCurrent Year.

2016 Projected Year 1 Projected Year 2

Emergency Room 16,305 16,305 16,305

Clinic 346 346 346

Private Outpatient 11,586 11,586 11,586

I. OPERATING PROJECTIONS

1.

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FEB 07

Revenues (Report in OOO's):

Category

2 Most Recent ActualYears Ended (Audited)

Current

Year

Projection

Projected Years Ending(Through Second Year After Project Completion)

2014 2015 2016 2017 2018

Inpatient Services 259,776 266,072 252,123 259,686 267,477

Outpatient Services 209,165 232,818 243,496 250,801 258,326

Total Patient ServiceRevenues 468,941 498,890 495,619 510,487 525,803

Allowance for CharityCare (7,979) (5,191) (617) (270) (270)

Contractual Allowances (388801 (419308 (452517 (434163\

(447188\

Net Patient ServiceRevenues 72,163 74,391 73,485 76,054 78,345

Other OperatingRevenues 3,582 4,085 4,343 1,500 1,500

Total Net OperatingRevenues 75,745 78,476 77,828 77,554 79,845


2. Expenses (Report in OOO's):

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FEB 07

Category

2 Most Recent Actuat -

Years Ended (Audited)

Current

Year

Projection


2014 2015 2016 2017 2018

Salaries, Wages &Professional Fees

(Including ContractedServices and FringeBenefits)

35,277 34,114 34,336 35,022 35,722

Interest: i ii in in mi inn m mm m mm ///////// ///////// ii i nun

a. Current Interest 2,184 2,475 2,387 1,740 1,740

b. Project Interest

c. Total Interest 2,184 2,475 2,387 1,740 1,740

Depreciation: in nun mi inn ///////// mi inn ///////// ///////// ii mini

a. Current Depreciation 2,370 2,260 2,214 2,214 2,214

b. Project Depreciation 200 400

c. Total Depreciation 2,370 2,260 2,214 2,414 2,614

Bad Debt Provision 4,591 4,650 3,750 3,863 3,978

Supplies and OtherExpenses 33,140 32,798 34,243 34,928 35,627

Total Operating Expenses 77,562 76,297 76,930 77,967 79,681

Net Income From

Operation (1,817) 2,179 898 (413) 164

Non-Operating Income (1,853) (10) - - -

Surplus (or Deficit) (3,670) 2,169 898 (413) 164


Patient Mix by Sources of Revenue (Report in OOO's):

Category

2 Most Recent ActualYears Ended (Audited)

Current

Year

Projection


2014 2015 2016 2017 2018

Medicare 23% 20% 23% 23% 23%

Medicaid 12% 6% 6% 6% 6%

Blue Cross 14% 17% 17% 17%

Commercial Insurance 64% 59% 53% 53% 53%

Self-Pay

Indigent 1% 1% 1% 1% 1%

Other

Total Patient ServiceRevenue 100% 100% 100% 100% 100% 100% 100%

PROJECTED STAFFING LEVELS

Provide a list of the type, number of Full-Time Equivalents (FTE's) and estimated annual salary of the personnel required to stafftZOZS n«Tnded ,ff"lty 3nd lder:tify the S°UrCe fr°m Which y0U intend t0 °btain the ^°a P^sonneL Tcompute FTEbased on 2,080 annual hours per employee.)

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FEB 07

Personnel Category

Department Job Title

See Attchment

Estimated

Annual SalaryNumber of

FTE'sSources of

Personnel

Additional

Personnel ToBe Hired


K. ACCESS TO SERVICES .

1. Was your facility, ora portion thereof, constructed with Hill-Burton funds?DYes |3No

2. Indicate the percentage of uncompensated care provided annually for inpatient and outnatiBnt services:a. Inpatient Mortgage (provide details in D-2) o/ob. Outpatient 0/

3. What is the number of physicians with admitting privileges at your facility?296

4. What is the number of physicians with admitting privileges who admit Medicaid patients to your facility?Not available

5. Does your facility require a pre-admission deposit?SYes DNo

a. if Yes, explain: Apre-admission deposit is required for elective self-paycases only.

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FEB 07

6. Clinic Services (Exclude Private Outpatient Visits):

Type Hours/Days Per Weekof Operation

General Medical See attachment on Page 22Surgery

Cardiac

Prenatal

Pediatric

Psychiatric

Post-Partum

Other:

Patient Visits/Week


L.

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FEB 07

BEDAND SERVICE INVENTORIES

1. Bed Inventory: • - ••-.-• — • '"' ---•'

Bed Complement LicensedBeds

C/N ApprovedBut Not

Licensed Beds

ProposedNew Beds

ProposedDecrease in

Beds

Total BedsAfter ProjectCompletion

Medical/Surgical 138138

ICU/CCU 1414

Obstetric 2222

Pediatric 2626

Psychiatric(All categories) 0

ComprehensiveRehabilitation 0

Long Term Care0

.

Other:

•

0

2. Psychiatric Beds byCategory:

Bed Category

Adult Open Acute

Adult Closed Acute

Adult Closed Acute

Adult Intermediate

Adult Special

Adult MICA

Adult Geriatric

Adult Eating Disorder

Child and Adolescent Acute

Child and AdolescentIntermediate

Undesignated

Total

Existing Beds Increase DecreaseTotal Beds

After ProjectCompletion


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FEB 07

3. Service Inventory:

Cardiac Services

Cardiac Diagnostic Services- Catheterization Labs-Adult

Cardiac Diagnostic Services- Catheterization Labs- Pediatric

Cardiac Diagnostic Services-E.P.S. Labs

Cardiac Surgery Operating Rooms

Renal Services

Acute Stations

ESRD Chronic Hemodialysis Stations

Peritoneal Stations

Isolation Stations

Training Stations

Surgical Services

Dedicated Inpatient Operating Rooms

Dedicated SDS

Mixed Inpatient/SDS

Cardiac

Trauma Services

• Level I

• Level II

M None

Number

Existing

Number ofExisting Stations

Number of ExistingOperating Rooms

C/N Approved ButNot Implemented



Total AfterProject Completion

Total AfterProject Completion

Total After

Project Completion

Page 17 of 19Pages.

Service Inventory, Continued:

Perinatal Services Existing

Regional Perinatal Center - Normal Newborn Bassinets

Regional Perinatal Center - Intermediate Neonatal Bassinets

Regional Perinatal Center - Intensive Neonatal Bassinets

Community PerinatalCenter - Birthing Center Bassinets

Community Perinatal Center - Normal Bassinets

Community Perinatal Center - Intermediate Bassinets

Community Perinatal Center - Intensive Bassinets

Obstetric Bed Categories - LDR

Obstetric Bed Categories - LDRP

Obstetric Bed Categories - Post Partum

M. PROJECT NARRATIVE

Respond to all statements specified in Section II referenced tothecorresponding items in Section II.

N. REQUIRED DOCUMENTS

Submit all required documents specified in Section III referenced tothe corresponding items in Section III.

ASSURANCES

The applicant gives assurance that the attached statements and tables are complete and correct to the best of the applicant'-knowledge and belief. '

Proposed

(s> ii>3 k(c

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FEB 07Page 18 of 19 Pages.

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SCHEDULE B

city and state in which the facility is ^^SiX&^^^SST^v !? ^ 5°mP'et6 name °f the facW^ thesubmit track record reports, for the preceding 12 months f™the^SecSr.tl L *** ^^^ facilities ™«sted, pleaseAttach additional sheets as necessary. respective state agencies responsible for licensing those facilities.

Name and Address of Facility M^, _ ._, „,* Medicare Provider Number

Excel Surgey Center, LLC N/A321 Essex Street

Hackensack, NJ 07601

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FEB 07


Year

DEPARTMENT NAME

Departments

(6010) NURSING ADMINISTRATION

(6030) EMPLOYEES HEALTH SERVICES

(6065) ENDOSCOPY

(6070) INFECTION CONTROL

(6075) SAME DAY SURGERY(6085) PEDIATRICS

(6105) NURSERY

(6115) INTENSIVE CARE UNIT

(6140) OPERATING ROOM

(6160) RECOVERY ROOM

(6170) EMERGENCY ROOM

(6180) CENTRAL SUPPLY

(6195) LABOR & DELIVERY

(6200) 3 WEST

(6207) RADIOLOGY-M Rl

(6525) AMBULANCE SERVICES

(6610) LAB ADMINISTRATION

(6645) LAB-BLOOD BANK

(6715) EEG/EKG

(6720) RADIOLOGY-DIAGNOSTIC

(6725) RADIOLOGY ULTRASOUND

(6730) RADIOLOGY-NUCLEAR MEDICINE

(6735) RADIOLOGY-CAT SCAN

(6740) RADIOLOGY- MEG MACHINE

(6750) CANCER CENTER HEMA/ONC/INFUS(6820) RESIDENTS

(7210) RESPIRATORY/ PULMONARY

(7225) PT/OT/SPEECH-PHYSICAL THERAPY(7360) PHARMACY

(7380) SLEEP CENTER

(7515) SECURITY

(7525) ENVIRONMENTAL SERVICES

(7535) FACILITIES

(7550) OPERATIONS OF PLANT

(7555) REVENUE-MEDICAL RECORDS

(7565) CUSTOMER SERVICE

(7575) GENERAL STORES

(7580) HUMAN RESOURCES

(7605) FOOD & NUTRITION

(7810) QUALITY AND COMPLIANCE

(7815) REVENUE-CASE MANAGEMENT

Attachment Section J

Estimated Annual Salary

No. of Employees (annualized for 26 pay per.)

20

8 S 516,731.38

2 $ 51,681.03

4 $ 147,417.84

1 $ 93,322.81

12 $ 663,290.47

11 $ 550,808.49

7 $ 642,442.71

23 $ 1,627,009.07

22 $ 1,397,752.33

12 $ 464,889.59

41 $ 1,921,107.03

5 $ 172,999.63

29 $ 1,393,853.06

61 $ 2,563,423.36

4 $ 172,627.08

43 $ 1,185,066.09

24 $ 1,121,154.53

1 $ 69,999.83

2 $ 45,116.47

9 S 497,458.29

7 $ 228,604.56

2 $ 77,466.64

6 $ 175,076.82

3 $ 164,137.56

$ 11,653.72

6 $ 304,808.76

16 S 689,664.04

2 S 88,742.03

11 $ 748,490.13

4 $ 86,699.86

15 $ 247,879.58

27 $ 538,598.87

$ 17,219.80

17 $ 617,023.89

6 $ 292,276.79

6 $ 144,396.25

5 $ 136,023.91

3 $ 249,974.11

24 $ 666,539.67

1 $ 55,009.60

8 $ 472,364.33

(7830) MEDICAL STAFF OFFICE

(7840) ADMINISTRATION

(7870) MARKETING

(8015) REVENUE-BILLING & COLLECTIONS(8020) FINANCE & ACCOUNTING

(8040) INFORMATION TECHNOLOGY

(8050) REVENUE-ADMITTING/REG

21

1 $ 54,999.96

6 $ 670,495.10

5 $ 119,949.54

25 $ 802,473.07

10 $ 497,130.63

7 $ 409,657.4817 $ 410,479.86

CLINICSATTACHMENT OF SECTION K-6

MHMC provides care to indigent patients as well as patients presenting without aprimary care physician through its hospitalist program. General Medical care isprovided by the Medicine Hospitalist in the outpatient setting located on the thirdfloor Monday thru Friday, 9am to 5pm. Pediatric follow up care is provided bythe Pediatric Hospitalist Monday thru Friday 8am to 4pm in the 3rd flooroutpatient area.

Surgical care is referred to the on-call Surgeon. The On-call Surgeon isresponsible for consultation, surgery and any post surgical care required. The on-call surgeon has exam room space available in the 3rd floor outpatient area forfollow-up. Some on-call surgeons prefer to schedule follow up visits in theirprivate practice office.

Pre-natal and post partum services are referred to Dr. Riftine, Director ofObstetrics and Gynecology in the 4th floor outpatient area. Office hours are heldMonday thru Friday, 9am-5pm.

22

Project Narrative

23

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE1. Provide an pvppiitii^ cumrviorxr ^^"+u^ : * t-i- i •Provide an executive summary of the project. This shall be limited to 3pages.

This application involves the transfer ofownership ofMeadowlands Hospital Medical Centerin Secaucus, Hudson Countyfrom MHA, LLC (M/a Meadowlands Hospital Medical Center)aNew Jersey Limited Liability Corporation to NJMHMC, LLC, aNew Jersey LimitedLiability Corporation. Theprospective owner will continue to provide the same number oflicensed beds and scope ofservices currentlyprovided at Meadowlands Hospital Medical

Meadowlands Hospital Medical Center is licensed by the New Jersey Department ofHealth(the Department") as aGeneralAcute Care Hospital Thefacility is located at 55Meadowlands Parkway in the City ofSecaucus in Hudson County. The licensed bed capacityofMeadowlands Hospital Medical Center is asfollows:

^rme BedsMedical /Surgical beds jjgOB/GYNbeds 22Pediatric beds 26Adult ICU/ CCU beds uIntermediate bassinets 4

Total 204

Applicant

NJMHMC LLC is owned 100% by Yan Moshe. Mr. Moshe currently owns Excel SurgeryothThZm "!^IL^J #2V39)- Mr-Moshe does not own> °Perate °r ™»«£ ™yother health carefacilities in New Jersey or any other state, other than Excel Surgery Center.<J J , ft*ProsPectlve ™ner to ^tain substantially all ofthe current staffemployed

at Meadowlands Hospital Medical Center. empioyea

fyMmIncPUrChaSed Mead°wlands HosPital Medical Center in 2010from Liberty HealthTransaction Terms

The transaction involves the acquisition by the applicant ofthe rights to the Hospital andtfrthllTlVZdTfr/Ch aSfum!T: ande<*uiP™»<' The applicant wUlalso acquirethe rights to the LeaseholdAgreement with Rosdev Development, Inc. Rosdev DevelopmentInc. acquired the ownership ofthe land through asale/leaseback in 2012. '

The aggregate purchasepricefor the Assets is $12,200,000.

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Project Description

Meadowlands is located in Secaucus, New Jersey in Northwestern Hudson County, the mostdenselypopulated county in New Jersey. Access to Meadowlands is relatively easy with Z orhighways (Route 3to Lincoln Tunnel, New Jersey Turnpike and Garden State Parkway) as-hfh'ZnZ andmiUTS (tHu teCTly °P™d Frank Lautenberg station). This transportationhubprovides access throughout the tri-state New York metropolitan area. As aresult ofthelocation Secaucus has seen agrowth in condo development and has become alocation ofchoicefor young executives commuting to Manhattan. Thefacility is located in theHackensack Meadowlands which is home to many large international companies, the MetLifeZ^^TmuI^'u tke S°°n f° be devd°ped1America» Dream complex. It should benoted that MHMC has negotiated aNon Irrevocable Letter OfIntent (LOI) with thedevelopers ofthe American Dream Mall complex to provide certain healthcare services as wellas providing anetworkfor the employees ofthe retail stores that will occupy the mall. ThisLOI and its terms arepart ofthe assets that will be acquired. MHMC's Primary Core ServiceArea includes Lyndhurst, West New York, North Bergen, Union City, Bayonne, Secaucus,Hoboken andportions ofJersey City. The secondary service areas ofMeadowlands includeKearny, Harrison, North Arlington, Rutherford and East Rutherford MHMC serves arelatively highly insuredpopulation.

The hospitals in Hudson County and the distancefrom Meadowlands Hospital Medical Center(Meadowlands) are asfollows: center

HosPital Distancefrom Meadowlands

Bayonne Medical Center 12.78 miiesChrist Hospital 6.01 milesJersey City Medical Center $.36 milesPalisade Medical Center 634miles

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Travel Time

from Meadowlands22 minutes14 minutes

17 minutes

Hoboken University Medical Center 5~86 mills 13 ZinutesSince the application is limited to achange ofownership, with no change in the scope ofbedsor services, there will be no impact on any ofthe area hospitals as aresult ofthis projectThere does not appear to be aduplication ofavailable services in the service area.

The applicant does not anticipate any changes in the administrativefunctions ofthe Hospitaland efficiencies will be realized through the continued availability ofacute care services at theexisting location, as opposed to closure ofthe Hospital

Thepresent owners have had asuccessful strategy to develop a"Center ofExcellence forOrthopedic Surgery on both an inpatient and outpatient basis ". NJMHMC LLC willcontinue this strategy along with committing to operate all current services, but in addition,plans to increase utilization and occupancy levels in all other service areas. In preparing theprojections, it was determined that aconservative approach be employed As such, no volumeincreases were included and only athree percent (3%) price increase was includedfor eachprojection period. J

Asummary ofcertain anticipated steps the new owner plans to employ to accomplishadditionalperformance is afollows:

• Recruit additionalprimary care physicians. This strategy willleadto additionalmedical services utilization as-well-as additional referralsfor surgical servicesincluding but not limitedto the currentspinal cases.

• Meet with managed care and commercial insurance carriers to develop an appropriatein- network strategy. For example, it is believed that an appropriate strategy will lead toadditional utilization especially since the hospital will beone oftwo remaining in-network providers in Hudson Countyfor a major carrier.

• The appropriate in-network strategy will increase our outpatientprivate referralvolumesfor Lab and Radiology Services,

• Develop a relationship with the North Bergen FQHC toprovide OB servicesfor theirclients.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE2. Describe the proposed project indetail and relate it to existing services such as changesin square footage, changes inequipment, deficiencies corrected, effect on length of stay,improved patient care, reduced cost, and improved patient safety.

This application is limited to a transferofownership ofMeadowlands in Secaucus. It is theintent ofthe prospective buyer to maintain allexisting beds and services currently provided byMeadowlands. No significant changes in the physicalplant orequipment is anticipated by theapplicant, however the applicant has made a commitment to invest a minimum of $3 million infacility andequipment upgrades within thenext60months. A copy of the facility Floor Plansare included in the attachments.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVEIn accordance withthe Hospital Policy Manual, please provide historical hospital volume

data incorporating the lastthree complete calendar years preceding date offiling the currentcertificate ofneed application as well as year to date data for current year.

Please refer to the historical andprojected volumes included in the application forms andattachments.

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SECTION II. A. DESCRIPTION / PROJECT NARRATIVE "v«r • ^°Vidlan efnfe°fPr°Jected volume in all categories as listed in #3 above for eachLTonH T6fr ^ ^ °faPpHcati°n t0 ±at ^ which is ^ complete calendar yearsbevond estimated nrmert pnmnUtfA. ^ ; WJbeyond estimated project completion.

PaZZ{el^tke hiSt°riCal andPr°Jected v°l»™ Eluded in the applicationforms and

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE "L« •Dr°fe^^"? mtici?ated need for the project in the hospital's service area usinghistorical and projectedvolume data. 8

This application involves aTransfer ofOwnership ofMeadowlands. Historical andprojectedvolume data is included in the applicationforms and attachments. naprojectea

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE6 List all other institutions in you service area that provide similar services. Indicate theanticipated impact of this project on these other institutions.

The Primary Service Area ofMeadowlands is Hudson County. Seventy-five (75) percent oftheHudson 1ZZarefIeadOWlandS "****"*"" *"***<oth"cifeZsîZn

CarePoint Health-Bayonne Medical Center Rnvn*,„aCarePoint Health-Christ Hospital Jerse CitvCarePoint Health-Hoboken University Medical Center Hnhnk™Jersey City Medical Center , ™Palisade Medical Center ^7»North Bergen

TacHC?e °{tH% Tâti°n, Ûmited t0 the Tmmfer °fOwnership ofan existing licensedacute care hospital. Since the applicant intends to maintain all ofthe existing beds andservices at their current level, the will be no impact on the other institutions in the service

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE7. Document the institution's past and current history in providing care to the indigent andhow the proposed project will affect the applicant's ability to provide care for the indigent.

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The historical care to indigentpatients at Meadowlands is included in the applicationformsThere will be no impact on the indigent carepolicies subsequent to the Transfer ofOwnership.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE = = =8. In the case ofareduction, elimination or relocation ofafacility service, describe the needthat the population presently has for the service; as well as the extent to which that need will bemet after the change.

There will be no reduction or elimination ofservices as aresult ofthisproject

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE9. As required in the Hospital Policy Manual, identify alternative approaches to the projectwhich were considered and demonstrate how the option selected most effectively benefits thehealth care system.

MHA, LLC has owned and operated Meadowlands since 2010. Prior to ownership by MHAMeadowlands had suffered losses ofapproximately $4.7 millionfor 2008 and $5.8 millionfor2009. Moreover, thepace ofsuch losses had accelerated. Liberty Health had been committedtofinding an alternative to closure to meet its accepted obligation to the residents ofthe areaserved by Meadowlands. Since 2010, MHA has successfully stabilized the operations atMeadowlands.

Prior to the sale to MHA, Liberty entertainedproposalsfrom otherpotentialpurchasers ofMeadowlands. Theproposalfrom MHA, LLC was viewed as the best alternative since itincluded keeping Meadowlands open as ageneral acute care hospital and was economicallysuperior to the others.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE "10. Efficient design is encouraged to promote significant life cycle operational cost savingsIf the project involves new construction, please identify operational cost savings which mayresult from such construction.

This project does not involve any new construction.

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SECTION II. A. DESCRIPTION / PROJECT NARRATIVE "11. Indicate the conformance of the proposed project with the appropriate local planningagency plan, ifapplicable, the State Health Plan, and appropriate State guidelines andregulations.

HOSPITAL POLICY MANUAL COMPLIANCENote: Although N.J.A.C. 8:33A has expired, we have addressed many of thecriteria cited in the former policy manual.

8:33A-1.4 Standards regarding minimum size; acute general hospitals

(a) The minimum size for an acute general hospital shall be200 beds.

Meadowlands is licensedfor 204 beds, including four (4) intermediate bassinets.

8:33A-1.5 Minimum size of obstetrics unit

(a) The minimum size ofan obstetric service shall be 10 beds.

Meadowlands is licensedfor 22 OB/ GYNbeds.

8:33A-1.6 Standards regarding minimum size; pediatric services

(a) The minimum size ofa pediatric unit shall be 6 beds.

Meadowlands is licensedfor 26Pediatric beds.

8:33A-1.7 Limitations onapprovals

Certificate ofNeed approval for construction, renovation, or purchase ofafacility is"^ to,?e Pr°JeCt aS contained in ±e Certificate ofNeed application. No implicit approval foradditional beds, services, or equipment can be inferred from the approval unless specificallydefined in the application and expressly approved by the Commissioner.

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This project does not involve construction or renovation and the applicants recognizethat approval is limited to the project as contained in the certificate ofneed application.

8:33A-1.8 Standards regarding shelled space

Projects proposing shelled space shall not be approved unless the applicant candemonstrate significant cost savings using present value analysis to both the institution and thehealth care system as well as the future need for the space.

Shelled space is not a component of this project.

8:33A-1.9 Standards regarding occupancy rates

(a) For purposes ofreview ofCertificate ofNeed applications, the minimum andoptimal occupancy rates based upon licensed beds for an acute general hospital, by servicecategory, shall be:

Minimum

Medical/SurgicalObstetrics

75%

LDRP

PostpartumPediatrics

50%

60%

Units of less than 30 bedsUnits of 30 and above

ICU/CCU

Psychiatric

50%

60%

60%

70%

(b) The level ofexcess beds within ahospital shall be that number oflicensed beds,which, when deleted from aservice, will allow ahospital to achieve minimum occupancy levelsas identified in (a) above, for aperiod oftwo years beyond the projected completion date oftheproject, defined as the "target year". Utilization levels for the target year shall be based on aprojection method defined at N.J.A.C. 8:33A-l. 13(b), applied forward to the target year.

This project does notinvolve the addition ofbeds.

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8:33A-1.10 Bed Need requirements and Criteria for the addition, expansion, replacement orconversion of beds.

(a) Except as specifically set forth at N.J.A.C. 8:33-3.4 and 6.1 (f) and (g), all facilities subject tothese rules seeking to add, expand, replace or convert existing beds must obtain certificate ofneedapproval to do so in accordance with the certificate ofneed review procedures applicable to theparticular category of bed need as set forth in N.J.A.C. 8:33. All certificate ofneed applicantssubject to this section should, prior to submitting their applications to the Department, consult withtheir respective LABs regarding their plans to assure that the projects address community needsAll applicants shall demonstrate compliance with all applicable standards and criteria ofNJAC8:33, pertinent licensing and health planning regulations and any outstanding certificate ofneed orlicensure conditions.

(b) In addition to all of the requirements set forth in (a) above, applicants for addition, expansionreplacement or conversion ofbeds shall also be required to document compliance with thefollowing requirements to the extent they apply to the specific category ofbed requests:

1. Applicants for bed expansions must exceed, on average, in the previous 18 months theminimum occupancy rates set forth at N.J.A.C. 8:33A-1.9(a) for the service(s) being proposed forexpansion and shall demonstrate that they will achieve and maintain an occupancy rate for theservice(s) being expanded ofno less than the minimum occupancy rates established for that serviceidentified at N.J.A.C. 8:33A-l .9(a) for the year which is two full facility fiscal years after the year ofproject completion.

2 Applicants for the replacement ofexisting acute care beds, shall demonstrate that they willachieve an occupancy rate in the service(s) being replaced ofno less than the minimum occupancyrates identified at N.J.A.C. 8:33A-1.9(a) for each ofthe two years beyond project completion

3. Applicants for bed additions, where there are other acute care hospitals within the applicant'sservice area which, during the 18 months preceding the filing ofthe Certificate ofNeed applicationtailed to meet the minimum occupancy levels identified at N.J.A.C. 8:33A-1.9 within the servicetype(s) for which expansion is being requested, must provide evidence that the Board of Directorshas undertaken good faith efforts to develop mergers, joint ventures, or other shared servicearrangements with the underutilized facility(ies).

(c) Exceptions to (b)l and 2above may be considered where:

1• The applicant can demonstrate that there will be anet bed reduction in its hospital servicearea resultmg from cooperative planning with neighboring hospitals; or

2. The applicant can demonstrate additional bed need by documenting rapid changes indemographics or case mix, as well as having evidenced appropriate increases in utilization over theprevious 18 months.

(d) Applicants seeking to initiate anew service or services, whether by bed additionsexpansions, replacement or conversions, shall document the need for the requested beds by an

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analysis ofempirical evidence which demonstrates that beds for the proposed new service are costeffective, beneficial to patients, will measurably improve accessibility and quality ofcare, and couldnot be provided maless costly setting. This analysis shall include, but shall not necessarily belimited to, consideration ofthe following factors:

1.

2.

Referrals from major referral sources, as reflected in letters ofsupport; and,

Projected admissions, patient days, and average length of stay (the bases for theseprojections must be specifically identified in the application); and

3. Utilization based upon methodologies established by federal, regional, or other healthplanning authorities.

beds.This application does not involve the addition, expansion, replacement or conversion of

8:33A-1.11 Certificate of Need requirements for necessary capital modernization/renovationprojects.

(a) Except as specifically set forth at N.J.A.C. 8:33-3.4 and 6.1, all facilities subject to theserules, seeking to undertake capital modernization/renovation projects as that term is defined abovesnail obtain certificate ofneed approval prior to doing so, in accordance with the applicablecertificate ofneed procedures set forth in N.J.A.C. 8:33. In addition to demonstrating compliancewitfi all applicable standards and criteria ofN.J.A.C. 8:33, applicable licensing and planning rulesand outstanding certificate ofneed or licensure conditions, applicants for certificates ofneed for 'capital modernization/renovation shall also meet the following standards and criteria:

1. Utilization standards are as follows:

i. Minimum occupancy rates in each licensed bed category as specified at NJAC 8-33A-1.9(a) atthe conclusion ofthe project; and

\- u•T,rendS mV°1Ume MSpedfied 'm NJAC 8-33A-1.10 (admissions, ALOS, and patient days)which mdicate occupancy will continue to be above minimum occupancy ofremaining licensedbeds in each licensed bed category for aperiod ofat least each ofthe two years beyond completionof the project. ^

2. Efficient size: Ahospital must maintain the minimum size criteria set forth in NJAC8.33A-1.4, at the conclusion of the project while maintaining an overall occupancy rate ofat least75 percent. Where it fails to meet this standard, modernization/renovation projects may only beapproved where the hospital is geographically isolated, where the application is part ofa"jointcommunity application" or where it is part ofahospital merger application as these terms are morespecifically defined below:

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i. "Geographic isolation" means alack ofanother acute care hospital within a15 mile radiusofan applicant hospital, and where at least 40 percent ofthe residents ofthe service area utilize thehospital.

ii. An application submitted jointly by all hospitals (or acombination of hospitals constitutingamajority ofneeded beds) within a 15 mile radius ofthe hospital seeking replacement and/oraddition or beds or in aservice area as approved by the Department, that accomplishes the followingobjectives:

(1) Consolidation and regionalization of services in the area, accomplishing the significantreduction ofduplicative inpatient, outpatient, therapeutic and diagnostic services and ofancillaryand administrative functions between institutions;

(2) Creation ofspecific operational cost savings;

(3) Establishment ofajoint planning committee for the area which includes all hospitalsidentified in the application, as well as community participates; and

(4) The continuation ofessential community-based psychiatric services (for example, STCF,CCIS, designated screening centers).

lii. An application for transfer ofownership between two or more institutions within a 15 mileradius or in aservice area as approved by the Department in which all assets are merged under asingle corporate entity operated by asingle board of trustees, which accomplishes the followingobjectives:

(1) Reduction of an appropriate level of excess beds within the merged institutions andconversion, closure, or consolidation ofunnecessary physical plant areas in amanner achieving costsavings to the system;

(2) Consolidation ofduplicative inpatient, outpatient, therapeutic and diagnostic services andancillary and administrative functions where appropriate to the overall health care needs ofthehealth service area;

(3) Compliance with accessibility standards identified atN.J.A.C. 8:33-2.1: and

(4) The continuation ofessential community-based psychiatric services (for example, STCF,CCIS, designated screening centers).

3. The project scope is limited to correction of conditions constituting an imminent hazard tothe health and safety ofpatients and staff, as determined by the Department.

4. Track Records will be evaluated in accordance with the following:

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(l) At the time ofapplication for acertificate ofneed, the applicant hospital or hospital systemshall be in substantial compliance with rules and standards contained in the Hospital LicensingStandards, N.J.A.C. 8:43G. In accordance with the provisions ofN.J.A.C. 8:33-4.10(e)3, certificateofneed applications shall not be approved for hospitals which are not in substantial compliance.

ii. An exception to (a)4i above shall be granted to applicants who are seeking to remedy areasofnon-compliance through implementation of the certificate ofneed.

This project does not involve capital modernization/renovation projects, however theapplicant has made acommitment to invest aminimum of$3 million in facility and equipmentupgrades.

8:33A-1.12 Certificate ofNeed requirements for capital project components

(a) As referenced at N.J.A.C. 8:33A-1.1 (b), capital projects subject to these rules may includedistinct components which implicate other certificate ofneed standards and criteria not specificallyset forth herein. Acomponent means any element ofthe overall project that isassociated with themodernization or renovation, expansion, or new construction ofan identifiable physical plant area,such as anursing unit, ancillary department, administrative area, or any structural element ofthefacility. Each applicant for acapital project subject to these rules shall assess its proposal anddetermine the extent to which itincorporates such distinct component facilities, equipment orservices. For all component parts ofthe proposed capital project which are not specificallyexempted from the requirement ofobtaining acertificate ofneed, the applicant for acapital projectsubject to this chapter shall also demonstrate compliance with all standards and criteria ofN.J.A.C.8:33, all provisions ofthe licensing and planning rules, and all outstanding certificate ofneed orlicensure conditions applicable to each distinct component part, specifically including, but notlimited to, the following:

1. Approval of components proposing to address modernization/renovation or construction ofphysical plant areas for needed services and departments may be made where capital expendituresare necessary for:

i. Correcting functional or structural obsolescence; orii. Correcting life-safety codeA and B violations.

2. The applicant must demonstrate the need for the expansion oftotal square footage to thehospital's physical plant within any component(s) ofthe proposed project.3. Any component(s) ofa certificate ofneed project not demonstrated to beneeded asdetermined by the Department, based on areview ofthe applicant's physical plant survey evaluatedin accordance with N.J.A.C. 8:43, and all other criteria in this chapter, may be denied.

This application does not involve a capitalproject

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8:33A-1.13 Volume projections

(a) All applications must contain historical volume data and projections of inpatientand outpatient volume for purposes of Certificate ofNeed review. These must be submitted in aform prescribed by the Department.

1. All data must be consistent with the hospital statistics as reported to theCenter for Health Statistics for the New Jersey General Hospital Inpatient Utilization Reports onofficial SHARE reporting forms, unless the applicant can demonstrate to the Department withverifiable evidence that there are inaccuracies in the statistical information which was reported.

(b) Historical hospital volume data must incorporate the last complete three calendaryears preceding the date of filing the Certificate ofNeed application, as well as year-to-date forthe current year, and at aminimum include the following data components:

1. Inpatient admissions by licensed bed category andtotal hospital;

2. Adjusted admissions by total hospital;

3. Patient days by licensed bed category and totalhospital;

4. Outpatient visits by department or service;

5. Emergency room visits;

6. Inpatient surgical cases;

7. Outpatient surgical cases;

8. Same day surgery cases;

9. Same day medical admissions

10. Births

(c) Each application shall provide an estimate of projected volume in all categories aslisted in (b) above for each year inclusive from the time ofapplication to that year which is twocomplete calendar years beyond estimated project completion. This estimate must be based onhistorical data delineated in (b) above, using at aminimum, astraight-line projection and one ormore of the following methodologies:

1. Linear regression modeling;

2. Constant volume;

35

3. Official county-based-volume projections and marketshare statistics publishedby or acceptable to theDepartment, if available;

4. A methodology chosen by the applicantbut in eachinstance the assumptions utilized in making theprojections must be clearly substantiated in theapplication.

(d) The volume projections must be deemed acceptable to the Department based onIconformance to the results of one or more of the methodologies listed in (c) above.

Historical data and projection are included in the attachments.

8:33A-1.14 Standards regarding equity contributions and financing

(a) Financing ofhospital construction, modernization/renovation, or equipmentprojects requires a minimum equity contribution from the hospital ofat least 15 percent oftotalproject costs, including allcapital costs, all financing and carrying charges, net interest onborrowings during construction, and debt service reserve fund. The Commissioner may reducethe equity requirement for applicants who can demonstrate financial hardship and that theproposed project will primarily serve a medically under served population, and the applicanthospital has historically demonstrated that it has provided significant levels of charity care forwhich it has not been reimbursed. This equity requirement may be reduced by one halfofonepercent for each full percentage point the hospital uncompensated care percentage exceeds thestatewide average uncompensated care percentage for acute care hospitals.

(b) Allprojects involving long-term financing of capital construction costs shalldemonstrate use of the least-cost financing reasonably available.

(c) Financing arrangements for construction, expansion, renovation, orpurchase offacilities shall not entail debt obligations ofgreater duration than the expected useful life oftheassets financed.

(d) All applicants shall demonstrate the financial feasibility of their projects. Anappropriate financial feasibility study shall be submitted for projects in excess of $15 million atthe time ofapplication. The study must test the feasibility of the project under reimbursementrules ineffect at the time ofthe application. Aproject will be determined financially feasiblewhere the applicant can demonstrate a net positive income for the calendar orfiscal years whichare two and five years beyond project completion. Financial projections shall be provided for thefirst five full years after project completion. These projections shall indicate themethod offunding any losses incurred during this time period.

36

(e) All projects will be evaluated based on relative cost considerations in comparisonto Statewide norms including capital expense per adjusted admission and total operating expenseper adjusted admission.

There are no project costs involved with this application.

8:33A-1.15 Standards regarding the transfer of services from anacute care hospital

(a) The transfer ofaservice from one corporation to another, regardless of their relationship,requires aCertificate ofNeed application in accordance with procedures identified at N.J.A.C. 8:33.In addition to demonstrating compliance with all applicable standards and criteria ofN.J.A.C. 8:33,applicable licensing and planning rules, and outstanding certificate ofneed or licensure conditions 'applicants for certificates ofneed for the transfer ofaservice from one entity, person or corporationto another must also demonstrate compliance with the following standards and criteria.

1. Implementation of the proposed transfer of service will not violate any bond, covenant orany loan and security agreement between itself and the New Jersey health Care Facilities FinancingAuthority or any other financing agency for either the transferring entity or the receiving entity.

2. The transferring entity, person or corporation must guarantee that services which arecorporately and/or physically transferred from hospitals to other areas are accessible and availableto all persons, independent of their ability to pay, with special attention given to medicallyundeserved groups in the existing hospital service area. The hospital must document that publictransportation is available to the aforementioned groups, and ifit is not, the hospital must makearrangements to guarantee that transportation willbe made available to those individuals.

3. The entity, person, or corporation receiving the new service must comply with the followingcriteria and conditions:

i. Any service transferred in whole must provide indigent care at the same level as providedfor that same service in the two calendar years preceding the submission of the application or at alevel commensurate with other hospitals in the area over the preceding two calendar years, or at alevel specified as acondition ofthe certificate ofneed at the time of issuance, whichever is greater.

ii. Any service transferred in part must, together with the applicant hospital, provide in theaggregate the same level of indigent care as provided for that same service in the two yearspreceding the application or at alevel commensurate with other hospitals in the area over thepreceding two years, or ata level specified as acondition ofthe certificate ofneed at the time ofissuance, whichever is greater.

in. Aquality assurance and review program for the health services proposed for transfer mustbe provided and it must be documented that such aprogram will be implemented at the proposedservice.

37

iv. The receiving entity, person or corporation must guarantee that services which arecorporately and/or physically transferred from hospitals to other areas are accessible and availableto all persons, independent of their ability to pay, with special attention given to medicallyundeserved groups in the existing hospital service area. The hospital must document that publictransportation is available to the aforementioned groups, and ifit is not, the hospital must makearrangements toguarantee that transportation will be made available tothose individuals

The hospital is served by aNJ Transit Bus route with stop BG5 at Meadowlands Parkway andCove Court Also, train service to Lautenberg Station and aconnection on NJT bus #129 tostop BG5.

Meadowlands has Spanish-speaking stafffor translation and has access to alanguageinterpretation service.

The application is in full compliance with the above noted requirements. The applicants willaccept the above noted requirements as acondition ofapproval ofthe certificate ofneedapplication.

8:33A-1.16 Standards regarding acquisition or replacement ofmajormoveable equipment

(a) Except as specifically set forth at N.J.A.C. 8:33-3.7 and 6.1, the acquisition or replacementof major moveable equipment requires acertificate ofneed, in accordance with the procedures setforth at N.J.A.C: 8:33. In addition to demonstrating compliance with all applicable standards andcriteria ofN.J.A.C. 8:33, applicable licensing and planning rules, and outstanding certificate ofneedor licensure conditions, applicants for the acquisition or replacement ofmajor moveable equipmentmust also document use of least-cost financing.

(b) Equity contributions to the financing of the project must meet minimum requirementsidentified at N.J.A.C. 8:33A-1.14(a). In projects proposing both acquisition ofmajor moveableequipment and modernization/renovation, equity contributions must be pro-rated betweenequipment costs and costs of the remainder ofthe project.

No major moveable equipment is involved with this transaction.

8:33A-1.7 Outpatient services

Applicants for any bed-related Certificate ofNeed must demonstrate the availability offollow-up for all discharged patients and all residents of the service area either through directprovision of such services by the hospital or its physicians, or through formal written linkageswith other health care providers in the area.

38

The applicants willcomply with the above noted requirement

8:33A-1.18 Standards regarding re-location of hospitals

(a) Proposals for the relocation ofor major new construction at an existing hospital by anewcorporate entity or for the new construction ofanacute care hospital requires certificate ofneedapproval in accordance with the procedures set forth at N.J.A.C. 8:33. In addition to demonstratingcompliance with all applicable standards and criteria ofN.J.A.C. 8:33-1, applicable licensing andplanning rules, and outstanding certificate ofneed or licensure conditions, applicants for suchprojects shall also demonstrate compliance with the following standards and criteria:

1. There must be a bedneedwhich complies withstandards set forth in N.J.A.C. 8:33A-1.10 inthe area ofproposed location for all services to be relocated, or a reduction ofan appropriate level ofexcess beds within the relocated facility which will be implemented upon relocation;

2. The applicant must demonstrate that there are sufficient resources (for example,transportation) inthe former area toensure access to care tothe former patient population;

3. The proposed site must be accessible to medically undeserved populations in the newly-defined service area in terms ofdriving time and/or public transportation;

4. All alternatives have been considered and the proposed project isresponsive to identifiedhealth needs and represents the most cost-effective course ofaction tomeet those needs;

5. The applicant mustat a minimum demonstrate long term reductions in costs.

(b) In addition to the requirements referenced in paragraph (a) above, applicants proposingconstruction ofanew hospital shall demonstrate compliance with all ofthe following:

1. Bedneedas specified in N.J.A.C. 8:33A-1.10 in the area has beendocumented for eachproposed service;

2. The hospital atits proposed location must be physically accessible to patients ofthe definedservice area and must provide care to the medically undeserved populations in the proposedlocation; and

3. All hospitals located within a25-mile radius ofthe proposed location shall have occupancylevels which exceed minimum levels as defined in N.J.A.C. 8:33A-1.9 for an average for each yearofthe previous two calendar years.

This application does not involve the relocation ofan acute care hospital.

8:33A-1.19 Standards regarding accessibility

39

The applicant must demonstrate compliance with all accessibility criteria as identified inN.J.A.C. 8:33

The hospital is served by aNJ Transit Bus route with stop BG5 at Meadowlands Parkway andCove Court Also, train service to Lautenberg Station and aconnection on NJT bus #129 tostop BG5.

Meadowlands has Spanish-speaking stafffor translation and has access to alanguageinterpretation service.

This application is in compliance with all requirements ofN.JA.C. 8: 33.

8:33A-1.20 Standards regarding transfers of ownership ofhospitals

(a) Certificates ofneed for transfer ofownership interests in acute care hospitals shall berequired in accordance with the provisions ofN.J.A.C. 8:33-3.3. In reviewing certificate ofneedapplications for transfer or ownership of acute care hospitals, the Department shall consider whetheror not the anticipated benefits which are reasonably expected to occur will outweigh any potentialdisadvantages attributable to any reduction in competition that may result from the implementationof the proposed transfer or ownership. Apreponderance ofthe following benefits should occur as aresult of any proposed transfer ofownership between acute care hospitals; improved quality ofcare-the preservation or expansion ofaccess, particularly by medically indigent or medically undeservedpopulations; the diffusion ofcommunity-based services and the regionalization oftertiary services-the promotion ofaffordable health care through gains in cost efficiency, improvements inutilization, and reduced duplication ofresources and technological advances.

(b) Pursuant to (a) above, applicants for certificates ofneed to transfer ownership shall inaddition to demonstrating compliance with all N.J.S.A. 26:2H-1 et seq NJAC 8-33 all 'applicable health planning and licensing rules, and outstanding certificate ofneed conditions alsodemonstrate in their application the following standards and criteria;

1• The extent to which the proposed change will improve the response to documented healthcare needs in the area(s) served by the hospital(s) proposing the change. Documentation shallinclude asummary ofhealth care needs in the affected market areas as determined by theappropnate Local Advisory Board(s) (LABs), as well as adescription of any proposed changes inservices designed to meetthose needs;

2. The impact that the proposed change will have on consumer access to health care inparticular the effect on access to medically indigent and medically undeserved population Theapplicant shall include:

40

i. Adescription of the medically indigent and medically undeserved populations in the servicearea, that is, the numbers and percentages of these populations served by each participatinginstitution; and

There will be no impact on consumer access to health care at Meadowlands, including access bymedically indigent and medically underservedpopulations. The applicant will continue to meetthe standards in New Jerseyforproviding access to allpatients regardless oftheir ability to payor theirpayer source. The demographic information related to poverty levels and ethnic origin ofresidents ofHudson County andSecaucus are included in the attachments.

11. Analysis and quantification, to the extent possible, of any anticipated impact, whetherpositive or negative, that the proposal will have on access by consumers, including medicallyindigent and medically undeserved populations, in the affected market areas;

Thisproject will have no negative impact on access by consumers including indigent andmedically underserved residents ofthe service area.

3. The extent to which the proposed change will affect the availability, array, and location ofhealth care services at the participating hospitals and within the health care system as awhole, withparticular concern for the impact it will have within the markets historically served by theparticipating hospitals. The applicant shall include:

i. Adescription of the existing array of services at each of the participating hospitals and anyproposed changes to that array of services;

Adescription ofthe existing services at Meadowlands is included in the applicationforms andservices at the related hospitals in Hudson County are included in the attachments. There will beno reduction ofservices offered at Meadowlands Hospital Medical Center subsequent tocompletion ofthe transfer.

ii. Adescription ofthe geographic location ofthe hospitals in relation to one another anddescnptions ofany services located away from the main hospital campus;

The hospitals in Hudson County and the distancefrom Meadowlands are asfollows:

HosPttal . Distance from SMH Travel TimeBayonne Medical Center 12.78 miles 22 minutesChrist Hospital 6M miles u minutesJersey City Medical Center 8.36 miles 17minutesPalisade Medical Center 6.34 miles 13 minutesHoboken University Medical Center 5.86 miles 13 minutes

41

iii. Adescription ofexisting physician referral patterns for all participating hospitals; and

iv. Adiscussion ofany changes in costs ofservices to consumers that are anticipated as aresultof this proposal;

There will be no change in the physician referralpatterns or services to consumers as aresult ofthis project

4. The extent to which cost efficiencies will be effected and will result insignificant netoperational savings. The applicant shall include:

i. A description ofany services or administrative functions whichwillbe eliminated ormodified as a result of the proposed change; and

ii. Aquantification, to the extent possible, ofthe savings to the participating hospitals and thehealth care system as a whole that are anticipated as a result ofthe proposed change;

The applicants do not anticipate any changes in the administrativefunctions ofthe Hospital andefficiencies will berealized through the continued availability of acute care services at theexisting location, as opposedto closure oftheHospital

5. A reduction of all excess bedcapacity, as determined underthe standards at N.J.A.C. 8:33A-1.9, which will result for allparticipating hospitals through decertification orconversion of acutecare beds;

No decertification ofbeds or services is anticipated atthis time. Future evaluation and review ofactual volume will determine the need tomaintain oreliminate any bedcapacity.

6. The extent to which duplication ofservices will be eliminated where appropriate;

7. The extent to which the proposed change will have an adverse economic orfinancial impacton the delivery of healthcare services in the region or Statewide;

No changes to the existing licensed bed capacity orscope ofservices offered atMeadowlands isanticipated

42

8 The extent to which the proposed change is likely to result in any reduction in competitionand the extent to which any reduction in competition is necessary to achieve the benefits that can beexpected from the proposed change. The applicant shall include:

i. Adescription of the geographic areas presently being served by each participating hospitalincluding the market share percentages served by each hospital in each;area;

ii. Adescription of the impact on each hospital's market share anticipated as aresult of theproposed change;

iii. Adescription of the impact on each hospital's physician referral patterns; and

The primary service area ofMeadowlands includes Lyndhurst, West New York, North Bergen,Union City, Bayonne, Secaucus, Hoboken andportions ofJersey City. The secondary serviceareas ofMeadowlands include Kearny, Harrison, North Arlington, Rutherford and EastRutherford. There does not appear to be aduplication ofavailable services in the service area.

iv. Adescription ofthe market formed as aresult ofthe proposed change, that is, the redefinedservice area(s) and the percentage market share(s) of the newly formed hospital system within thatredefined service area; and

The proposedproject will not alter the market ofMeadowlands.

9. The extent ofany change in financial status for the parties involved in the transfer ofownership. The applicant shall include:

i. Audited financial statements for the two most recent years, and projected financialstatements for the current year and following four years. Financial statements shall include adelineation of any cost savings which are expected to occur as aresult ofthe transfer of ownership-and ^'

ii. Adescription ofproject costs and an independently verified purchase price whenappropriate. Compliance with the requirements ofN.J.A.C. 8:33A-1.16 equity contributions andfinancing shall be demonstrated.

N/A

8:33A-1.21 Closure of services

ACertificate ofNeed may be awarded for the closure ofaservice except where the applicant failsto demonstrate compliance with Specific Criteria for Review contained in N.J.A.C. 8:33, and otherapplicablerequirements of these rules.

43

This project does not involve the closure ofany beds or services and the Transfer will providethe only alternative to closure.

8:33A-1.22 Decertification of unused beds

(a) Pursuant to the Health Care Cost Reduction Act (N.J.S.A. 26:2H-12d), theCommissioner may amend afacility's license to reduce the facility's licensed bed capacity toreflect actual utilization atthe facility. This authority may be exercised ifthe Commissionerdetermines that 10 or more licensed beds in the health care facility have not been used for at leastthe last two succeeding years. For purposes of this rule, the Commissioner may review hospitalutilization from January 1, 1990.

(b) In determining iflicensed beds have been unused, the Commissioner may employthe minimum occupancy rates identified at N.J.A.C. 8:33A-1.11(a), and reduce licensed beds to anumber which would permit conformance with these minimum occupancy rates.

N/A

8:33A-1.23 Hospital physical plant survey

(a) Certificate ofNeed applications shall not be accepted by the Department from anyhospital which is subject to these rules, unless such hospital has filed acomplete physical plantsurvey or update with the Department atleast 60 days prior to filing the application.

(b) Each hospital that is approved (either through the Certificate ofNeed process orthrough construction plans review) for any modernization, renovation, construction or expansionproject shall provide an update ofthe hospital physical plant survey to the Division ofHealthFacilities Evaluation and Licensing. This update shall be provided in aformat prescribed by theDivision of Health Facilities Evaluation and Licensing and shall be submitted within 60 days ofproject completion.

N/A

8:33A-1.24 Surgical Facilities

(a) In addition to demonstrating compliance with all applicable standards and criteria ofN.J.A.C. 8:33, applicable licensing and planning rules and outstanding certificate ofneedconditions, applicants proposing addition, deletion or alteration ofhospital-based operating rooms,surgical facilities and services shall follow the certificate ofneed requirements identified at N.J.A.C.8:33-4.1(a). These rules shall not apply to the provision of cardiac surgical services or any other

44

special surgical service which is the subject ofaseparate Department ofHealth planning regulation.Applications for additions, deletions, or alteration ofoperating rooms and surgical facilities shall beaccepted in accordance with policies and procedures ofthe full certificate ofneed review process setforthinN.J.A.C. 8:33.

(b) Information provided by all applicants for inpatient operating rooms shall include thefollowing:

1. The expected number ofrecovery beds and/or recliners;

2. The total expected number ofsurgical cases, by each type ofsurgery;

3. The expected payorpercentage; and

4. Adetailed description ofthe proposed service area, accompanied by alegible map whichincludes adistance scale and physical relationship to other existing surgical services within theproposed service area and immediately bordering the area. The rationale justifying the delineationofthe service area chosen by the applicant shall be included, with supporting quantifiable evidence.The Department shall determine the reasonableness ofthe defined service area, using existingmarketshare and patientorigindate.

(c) For the purposes ofcertificate ofneed review, the capacity ofeach type oflicensedinpatient/mixed operating room (OR) shall be calculated as follows:

1. Dedicated inpatient OR = 1,000 surgical cases annually;

2. Mixed (inpatient/same day surgery) OR = 1,090 surgical cases annually; and

3. Dedicated SDS OR = 1,500 surgical cases annually.

(d) Where all other criteria ofthis section are met, no application for anew inpatient/mixedsurgical service, or increase in the number ofoperating rooms in an existing surgical service, shallbeapproved unless allof the following conditions are met:

1. The applicant has documented that its existing surgical caseload exceeds the capacity of itslicensed operating rooms for the past 12 months prior to the submission ofthis certificate ofneedapplications;

2. The applicant has agreed, as part ofthe application, to limit the proposed addition ofoperating room capacity to that number ofoperating rooms necessary to reduce its surgical caseutilization level to 80 percent ofits operating room capacity at the time the application is submitted;and

3. The applicant has documented that sufficient access to alternative surgical providers thatshare the service area is notreadily available.

45

(e) Applicants seeking toreplace their existing inpatient/mixed operating rooms shall documentthat existing annual surgical caseload, during the year immediately prior to the submission oftheapplication, exceeds 75 percent ofthe hospital's surgical capacity, using the capacity levels specifiedat (c)l through 3 above.

(f) An ambulatory surgery facility shall comply with the State Uniform Construction Code, atN.J.A.C. 5:23-3 andthe Department's licensing requirements.

(g) Apost anesthesia care unit shall comply with the State Uniform Construction Code, atN.J.A.C. 5:23-3 andtheDepartment's licensing requirements.

(h) Hospitals may submit applications for dedicated SDS operating rooms, either freestandingor withinthe hospital, as an expedited CN review and in accordancewith criteria identifiedatN.J.A.C. 8:33-5.1 and 5.3(a)4. These facilities shall also comply with Standards for Licensure ofAmbulatory Care Facilities atN.J.A.C. 8:43A.

Thisproject does not involve surgical facilities.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE12. Attach a map of yourpatient service areaincluding the location of your institution.Identify major service areas based on patient origin studies for inpatients and/or outpatients.

A map is included in the attachments.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE13. Provide a breakdown oftotal project costs into costs associated with each programmaticor functional component.

N/A.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE14. The certificate of need criteria identified in NJAC 8:33-4.9 and NJAC 8:33-4.10 must beaddressed.

46

The hospital is served by aNJTransit Bus route with stop BG5 at Meadowlands Parkway andCove Court Also, train service toLautenberg Station anda connection on NJTbus #129 tostop BG5.

Meadowlands has Spanish-speaking stafffortranslation and has access to a languageinterpretation service.

The applicant will continue compliance with allcriteria ofNJAC 8:33-4.9 and NJAC 8:33-4.10.

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE15. Identify all previously approved certificates ofneed which have not been completed andindicate the currentstatus of each project.

None

SECTION II. A. DESCRIPTION / PROJECT NARRATIVE16. Identify any conditions of certificate of need approval which have notbeen metandexplain.

N/A

CONSTRUCTION REQUIREMENTS

No construction orrenovations are involved in this project.

3.A. LICENSING REQUIREMENTSOne Hundred percent of the ownership and operation ofthe proposed facility, service orequipment must be accounted for in the Certificate ofNeed application.

Meadowlands will be owned by NJMHMC, LLC. NJMHMC, LLC isaNew Jersey LimitedLiability Corporation with Yan Moshe as the Sole Member. Mr. Moshe's address is 32Farmstead Lane in Brookville, New York. Mr. Moshe also owns Excel Surgery Center inHackensack, New Jersey.

41

3.b CERTIFICATE OF NEED REQUIREMENTSAnapplicant must document in the application thatheowns thesitewhere thefacility

will be located, orhas an ownership or lease option for such site, which option is valid at leastthrough the Certificate ofNeed processing period. A duly executed copy of the deed, option orlease agreement for the sitemust be submitted with the certificate ofneed application andinclude identification of site, terms of agreement, date of execution and signature of allparties tothe transaction. If the site is optioned or leased by the applicant, a copy of the deed held by thecurrent owner is required at the time of filing.

The Purchase Agreement between the two parties has been included in the attachments.

48

Attachments

49

Hospitals

Hospitals

♦ All items

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2Horristown

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OverlookHospital,

Summit

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5AtfantiCire

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ealthSystem

7CapitalHealth

RegionalHedicalCenter,TrentonI

Heror

Campus,TrintM

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atholicHealth

EastA

ffiliatesI

LmntesHedial

CenterofInrfiigton

CMirty.W

Umgboro*1D

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ipnuttfM

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HedicalCenter,Newark

#CathoBc

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Initiatives13

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14StDare's

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St.dare'sHospitalSussex

#Com

munity

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Systems,Inc.

IEThe

MemorialHoipital

ofSalemCounty,Silent

AKennedyHealth

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KennedyMemorial

Hospitals.CherryRift

18Kennedy

MemorialHospitals,Stratford

19Kenned;

MemorialHwpitak.Washington

Township

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29Jersey

GtyHedicalCenter,Jersey

Qty

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ealthSystem

21Bayshare

CtmmumtyHospital,Holmdel

22Jersey

ShoreUnnrersity

MedialCenter,Neptune

23Ocean

Hediat

Center,Bricktowi24

RWerview

Medial

Center,RedBank

25Southern

OceanM

edialCenter,Hanahawkin

0M

eritHealth

Systems

2fiM

ountainsideHospital,Hontdair

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ewYork-Presbyterian

Healthcare

27Palisades

Medial

Center,NorthBergen

•Rarttan

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edicalCenter29

OldBridge

Dmston,OldBridge

29Perth

JunboyDivision,Perth

Ambuy

ARobertW

oodJohnsonHealthSystem

30KWJ

ItrmnityHospitalNew

Brunswick31

KW]University

HoipitalatHarafton,Hamilton32

KW]University

HospitalatRahway,Rahway

+SaintBarnabasHealth

CareSystem33

rjanHaass

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34Community

MedicalCenter,TomsRiver

35Kimball

HedicalCenter,Lakewood

36Monmouth

MedialCenter,Ling

Brawn37

NewarkBeth

IsraelHedical

Carter,Newark31

SaintBarnabasHedicalCenter,Livingston

ASouthJerseyHealth

System39

SouthJersey

Healthcare-

RegionalMedialCenter,YinelandW

SjHElmerHoipital.Elmer

+StJoseph'sHealthcareSystem

MSt.Joseph's

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*2SlJoseph's

HospitalandHedicalCenter.Wayne

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46TirtiaVoorhees.VoD

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SPTTALS47

BayonneHospitalCenter,Bayonne

41Bergen

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edialCenter,Paraimn49

CapeRegionalM

edialCenter,Cape

HayCourtHome

50CentraStale

Medial

Center,freehold

51Chiton

MemorialHospital,Plimpton

Plain52

ChristHospital,JerseyQty

53Owper

HospitalUniversity

HedicalCenter,Camden54

DeborahHeart

ILung

Center,BrownsMills

55East

OrangeGeneral

HospitalEastOrange56

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andMedicalCenter,Englewood

57Hackensack

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edialCenter,Hackensack

58Hoboken

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Center,Hoboken59

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Updated

April15,2011

61JFK

HedicalCenter,Edison62

HeadowiandsHospital

Medial

Center,Seautut93

ShoreMemorial

Hospital,SomenPoint

64Somerset

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Center,SomerviDe65

St.Mary'sHospital,Passaic

66SL

Peter'sUniversity

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67Trinitas

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emorialHospital,W

oodbory69

UniversityHospital,Newark

71University

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71TheValley

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72W

arrenHospital,Phiipiburg

U.S. Census Bureau

FaeiFinder v...^S0101 AGE AND SEX

2010-2014 American Community Survey 5-Year Estimates

Supporting documentation oncode lists, subject definitions, data accuracy, and statistical testing can befound on the American Community Surveywebsite in the Data and Documentation section.

Sample size and data quality measures (including coverage rates, allocation rates, and response rates) can befound onthe American CommunitySurvey website in the Methodology section.

Although the American Community Survey (ACS) produces population, demographic and housing unit estimates, it is the Census Bureau's PopulationEstimates Program that produces and disseminates the official estimates of thepopulation for thenation, states, counties, cities and towns andestimates of housing units for states and counties.

Subject Hudson County, New Jersey

Total Male Female

Estimate | Margin of Error Estimate ; Margin of Error ! Estimate

Total population 654,878 ! ***** : 324,965 ; +/-132 j 329,913

AGE • • I i

Under 5 years

5 to 9 years

6.9% j +/-0.1 7.1%: tt°l.^5.4%!^ +/-0.1 ; 5.5%: +7-0.2 j

6.7%

5.3% ;

10 to 14 years 5.0% i +/-0.1 5.2% , +/-0.2 i 4.8%

15 to 19 years 5.4% i +/-0.1 '• 5.7% ! +/-0.1 j 5.1%

20 to 24 years : 7.3% ! +/-0.1 i 7.6% : +/-0.1 \ 6.9% :

25 to 29 years "~ 10.5% i +/-0.1 ; 10.8% I +/-0.1 i 10.3% |

30 to 34 years 10.4% I +/-0.1 10.8% ; +/-0.1 ; 10.0%

35 to 39 years 8.2% ' +/-0.2 ; 8.7% ; +/-0.3 \ 7.7%

40 to 44 years 7.3% ! +/-0.2 ; 7.4% , +/-0.3 _ 7.2%

: 45 to 49 years 6.6% : +/-0.1 ; 6.7% i +/-0.1 ; 6.6% .

50 to 54 years 6.3% i +/-0.1 : 6.2% ' +/-0.1 ; 6.4%

55 to 59 years 5.4% i +/-0.1 ; 5.2% I +/-0.2 I 5.7% :

60 to 64 years 4.7% +/-0.1 , 4.4% +/-0.2 5.6%j65 to 69 years 3.4% i +/-0.1 : 3.1% : +/-0.1 | 3.7%

70 to 74 years 2.5% : +/-0.1 2.1% '•• +/-0.1 : 2.8%

75 to 79 years ~ : 1.9% [ +7-0.1 i 1.6% ±t9:!l. 2.1% :

80 to 84 years 1.4% i +/-0.1 1.1% , ±/^-.Li..- 1.8%

85 years and over 1.4% : +7-0.1 . 0.9% +/-0.1 | 1.9%

SELECTED AGE CATEGORIES ! ;

5 to 14 years 10.4% . +/-0.1 10.7% +/-0.1 10.1%

15 to 17 years 3.2% ; +/-0.1 I 3.3% +/-0.1 i 3.0%

18 to 24 years 9.5% +/-0.1 ; 10.0% ' +/-0.1 9.0% :

15 to 44 years 49.1% ! +/-0.1 : 51.0% +/-0.1 47.1%

16 years and over 81.7% +/-0.1 81.1% +/-0.1 82.3%

18 years and over 79.5% +/-0.1 : 78.8% ; +/-0.1 ; 80.2%_,

60 years and over 15.2% +/-0.1 13.0% +/-0.2 17.4%

62 years and over 13.2% ; +/-0.1 ; 11.2% ; _ _...+/^).-2..„_ 15.2% ;

65 years and over 10.6% +/-0.1 8.7% +/-0.1 12.4%

75 years and over 4.7% ; +/-0.1 3.5% +/-0.1 ; 5.8%

SUMMARY INDICATORS

Median age (years) 34.5 +/-0.1 33.6 +/-0.2 35.5

1 of i. 06/13/2016

52

Subject Hudson County, New Jersey.

;4-,w~-^.,-.v~-~-V'--:-'— '-''•.-,' - Total " '•__Estimate i Margin of Error 1

" Male

Estimate ! Margin of Error i

Female

Estimate

Sex ratio (males per 100 females)

Age dependency ratio

Old-age dependency ratio

Child dependency ratio

98.5 ! +/-0.145.1 ; +/-0.1

'"" 15.3 ' +/-0.1 ;29.7 ' +/-0.1

(X) : (X) ,(X) , (X) j

(X) ; CX) |(X) ; JX) ;

(X)

(X)

(X)

(X)

percentImputed" "'"-. - - -- ;- -- - • '.

-_i :Sex

Age

0.1% j w.i..'.""" ~~"Z3%" ' (X) ;

(X) ; (X) ;

"""". ii iiiiWj lx)_L(X)

(X)

2 Of 406/13/2016

53

Subject

Total population

AGE

i Hudson County,New Jersey -

Female

Margin of Error i

+/-132 i

Under 5 years

5 to 9 years

10 to 14 years

+/-0.1

+/-0.2 [

+/-0.2 i15 to 19 years

20 to 24 years+/-0.1 !

+/-0.1

25 to 29 years

i 30 to 34 years: 35 to 39 years

40 to 44 years

45 to 49 years

50 to 54 years

55 to 59 years

+/-0.1 ;

+/-0.1 I

+/-0.2 i+/-0.2

+/-0.1 i+/-0.1 '+/-0.2 |

• 60 to 64 years

, 65 to 69 years

; 70 to 74 years

+/-0.2 ;

i +/-0.2 i

+/-0.2:

! 75 to 79 years

80 to 84 years

85 years and over

+/-0.1 ';

+/-0.1 i

+/-0.1 •

SELECTED AGE CATEGORIES • i

5 to 14 years

• 15 to 17 years

18 to 24 years

+/-0.1 i; +7-6.1 i' +/-0.1 I

15 to 44 years

16 years and over

18 years and over

60 years and over

; +/-°-1 '+/-0.1

+7-o.i j+/-0.2 :

: 62 years and over

65 years and over

. 75 years and over

+/-0.2 j

+/-0.1 :

+/-0.1 |

SUMMARY INDICATORS

Median age (years) +/-0.1 iSex ratio (males per 100 females)

: Age dependency ratio

Old-age dependency ratio

Child dependency ratio

(X)!(X)

(X) :(X) ;

PERCENT IMPUTED

Sex

Age(X) j

(X)

Data are based on a sample and are subject to sampling variability. The degree of uncertainty for an estimate arising from sampling variability isrepresented through the use of a margin of error. The value shown here is the 90 percent margin of error. The margin of error can be interpretedroughly as providing a 90 percent probability that the interval defined by the estimate minus the margin of error and the estimate plus the margin oferror (the lower and upper confidence bounds) contains the true value. In addition to sampling variability, the ACS estimates are subject tononsampling error (for a discussion of nonsampling variability, see Accuracy of the Data). The effect of nonsampling error is not represented in thesetables.

The age dependency ratio is derived by dividingthe combined under-18 and 65-and-over populations by the 18-to-64 population and multiplying by100.

The old-age dependency ratio is derived by dividing the population 65 and over by the 18-to-64 population and multiplying by 100.

The child dependency ratio is derived by dividing the population under 18 by the 18-to-64 population and multiplying by 100.

3 of 4 06/13/2016

54

U.S. Census Bureau

amkrita:, /"""•

raeiFinder v ^S1701 POVERTY STATUS IN THE PAST 12 MONTHS

2010-2014 American Community Survey 5-Year Estimates

Supporting documentation on code lists, subject definitions, data accuracy, and statistical testing can be found on the American Community Surveywebsite in the Data and Documentation section.

Sample size and data quality measures (including coverage rates, allocation rates, and response rates) can be found on the American CommunitySurvey website in the Methodology section.

Although the American Community Survey (ACS) produces population, demographic and housing unit estimates, it is the Census Bureau's PopulationEstimates Program that produces and disseminates the official estimates of the population for the nabon. states, counties, cities and towns andestimates of housingunits for states and counties.

Subject• . -

Hudson C ounty, New Jersey.

Total Below poverty level Percent belowjjpyertyJeyel

Estimate i Margin of Error I

+/-716 j

Estimate i Margin of Error Estimate

Population forwhom poverty status is determined 648,311 i 112,585 ; +/-3,774 • 17.4%

AGE

Under 18 years 133,194 | +/-339 35,265 ; +/-1.725 ! 26.5% ;

Related children under 18 years 132,713 I

448,168 j

+/-371 |+/-467 !

34,808 i

66,889 :

+/-1.703 |

+/-2,522 I

26.2% :

14.9% i18 to 64 years

65 years and over 66,949 I +/-461; 10,431 I +/-697 | 15.6% i

,- - - I I

SEX

+/-554 T._j :

: Male 321,496 49,194 +/-2.091 I

+/-2,229 I

15.3%

Female 326,815 ' +1-445 l 63,391 ! 19.4% ;.._. .. .-

_.

RACE AND HiSPANIC OR LATINO ORIGIN : Ii

One race 628,148 j +/-1.556 i 109,525 l +/-3,834

"+7-2,555 ]+/-1.722

17.4% :

White 357,140 ;

82,595 i

+/-3.201 ;

+/-1,573 i

+/-597 I

56,721 :

19,826 :

15.9%

24.0%Black or African American

American Indian and Alaska Native 2,207 !

92,915 I

604 L._10,466 I

+A470|+/-1.113T

27.4%

Asian +/-670 11.3% ,

I Native Hawaiian and Other Pacific Islander 269 I +/-152 ;

+/-3.501

+/-1.396 :

26 i

21,882 I

+/-31 I

+/-1.952 :

9.7% I

Some other race 93,022 23.5%

Two or more races ; 20,163 : 3,060 i +/-548 15.2% '

_. -

Hispanic or Latino origin (of anyrace) 278,157 : +/-358 :

+/-927

62,736

20,399

+/-3.060 22.6% i

+/-1,346White alone, not Hispanic or Latino 190,884 10.7%

! 4- :• -

EDUCATIONAL ATTAINMENT

* 455,443 I79,133

+/-571 :

" +/-2,336+/-2.300J

""'+7-2,214 _+/-2.481

62,489 I19,858

20,336_Tl,859_

10,436

+/-2.053

" +/-1,047+/-1,067 ^

" +/-798" ""+7-906

+/-1.695

+/-1.375

+/-815

13.7%

25.1% '-i Population 25 years andover\ Less than high school graduate

17.1% :

13.4%

~ 6.2% i

High school graduate(includes equivalency): Some college, associate's degree"Bachelor's degree or higher

119,248 ;

" " 88,576 I" ; 168,486 '

EMPLOYMENT STATUS

CivilianTabor force 16 years and over

• Employed

Male

369,836

""-;" ' 331,747 i180,298

+/-2.039

+/-2.261 I

'+7-1,551

36,480

24,712"" "" 11,045

9.9%

7.4%

6.1%

06/13/20161 of 4

55

Female

Unemployed

Male

Female

Subject

WORK EXPERIENCE

Population 16 years and over

Worked full-time, year-round inthe past 12 months

Worked part-time or part-year in the past 12 months

Did not work

All Individuals below:

50 percent of poverty level

125 percent of poverty level

150percent ofpoverty level185percenfof poverty level20Cfpercentofpoverty level

Unrelated individuals for whom poverty status isdetermined _

Male

Female

Mean income deficit for unrelated individuals (dollars)

Worked full-time, year-round in the past 12 months

Worked less than full-time, year-round in the past 12monthsDid not work

PERCENT IMPUTED

Poverty status for individuals

2 of 4

Total

Hudson County, New Jersey .

~ " Below poverty level Percent below

_ poverty, levelEstimate

9^0%_ _30.9%_ __ 25.8%

36.2%

Estimate [ Margin of Error151,449 i +7-1,64038,089

19,345

18,744

529,573

250,058

110,912

168,603

47,959

143,833

174,823

219_,398236,761

149,803

80,902

68,901

6,929

81^882

27,281

40,640

33.6%

+/-1,525_+/-996

+7-1,047

+/-799

+/-2,536

"+/-2*616

+7-2,237

+/-2,518_+/-4,052_+7-4,276"

j7-4,526+/-4.741

+/-2,755

+7-2,044

+/-1.363

+7-170

+/-2.220

+/-1,344

+7-1,486

(X)

56

Estimate j_ Margin of_Error_13,667 : _ _ +/-950

11,768 i_ _ .jf84fL4,986 +l-51-\

6,782 +7-652

81,350_7,600

22,864

50,886

(X)

(X)

(X)

(X)

33,698

15,054_

18,644

"""7xf

""l,6578,748

23,293

(X)

_+/-2,755_+/-642

+/-1.318

+7-1,972

(X)

JX)(X)

(X)

(X)

+/-1.414

+/-1,062

+7-927

(X)

+/-316 ;

+7-696 '

+7-1,207

(X)

15_.4%_3.0%

20.6%

30.2%

(X)

(X)

(X)

IX)(X)

22.5%

18.6%

27.1%

(X)

2.0%

32.1%

57.3%

(X)

06/13/2016

Subject Hudson County,-. .- - _„-New,Jersey:._:_ _

•"•••"- ~ Percent belowpoverty level

1 Margin of Error

Population for whom poverty status is determined +/-0.6age" """ --•-—•-- • •-•-

Under 18 years » +/-1.3

Related children under 18 years +/-1.3

M8to~64 years +/-0.665 years and over +7-1.0

SEX

Male +/-0.6 j

I Female +/-0.7 j

RACE AND HISPANIC OR LATINO ORIGIN

One race +/-0.6 ;

White +/-0.7

Black or African American +/-2.0

; American Indian and Alaska Native +/-15.9 ;

Asian +/-1.2 '

Native Hawaiian and Other Pacific Islander +/-12.4 i

Some other race +/-2.0

Two or more races +A2.4 I

Hispanic or Latino origin (of any race) +/-1.1 I

White alone, not Hispanic or Latino +/-0.7 !

EDUCATIONAL ATTAINMENT ~~ ":--

Population 25 years and over +/-0.5

Less than high school graduate +/-1.2

I Highschool graduate (includes equivalency) +/-0.9 iSome college, associate's degree +/-0.9

Bachelor's degree or higher +/-0.5 ;

EMPLOYMENT STATUS :- ;

Civilian labor force 16 years and over +/-0.5 j

: Employed +/-0.4 i

Male

Female

+/-0.5 I

+/-0.61Unemployed +/-1.7

Male +/-2.3

Female +/-2.5

WORK EXPERIENCE"- -:

Population 16 years and over +/-0.5

Worked full-time, year-round in the past 12 months +/-0.3

Worked part-time or part-year in the past 12 months +/-1.0 i

: Did not work +/-1.0

Ail Individuals below:-• '.

50 percent of poverty level (X) I

125 percent of poverty level (X)




Unrelated individuals for whom poverty status is +/-0.9determined _ _ . I.... _... _

Male +/-1.2

Female +/-1.2

3 of 4 06/13/2016

57

Subject

Meanincome deficit for unrelated individuals (dollars)

Worked full-time," year-round inthe past 12 monthsWorked less than fulT-time, year-round inthe past 12monthsDid not work

PERCENT IMPUTED

Povertyltatus for individuals

Hudson County,New Jersey

; Percent below

povertyJeyeLi Margin of Error

(X)

+/-0.4

+/-2.1

+/-1.7 '

I

i

(X);

tables.

ACS tables may differ from the OMB definitions due to differences in the effective dates of the geographic entibes.

Estimates of urban and rural population, housing units, and characteristics reflect boundaries of urban areas defined based on Census 2010 data. Asaresult data for urban and rural areas from the ACS do not necessarily reflect the results of ongoing urbanization.

Source: U.S. Census Bureau, 2010-2014 American Community Survey 5-Year Estimates

Explanation of Symbols:

1 An - entry in the margin of error column indicates that either no sample observations or too few sample observations were available to

^rSoWamedian estimate means the median falls in the lowest interval of an open-ended distribution.^^^^

*?^SSairgln of error column indicates that the estimate is controlled. Astatistical test^^^SISS^^S^^7. An 'N' entry in the estimate and margin of error columns indicates that data for this geographic area cannot be displayed because the numbersample cases is too small.

8. An '(X)' means that theestimate isnot applicable ornot available.

4 of 4

06/13/2016

Real Proyertu Ayyraisul Ayyemiix C

Summary of Salient Facts and Conclusions

i Tj.. IJ.vmfii

1UU-..I Value

Inspection D.Hc

Date of the Report

Gross Land Area (Sq Ft t

Cross Land Area (Ai.res|

Usable Land Area (Sq Ft J

Usable Land Area (Acres)

Number oi Buildings

Power Plant k Main! Shop Square Footage

Hospital BuildingSquare Footage

Hospital andPower Plan) CrossBuilding Area (G13A)

Current Occupancy (O^Tier Occupied)

Year Built

Zoning Designation

Floodplain MapPanel Number and Oate

Flood Map EffectiveOate

Flood Plain Location

Assessed Value - Hudson County (2010)

Land/Building Valuesper Hudson County

Real Estate Taxes (2010)

Highest and Best Useas improved

Property Rights Appraised

Estimated Exposure Time

Fair Market Value Range Indications

Cost Approach

Land Valuation

Depreciated Site Improvements

Depreciated Building Value (Building As If Vacant)

Indicated Value Range ViaCost Approach

Sales Companson Approach

Number of Listings and Sates

Range of Datesnf Sale

Range of Prices per Unit(Unadjusted)

Range of Pricesper Unit (Adjusted)

Concluded Value Indication per Sq Ft

Indicated Value Range ViaSales Companson

IncomeCapitalization Approach

NCI Fair Market Value Range

Fair Market Value per Sq. Fl. Range

Meadozvtand* Hospital

f.te.idou-lands Hospital

Vi Mci'-lowlanos Pjrkv..v,

Srtju.-us MJ urif'4

filock 21 Leu 'i

Libem Riverside I ledlthcirc In

lulv 51. 2HIU

August 3. 2(110

August 12 2010

ST 1.201)

20 0

•tM.tm

10"

TimJ

5 850

188.616

194.466

100'.'-..

1976/Partial Bldg Renov 2004-2010

CP (Commercial Park)

34003C0262C

September JO. 2005

AE - Inside the Flood Plain

S33.024.700

$8,000,000 /125.024.700

Exempt

Hospital (interim use)

Fee Simple

Nine to Twelve Months

S5.5OO.0O0 $5,500,000

S260.000 $260,000

$4.940.000 to S5.540.000

5.111,700.000 to $11,300,000

One Listing and Five Sales

Currently Listed lo February-07

S3533 $13519

$35.33 SI 10.59

S55 00 to S58.00

510.700.000 to $11,300,000

Not Applicable

$10,700,000 to S11.3O0.000

S55.02 lo S5S.II

Navigant Consulting. Inc. • Real Estate Valuation

59

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67

EXECUTION VERSION—5/9/2016

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement"), dated as of May \Q, 2016, isentered into by and between MHA, LLC, a New Jersey limited liability company ("Seller1"), andNJMHMCLLC, a New Jersey limited liability company ("Buyer").

RECITALS

WHEREAS, Seller is engaged in the business (the "Business") of owning and operatingMeadowlands Hospital Medical Center, an acute care hospital located at 55 MeadowlandsParkway, Secaucus.New Jersey 07094 (the "Facility" or "Hospital"); and

WHEREAS, Sellerwishes to sell and assign to Buyer, and Buyer wishes to purchase andassume from Seller, substantially all the assets and certain liabilities of Seller used in theBusiness, subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreementshereinafter set forth and for other good and valuable consideration, the receipt and sufficiency ofwhich arehereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The following terms have the meanings specified or referred to in thisArticle I:

"Affiliate" of a Person means any other Person that directly or indirectly, through one ormore intermediaries, controls, is controlled by, or is under common control with, such Person.The term "control" (including the terms "controlled by" and "under common control with")means the possession, directly or indirectly, of the power to direct or cause the direction of themanagement and policies of a Person, whether through the ownership of voting securities, bycontract or otherwise.

"Agreement" has the meaning set forth in the preamble.

"Allocation Schedule" has the meaning set forth in Section 2.6.

"Assigned Contracts" has the meaning set forth in Section 2.1(c).

"Assignment and Assumption Agreement" has the meaning set forth in Section 3.2(a)(ii).

"Assignment and Assumption ofLease" has the meaning set forth in Section 3.2(a)(iii).

"Assumed Liabilities" has the meaning set forth in Section 2.3.

"Benefit Plan" means each material benefit, retirement, employment, consulting,compensation, incentive, bonus, stock option, restricted stock, stock appreciation right, phantomequity, change in control, severance, vacation, paid time off, welfare and fringe-benefit

68

/nt

agreement, plan, policy and program in effect and covering one or more Employees, formeremployees of the Business, current or former directors of the Business or the beneficiaries ordependents of any such Persons, and is maintained, sponsored, contributed to, or required to becontributed to by Seller, or under which Seller has any material liability for premiums orbenefits.

"Bill of Sale" has the meaning set forth in Section 3.2(a)(i).

"Books and Records" has the meaning set forth in Section 2.1 (i).

"Business" has the meaning set forth in the recitals.

"Business Day" means any day except Saturday, Sunday or any other day on whichcommercial banks located in Newark, NJ are authorized or required by' Law to be closed forbusiness.

"Buyer" has the meaning set forth in thepreamble.

"Buyer Benefit Plans" has the meaning set forth in Section 6.2(b).

"Buyer Closing Certificate" has the meaning set forth in Section 7.3(d).

"Buyer Principal" means Yan Moshe.

"Cancer Center" means the cancer treatment center which is located in a portion of tiieHospital which is leased by Seller to the Cancer Center Entity.

"Cancer Center Entity" means Meadowlands Cancer Center, LLC.

"Closing"has the meaning set forth in Section 3.1.

"Closing Date"has the meaning set forth in Section 3.1.

"Code" means the Internal Revenue Codeof 1986, as amended.

"Contracts" means all legally binding written contracts, leases, mortgages, licenses,instalments, notes, commitments, undertakings, indentures and other agreements.

"Direct Claim" has the meaning set forth in Section 8.5(c).

"Disclosure Schedules" means the Disclosure Schedules delivered by Seller and Buyerconcurrently with the execution and deliveiy ofthis Agreement and attached to this Agreement.

"Dollars or $" means the lawful currency of theUnited States.

"Drop Dead Date" has the meaning set forth in Section 9.1(c)(1).

"Employees" means those Persons employed by Seller who worked for the Businessimmediately prior to the Closing,

5fl7i379U.S'

^L-

"Encumbrance" means any lien, pledge, mortgage, deed of trust, security interest, charge,claim, easement, encroachment or other similar encumbrance.

"Environmental Claim" means any Governmental Order, action, suit, claim, investigationor other legai proceeding by any Person alleging liability of whatever kind or nature (includingliability or responsibility for the costs of enforcement proceedings, investigations, cleanup,governmental response, removal or remediation, natural resources damages, property damages^personal injuries, medical monitoring, penalties, contribution, indemnification and injunctiverelief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, anyHazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Lawor term or condition of any Environmental Permit.

"Environmental Law" means any applicable Law, and any Governmental Order orbinding agreement with any Governmental Authority: (a) relating to pollution (or the cleanupthereof) or the protection of natural resources, endangered or threatened species, human health orsafety, or the environment (including ambient air, soil, surface water or groundwater, orsubsurface strata); or (b) concerning the presence of, exposure to, or the management,manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generationdischarge, transportation, processing, production, disposal or remediation of any HazardousMaterials. Ihe term "Environmental Law" includes, without limitation, the following (includingtheir implementing regulations and any state analogs): the Comprehensive EnvironmentalResponse, Compensation, and Liability Act of 1980, as amended by the Superfund Amendmentsand Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, asamended by the Resource Conservation and Recovery-Act of 1976, as amended by theHazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water1oilution Control Act of 1972, as amended by the Clean Water Act of 1977 33 USC §§1251et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. '§§ ?601 et seq •theEmergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.;the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990 42 USC §87401 et seq.; and the Occupational Safety and Health Act of 1970, as amended ?9 USC 55 651et seq. ' • • • ss

^Ejivjronme^^ means any Permit, letter, clearance, consent, waiver closureexemption, decision or other action required under or issued, granted, given, authorized by ormade pursuant to Environmental Law.

"ERISA" means the Employee Retirement Income Security Act of 1974 as amendedand the regulations promulgated thereunder.

"Excluded Assets" has the meaning set forth in Section 2.2.

"Excluded Liabilities" has the meaning set forth in Section 2.4.

"GAAP" means United States generally accepted accounting principles in effect fromtime to time. -if

, "Gr^ygi-nmental Authority" means any federal, state, local or foreign government orpolitical subdivision thereof, or any agency or instrumentality of such government or political

^imiMSr

>

subdivision, or any self-regulated organization or other non-governmental regulatory authority orquasi-govermnental authority (to the extent that the rules, regulations or orders of suchorganization or authority have the force ofLaw), or any arbitrator, court or tribunal ofcompetentjurisdiction.

"Governmental Order" means any order, writ, judgment, injunction, decree, stipulation,determination or award entered by orwith any Governmental Authority.

"Hazardous Materials" means: (a) any material, substance, chemical, waste, product,derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturallyoccurring or man-made, that is hazardous, acutely hazardous, toxic, or words of similar import orregulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derivedproducts, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containingmaterials, urea formaldehyde foam insulation and polychlorinated biphenyls.

"Hospital" means the acute care hospital known as Meadowlands Hospital MedicalCenter, located at 55 Meadowlands Parkway, Secaucus, New Jersey 07094. which is operated bvSeller. ' ' y

"Indemnified Party" hasthe meaning set forth in Section 8.4.

"Indemnifyjn^Tfarty" hasthemeaning set forth in Section 8.4.

"Intellectual Property" means any and all of the following in any jurisdiction throughoutthe world: (a) trademarks and service marks, including all applications and registrations and thegoodwill connected with the use of and symbolized by the foregoing; (b) copyrights, includingall applications and registrations, and works of authorship, whether or not copyrightable- (c)trade secrets and confidential know-how; (d) patents and patent applications; (e) websites'andinternet domain name registrations; and (f) all other intellectual property and industrial propertyrights and assets, and all rights, interests and protections that are associated with, similar to. orrequired for the exercise of, any of the foregoing.

"Intellectual Property Agreements" means all licenses, sublicenses and other agreementsby or through which other Persons grant Seller or Seller grants any other Persons any exclusiveor non-exclusive rights or interests in or to any Intellectual Property that is used exclusively inconnection with the Business.

"intellectual Property Assets" means all Intellectual Property that is owned by Seller andexclusively used in connection with the Business.

"Intellectual .Property Registrations" means ail Intellectual Property Assets that aresubject to any issuance, registration, application or other filing by, to or with any GovernmentalAuthority or authorized private registrar in any jurisdiction, including registered trademarks,domain names, and copyrights, issued and reissued patents and pending applications for any ofthe foregoing.

"Inventory" has the meaning set forth in Section 2.1(b).

awwM—-*

"Law" means any statute, law, ordinance, regulation, rule, code, order, constitution,treaty, common law, judgment, decree, other requirement or rule of law of any GovernmentalAuthority.

"Leased Real Property" means the real property located at 55 Meadowlands Parkway,Secaucus, New Jersey which is leased by Seller and used in connection with the Business.

"Losses" means actual out-of-pocket losses, damages, liabilities, costs or expenses,including reasonable attorneys' fees.

"Material Adverse Effect" means any event, occurrence, fact, condition or change that ismaterially adverse to (a) the business, results ofoperations, financial condition or assets of theBusiness, taken as a whole, or (b) the ability of Seller to consummate the transactionscontemplated hereby; provided, however, that "Material Adverse Effect" shall not include anyevent, occurrence, fact, condition or change, directly or indirectly, arising out ofor attributableto: (l) general economic or political conditions; (ii) conditions generally affecting the industriesmwhich the Business operates; (iii) any changes in financial, banking or securities markets ingeneral, including any disruption thereof and any decline in the price of any security or anymarket index or any change in prevailing interest rates; (iv) acts of war (whether or notdeclared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any actionrequired or permitted by this Agreement or any action taken (or omitted to be taken) with thewritten consent of or at the written request of Buyer; (vi) any matter of which Buyer is aware onthe date hereof; (vn) any changes in applicable Laws or accounting rales (including GAAP) orthe enforcement, implementation or interpretation thereof; (viii) the announcement, pendency orcompletion of the transactions contemplated by this Agreement, including losses or threatenedlosses ol employees, customers, suppliers, distributors or others having relationships with theSeller and the Business; (ix) any natural or man-made disaster or acts of God; or (x) any failureby the Business lo meet any internal or published projections, forecasts or revenue or earningspredictions (provided that the underlying causes of such failures (subject to the other provisionsof tins definition) shall not be excluded).

_ "Perrnils" means all permits, licenses, franchises, approvals, authorizations and consentsrequired to be obtained from Governmental Authorities.

"Pjnnittedjr^ujnbrances" means (a) liens for Taxes not yet due and payable or bein°contested in good faith by appropriate procedures; (b) mechanics', carriers', workmen's*repairmen's or other like liens arising or incurred in the ordinary course of business- (c)easements, rights of way, zoning ordinances and other similar encumbrances affecting Reali roperty; (d) hens arising under conditional sales contracts and equipment leases with thirdparties entered into mthe ordinary course of business; and (e) other imperfections of title orincumbrances, ifany, that have not had, and would not have, a Material Adverse Effect.

"Person" means an individual, corporation, partnership, joint venture, limited liabilitycompany, Governmental Authority, unincorporated organization, trust, association or otherentity.

iuPyichiy?^l!rice" has the meaning set forth in Section 2.5.

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"Purchased Assets" has the meaning set forth in Section 2.1.

"Release" means any actual or threatened release, spilling, leaking, pumping, pouring,emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposingor allowing to escape or migrate into or through the environment (including, without limitation,ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata orwithin any building, structure, facility orfixture).

"Representative" means, with respect to any Person, any and all directors, officers,employees, consultants, financial advisors, counsel, accountants and other agents of such Person.'

"SeUer" has the meaning set forth in the preamble.

"Sejler Closing Cejrtfjeate" has the meaning set forth in Section 7.2(c).

"Seller Principals" means Richard Lipsky M.D., Tamara Dunaev and Pavel Pogodin.

"Tangible Personal Properly" has the meaning set forth in Section 2.1(e).

•Taxes" means all federal, state, local, foreign and other income, gross receipts, salesuse, production, ad valorem, transfer, franchise, registration, profits, license, lease, serviceservice use, withholding, payroll, employment, unemployment, estimated, excise, severanceenvironmental, stamp, occupation, premium, property (real or personal), real property gains"windfall profits, customs, duties or other taxes, fees, assessments or charges of anv kindwhatsoever, together with any interest, additions or penalties with respect thereto and anyinterest in respect of such additions or penalties.

"Tax Return" means any return, declaration, report, claim for refund, information returnor statement or other document required to be filed with respect to Taxes, including any scheduleor attachment thereto, and including any amendment thereof.

"IlMlart^aajm" has the meaning set forth in Section 8.5(a).

"Transaction Documents" means this Agreement, the Bill ofSale, the Assignment andAssumption Agreement, Deeds, Assignment and Assumption of Leases, the Note, the SecurityMerest and the other agreements, instruments and documents required to be delivered at theClosing.

"Transferred Employee" has the meaning set forth in Section 6.2(a).

ARTICLE IIPURCHASE AND SALE

Section 2.1 Purchase and Sale of Assets. Subject to the terms and conditions set forthherein, at the Closing Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyershall purchase from Seller, subject to all Encumbrances, all of Seller's right, title and interest into and under Seller sassets, properties and rights used in the operation of the Business, excepifor the Excluded Assets, but including without limitation the following assets, properties and

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rights ofSeller, to the extent that such assets, properties and rights exist as of the Closing Dateand are used in the operation ofthe Business (collectively, the 'TurcJiascd Ajjscts"):

(a) the Hospital (but not the Leased Real Property upon which the Hospital islocated, which is leased by Seller pursuant to the Ground Lease);

(b) all inventory, packaging, supplies and other inventories of Seller used inthe operation of the Business ("Inventory"):

(c) all Contracts and Intellectual Property Agreements of Seller related to theBusiness, including, without limitation, the Leaseback Agreement between Seller, as the seller,and Rosdev Development, Inc., as the purchaser, dated December 24, 2012 (the "Sale/LeasebackAgreement") and the Ground Lease between MHR Investments LP ("Ground Lease Landlord"),as the landlord, and Seller, as the tenant, dated December 28, 2012" (the "Ground Lease")(collectively, the"Assigned Contracts"');

(d) all Intellectual Property Assets related lo the Business;

(e) all furniture, fixtures, equipment (subject lo the assumption of leases),supplies and other tangible personal property of Seller used in the operation of the Business (the" Tangible Personal Property"'):

(f) Seller's leasehold interest in the Leased Real Property used in theoperation of the Business;

(g) all Permits, including Environmental Permits, but only to the extent suchPermits and Environmental Attributes may be transferred under applicable Law;

(h) Seller's Medicare and Medicaid provider agreements and providernumbers;

(i) originals, or where not available, copies, of all books and recordsinc tiding books of account, ledgers and general, financial and accounting records, machinery'and equipment maintenance files, price lists, supplier lists, production data, quality controlrecords and procedures, patient complaints and inquiry files, research and development filesrecords and data (including all correspondence with any Governmental Authority), strategicplans, marketing and promotional surveys, material and research, that relate exclusively to theBusiness or the Purchased Assets, odier titan books and records set forth in Section 1?(g)("Books and Records"): and """ b

clauses.(j) all goodwill associated with any of the assets described in the foregoing

Section 2.2 Excluded Assets. Buyer expressly understands and agrees that, other thanthe Purchased Assets being purchased by the Buyer pursuant to Section 2.1, it is not purchasingor acquiring, and Seller is not selling or assigning, any other assets or properties of Seller and allsuch other assets and properties shall be excluded from the Purchased Assets (the "Excluded

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Assets"). Excluded Assets include, without limitation, the following assets and properties ofSeller:

(a) a" cash md cash equivalents, bank accounts, securities and securitydeposits (including those paid in connection with the Ground Lease and the Sale/LeasebackAgreement) of the Seller;

(b) all accounts receivable and notes receivable of Seller as of the Closingand all amounts due for services which have been provided by Seller prior to the Closing bothbilled and unbilled (including, without limitation, amounts due from Medicaid and Medicare);

(c) all rights to any action, suit, claim or cause of action of any nature(whether asserted or unasserted) available to or being pursued by Seller, whether arising by wayof counterclaim or otherwise (including, without limitation, those asserted or that may beasserted many pending litigation in which Seller is the plaintiff or defendant) which exist as ofthe Closing or relate to the conduct ofthe Business prior to the Closing

(d) Seller's ownership interest in the Cancer Center Entity;

all prepaid expenses, credits, advance payments, deposits, charges, sums(e)and fees;

(I)New Jersey;

the condominium owned by Seller located at 421 Harmon Cove, Secaucus,

t d ♦ ,(8), ihC corP°rate seals> organizational documents, minute books, stock booksTax Returns, books of account or other records having to do with the corporate organization offit nVr e7l0>'ee:relfd or emPlQyee benefit-related files or records, other than personnelfiles of Transferred Employees, and any other books and records which Seller is prohibited fromdisclosing or transferring to Buyer under applicable Law and is required by applicable Law toi CIdlll j

facility; ^ SellCr'S HCenSe iSS"ed by ^ NJD0H t0 0perate a3°-bed rehabilitation

(i) all Tax assets (including duty and Tax refunds and prepayments) of Seller;

proceeds theretmder; *" ^'^ ^^ °f ^ ^ ^ rightS t0 appIicable ciaims and

the Business; ^ *" ^^ PT°peitks and rights used ^ Seller mits businesses other than

Documents; ® ^ ^ WWCh ^'^ °r wHI aCCI'Ue t0 Seller under the Transacti°n(m) Seller's ownership interest in St. James -Columbus Med Realty, LLC; and

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(n) Seller's ownership interest in Elite Auto.

Section 2.3 Assumed Liabilities. Subject to the terms and conditions set forth herein.Buyer shall assume and agree to pay, perform and discharge when due any and all liabilities andobligations of Seller arising out of or relating to the Business or the Purchased Assets from andarise solely after the Closing, other than the Excluded Liabilities (collectively, the "AssumedLiabilities"), including, without limitation, the following:

(a) All liabilities and obligations arising under or relating to the PurchasedAssets and the Assigned Contracts;

(b) all liabilities and obligations of Buyer relating to employee benefits,compensation or other arrangements with respect to any Transferred Employee arising on orafter the Closing;

(c) all Accrued Employee Liabilities, pursuant to Section 2.5(b);

(d) all liabilities and obligations for (i) Taxes relating to the Business thePurchased Assets or the Assumed Liabilities for any taxable period (or portion thereof) after theClosing Date and (ii) Taxes for which Buyer is liable pursuant to Section 6.9;

(e) all other liabilities and obligations arising out of or relating to Buyer'sownership or operation of the Business and the Purchased Assets on or after the Closing; and

(0 all liabilities and obligations of Seller under and relating to the Seller'sMedicare and Medicaid provider agreements and provider numbers being sold to Buyerhereunder. J

Section 2.4 Excluded Liabilities. Except for the Assumed Liabilities and thePermitted Encumbrances, Buyer shall not assume and shall not be responsible to pay, perform ordl.scKha^e ,f"y of the Allowing liabilities or obligations of Seller (collectively, the "Excluded

(a) any other liabilities or obligations arising out ofor relating to Seller'sownership or operation of the Business and the Purchased Assets prior to the Closing Date;

(b) any liabilities or obligations relating to or arising out of the Excluded

(<0 any liabilities or obligations for (i) Taxes relating to the Business, thePurchased Assets or the Assumed Liabilities for any taxable period (or portion thereof) prior lothe Closing Date and (n) any other Taxes of Seller (other than Taxes allocated to Buyer underSection 6.11) for any taxable period;

fc „ , .(d) except as specifically provided in Section 6.2. any liabilities or obligationsof Seller relating to or arising out of (i) the employment, or termination of employment, of anyEmployee prior to the Closing, or (ii) workers' compensation claims of any Employee whichrelate to events occurring prior to the Closing Date; and

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(e) any liabilities or obligations of Seller arising or incurred in connectionwith the negotiation, preparation, investigation and performance of this Agreement, the otherTransaction Documents and the transactions contemplated hereby and thereby, including,without limitation, fees and expenses ofcounsel, accountants, consultants, advisers and others. "'

Section 2.5 Purchase Price.

(a) The aggregate purchase price for the Purchased Assets shall be TwelveMillion Two Hundred Thousand Dollars ($12,200,000) (the "Purchase Price"-), plus theassumption of the Assumed Liabilities. The Purchase Price shall be paid by Buyer, by wiretransfer of immediately available funds to an account designated in writing by Seller to Buyer, asfollows.

(i) One Million Dollars (S1,000,000) (the "Deposit") shall be due andpayable by Buyer to Seller immediately upon execution and delivery of this Agreement by Buyerand Seller, which Deposit shall be non-refundable, except as otherwise provided in Section9.2(c) hereof;

. . (") Four Million Dollars ($4,000,000) (the "Closing Payment") shallbe due and payable by Buyer to Seller at Closing, subject to adjustment pursuant to Section2.5(b); and

(iii) Seven Million Two-Hundred Thousand Dollars ($7,200,000) shallbe paid by Buyer to Seller by delivery at Closing of a promissory note of Buyer payable toSeller, in form and substance reasonably satisfactory to Seller and Purchaser (the "Note") in theoriginal principal amount of Seven Million Two-Hundred Thousand Dollars ($7 200 000) theunpaid principal amount of which shall bear interest at the applicable federal rate' for mid-termobligations as of the date of the Note, as announced by the Internal Revenue Service for theperiod from the date ofthe Note until the principal balance is paid in full. Such Note shall bepayable in seventy-two (72) equal consecutive installments of principal and interest and paidautomatically via Automated Clearing House (ACH), commencing on the first day of the tenthmonth following the Closmg Date and continuing on the first day of each month thereafter.

O) At Closing, Seller shall deliver to Buyer a calculation setting forth indetail the accrued liabilities of the Seller as of the Closing in respect of employee-related costsand benefits, including unpaid wages, accrued but unused vacation and personal time and sickday' (u 4ppd-£mpJo^^ and (i) the amount of such Accrued Employee Liabilitiesshall be deducted from the Closing Payment otherwise payable pursuant to Section 25(a)(ii) and(ii) notwithstanding anything to the contrary contained in this Agreement Buyer agrees toassume, pay, perform and discharge when due such Accrued Employee Liabilities.

(c) At Closing, all real estate taxes, municipal water and sewer charges, utilitycharges, luel oil, prepaid expenses, an amount equal to the Security Deposit on the Leased RealProperty assigned to the Buyer under the Assignment and Assumption of Lease, and othercharges typically adjusted between abuyer and aseller at acommercial closing in New lerseywill be adjusted between the Buyer and the Seller as of the Closing Date, and an adjustmenttherefor shall be made to the Closing Payment otherwise payable pursuant to Section 25(a)(ii)

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(d) At Closing, as collateral security for the prompt and complete payment ofthe Note, Buyer shall grant to Seller a first priority security interest in and to any and all ofSeller's assets, real or personal (including, but not limited to. any and all revenues or monieswhich Buyer is entitled to receive, now or in the future), wherever located, together with allreplacements, substitutions, renewals and the proceeds and products thereof, to the extentpermitted by applicable law (the "Security Interest"). Seller agrees to subordinate its SecurityInterest to the security interest ofany lender to the Buyer (for purposes ofthis paragraph the term"Buyer" shall also include any entity inwhich Yan Moshe holds any ownership interest therein)in respect ofa loan made by such lender to fund the purchase by the Buyer of the real propertyupon which the Hospital is located.

Section 2.6 Allocation of Purchase Price. Within thirty (30) days after the ClosingDate, Seller shall deliver to Buyer a schedule allocating the Purchase Price (including anyAssumed Liabilities treated as consideration for the Purchased Assets for Tax purposes) (the"Allocation Schedule"). The Allocation Schedule shall be prepared in accordance with Section1060 ofthe Code. The Allocation Schedule shall be deemed final unless Buyer notifies Seller inwriting that Buyer objects to one or more items reflected in the Allocation Schedule widiin five(5) days after delivery of the Allocation Schedule to Buyer. In the event of any such objection,Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that ifSeller and Buyer are unable to resolve any dispute with respect to the Allocation Schedule withinfifteen (15) days after the delivery of the Allocation Schedule to Buyer, such dispute shall beresolved by a nationally recognized firm of independent certified public accountants mutuallyappointed by Buyer and Seller. The fees and expenses of such accounting firm shall be borneequally by Seller and Buyer. Seller and Buyer agree to file their respective IRS Forms 8594 andall federal, state and local Tax Returns inaccordance with the Allocation Schedule.

Section 2.7 Non-assignable Assets.

(a) Notwithstanding anything to the contrary in this Agreement, and subject tothe provisions of this Section 2.7, to the extent that the sale, assignment, transfer, conveyance ordeliver)', or attempted sale, assignment, transfer, conveyance or deliver}', to Buyer of anyPurchased Asset would result in a violation of applicable Law, or would require the consentauthorization, approval or waiver of aPerson who is not aparty to this Agreement or an Affiliateof a party to this Agreement (including any Governmental Authority), and such consentauthorization, approval or waiver shall not have been obtained prior to the Closing, thisAgreement shall not constitute a sale, assignment, transfer, conveyance or delivery or anattempted sale, assignment, transfer, conveyance or delivery, thereof; provided however thatsubject to the satisfaction of the conditions to Closing set forth in Section 7.1(b) and Section7..3(g), the Closing shall occur notwithstanding the foregoing without any adjustment to diePurchase Price on account thereof. Following the Closing. Seller and Buyer shall usecommercially reasonable efforts, and shall cooperate with each other, to obtain any such requiredconsent, authorization, approval or waiver, or any release, substitution or amendment required tonovate all liabilities and obligations under any and all Assigned Contracts or other liabilities thatconstitute Assumed Liabilities or to obtain in writing the unconditional release of all parties tosuch arrangements, so that, in any case, Buyer shall be solely responsible for such liabilities andobligations from and after the Closing Date; provided, however, that neither Seller nor Buyershall be required to pay any consideration therefor. Once such consent, authorization, approval

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waiver, release, substitution or amendment is obtained, Seller shall sell, assign, transfer, conveyand deliver to Buyer the relevant Purchased Asset to which such consent, authorizationapproval, waiver, release, substitution or amendment relates for no additional consideration'Applicable sales, transfer and other similar Taxes in connection with such sale, assignmenttransfer, conveyance orlicense shall be paid by Buyer in accordance with Section 6.9.

(b) To the extent that any Purchased Asset and/or Assumed Liability cannotbe transferred to Buyer following the Closing pursuant to this Section 2.7, Buver and Seller shalluse commercially reasonable efforts to enter into such arrangements (such as subleasingsublicensing or subcontiacting) to provide to the parties the economic and, to the extentpermitted under applicable Law, operational equivalent of(he transfer ofsuch Purchased Assetand/or Assumed Liability to Buyer as of the Closing and the performance by Buyer of itsobligations with respect thereto. Buyer shall, as agent or subcontractor for Seller pay, performarid discharge fully the liabilities and obligations of Seller thereunder from and after the ClosingDate To the extent permitted under applicable Law, Seller shall, at Buyer's expense, hold in(rust for and pay to Buyer promptly upon receipt thereof, such Purchased Asset and all incomeproceeds and other monies received by Seller to the extent related to such Purchased Asset inconnection with the arrangements under this Section 2.7. Seller shall be permitted to set offagainst such amounts all direct costs associated with the retention and maintenance of suchPurchased Assets.

ARTICLE HI

CLOSING

Section 3.1 Closing. Subject to the terms and conditions of this Agreement theconsummation of the transactions contemplated by this Agreement (the "Closing") shall'takeSn^U 1CeS of Chiesa Shahinian and Giantomasi PC, One Boland Drive, West OrangeNJ 07052 at 10:00 a.m. on the tenth day after all of the conditions to Closing set forth in ArticleVII are either satisfied or waived (other than conditions which, by their nature, are to be satisfiedon the Closing Date), or at such other time, date or place as Seller and Buyer may mutually agreeupon mwriting. The date on which the Closing is to occur is herein referred to as the "Closing

Section 3.2 Closing Deliverables.

(a) At the Closing, Seller shall deliver to Buyer the following:

. .. (i) a bill ofsale in the form of Exhibit Ahereto (the "Bill of Sale")and duly executed by Seller, transferring the tangible personal property included~m"7hePurchased Assets to Buyer;

00 an assignment and assumption agreement in the form ofExhibit Bheret0 (the 'Assignment and AssurmitigjLA^reemgnt") and duly executed by Seller, effecting theassignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

. . _, (iii) with resPect t0 each Lease relating to Leased Real Property anAssignment and Assumption of Lease substantially in the form of Exhibit C (each, an

JS2222M,

"Assignment ani^ssum£tjon_of_Leasg")> duly executed by Seller and. if necessarv Seller'ssignature shall be witnessed and/or notarized;

(iv) the Seller Closing Certificate;

(v) the certificates of the manager or members of Seller required bvSection 7.2(e) and Section 7.2(f); and

(vi) such other customaiy instruments of transfer, assumption, filingsor documents, in form and substance reasonably satisfactory to Buyer, as may be required to eivceffect to this Agreement.

(b) At the Closing, Buyer shall deliver to Seller the following:

(i) the Closing Payment;

(ii) the Note and the Security Interest;

(iii) the Assignment and Assumption Agreement dulv executed bvBuyer; ' }

. . (iv) with respect to each Lease relating to Leased Real Property anAssignment and Assumption ofLease duly executed by Buyer;

(v) the BuyerClosing Certificate; and

(vi) ^e certificates of the members of Buyer required by Section 7.3(e)and Section 7.3(f). • '

ARTICLE IV

NO REPRESENTATIONS AND WARRANTIES OF SELLER

Neither Seller nor any other Person has made or makes any express or impliedrepresentation or warranty, either written or oral, on behalf of Seller, including anyrepresentation or warranty as to the accuracy or completeness of any information regarding theBusiness the Purchased Assets and the Assumed Liabilities furnished or made available toBuyer and its Representatives (including any information, management presentations or in anyother form mexpectation of the transactions contemplated hereby) or as to the future revenueprofitability or success of the Business, or condition or suitability of the Purchased Assets or anyrepresentation or warranty arising from statute orotherwise in law.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that the statements contained in this Article Varetrue and correct as of the date hereof.

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Section 5.1 Organization and Authority of Buyer. Buyer is a limited liabilitycompany duly organized, validly existing and in good standing under the Laws of the State ofNew Jersey.

Section 5.2 Authority of Buyer. Buyer has all limited liability company power andauthority to enter into this Agreement and the other Transaction Documents to which Buyer is apart)', to carry out its obligations hereunder and thereunder and to consummate the transactionscontemplated hereby and thereby. The execution and delivery by Buyer of this Agreement andany other Transaction Document to which Buyer is a party, the performance by Buyer of itsobligations hereunder and thereunder and the consummation by Buyer of the transactionscontemplated hereby and thereby have been duly authorized by all requisite limited liabilitycompany action on the part of Buyer. This Agreement has been duly executed and delivered byBuyer, and (assuming due authorization, execution and delivery by Seller) this Agreementconstitutes a legal, valid and binding obligation of Buyer enforceable against Buyer inaccordance with its terms, except as such enforceability may be limited by bankruptcy,insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally andby general principles of equity (regardless of whether enforcement is sought in aproceeding atlaw or in equity). When each other Transaction Document to which Buyer is or will be apartyhas been duly executed and delivered by Buyer (assuming due authorization, execution anddelivery by each other party thereto), such Transaction Document will constitute a legal andbinding obligation of Buyer enforceable against it in accordance with its terms, except as suchenforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similarLaws affecting creditors' rights generally and by general principles of equity (regardless ofwhether enforcement is sought in aproceeding at law or in equity).

Section 5.3 No Conflicts; Consents. The execution, delivery and performance byBuyer of this Agreement and the other Transaction Documents to which it is a party and theconsummation of the transactions contemplated hereby and thereby, do not and will not- (a)result in a violation or breach of any provision of the certificate of formation or operatingagreement of Buyer: (b) result in a violation or breach of any provision of any Law orGovernmental Order applicable to Buyer; or (c) require the consent, notice or other action by anyPerson under, conflict with, result in aviolation or breach of. constitute adefault under or resultin the acceleration of any agreement to which Buyer is aparty, except in the cases of clauses (b)and (c), where the violation, breach, conflict, default, acceleration or failure to give notice wouldnot have a material adverse effect on Buyer's ability to consummate the transactionscontemplated hereby. No consent, approval, Permit, Governmental Order, declaration or film-with, or notice to, any Governmental Authority is required by or with respect to Buyer inconnection with the execution and delivery of this Agreement and the other TransactionDocuments and the consummation of the transactions contemplated hereby and thereby exceptfor such consents, approvals, Permits, Governmental Orders, declarations, filings or'noticeswhich would not have a material adverse effect on Buyer's ability (o consummate thetransactions contemplated hereby and thereby.

Section 5.4 Brokers. No broker, finder or investment banker is entitled to anybrokerage, finder sor other fee or commission in connection with the transactions contemplatedbehalfotBUT111 ^ ^ ^ TranSaCti°n Docume,1t bas^ upon arrangements made by or on

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Section 5.5 Sufficiency of Funds. Buyer has sufficient cash on hand or other sourcesof immediately available funds to enable it to make payment of the Purchase Price andconsummate the transactions contemplated by this Agreement and the Buyer Principal has a networth not less than the greater of (i) the liquid net worth of each Seller Principal who hasexecuted the Seller Principals Guaranty, guarantying the Seller's obligations under the GroundLease, or (ii) $10,000,000, but with acap of$15,000,000 per Buyer Principal.

Section 5.6 Solvency. Immediately alter giving effect to the transactions contemplatedhereby, Buyer shall be solvent and shall: (a) be able to pay its debts as they become due: (b) ownproperty that has a fair saleable value greater than die amounts required to pay its debts(including a reasonable estimate of the amount of all contingent liabilities); and (c) haveadequate capital to carry on its business. No transfer of property is being made and no obligationis being incurred in connection with the transactions contemplated hereby with the intent tohinder, delay or defraud either present or future creditors ofBuyer or Seller. In connection withthe transactions contemplated hereby. Buyer has not incurred, nor plans to incur, debts beyondits ability to pay as they become absolute and matured.

Section 5.7 "As-Is, Where-Is"; Independent Investigation. Buyer acknowledgesand agrees that: (a) in making its decision to enter into this Agreement and to consummate thetransactions contemplated hereby, Buyer has relied upon its own analysis of the transactioncontemplated by this Agreement; (b) the Purchased Assets and Assumed Liabilities are beingassigned and sold "As-Is, Where-Is" and Seller makes no representations or warranties withrespect to the Purchased Assets, the Assumed Liabilities, die Facility or its operations, Seller orits Business, and (c) Buyer shall not assert, and Seller shall have no liability with respect to, anyclaim that Seller failed to disclose to Buyer any information regarding the Purchased Assets', theAssumed Liabilities, the Facility or itsoperations, Seller or its Business.

ARTICLE VI

COVENANTS

Section 6.1 Governmental Approvals and Consents.

(a) Each part)' hereto shall, as promptly as possible, use its reasonable bestefforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals fromall Governmental Authorities, as required by law to be obtained by such party, that may be orbecome necessary for its execution and delivery of this Agreement and the performance of itsobligations pursuant to this Agreement and the other Transaction Documents. Each party shallcooperate fully with the other party in such other party's efforts to promptly seek to obtain allsuch consents, authorizations, orders and approvals. The parties hereto shall'not knowingly andwillingly take any action that will have the effect of delaying, impairing or impeding the receiptofany required consents, authorizations, orders and approvals.

Section 6.2 Employees and Employee Benefits.

(a) Buyer shall offer employment effective on the Closing Date, to allEmployees, including Employees who are absent due to vacation, family leave, short-termdisability or other approved leave of absence (the Employees who accept such employment and

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commence employment on the Closing Date, the "Transferred Employees'") at (i) base salary orhourly wages which are no less than the base salary or hourly wages provided by Sellerimmediately prior to the Closing; (ii) target bonus opportunities, if any, which are no less thanthe target bonus opportunities provided by Seller immediately prior to the Closing; (iii)retirement and welfare benefits that are no less favorable in the aggregate than those provided bySeller immediately prior to the Closing; and (iv) severance benefits that are no less favorablethan the practice, plan or policy in effect for such Transferred Employee immediately prior to theClosing.

(b) With respect to any employee benefit plan maintained by Buyer(collectively, "Buyer Benefit Plans") for the benefit ofany Transferred Employee, effective as ofthe Closing. Buyer shall, or shall cause its Affiliate to, recognize all service of the TransferredEmployees with Seller, as if such service were with Buyer, for vesting, eligibility and accrualpurposes; provided, however, such service shall not be recognized to the extent that (x) suchrecognition would result in aduplication ofbenefits or (y) such service was not recognized underthe correspondingBenefit Plan.

(c) Effective as of the Closing, the Transferred Employees shall cease activeparticipation in the Benefit Plans. Seller shall remain liable for all known or unknown valideligible claims (as approved by the duly appointed third party administrator of such BenefitPlans) for benefits under the Benefit Plans that are incurred by the Employees prior to theClosing Date. For purposes of this Agreement, the following claims shall be deemed to beincurred as follows: (i) life, accidental death and dismemberment, short-term disability, andworkers' compensation insurance benefits, on the event giving rise to such benefits; (ii) medical,vision, dental, and prescription drug benefits, on the date the applicable services, materials orsupplies were provided; and (iii) long-term disability benefits, on tiie eligibility date determinedby the long-term disability insurance carrier for the plan in which the applicable Employeeparticipates.

(d) Buyer and Seller intend that the transactions contemplated by thisAgreement should not constitute a separation, termination or severance of employment of anyEmployee who accepts an employment offer by Buyer diat is consistent with the requirements ofSection 6.2(a), including for purposes of any Benefit Plan that provides for separation,termination or severance benefits, and that each such Employee will have continuousemployment immediately before and immediately after the Closing. Buyer shall be liable andhold the Seller harmless for: (i) any statutory, common law, contractual or other severance withrespect to any Employee, other than an Employee who has received an offer of employment byBuyer on terms and conditions consistent with Section 6.2(a) hereof and declines such offer; and(11) any claims relating to the employment of any Transferred Employee arising in connectionwith or following the Closing.

(e) Notwithstanding the foregoing, Buver shall have the right to terminate anyTransferred Employee during the ninety (90) day probationary period following the TransferredEmployee s commencement of employment with Buyer, unless to do so would violate anycontract or Law.

jit i *. r. , ....

(f) This Section shall be binding upon and inure solely to the benefit of eachof the parties to this Agreement, and nothing in this Section 6.2, express or implied, shall conferupon any other Person any rights or remedies of any nature whatsoever under or by reason of thisSection 6.2. Nothing contained herein, express or implied, shall be construed to establish, amendor modify any benefit plan, program, agreement or arrangement. The parties hereto acknowledgeand agree that the terms set forth in this Section 6.2 shall not create any right in any TransferredEmployee or any other Person to any continued employment with Buyer or any of its Affiliatesor compensation or benefits of any nature or kind whatsoever.

Section 6.3 Books and Records.

(a) In order to facilitate the resolution of any claims made against or incurredby Seller prior to the Closing, or for any oilier reasonable purpose, fora period of seven (7) yearsafter the Closing, Buyer shall:

(i) retain the Books and Records (including personnel files) relating toperiods prior to the Closing in a manner reasonably consistent with the prior practices of Seller,and

(ii) upon reasonable notice, afford the Seller's Representativesreasonable access (including the right to make, at Seller's expense, photocopies), during normalbusiness hours, to such Books and Records.

(b) In order to facilitate the resolution of any claims made by or against orincurred by Buyer after the Closing, or for any other reasonable purpose, for a period of seven(7) years after the Closing, Seller shall:

(i) retain the books and records (including personnel files) of Sellerwhich relate to the Business and its operations for periods prior to the Closing; and

(ii) upon reasonable notice, afford the Buyer's Representativesreasonable access (including the right to make, at Buyer's expense, photocopies), during normalbusiness hours, to such books and records.

(c) Buyer shall afford Seller the right of immediate and continuing access tothe Hospital's billing system, billing records and patient medical records for the purpose ofreconciling Seller's accounts receivable and payments received.

(d) Neither Buyer nor Seller shall be obligated to provide the other party withaccess toany books or records (including personnel files) pursuant to thisSection 6.3 where suchaccess would violate any Law.

Section 6.4 Compliance with Department of Health Letter. From and after theClosing, Buyer shall comply with all conditions to the approval by the New Jersey Departmentof Health ("NJDOH") ofSeller's Certificate of Need application and the transfer of ownership ofthe Hospital to Seller as are set forth in the letter from the NJDOH to Seller dated November 1,2010 attached hereto as Exhibit D, and Buyer shall comply with such other conditions as may be

17

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imposed by NJDOH in connection with Buyer's application for a Certificate of Need and thetransfer of ownership of the Hospital from Seller to Buyer as contemplated by this Agreement.

Section 6.5 Medical Records Custody Agreement. Buyer shall, from and after theClosing, maintain custody of all patient medical records of die Hospital (including withouthmitation those arising before the Closing) and shall enter into at Closing a Medical RecordsCustody Agreement between Buyer and Seller in the fonn attached hereto as Exhibit E.

Section 6,6 Closing Conditions. From the date hereof until the Closing, each partvhereto shall use commercially reasonable efforts to take such actions as are necessary toexpeditiously satisfy the closing conditions set forth in Article VII hereof.

Section 6.7 Public Announcements. Unless otherwise required by applicable Law(based upon the reasonable advice of counsel), no party to this Agreement shall make any publicannouncements in respect of this Agreement or the transactions contemplated hereby orotherwise communicate with any news media without the prior written consent of the other partywhich consent shall not be unreasonably withheld or delayed), and the parties shall cooperate as

to the timing and contents of any such announcement.

Section 6.8 Bulk Sales Laws. The parties hereby waive compliance with theprovisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwisebe applicable with respect to the sale of any or all of the Purchased Assets to Buyer.

Section 6.9 Transfer Taxes. Ail transfer, documentary, sales, use, stamp, registration,value added and other such Taxes and fees (including any penalties and intend) incurred bconnection with this Agreement and the other Transaction Documents (including'any realproperty transfer Tax and any other similar Tax) shall be borne and paid by Buyer\hen dueBuyer shall, at its own expense, timely file any Tax Return or other document with respect tosuch Taxes or fees (and Seller shall cooperate with respect thereto as necessary).

nnH nJff011 ^ r Confidcn«a««y- Buyer covenants and agrees to keep confidentialand not disclose or use for any purpose other than the evaluation of the transaction contemplatedBu iest^fSk Aaa^ TU°? Pr°Vided l° BU>'er relating t0 thC Sdle1"' the Facilit>' aild ^Section^ inVh'n §T. *' ^ ^^ ^"^ Pri°r t0 C1°sinS' the terms of lhisbeclion 6.10 shall nonetheless continue in full force and effect.

From 1.teC/it°nf,!1 * ACCeSS t0 Inf°™»tfon/Personne» and Transition AssistanceAZmLit^ ArmeTTn the earHer °f the Cl0SinS or lhe termination of thisas! tf Ser nnT ^J ^ ^ *« ^ (° ^'^ md take *" l™^' °f^assets of Seller and mspect the Contracts, and (ii) shall make available to Buyer the Seller^F^^ZZ^™5 BU>'Cr ma>' h3Ve WUh reSP£Ct t0 the 3SSetS a«d <— ofreamJ tnttn ^ • Mcdkarc and Medicaid. Seller shall take such actions as areZZn , V° bC ,n comPha"ce with all Medicare and Medicaid requirements applicablettel^XJX wilh ?Tin connection wilh Buyer's app,?ca(ion^^ior Medicare &Medicaid Services for the approval of the transfer of the Medicare and Medicaidprovider agreements from Seller to Buyer as contemplated by this Agreement

2S2W&&.

?

Section 6.13 Conduct ofBusiness Prior to Closing. From the date hereof untilthe earlier of the Closing or the termination of this Agreement, Seller shall continue to conductthe Business in the ordinary course consistent with past practice, and use reasonable best effortsto maintain and preserve intact its current Business organization and operations and materialassets and shall specifically refrain from removing any of Seller's material assets from theFacility.

Section 6.14 Contractual Payment Obligations; Payment of ExcludedLiabilities.

(a) From the date hereof until the earlier of the Closing or the termination ofthis Agreement, Seller shall pay when due and otherwise remain current on all paymentobligations of Seller under its Contracts.

(b) If after Closing Buyer receives a bill for any amount which relates to anExcluded Liability for which Seller remains liable, Buyer shall forward the bill to Seller withinthree (3) days after Buyer's receipt of such bill. Seller shall have a period of thirty (30) daysafter its receipt of the bill to review the bill to verify its accuracy and validity. IfSeller disputesthe legitimacy or validity of the bill, or otherwise believes it does not constitute an ExcludedLiability for which the Seller is liable, Seller shall within thirty (30) days of its receipt of the billfrom the Buyer (the "Rjsjrons^Time'') deliver awritten notice to the Buyer indicating Seller'sobjection to the bill and the basis for such objection (an "Objection Notice'"). If Seller°does notdeliver an Objection Notice within the Response Time, Buyer shall be permitted to pay such billon Seller's behalf and setoff the amount so paid against the payments due from Buyer under theNote. If Seller delivers an Objection Notice within the Response Time, but Buyer nonethelesspays the bill, Buyer shall not be permitted to setoff the amount paid against the payments thatwould otherwise be due from Buyer under the Note, however, Buyer shall be free to assert aclaim for indemnification for such amount in accordance with Section 8.2.

Section 6.15 Further Assurances. Following the Closing, each of the partieshereto shall, and shall cause their respective Affiliates to, execute and deliver such additionaldocuments, instruments, conveyances and assurances and take such further actions as may bereasonably required to cany out the provisions hereof and give effect to the transactionscontemplated by this Agreement and the other Transaction Documents.

ARTICLE VII

CONDITIONS TO CLOSING

Section 7.1 Conditions to Obligations of All Parties. The obligations of each partyto consummate the transactions contemplated by this Agreement shall be subject lo thefulfillment, at or prior to the Closing, ofeach ofthe following conditions;

(a) No Governmental Authority shall have enacted, issued, promulgatedenforced or entered any Governmental Order which is in effect and has the effect ofmakin« thetransactions contemplated by this Agreement illegal, otherwise restraining or prohibitingconsummation of such transactions or causing any of the transactions contemplated hereunder tobe rescinded following completion thereof.

19

4

(b) Buyer and Seller shall have obtained all consents, authorizations, ordersand approvals from all Governmental Authorities, as required by law to be obtained by them thatmay be or become necessary for their execution and delivery of this Agreement and theperformance of their obligations pursuant to this Agreement and the other TransactionDocuments, including but not limited to the approval by NJDOH ofBuyer's Certificate ofNeedapplication and approval ofthe transfer of the Hospital by Seller to Buyer.

Section 7.2 Conditions to Obligations of Buyer. The obligations of Buyer toconsummate the transactions contemplated by this Agreement shall be subject to the fulfillmentor Buyer's waiver, at or prior to the Closing, ofeach ofthe following conditions:

(a) Seller shall have duly performed and complied in all material respectswith all agreements, covenants and conditions required by this Agreement and each of the otheriransaction Documents to be performed or complied with by it prior to or on the Closing Date.

(b) Seller shall have delivered to Buyer duly executed counterparts to theTransaction Documents (other than this Agreement) and such other documents and deliveries setforth in Section 3.2(a).

(c) Buyer shall have received acertificate, dated the Closing Date and signedby the manager of Seller, that: each ofthe conditions set forth in Section 7.2(a) and Section 7?(b)have been satisfied (the "Seller Closing Certificate'").

(d) Buyer shall have received acertificate of the manager of Seller certifyingthat attached thereto are true and complete copies of all resolutions adopted by the manager andmembers ofSeller authorizing the execution, delivery and performance of this Agreement andthe other Transaction Documents and the consummation of the transactions contemplated herebyand thereby, and that all such resolutions are in full force and effect and are all the resolutionsadopted mconnection with the transactions contemplated hereby and thereby.

(e) Buyer shall have received acertificate of the manager of Seller certifyingthe names and signatures of the manager or other Persons authorized to execute on behalf ofSeller the Transaction Documents and the other documents to be delivered hereunder andthereunder.

r * a , ® • Buyer shal1 lmve received evidence of the consent of the Ground LeaseLandlord to the assignment ofthe Ground Lease by Seller to Buyer.

(g) Ground Lease Landlord shall have given its approval of Buyer Principal asan acceptab ereplacement guarantor (replacing the Seller Principals as guarantor) of the Buyer'sobligations (as assignee of the Seller) under the Ground Lease.

Section 7.3 Conditions to Obligations of Seller. The obligations of Seller toconsummate the transactions contemplated by this Agreement shall be subject to the fulfillmentor Seller swaiver, at or prior to the Closing, of each of the following conditions:

00 The representations and warranties of Buyer contained in .Article Vshallbe true and correct in all respects as of the Closing Date with the same effect as though made at

20

5873790.8

K.

and as of such date (except those representations and warranties thai address matters only as of aspecified date, which shall be true and correct in all respects as of that specified date), exceptwhere die failure ofsuch representations and warranties to be true and correct would not have anadverse effect on Buyer's ability to consummate the transactions contemplated hereby.

(b) Buyer shall have duly performed and complied in all materia! respectswith all agreements, covenants and conditions required by this Agreement and each ofthe otherTransaction Documents to be performed or complied with by it prior to or on the Closing Date.

(c) Buyer shall have delivered to Seller the Purchase Price, duly executedcounterparts to the Transaction Documents (other than this Agreement) and such otherdocuments and deliveries set forth in Section 3.2(b).

, (d) Seller shall have received acertificate, dated the Closing Date and signedby the members of Buyer, that each of the conditions set forth in Section 7.3(a) and Section7.3(b) have been satisfied (the "Buyer Closing Certificate'").

(e) Seller shall have received acertificate of the members of Buyer certifyingdiat attached thereto are true and complete copies of all resolutions adopted by the members ofBuyer authorizing the execution, delivery and performance of this Agreement and the otherTransaction Documents and the consummation of the transactions contemplated hereby andthereby and that all such resolutions are in full force and effect and are all die resolutionsadopted in connection with the transactions contemplated hereby and thereby.

(0 Seller shall have received acertificate of the members of Buver certifyingdie names and signatures of the members or other Persons authorized to execution behalf ofBuyer this Agreement, the Transaction Documents and the other documents to be deliveredhereunder and thereunder.

d n• • ?? Sdler Sha" haVe received from Buyer evidence that (i) Buyer and theBuyer Principal have satisfied the net worth requirements set forth in the Ground Lease to permitdie release of the Seller Principals from their obligations under the guaranty in favor of theGround Lease Landlord (the "M*LMn<miGmmil with respect to the obligations ofSeller under the Ground Lease, (ii) Buyer Principal shall have executed and delivered to theGround Lease Landlord aguaranty of die obligations of Buyer (as successor in interest to Seller)under the Ground Lease, (,„) Buyer shall have obtained the consent of Ground Lease Landlord tohe assignment of the Ground Lease by Seller to Buyer and the consent of Rosdev Development!'«m!T?i lhC Sale/Leaseback Agreement by Seller to Buyer, and (iv) GroundLease Land|ord sl „ h ed ^ delivered to ^ p ^ &̂ ^substance reasonably satisfactory to the Seller principals, releasing them from any and allliability under the Seller Principals Guaranty. nom any ana all

fflP r\ • nh) '[B '̂yer StU1 °WnS an equity interest in Cancer Center Entity at the time ofthe Closing, Buyer and Cancer Center Entity shall have entered into a lease on terms andconditions acceptable to Buyer and Cancer Center Entity in their sole discretion

21

587J790.8

ARTICLE Vni

INDEMNIFICATION

Section 8.1 Survival of Representations and Warranties. Subject to the limitationsand other provisions of this Agreement, the representations and warranties contained herein shallsurvive the Closing and shall remain in full force and effect until the date that is 1year from theClosing Date. Notwithstanding the foregoing, any claims asserted in good faith with reasonablespecificity (to the extent known at such time) and in writing by notice from the party seekingindemnification based upon a breach of representations and warranties prior to the expirationdate of the applicable survival period shall not thereafter be barred by the expiration of suchsurvival period and such claims shall survive until finally resolved.

.hi, a,SC vm \'l Infmniflcation Ry St>,lcr' Subject to the other terms and conditions ofthis Article VIII, Seller shall indemnify Buyer against, and shall hold Buyer harmless from andagainst, any and all Losses incurred or sustained by, or imposed upon, Buyer arising out of withrespect to or by reason of:

k p au(ai ,, any breach °r non-fulfi,lment of any covenant, agreement or obligation tobe performed by Seller pursuant to this Agreement;

(b) any Excluded Asset or any Excluded Liability;

,i, n • • (,C)^ toeoperauonofthe Facility and conduct of the Business by Seller prior tothe Closing, including employee obligations; and

(d) Seller's obligations prior to the Closing under the Ground Lease.

nhr ,• NotwitJstanding anything to the contrary contained herein, Seller shall have noobligation under this Section 8.2 to indemnify Buyer against Losses arising out of or relating to0) any structural defect or damage to the Facility, (ii) any Assumed Liability or Permittedforlf"T'/ (m)-^e eTonmental conditio» °f the real properly upon which the Facility isloc ted including without limitation, any contamination of such real property by HazardousMaterials or Losses relating to aviolation of Environmental Laws, unless such environ^entacondition or contain,nation was caused by Seller in the course of its operation of the Bu ines

bilirt S^f N0rt,hSt cnding a"ything t0 the C°ntr^ comained ^ the indemdfi tt^nliability of Seller under this Section 8.2 shall not exceed, in the aggregate, the Purchase Price.

this Artictevm RItIntTinifirti0n.Bcy ,?Uyer- SubjeCt t0 lhe °ther terms and cond*ons of•̂ f ' IF ShaU lndemnif? SeI!er *&*>*> ^d shall hold Seller harmless from andagainst, any and all Losses incurred or sustained by, or imposed upon, Seller based upon, arisingout of, with respect to or by reason of: l y

Buvercnntainifl ,i •"? inflccurw* in or breach of mV of ^ representations or warranties ofouyei contained in this Agreement:

, . ,, (b)Q an>' breach °r non-fulfillment of any covenant, agreement or obligation tobe performed by Buyer pursuant to this Agreement; uungauon 10or

22

3873790.S^

(c) any Assumed Liability.

Section 8.4 Certain Limitations. The party making aclaim under this Article vm u

lor in Section 8.2 and Section 8.3 shall be subject to the following limitations:

in resnect nf Jw « ^'nTl by ^ IndemniV™& P^V Pursuant to Section 8.2 or Section 83dXriS * ^ mited l° the amoum 0f any liability or damage that remains afterdeducting therefrom any insurance proceeds and any indemnity, contribut?on or other snh

PnrK, f« (b)- • ln no,event shal] ^ Indemnifying Party be liable to anv IndemnifiedParty for any punitive, incidental, consequential, special or indirect damages inlaws of

=e~s^Section 8.5 Indemnification Procedures.

Indemnifying Party forfeils riZ n^i r f *' eXCeP' """ °"ly l0 lhe cxteM ta <"<=Indemnify Party sha?dec, £ L Tl,^ P^f b/, reaS°n °f S"C'' fa"llre- Sud> "»fa by «"of all material JtaetS «Sj*« "! T^^ *""''Sha" inCllK,e C°Piespracticable, of the Us ihTL, h^ stall/ndlcatc lhe Hllmi"«l amount, if reasonably•Wing ^^. t« te^KrTo? £ ihe lndci™incd p^-TheIndemrufied Party, to assume the defens of aTS P"rlv ch^',7 7T" "^ '° ,heexpense and by the Indemnifying p,w„ , „ , , J ™ al ,he Indemnifying Party'sin good faith muchdeZt I* S eve^T •' ?"' *« hdOT"iM f^ shall cooperateany Third Party Claim, subiectt I , » r?> 'n<lem"'IJ""g Party assumes the defense ofdeems necesst^ void 'p7e deW ^£ ,l mT" "* T"''° * Sach Mi°" «"Third Par, Cairn in the nam'e and t^Z%Z^tf££££

23

5873790.8

shall have the right, at its own cost and expense, to participate in the defense of any Third Party.wVl'̂ „C°?T SC r-^ ny USUbJCCt tD dl£ ^^"ifying Party's right to control the defensehereof, if the Indemnifying Party elects not to compromise or defend such Third Party Claim orfails to promptly notify the Indemnified Party in writing of its election to defend as provided inuch ZTZlXIndeTf,ld^ «??. ?*i«**> Section 8.5(b), pay, compromise, defendsuch Third Party Claim and seek indemnification for any and all Losses based upon, arising from

or relating to such Third Party Claim. Seller and Buyer shall cooperate with each other in allea onable respects in connection with the defense of any Third Party Claim, including making

of t^nTd r I out-of-pocket expenses) to the defending party, management employeessth ^ 3S may reaS0Mbly neCSSSary f°r the P1'eparati0n 0f the de^se of

(b) Settlement of Third Party Claims. Notwithstanding any other provision ofthis Agreement the Indemnifying Party shall not enter into settlement of any Third Parrv CIdmwithout the prior written consent of the Indemnified Party (which consent shall nmbeunreasonably withheld or delayed), except as provided in this Section 8.5(b). If aZ offer i0biro?." "^l' ^^ ?3im With°Ut leadin§ t0 liabilil>' or lhe ciea ion of afile al oother obligation on the part of the Indemnified Parly and provides, in customaiy form for theStiT hl^craf Ind!Tififd,Parly fr0m aU liabilHieS -d 0bli^°- incSntt^rV r .T .^ CIaUn ^ the Illden« '̂»ng Party desires to accept and agree to suchoffer, he Indemnifying Party shall give mitten notice to that effect to the IndemnifiedParty Ifthe Indemnified Party fails to consent to such firm offer within ten days after UsSt o^sucnotice, the Indemnified Party may continue to contest or defend such Third Party Camild insuch event, the maximum liability of the Indemnifying Party as to such Thir IP£t^ shallnot exceed the amount of such settlement offer. If the Indemnified Party fails toTonsentfo umy s°e tie temrfi^rT™ ^ °f SUCh ™ri ^ Claim'the Indem^JSng P^Paw OamS *?* rT» Up°? ^ tenM SCt forth in SUch fim offer "> settle such Third1arty Claim. If the Indemnified Party has assumed the defense pursuant to Section 85(i) it shnllnot agree to any settlement without the written consent of the Indemnify^shall not be unreasonably withheld or delayed). ° Y[ nt

(c) Direct Claims. Any claim by an Indemnified Party on account of a Io«ndem TeH 7 !'eSUlt fr0m a™rd Pat1y CMm <a "D^ect Claim") saIbTallied by theIndemnified Party givmg the Indemnifying Party prompt written not ce thereof^ feill o

give such prompt written notice shall not, however/relieve the InJemn Mng pj^ of £indemnificanon obligations, except and only to the extent that the hide, Mng'party'folughts or defenses by reason of such failure. Such notice by the Indemnified Party shall dserf ed hr|i ^ in,reaS0nab!e detail> sha" ™^ copies of all material writteEvidence Sand shall indicate the estimated amount if reasonably practicable, of the Loss 1^ias been or

24

5873790.8

to examine and copy any accounts, documents or records) as the Indemnifying Party or any of itsprofessional advisors may reasonably request. If the Indemnifying Party does not so respondwithin such seven (7) day period, the Indemnifying Party shall be deemed to hv^"ctedTu hiaim ui which case the Indemnified Party shall be free to pursue such remedies amay be

available to the Indemnified Party on the terms and subject to the provisions of this Agreement„ „ ni . i-d} NotwiAstanding anything to the contrary in this Section 85 if a ThirdParty Claim relating to the Facility (i) is subject to indemnification bv Seller and (ii)'i the basiso^TJuÎ^ W^t "fT Jmpeding Ule BuyCr'S abiH* l0 consummate flicTnot the Facility, in that event Seller shall in good faith attempt to expeditiously resolve the ThirdParty Claim so as to enable Buyer to consummate its financing. If the Seller,' ater makina^Sgood faith attempts to expeditiously resolve such Third Party Claims shall be unab todo ob reouireedre/ainS û r™' ^ the Sdler t0 take such ônol steps wWch maybe required to remove such liens or other encumberences which continue to impede suchfinancing by Buyer Neither Buyer nor Seller waive any of their respective righ^ toTo>L"lesubject hen in any forum ofcompetent jurisdiction.

Section 8.6 Tax Treatment of indemnification Payments. All indemnificationSwcffoTrf thlS AgreeTnt S'fU bC trealCd by lhe Parties as an #tStSIurcnase Puce for Tax purposes, unless otherwise required by Law.

Section 8.7 Exclusive Remedies. Subject to Section 10.11, the parlies acknowledgeand agree that their sole and exclusive remedy with respect to any and alfclaims K*?nclaims arising from fraud on the part of aparty hereto in connection wim thTtiansacttonscontemplated by this Agreement) for any breach of any representX, Ziintv^Sagreement or obligation set forth herein or otherwise relating to the subject mLrofMsAgreement, shall be pursuant to the indemnification provisions set forth iii Article VHI Inurtherance of the foregoing, each party hereby waives, to the fullest extent p mittdtndeLl"

any and ail rights, claims and causes of action for any breach of any rep«se3onwmLv'covenant, agreement or obligation set forth herein or otherwise relation et£Z fthis Agreement it may have against the other parties hereto and thei Affifia es and e'cHf teirrespective Representatives arising under or based upon any La*, exctt TursS to me™™^r:::7seri frin this Artide vm ^f-^™^^HlZ to Se donTo or to ~T "* T^* *"* l° wWch "* PerS0" sha11 be titledpursuant to Section 10. II or to seek any remedy on account ofany fraud by any party hereto.

Section 8.8 Medicare and Medicaid Adjustments.

Medicare or Medicaid^^h ^ ^T'1* md agree lhat <!> alf reimbursements fromMe cS o Medicaid rS^^'0 ^ f ^^ Sett,eraents °r Setoffs aPPlied >>v

25

5X73790.8

whi i • t /b)- Up°" reCeipt by either Party (the "EeceiyingJVty") of aReimbursementwhic ,s not for its account pursuant to Section 8.8(a), the Recurving Party shall reSSReimbursement to the other party within seven (7) days of the Receiving Party's rece pt of ucsuch Reimbursement relates.

P.rtv-^ u- u(n\ UP0" the imPosition of barges against either party (the "ChargednKlLtd pSvT IT "°Z f01'thC 3CC0Unt °f *e Charged Par* P™1^Section^the Charged Party shall send written notice to the other party (the "Reimbursing Party''X cLTf1thUrSement f°Vhe Cha,'8eS imp°Sed (a "^d^mi^s^^Jrdates Z° !^]>ondence provided by Medicare^rMeMd^^ andSenZV 'mP°s,tlonAof the C^s> and such other documentation sufficient to identify therece PTofTe Reouet fo ,f" H'̂ ^ ^"f^"8 *"» sMl> Witl™ Seve" ^da^ «freceipt ot the Request for Reimbursement, reimburse die Charged Party for diose Chan.^ ^t

CpU*:aS^^i,rsemen' *h are prope-ly *-*• -«°^=S,1,. c ••-.. • (d) ^ller !ha" be ™lilled 10 "" Meaningful Use Payments lo which Seller nr

ARTICLE IX

TERMINATION

Closing86'"011 9>1 Termination' This AS'e™ may be terminated at any time prior to the

(a) by the mutual written consent of Seller and Buyer;

(b) by Buyer or Seller, by written notice to the other party, in the event that:

(c) By Buyer, by written, notice to Seller, if:

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5873790.8

r ifii a u x r* ?? Any ofthe condilions set forth in Section 7.2 shall not have beenfulfilled by the Drop Dead Date, unless such failure shall be due to the imLTo Zlrlperform or comply with any of the covenants, agreements or conditions hereo to be perfomiedor complied with by it prior to Closing; ptriormea

(d) By Seller, by written notice to Buyer, if:

a , , (9 Seller is not then in material breach of any provision of thisAgreement and there has been a material breach, inaccuracy in or failure toperforn'anyrepresentation, warranty, covenant or agreement made by Buyer pursuant toAisAg? ment Zwould give rise to afailure of any of the conditions specified in Article V ^Zinaccuracy or failure cannot be cured by Buyer by the Drop Dead Date;

rniaiea by te ^ ^^StTE?£*£% £2^'^

(iii) Bui'er sha11 have not obtained by the Drop Dead Date all ihi>consents and Government Approvals required to be obtained by Buyer pursuant to'sSon 6.lSj

Section 9.2 Effect of Termination. In the event of the termination of this Aereememmaccordance with this Article, this Agreement shall forthwith become void and he e« bToliability on the part of any party hereto except: be n°

(a) as set forth in this Article IX and Article Xhereof;

(b) that nothing herein shall relieve any party herein Onm i;.,h;i;,„ r„mtenttonal breach of any provision hereof, limi|ed ,„ lheXm „ fc d" fi 'L inZeven, or an intentional breach ofthis Agreement by Buyer; and P " ""

Deposit; P^hJLif ^'^ *^""^ S'^ sta" >* entitled ,„ retain the

10 be obtained by Buyer, necessary for its execution and delivery of thiAtiSS 2performance of ,,s obligations pursuant to this Agreement and the oVer M£S£££

Buyer the full armjfnf ,h? n" *fr1", ^ '" "* """'" °f' a,ld Seller sM re<™ '»See, on 9(") dT oSe I "s materi I!re?i ^n" " 'T™** ">' Bu>'CT P"™*™ »made by Se I _I s™ m "' fa"Ure '° Perr°rm °"y "«"•» OT '̂ ™»'

27

587379U.S

ARTICLE X

MISCELLANEOUS

Section 10.1.nH „v . ,**, Expenses. Except as otherwise expressly provided herein all costsand expenses, including, without limitation, fees and disbursements of counsel feancSadvisors, consultants and accountants, incurred in connection with thislA^nent^d ^transactions contemplated hereby shall be miH hv ti«, „ari, • , A§reement ^ ^e

welter shall be responsible only for services authorized by it.

Section 10.2

If to Seller: MHA, LLC

if before Closing:MHA, LLC

55 Meadowlands ParkwaySecaucus, New Jersey 07094Facsimile:

E-mail: rlipskyma^gmaTTcom-Attention: Richard Lipsky, M.D.

if after Closing:MHA, LLC

Facsimile:E-mail: dipskymd@ginaihconiAttention: Richard Lipsky, M.D.

with acopy to: Chiesa Shahinian &Giantomasi PCOne Boland DriveWest Orange, New Jersey 07052Facsimile: (973) 530-230E-mail: [email protected]: A. Ross Pearlson, Esq.

28

5873790.

If to Buyer: NJMHMC LLC ,

Facsimile: 'E-maiI:J^MOjJl£gtMB£eÎc^JI;Attention:

with a copy to: Russell Friedman &Associates, LLP3000 MarcusAvenue, Suite 2E03Lake Success, New York 11042Facsimile: (516) 335-9621E-mail: [email protected]: Russell C. Friedman, Esq.

Section 10*3 Interpretation. For purposes of this Agreement (a) the wmrkneude,.includes" and "including" shall be deemed to be followed8 by th^ÂoSS ;i . VV°;d„"0r':is not excjl,si^ ™d (O the words "herein" "hereof«hTeby*^Z ""f "T^- 7fer l° lhl'S Ag,'eemenl as awh0,e' Unless the contex't oherwLS^S^tTd cl° t0 ^Sections'Schedu,es and Exhibits m™the ând Sections of and Schedules and Exhibits attached to, this Agreement; (v) to an agreement

supplemented and modified from time to time to the extent permitted by the provisions thereofSsfa i? tCto Td^f STe"amend6d fr°m t!me t0 timC ^ ^ ^Slegislation thereto and any regulations promulgated thereunder. This Aoreement shall beSIM:-8? P—ption or rule requiring construction êr rSati^!S p . -kIP ^ If ,nstmment or cailsl»g any instrument lo be drafted The Schedulesand Exhibits referred to herein shall be construed with, and as an integral part of ih£Acreemento the same extent as if they were set forth verbatim herein. Agreement

andJ2Êinterpret «* A~ « '« «*™ onlyiii™i Secti0? 10-?, . ScvcrabilitJ'-lfanytcrmorprovisionoi'thisA..reenientisinvaMrl

8affee,rv1rrt™'n ^*îal"-.«'* -validity. illegality or unenfeeab iy sSnot a tect any other term or provision of this Agreement or invalidate or render unenfnrreihl,.such term or provision in any other jurisdiction. Upon sad, determinate thatâmTe moô hprovision ,s invalid, illegal or unenforceable, the parties here.o shall 2Zeh cod f[TZmodify thts Agreement so as to effect the original intent or .he parties as cSy Z0Ss, t „as»i,C:ib3rcon,emplaw ,Wbec—s,°rsrr~

29

5S73790.S

We^^ST'* "* f0r,h aS S"Ch '" "" **«*"«* <"* «•»""«• »<•« body ofthisAgreement will control.

Section 10.7™h „h»ir• , S'\ s Successors and Assigns. This Agreement shall be binding uponand shall nure to the benefit of the parties hereto and their respective successors and Sassigns Neither party may assign its rights or obligations hereunder without"he^rio ™Sconsent of the other party, which consent shall not be unreasonably withheld or StayedNoassignment shall relieve the assigning party ofany of its obligations hereunder

Section 10.8 No Third Party Beneficiaries. This Agreement is for the solebenefit of the parties hereto and their respective successors and permitted aslns and nothSaherein, express or implied, is intended to or shall confer upon any other pJInoTL^Zy.AlrlmeTltable "^ ^ °'' ""^ °f "* nature "»»tsoe^ ^ «by rSason oT 2

Section 10.9 Amendment and Modification; Waiver. This Agreement mavonly be amended modified or supplemented by an agreement in writing signed bTeachpZhereto _No waiver by any party of any of the provisions hereof shall be efLi^nlL^lffiset forth in writing and signed by the party so waiving. No waiver by any PLy shalôperate orbe construed as awaiver in respect of any failure, breach or default not eSHS!such written waiver, whether ofasimilar or different character, and wESriJSSafter that waiver No failure to exercise, or delay in exercising, any r ~pote0privilegeârising from this Agreement shall operate or be construed as awrive^f ^ aSany singh, or partial exercise of any right, remedy, power or privilege hSi^ ^Setntother or further exercise thereofor the exercise of any other right, remfdy, power orSegeTrial. SeCti°n 10'10 GovernInB L™1 Submission to Jurisdiction; Waiver of Jury

the interml JJnf HJJt f^f™"1 ,sha11 be governed by and construed in accordance witht PôIfoTruie StatC °f N"V JerSSy' With°Ul 8iVing effcct t0 «* choice or conflict of

30

5873 790. S

SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEENBROUGHT IN AN INCONVENIENT FORUM.

™™ (C) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANYCONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHERTRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED ANDDIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY ANDUNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO ATRIAL BY JURY INRESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THISrnM?nwmNATJiIETT?THER TRANSACTION DOCUMENTS OR THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENTCERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHERPARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHERPARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT?mc w^LACJ!°N' (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF™ WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D)nTSRP™/cALBnEN INDUCED T° ENTER mJ0 THIS AGREEMENT BY, AMONG?I^, THINGS' THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION10.10(c).

Section 10.11 Specific Performance. The parties agree that irreparable damagewould occur it any provision of this Agreement were not performed in accordance with the termshereof and that the parties shall be entitled to specific performance of the terms hereof inaddition to any other remedy to which they are entitled at law or in equity.

Section 10.12 Counterparts, This Agreement may be executed in counterpartseach of which shall be deemed an original, but all of which together shall be deemed to be oneand the same agreement. Asigned copy of this Agreement delivered by facsimile, e-mail or othermeans of electronic transmission shall be deemed to have the same legal effect as delivery of anoriginal signed copy ofthis Agreement. y

[SIGNATURE PAGE FOLLOWS]

31

5873790.8

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executedas of the date first written above by their respective officers thereunto duly authorized.

MHA, LLC

Name: _ , . nA/efa*

,tle: \M-(L,*a,Iq<u£

32

5873790.7

EXHIB1TA

Bill of Sale

SS73790.il

BILL OF SALE

KNOW ALL MEN BY THESE PRFSFNTS THAT mi-i a tip m i >• • .commnv r««ww»^ r„, i • ^r, \b JHAJ' MHA> LLC> a New Jersey limited abilitycompany ( Seller ) for and in consideration of the sum of [ ] and other oood andvaluable cons,derat,on to it in hand paid by NJMHMC LLC,TNeTvlersey Hm^d 1abihycompany ('-Buyer'), the receipt and sufficiency of which are hereby acknowledged h^-so dassigned transfer and conveyed, and does by these presents, sell, assign? tmnsfe^a'nd convey'unto the Buyer, any and all of Seller's right, title, and interest, in and to the PuS a Asset? (asoi6 "apa" efmed'Vhat certain Assel Purchase A^>™*> ^ - on

for 1LX APAyan?; ,,tet:reen ^ ^ ^ AS IS' *"*** ,S' ^cept as otherwise stt ami Setfih?n he APA ^T 1° ^ temiS' C°,ldili°nS' C°Ve"antS' reP~*ons andwan amies set lortn in the APA. Seller hereby covenants that it will, at any time and from timeto time upon written request therefor, execute and deliver to Buyer, its nomineeTswceWJand or assigns, any new or confirmatory instruments which Buyer is nominees u e oand/or assigns may reasonably request in order to assign and transfer to Buye ai yandTofinghts t«te and interest in and to, the Purchased Assets, and otherwise to carry out Ae pIwoscand intent ofthe APA, without further consideration. P ^

2016.

MHA, LLC

By:Name:

Title:

5873790.8

EXHIBIT B

Assignment and Assumption Agreement

5873790.8

ASSIGJjMENTVAgD ASSUMPTION AGREEMENT

This ASSIGNMENT AND ASSUMPTION AGREEMENT ('"Assignment and^mmmAgmmml is dated as of m^ <Q ,2016, by and benyee~nMIÂlTc^New Jersey limited liability company ("Assignor"), and NJMHMC LLC, aNew Jersey limitedliability company ("Assignee").

WITNESSETH:

WHEREAS pursuant to that certain Asset Purchase Agreement dated as of, 2016 (the "AsseLPurchasej\grcement"), by and among the Assignor and the

Assignee Assignor has agreed to sell, transfer, convey; assign and deliver to Assignee thePurchased Assets (as defined in the Asset Purchase Agreement); and '

WHEREAS the Asset Purchase Agreement requires that Assignee assume as of the datehereof and pay perform and discharge, when due, the Assumed Liabilities (as defined in theAsset Purchase Agreement); v

NOW, THEREFORE, pursuant to the terms of the Asset Purchase Agreement and forTei^L consideration, the receipt and adequacy of which hereby are acknowledged,the parties agree as follows: fa

, • '' Assortment and Assumption of PurchasgdAssets. Assienor hereby assigns lotn! tnT P tSSlf? hCreby aSSUmSS fr0m Assign0r' a11 ri£ht>title înterest of Assizor hiand to the Purchased Assets. b

• 2* Assignment and Assumption of Assumed Liability Assignor does hereby sellassign and Iransferlo^slg^^ hereb ^^foregoing assignment and agrees to pay any and all sums due and owing accruing on or after tieClosing Date (as defined in the Asset Purchase Agreement) and to assume andTaith'lly^ fonnall covenants, stipulations, agreements and obligations on or after the Closing Date.

. .3- Pjyjn?i!LiOxcJudie^^ It js agreed that, notwithstanding any otherprovis.on contained herein to the contrary, Assignor shall solely retain, pay perform odischarge all Excluded Liabilities (as defined in the Asset Purchase Agreement)

benefit of nnri hTTT^' ^ Assignment and Assumption Agreement shall inure to thebenefit of and be binding upon the successors and assigns of Assignor and Assignee.5- FjiriJiejLAssurances. Each party hereto covenants that at any time and from time

to time, after the date hereof, it will execute such additional instruments and take su hactio, smay be reasonably requested by the other parties to confirm or perfect or othervvise ocô?the intent and purposes of (his Assignment and Assumption Agreement.

mnfi. 6' -N^^s--illJ^^ Nothing expressed or implied herein is intended toconfer upon any person, other than Assignor, Assignee and their respective succe so," an5permitted assignees, any rights, remedies, obligauons or liabilities hereunder or byre^r^

5873790.8

7. Amendment. This Assignment and Assumption Agreement may not be amendedor modified except by an instrument in writing signed by all the parties hereto.

8- Governing Law. This Assignment and Assumption Agreement, die parties'perfoimance hereunder and the relationship between them shall be governed by, construed andenforced in accordance with the laws of the State ofNew Jersey, without regard to the principlesthereof regarding conflicts of laws.

, 9- Capitalized Terms. All capitalized terms not otherwise defined herein aredefined as set forth inthe Asset Purchase Agreement.

10. Conflicts. This Assignment and Assumption Agreement is delivered pursuant toand is subject to the Asset Purchase Agreement. In the event that any provision hereof conflictswith any provision of die Asset Purchase Agreement, die Asset Purchase Agreement shall bedeemed to govern and correctly evidence the intentions ofthe parties.

[Signatures on Following Page]

5873790.8

Aî^r0=ÂSSIGNOR:

MHA, LLC

By:.Name:

Title:

ASSIGNE

N^rîn^riic'Title: i-M-C^M, k e (L^

5873790.8

EXHTBITC

Assignment and Assumption of Lease

5873790.8

ASSIGriîEf£TA^D ASSUMl'TION OF LEASE

into OS ™§£S^^l^lASrtS' ,°^,EASE (Ul'S '««an fenteredJersey ^hm'JZ^JS^^ll^clSr.'T-^ ?̂liability company ("Assignee")- MHMt LLC' a Nevv Jei"seY limited

valuableiS^SXr^M1?1f^T^ ^ for ^ ^ «">agree as follows: P sufficiency of which are hereby acknowledged, the parties

BACKGROUND.

landlord, are parries ,„£^S^S^S^^g^"•meanings glen» ,h™eOrou" dST* "'"" ***"*" ShM "^ ^

dated asof May_ 2ofs (th^g^tSSnJ").^1"'° *** P™>™^'™™<Section 3.2(a)(iii) ofteLchlse^2™""' "*^V™ ""^referred »"Assignor hereb^ssiotâ^1^11^-' Mbclive as of,he EIT«'ive Date,interest, as •^T^^dSSZTr'0 A>T?V" °fAssi"™'* •*"". «* andDeposit in the amom ofTl™^ nircdFSf '£"*'"*• wilhoul limi,ali™. '"= Security33/.00 D„„a„ (S.^T^^tSil^niS'SrSll,^ HUndrCd Ei8"' """assiglUne„,, lKludin«.tSSKS??t ASSi8°r hOTby 3CCep,S lhe "«***and agrees to perfonaIofX terns con™ "" ^Security Deposit, and assumes•he Ground Jase arising or acôn '̂IZS:^<**•*«* «*will in any wV^raSî^S¥l?BHI- 1N<""in8 '""""^ ''" *is Assi6"m™forth in the Purchase Agreed„H„ S SZ^f"T* "*" "* °f "* pr0Visi°"s «warranties, covenants and ageerae" t se, S ,! ." a"y °' ",C rePres™«'i<>»s,effect the transfer and convey^ ebyAsa1 T'"' ArSSr"ra« b«"8 intended only toPurchase Agreement. X e"0r'° Ass'gni!e of"le 0roil"d Lease pursuant to the

•o ** benem of! thepSS^~^^ ""^

5873790.S

6 AMENDMENTS. This Assignment may not be changed modified oramended orally but only by an agreement in writing signed by the party against whomenforcement of any change, modification or amendment is sought.

,. . ,. . ]• . COUNTERPARTS. This Assignment may be executed and delivered(including by facsimile transmission or portable document format (PDF)) by the parties hereto inseparate counterparts, each of which when executed shall be deem dto be ^ origh butS ofwhich taken together shall constitute one and the same instrument.

... 8" GOVERNING LAW. This Assignment shall be governed by andconstrued in accordance with the laws of the State of New Jersey, without regard to conflicts oflaw pnnciples which might otherwise cause the laws ofadifferent jurisdictio" lo govern or

A«f t• 9' -M^PgETATJON. The parties have fully negotiated the terms of thisAssigimen in consultation widi counsel, and have arrived at the wording of this AssiZent asaresult of dieir mutual discussions. Accordingly, no provision of this AssignmenV XorTl^Z TTUlaV Prty °r hl faV°r of an0ther Part>' mere'y because ofTen party(or its attorney) drafted or supplied the wording for such provision. Y

10 FWTHTOASSIJRANCES. Each ofAssignor and Assignee shallpromptly and at their sole cost and expense, execute, acknowledge and deliver udi otherdocuments and instruments, and take such further actions, as the other party m^- fronTthne to

/Signature pagefoliowsJ

5873790.8

IN WITNESS WHEREOF, the parties hereto have executed and delivered thisAssignment and Assumption of Lease as of the date first writien „h™. 11S

MHA, LLC

Bv:

Name:

Title:

TitIe: m.e Ka k 0 \

5873790.S

EXHJBITD

Letter dated November 1, 2010 from New Jersey Department of Health

5873790.8

^intt of £?rfa 3JcrscBDEPARTMENT OF HEALTH AND SENIOR SERVICES

PO SOX 360CHKISCHR1ST.I TRENTON. NJ 03623-0350

Governorwttv.iij.gov/iie.ililt

KIM GUADACftOU. Gtmmur POONAM ALAIGH. MO, MSIICPM, fACP

Carantiitlanti

November 1, 2010

VIA UNITED PARCEL SFRVIfiF

Richard Lipsky, M.D.Owner

59 Mill Road ExtensionWoodcliff Lake, NJ 07677

Dear Dr. Lipsky:

Re: Meadowlands Hospital Medical CenterCN#FR 100201-09-01ProjectCost: $15,000,000,00Expiration Date: November 1,2015

NJ.A ca8m33?3PTVSiH C9rfca!euof TOed (CN) application, submitted pursuant to

a. the total projects* nXiTbSe * ^ Th" aPP"Ca;'°n iS bdng opproved

». the MHMC loSato Sn KSSiSf '• *™C8 °rptemenl ="" P""9»™

5873790.8

Meadowlands Hospital Medical CenterCN# PR 100201-09-01Page 2

The standards that Iam compelled to use in evaluating this application are setforth in statute (N.J.S.A. 28:2H-1 §tsegjand by administrative rule (N.J.A.C 833) Imust besatisfied that the application submitted by MHA LLC isconsistent wilh thoserequirements. Atransfer ofownership ofan entire general hospital and a transfer thatwill result in a new Medicare provider number for the hospitals involved in the transferwas subject to the full review certificate of need process. N.J.A.C. 8:33-3 3(a)1 For thepurposes of the review, the application was considered a transfer of ownership of alicensed facility currently offering health care services and not a reduction, elimination,or relocation of a health care service. Therefore, for the reasons that follow IamffJ?ir^in9LWllh concfitic,ns tn® application submitted for the transfer of ownership ofMHMC to MHA LLC. Inote for the record that my decision to approve this CNapplication is consistent with the recommendation of the Stale Health Planning Board(SHPB) which recommended approval of CN# FR 100201-09-01 with conditions, at itsSeptember 30, 2010, meeting. In issuing this decision 1reviewed the CN application forthe transfer of ownership of MHMC, completeness questions, the transcripts of thepublic neanngs, wntten comments, exhibits, petitions, the Department of Health andSenior Services' recommendations, and transcripts of SHPB and Community HealthAsset Protection Act (CHAPA) meetings, and the SHPB recommendations. Thereferenced matenals are incorporated and made a part of this final decision.

N;J-S.A. 26:2H-8, aswell asN.J.A.C, 8:33-4.9(a), provides for the issuance of acertificate of need only where the action proposed in the application for such certificateis necessary toprovide required health care In the areatobe served can beeconomically accomplished and maintained, will not have an adverse economic orfinancial impact on the delivery of health services in the region orstatewide and willcontribute tothe orderly development of adequate and effective health care services Inmaking such determinations, Imust take into consideration: (a) the availability of(acuities or services which may serve asalternatives orsubstitutes, (b) the need forspecial equipment and services in the area, (c) the possible economies andImprovement in services to be anticipated from the operation of joint central servicesd) the adequacy of financial resources and sources of present and future revenues (e)

the availability of sufficient manpower in the several professional disciplines and (f)such other tactors as may be established by regulation.

... wAs Part of ,he review Process, the SHPB is also required to hold at least onepubic hearing in the service area of the health care facility within 30 days of theC!nw Ln9cdf'fd?Mp,ete by the Department. Apublic hearing took place atSecaucus H.gh School on August 26, 2010 with approximately 150 people attending offa Provided verbal testimony. Most of the speakers expressed concerns aboutthe applicant s lack of experience in operating a hospital; the for-profit status of theapplicant; the applicant s lack ot a long-range written commitment to keeping the facilityopen as a hospital; the lack of a written commitment to retaining most of the currentIhiw5!! I*™*™ °f funds away from the immunity and hospital to investors;and the retention of contracts with insurers. The Department and the SHPB reviewed

5S73790.8

Meadowlands Hospital Medical CenterCN#FR 100201-09-01Page 3

£™Tn£?S and adetû«te|y addressed the issues in the analysis andrecommendations approved by the SHPB.

As to the specifics of this application, N.J.S.A. 26:2H-8(a) requires thatInhS ht KV,ailabi!!!y °f fadli,ies °r ««vteirShTch may sSe as altmat ves orsubstitutes Ibelieve the applicant carefully and thoroughly examined teavafablB

level of hS,LL ° ownersh.p is the only viable option to preserving the currentlevel of health care services for its service area residents. The applicant does nniMHT°ltTe1aLSne2oeS"Tf"f^ to ^ ^-KftWad atu*k,- it- f" lnt0 cons|derat.on that there are five other hospitals in the countvwhS hiS,rteen m'6 :adiUS ,hat 0ffer ^mPâble or expanded capabS es to MrS *Sn^T ?°/eXlsted wi,h MHMC and find this alternative to be the leashd sruptivetomaintaining the current level of care and services. Iagree that me Proposed ransft nfSnTT?' %°PP°Sed 7*the Cl°SUre °f the hoSpilal> mPreserve a'cceslo r,ealm areSo^population Although the Department real zes that in lhefuture MHA LLC mauapproach the Community Advisory Group and the Department wTeouesK modifvserv.ces to strengthen the viability of the hospital, on balanci the stSitto*the *community by this provider outweighs the alternative of reducllof of serjfces orsignificant disruption. Thus, Iam satisfied that this criterion is met

special^ômenS^Vn?"1^?ât^^ 26:2H-8(b) to consider lhe need for

currently licensed at the present facility, ne services mat are

With respect to N.J.SA 26:2H-8(c) regarding the possible economies andZ'ZE^nn?"*? 'K,be fn,iCiPa!ed U°m the °Pâtion of join, cenSseSces Ifind that this is not applicable since the applicant will independently operate thisS oTrV nrr°te th3t the applicant is cornmlttedW23j2i!S.

hcensed bed complement or services provided al MHMC prior to the transfer

5873790.8

Meadowlands Hospital Medical CenterCN# FR 100201-09-01Page 4

Kefatlll'oflS^L'rfCiT qUalifled PerSonnel slnce MHA LLC has agreediubSantSlS »?2mS 9 ,S 3nd STiceS pfesenl|y at MHMC a"d hire Usubstantially all ofMHMC employees at the time ofthe sale.

N-J;S-A. 26:2H-8(f) requires consideration of such other Factor-? a* mnu h»

admSisSSv7„Ztattan: ^Î0"'' HaVe ,3ken int°«SS«et seo f MHA I r f vern,n9, he servlce* object to full reviow (i.e., N.J AC. 8:33-1.1am). MHA LLC is mcompliance with the access requirements set"forthln~N JACma eVoSeTo'thTT^ *Wi-"W- Specifically' MHA LLC state!TZWFmake no change to the care or services currently provided at MHMC followina thistransfer of ownership and that outreach efforts will continue toTo*"incomeSandetnnic minorities, women, disabled, elderly and all other patien sTn need of preventiondiagnoste and treatment services. MHA LLC notes that under their leadersh!MHMCSI<T!LUB t0 Tamta nUS commi'™"< to the community to preserve acce?to tealhSulaton rSTn hW "2? mediCa"y indl9ent and medicaTundSedSt âPP'lrant states that their policies are consistent wilh those pVevicuslv%£S£U"8!ffl5WSi°"îndi9ent C3re and i,S ^^ptancro'f alfpaTems"S'yS£telr?MSZ?£F oPPr°Ving thiS °PPlicati°n with conditions, Ihere willCtth^BlSSi,m ^ r/ Gr°UP t0 m°nit0r *B aVailab"ily and acrassibi,ity -

ownershiDofMHMCf°Mvh'̂ ' '"T'"T"'"9 the applicationfor the"ansferof

5873790.8

Meadowlands Hospital Medical CenterCN#FR 100201-09-01PageS

in Hudson County or the surrounding counties. I also believe that without this action,the financial conditions atMHMC under the ownership of Liberty would place thecontinued operation of both JerseyCity Medical Center and MHMC at risk and couldeventually lead to the closure of MHMC, closure or reduction of services, or bankruptcy.There is no existing data to suggest that this transfer of ownership would changeMHMC relationship with the other Hudson County hospitals or adversely impact thehealthstatus of the community.

Finally, Iacknowledge that MHMC has had a long standing commitment to theresidents in its service areasand believe that this approval will better enable MHMCunder their new ownership to maintain and enhance their commitment to the communityinto the foreseeable future. Ialso note that the applicant's business model andmarketing strategy could stimulate an Increase in patient volume and, in turn, return thehospital to financial stability. For the reasons set forth in this letter and noting theapproval of the SHPB, Iam approving MHA LLCs' application for the transfer ofownership for MHMC subject to the following conditions, which Inote were accepted bya representative of the applicant while addressing the SHPB:

1. The applicant completes the Office of Attorney General Community HealthCare Assets Protection Act, N.J.S.A. 26:2H-7.1Q et seq., review for theproposed saleofthe assets of Meadowlands Hospital Medical Center byLibertyHealthcare System. Inc. to MHA LLC.

2. The applicant shall file a licensing application with the Department's Certificateof Need andHealthcare Facility Licensure Program to execute the transfer oftheownership of MHMC license from Liberty to MHA LLC.

3. The applicant shall notify the Department's Office of Certificate ofNeed andHealthcare Facility Licensure (CNHCFL) in writing, specifically who Isresponsible for the safekeeping and accessibility of all MHMC Datients' medicalrecords (both active and stored) in accordance with N.J.S.A 826-85et SeaandN^AX. 8:43G-15.2.

4. MHA LLC shall operate MHMC as a general hospital, In compliance with allregulatory requirements, for at least seven years, This condition shall beimposed as a contractual condition of any subsequent sale or transfer subjectto appropriate regulatory orlegal review, by MHA LLC, within the seven yearperiod.

5. As noted by the applicant, MHA LLC shall hire substantially all MHMCemployees who are employed at the time ofthe sale.

6. MHA LLC shall continue all clinical services and community health programscurrently offered at MHMC by the previous ownership. Any changes in thiscommitment Involving either a reduction orelimination ofclinical services or

5S7J790.8

Meadowlands HospitalMedical CenterCm FR 100201-09-01Page 6

community health programs offered by MHMC's former ownership shall requireS™'f approvffrom the Department and shall be subject to all applicablestatutory and regulatory requirements. Any request for reduction or eliminationa^Z ,C? °rcommumly heal'h Programs shall include the CommunityAdvisory Group (see paragraph 12 below) written analysis and response to the

7. MHA LLC shall continue compliance with N.J.AC. 8:43G-5 21(a) whichrequires that "[a] all hospitals ... provide on a regular and continuing basis,out-patient and preventive services, including clinical services for medically^digent patients, for those services provided on an in-patient basis"Documentation of compliance shall be submitted within 30 days of the issuanceof the license and quarterly thereafter for aperiod of seven years.

8. In accordance with N.J.S.A, 26:2H-18.64 and N.J.A.C. 8:43G-5 2(c) MHA LLCZ»r„l0n'lf CTP,y Wilh fed9ral EMTAU req^^"nts but also provide careor all patients who present themselves at MHMC without regard to their abilityto pay or payment source. '

IâlU,e °f I"?,igent Care provided by MHA LLC sha» ^ determined by ther,t InHcL0, frrntfd,Chafity care' ûlated at the prevailing Medicaidby MHMC m '°,hS am°Unt °f Char"y Care Provided historically

r»^LL£Sh,a"eSlab!ish afunct,0™ng Board of Directors for the hospitalX^f for,mPlerT,Bnl,n9 hospital-wide policy, adopting bylaws, maintainingBoaKX*' 'w Prd'ng ,instituti°na< management and planning. The 9mi 'C°nSISt.0f hospilal mana3Qment as well as local communityi«c .h ,kpresr"r?tne residin9 Population of MHMC's service area and notwho"SrthS lalter ,W?9r0UpS l° be COmprised of^ alswno are not themselves owners or employees of, nor related to employees ofl?£r* 8UbBidia? corporatlon °' borate affiliate. These ohysK^yHtSSSaTN? "T C'ralrC,iCS °f ,mdiCine and may have c"âl™Sn^L« £' Thfieafler«lne b°ard shall continually maintain su.tableXIs' " °f '^ resldin9 PoP"la«on of the hospital's service area Annualnotice shall be made to the Department of this Boa d's roster along with anySpo'iSnT'"9 CQmposi,i0^ governance authority and bS *a. Provide, with specificity, which best practices in the New Jersey

Commission on Rationalizing Health Care Resources Report that MHA LLCnil /n? mfna9ement Policies including, but not limited to, Conflict ofinterest Policy for principals and Board.

9.

10.

587.5790.;


b. All Policies and Procedures related to best practices shall beshared withlhe Community Advisory Group and made available to the Departmentupon request.

1T. MHA LLC shall submit a report to the Department, on anannual basis for th°initial seven years following the transfer of ownership, orupon requestdetailing:

a. the investments it has made during the previous year at the hospital Suchreport shall also include a detailed annual accounting of any long or shortterm debt orother liabilities incurred on the hospital's behalf and reflectedon the MHMC's balance sheet; and,

b. the transfer of funds from the hospital to any parent, subsidiary corporationor corporate affiliate andshall indicate theamount offunds transferred,Transfer offunds shall include, but not belimited to, assessments forcorporate services, transfers of cash and investment balances to centrallycontrolled accounts, management fees, capital assessments, and/or specialone-time assessments for anypurpose; and

c. submit all required financial measures pursuant to N.J.A.C. 8-31B andmonthly reporting of financial indicators.

12. Within three months of approval of this application, MHA LLC shall develop andparticipate In a Community Advisory Group (CAG) to provide ongoingcommunity input to the hospital's CEO and the hospital's Board on ways thatMHMC canmeet theneedsof the residents in its service area.

a. Subject to the provisions below, MHA LLC shall determine the membershipstructure, governance, rules, goals, timeframes, and the role of the CAG in'accordance with the primary objectives set forth above, and shall provide awritten report setting forth same to the hospital's Board of Trustees with acopy to the Department and subject to the Department's approval, within 60days from the date of formation of the CAG.

b. MHA LLC sha,| minima||y seek parlicipatior| from each ,own jn ^ servjcearea of MHMC by offering a seat on lhe CAG to each town's mayor orhis/her designee. Membership on the CAG shall include patient advocatesocal public health officials, clinical practitioners whose mission is to ensure'that New Jersey residents are provided fully-integrated and comprehensivehealth services; labor unions and community advocates.

c. MHA LLC shall designate co-chairs of the CAG, one of whom shall bo amember of the hospital's Board and one of whom shall be acommunity

5873790.8

Meadowlands Hospital Medical CenterCN# FR 100201-09-01Pages

member who Is neither employed by nor related to anyone employed by anyparent, corporate subsidiaries or corporate affiliates.

d. ACAG representative shall be given aseal, ex-officio, on the hospital'sBoard of Trustees.

e. The co-chairs of the CAG shall jointly submit to the hospital's Board ofTrustees, with a copy to the Department, a semi-annual report of theprogress toward the goals of the CAG,

f. The co-chairs of the CAG shall jointly transmit to the hospital's Board wilh acopy to the Department, a quarterly and any special reports relative to theimplementation of these conditions.

g. Each member of the CAG shall be required to publicly disclose any and ailTrustee's '^^l°^ CA° members and lhe hospital's Board of

h. MHA LLC may petition the Department to disband the CAG not earlier thanthree years from the date of CN approval and on showing that all of theabove conditions have been satisfied for al least one year.

13. MHA LLC shall report in a timely manner all quality measures required byadministrative rule to the Department and report to the Community Advisory(aroup onscores and recommendations for improvement.

14, For seven years after initial licensure of MHMC under MHA LLC ownership thehospital's Board Chairman, President/CEO and other senior hospitalmanagement shall meet with the Commissioner of the Department of Healthand Senior Services (Commissioner) at regular intervals on a schedule to bedetermined by the Commissioner to discuss the hospital's condition andcompliance wilh the terms ofthiscertificate of need.

15' h^U.'?aCh fff0r1 Sha"be placed int0 effecl ,0 ensure that all residents of thehospital service area, especially the medically indigent, have access to theavartab e serv.ces atthe location. Aself-evaluation of ihis effort shall beefeS«r,Wy baSiS for seven ye3rs a,tsr lic9nsure to measure itsHmSto mf,S ? a0y Pa,ymen15 aCC0Unted for actMlies' inclodinS but notyj°l2L; ^"y PK>9«nis, health professional education, andfhjLih.v X I he Department for review and comment and presented tolhe public al the hospital's annual public meeting.

16. MHA LLC must make areasonable attempt to continue the current commercialinsurance contracts of MHMC that are in effect for at least 1yearXTensureand report annually on payor mix. If MHA LLC provides notice to fermS

5S73790.lt


such contracts at any time, MHA LLC shall meet with the Department todiscuss public notice and access.

a. MHA LLC shall endeavor to maintain existing HMO Insurance coverage atMeadowlands Hospital for the first year following acquisition, including butnot limited togood faith negotiations. If MHA LLC provides notice toterminate any HMO contracts al any time, MHA LLC shall in advance meetwith representatives from the Departments of Banking and Insurance andHealth and Senior Services to discuss the intent to terminate such contractand documenting how it will provide notice to patients and providers.

17. In accordance with the provisions of hUaA,26:2H-18.59h, MHA LLC shalloffer to its employees who were affected by the transfer, health insurance

coverage at substantially equivalent levels, terms and conditions tothose thatwere offered to the employees prior to the transfer."

18, All the above conditions shall also apply to any successor organization to MHALLC who acquires MHMC within seven years from the date of the CN approval.

Failure to satisfy the aforementioned conditions of approval may result insanctions, including license suspension, monetary penalties and other sanctions inaccordance with N.J.S.A. 26:2H-1 et sea, and all other applicable requirementsAcceptance of these conditions will be presumed unless written objections aret^rf ,° e°ePartment wlttlln 30 days of receipt of this letter. Upon receipt ofsuch objections this approval will be deemed suspended and the project shall be reexamined in lightof the objections.

We look forward to working with you and helping you to provide ahigh quality ofcare to the patients of MHMC's service areas. If you have any Questions concern ngthis certificate of need, please do not hesitate to contact John Calabria, Director Officeof Certificate of Need and Healthcare Facility Licensure, at (609) 292-8773.

Sincerely,

c: John A. Calabria

Poonam Alaigh, MD, MSHCPM, FACPCommissioner

5873790.8

EXHIBIT E

Medical Records Custody Agreement

5S73790.S

MEDICAL RECORD CUSTODIAL AGRFFMFNT

This Medical Record Custodial Agreement ("Agreement") is entered into \\cMj IQ2016 by and between MHA, LLC, a New Jersey limited liability company ("MHA"), and NJMHMCLLC, a New Jersey limited liability company (the "Custodian"). MHA and Custodian are each aParty"and, collectively, the "Parties."

RECITALS

WHEREAS, MHA operates Meadowlands Hospital Medical Center, an acute care hospital locatedat 55 Meadowlands Parkway, Secaucus, New Jersey 07094 (the "Hospital");

WHEREAS, the Custodian and MHA entered into an Asset Purchase Agreement wherebyCustodian has purchased and assumed from MHA certain assets and liabilities of MHA used in theownership and operation of the Hospital (the "APA") as of the Closing Date (as defined in the APA);

WHEREAS, Custodian will, as of the Closing Date, operate the Hospital;

WHEREAS, the Parties desire to set forth the conditions upon which medical records withrespect to patients treated at the Hospital prior to the Closing Date (the "Medical Records") will betransferred and retained by Custodian and the conditions under which MHA will have access to suchMedical Records.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinaftercontained, the parties hereby agree as follows.

1- Effective Date. The term of this Agreement shall begin on the Closing Date (theEffective Date") and shall continue unless and until the parties mutually agree to

terminate this Agreement and/or until the Custodian disposes of all the MedicalRecords in accordance with this Agreement and all applicable law.

2- Tm^^C^^n^^mn. The Medical Records shall be transferred, effective as ofthe Effective Date, to the custody and control of the Custodian. The Custodian shall acceptretain and store, at its sole cost and expense, the Medical Records in accordance with alllocal, state and federal laws, statutes, regulations or other requirements governing themaintenance and protection of hospital medical records (the "Medical RecordRequirements"), including without limitation, the New Jersey Manual of Hospital LicensingStandards located at N.J.A.C. 8:43G, the Medicare Conditions of Participation for HospitalsS,14S Utu\ T 482'thS requirements of the S^dards for Privacy of IndividuallyIdentifiable Health Information published by the U.S. Department of Health and HumanServices at 45 CF.R, part 160 and part 164, subpart E, under the Health Insurance Portabilityand Accountability Act of 1996 and the Health Information Technology for Economic andClinical Health Act and its related regulations.

3- BiESeniatfaDJ^^ Custodian represents and warrants that (A) it willprovide MHA immediate and continuing access to and complete copies of any MedicalRecords MHA requires (i) to defend anticipated or actual litigation, (ii) to satisfy any

5S73790.S

applicable local, state or federal laws; (iii) to respond to any governmental inquiry,including but not limited to inquiries of the Medicare and Medicaid programs and/orthe U.S. Department of Health and Human Services; (iv) to reconcile accountsreceivable and payments; or (v) for any due diligence business inquiry or such otheraccess as reasonably requested in connection with the exercise of MHA's healthcare orbusiness operations; and (B) with respect to its retention of the Medical Records, it isand shall remain for the duration of this Agreement the covered entity for purposes ofmeeting HIPAA and/or HITECH requirements and/or is otherwise the responsible partywith respect to meeting any Medical Record Requirements.

4. Indemnification. Custodian shall hold harmless, indemnify and defend (includingreasonable attorney fees) MHA from and against any claims, damages, liabilities orpenalties that may be incurred by MHA as the result of or related to Custodian'sresponsibilities as custodian of the Medical Records and/or Custodian's alleged oractual violation of the Medical Record Requirements..

5. Relationship of the Parties. The Custodian and MHA hereto acknowledge that theyare independent contractors in the performance of their obligations under the termsof this Agreement. Nothing in this Agreement shall be deemed or construed to create ajoint venture or partnership between the Parties.

6. Assignment. Neither Party may assign any rights or obligations under this Agreementwithout the other Party's prior written consent, which shall not be unreasonablywithheld or delayed.

7. Notices. Any notice from one Party to the other Party related to this Agreement shallbe in writing and shall be deemed to be given (i) upon delivery if by hand or byovernight courier or (ii) three days after mailing, if by certified or registered mail to thereceiving Party's Notice Address below. The Parties may change their Notice Addressesupon delivery of notice to the other Parties,

8. Severability. If a court or other body of competent jurisdiction declares any term of thisAgreement invalid or unenforceable, then the remaining terms shall continue in fullforce and effect.

9. N„onrWaiver, No right created by this Agreement shall be deemed waived unlessspecifically and expressly waived in a writing signed by the Party possessing the right.

10. PrevailingJParty. If a Party prevails against another Party regarding any claim arisingfrom or related to this Agreement, then the non-prevailing Party shall reimburse theprevailing Party for costs, expenses, and attorneys' fees reasonably incurred by theprevailing Party regarding that claim.

11- governing. Law, The laws of the State of New Jersey will govern the validity,interpretation, performance, remedies, and all other issues arising under or out of thisAgreement.

5873790.8

Notice Address for Custodian:

Facsimile^E-mail:Attention:

with a copy to: Russell Friedman & Associates, LLP3000 Marcus Avenue, Suite 2E03Lake Success, New York 11042

Facsimile: (516) 335-9621E-mail: [email protected]

Attention: Russell C, Friedman, Esq,

5S73 790.8