DISCLOSURE SCHEDULES
to the
ASSET PURCHASE AGREEMENT
dated as of June 16, 2025
by and among
CRESTLINE PACKAGING SOLUTIONS LLC a Delaware limited liability company ("Buyer")
and
LAKEWOOD REGIONAL HEALTH PARTNERS, LLC a New York limited liability company ("Seller")
and
DR. RAYMOND ALCOTT and DR. NADIA PETROSIAN (collectively, the "Seller Members")
Prepared by Seller
Reviewed by Calderwood & Harkness LLP Counsel to Buyer Matter No. 1006-00008
CONFIDENTIAL TREATMENT REQUESTED — This document and the information contained herein are confidential and proprietary. Distribution, reproduction, or use of this document, in whole or in part, without the express written consent of the parties is strictly prohibited.
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INTRODUCTORY NOTES AND GENERAL DISCLAIMERS
These Disclosure Schedules (the "Schedules") are delivered by Lakewood Regional Health Partners, LLC, a New York limited liability company ("Seller"), and Dr. Raymond Alcott and Dr. Nadia Petrosian (collectively, the "Seller Members"), pursuant to, and form an integral part of, that certain Asset Purchase Agreement, dated as of June 16, 2025 (the "Agreement"), by and among Crestline Packaging Solutions LLC, a Delaware limited liability company ("Buyer"), Seller, and the Seller Members. All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Agreement.
The section and subsection references set forth in these Schedules correspond to the representations, warranties, covenants, and other provisions of the Agreement to which the disclosed items relate. The disclosure of any item in a particular Schedule shall be deemed disclosed with respect to every other Schedule to the extent its applicability to such other Schedule is reasonably apparent on the face of such disclosure, without the necessity of cross-reference, repetition, or duplication of such item in each applicable Schedule. Nothing in these Schedules shall be construed to broaden or otherwise alter the scope of any representation, warranty, covenant, or other provision of the Agreement.
The inclusion of any item, matter, or information in any Schedule shall not constitute an admission by Seller or any Seller Member that (a) such item, matter, or information is material to the Business, (b) such item, matter, or information constitutes or gives rise to a breach or violation of any applicable Law, Contract, or Governmental Order, (c) such item, matter, or information constitutes or gives rise to a Material Adverse Effect, or (d) Seller or any Seller Member has any liability or obligation with respect thereto. In many instances, matters or items are disclosed in these Schedules solely for informational purposes, out of an abundance of caution, or in order to provide Buyer with a comprehensive understanding of the Business, and such disclosure is not intended to suggest that such matters or items are required to be disclosed under the Agreement.
Headings, brief descriptions, and summaries of documents, agreements, claims, or other matters contained in these Schedules are provided for convenience of reference only and do not purport to be complete or comprehensive descriptions of the documents, agreements, claims, or matters to which they relate. In the event of any inconsistency between any description or summary contained herein and the terms of the actual underlying document, agreement, or instrument, the terms of the actual underlying document, agreement, or instrument shall control. Complete copies of all documents referenced herein have been made available to Buyer and its Representatives in the electronic virtual data room (the "VDR" or "Data Room") maintained by Bellweather Partners LLP (the VDR platform hosted at https://vdr.bellweatherpartners.com/lakewood2025 and accessible via credentials previously provided to Buyer's counsel, Calderwood & Harkness LLP).
All dollar amounts set forth in these Schedules are expressed in United States Dollars ("$") unless otherwise specifically noted. All estimates of dollar amounts provided herein are good faith estimates by Seller's management based on information available as of the date of preparation of these Schedules and are subject to change based on actual final calculations, reconciliations, and adjustments as contemplated by the Agreement.
Seller's principal office is located at 450 East Ridge Road, Rochester, New York 14621. Seller's Employer Identification Number is 46-5183294.
These Schedules have been prepared as of June 16, 2025 (the "Schedule Date"), and the information set forth herein is current as of the date of the Agreement unless a different date is otherwise specifically indicated with respect to a particular disclosed item. Seller undertakes no obligation to update these Schedules except as expressly provided in Section 7.8 of the Agreement.
SCHEDULE 2.1 — PURCHASED ASSETS
Pursuant to Section 2.1 of the Agreement, the following categories of assets constitute the "Purchased Assets" to be conveyed, transferred, assigned, and delivered by Seller to Buyer at the Closing:
1. Tangible Personal Property. All furniture, fixtures, equipment, medical devices, diagnostic and imaging equipment, laboratory instruments, examination tables, surgical instruments, computer hardware (including desktop computers, laptop computers, servers, monitors, printers, scanners, and related peripherals), telephone systems and telecommunications equipment, audio-visual equipment, leasehold improvements, and all other tangible personal property of every kind and description located at, used in, or held for use in connection with the operation of the Business at each of the eleven (11) clinic locations operated by Seller. A detailed equipment and asset inventory, organized by clinic location, has been prepared by Seller and made available in the Data Room (VDR Folders 3.1 through 3.11, containing clinic-by-clinic inventories for each of the Rochester Main, Brighton, Henrietta, Syracuse, Utica, Binghamtonhamton, Ithaca, Albany, Scranton, Wilkes-Barre, and Towanda facilities, respectively). The inventories set forth in VDR Folders 3.1 through 3.11 were prepared as of May 15, 2025, and are believed by Seller to be materially complete and accurate as of such date, subject to normal additions and dispositions in the ordinary course of business between such date and the Closing Date. Tangible Personal Property specifically includes, without limitation, all imaging and diagnostic equipment subject to the Marlowe Asset Management Medical Equipment Finance, LLC leases identified in Schedule 2.3, Part B.
2. Owned Real Property. All of Seller's right, title, and interest in and to the following real property owned in fee simple by Seller:
(a) 450 East Ridge Road, Rochester, New York 14621 (Monroe County) (the "Rochester Main Property") — Appraised value: $6,900,000 (based on the appraisal report prepared by Meridian Valuation Group, LLC, dated April 22, 2025, a copy of which is available in VDR Folder 4.1); and
(b) 1840 West Genesee Street, Syracuse, New York 13204 (Onondaga County) (the "Syracuse Property") — Appraised value: $4,900,000 (based on the appraisal report prepared by Meridian Valuation Group, LLC, dated April 24, 2025, a copy of which is available in VDR Folder 4.2).
The aggregate appraised value of the Owned Real Property is $11,800,000. The Owned Real Property is more particularly described in Schedule 4.6(a), including legal descriptions, tax parcel identification numbers, and all encumbrances, easements, and other matters affecting title thereto. Transfer of the Owned Real Property shall be effectuated by delivery of a bargain and sale deed with covenants against grantor's acts for each parcel, in form and substance reasonably satisfactory to Buyer and its counsel.
3. Leasehold Interests. All of Seller's right, title, and interest as tenant or lessee in and to the nine (9) real property leases (and any amendments, modifications, supplements, or renewals thereof) described in Schedule 4.6(b) of these Schedules, subject to receipt of required landlord consents as set forth in Schedule 4.3, Part C.
4. Assumed Contracts. All of Seller's right, title, and interest in and to all Contracts listed on Schedule 2.3 of these Schedules (collectively, the "Assumed Contracts"), including all rights, benefits, and entitlements of Seller thereunder.
5. Accounts Receivable. All accounts receivable, notes receivable, and other rights to payment for goods sold, services rendered, or otherwise arising from the operation of the Business as of 11:59 p.m. Eastern Time on the day immediately preceding the Closing Date, whether billed or unbilled, including all amounts owed by patients, third-party payors (including Medicare, Medicaid, and all commercial insurance carriers and managed care organizations), and any other Person, together with all security and collateral therefor and all rights of collection with respect thereto. For the avoidance of doubt, Accounts Receivable include all claims for reimbursement submitted to or pending with any third-party payor for services rendered prior to the Closing Date, regardless of the date on which payment is received.
6. Inventory. All medical supplies, pharmaceuticals (including prescription medications and sample medications to the extent transferable under applicable Law), vaccines, reagents, laboratory consumables, office supplies, janitorial supplies, maintenance supplies, and all other consumable items and supplies of every kind and description located at or in transit to any of the eleven (11) clinic locations and used or held for use in the operation of the Business.
7. Intellectual Property. All intellectual Property owned, licensed, or used by Seller in connection with the operation of the Business, as more particularly described in Schedule 4.9, including all trademarks and service marks (whether registered or unregistered), trade names, assumed names, logos, trade dress, domain names, copyrights, trade secrets, proprietary clinical protocols, patient management workflows, proprietary billing procedures, and all other intellectual property rights of every kind and description.
8. Permits and Licenses. All Permits, licenses, authorizations, approvals, certificates, registrations, and similar rights issued by any Governmental Authority to Seller or otherwise held by Seller in connection with the operation of the Business, as more particularly listed on Schedule 4.12, in each case to the extent transferable or assignable to Buyer under applicable Law and the terms of such Permit or license.
9. Books and Records. All books, records, files, data, documents, and information of every kind and description used or maintained by Seller in connection with the operation of the Business, including:
(a) all patient records, charts, and medical histories (subject to compliance with the Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated thereunder ("HIPAA"), and all applicable state privacy and medical records Laws);
(b) all billing records, coding records, claims data, explanation of benefits records, remittance advices, and collection records;
(c) all financial records, including general ledgers, accounts receivable aging reports, accounts payable records, bank statements, and tax records to the extent related to the Purchased Assets or Assumed Liabilities;
(d) all vendor and supplier files, correspondence, and records;
(e) all personnel files and employment records of Transferred Employees, to the extent permitted by applicable Law;
(f) all correspondence with Governmental Authorities, including regulatory correspondence with the New York State Department of Health, the Pennsylvania Department of Health, CMS, OIG, and all other federal and state regulatory agencies;
(g) all quality assurance and peer review records, to the extent transferable under applicable Law;
(h) all marketing and advertising materials, brochures, and promotional materials; and
(i) all other books and records of every kind related to the operation of the Business.
10. Goodwill. All goodwill of Seller associated with the Business, including the going-concern value of the Business, customer and patient relationships, referral relationships, community reputation, and the value associated with the workforce in place.
11. Prepaid Items. All prepaid expenses, advance payments, deposits (including security deposits under real property leases and vendor deposits), and other prepaid items of Seller to the extent related to the Business or the Purchased Assets, including prepaid insurance premiums (to the extent related to policies being assigned to Buyer), prepaid rent, and prepaid license fees.
12. Insurance Proceeds. All rights to insurance proceeds, insurance receivables, and rights of recovery under insurance policies of Seller, in each case to the extent arising from pre-Closing events and relating to the Assumed Liabilities or damage to or loss of Purchased Assets.
13. Claims and Causes of Action. All claims, counterclaims, causes of action, choses in action, rights of recovery, rights of set-off, rights of recoupment, and demands of every kind and nature against third parties, whether known or unknown, arising from or relating to the Purchased Assets, the Business, or the Assumed Liabilities, including rights under warranties and guarantees from manufacturers and vendors of equipment and supplies.
14. Telephone and Fax Numbers, URLs, and Email Addresses. All telephone numbers, fax numbers, toll-free numbers, website domain names and uniform resource locators (URLs) (including the domain name lakewoodhealth.com and all subdomains thereof, including patient.lakewoodhealth.com, portal.lakewoodhealth.com, careers.lakewoodhealth.com, and provider.lakewoodhealth.com), email addresses (including all email accounts using the @lakewoodhealth.com domain), social media accounts (including Kestrel Services Inc., Northpoint Services Inc., Westmark Health IT, and Westvale Solutions accounts maintained in the name of the Business), and directory listings used in the operation of the Business.
15. EHR Data. All data, records, databases, data sets, data files, reports, templates, and configurations maintained within or generated by the Clearpath Health Systems, Inc. electronic health records platform under Enterprise EHR License Agreement No. CP-ENT-2022-0487, dated June 1, 2022, including all patient demographic data, clinical data, encounter records, prescribing records, laboratory results, imaging records, referral records, and all associated metadata, to the extent owned by Seller and transferable under the terms of the Clearpath license agreement and applicable Law.
SCHEDULE 2.2 — EXCLUDED ASSETS
Pursuant to Section 2.2 of the Agreement, the following assets are expressly excluded from the Purchased Assets and shall be retained by Seller (collectively, the "Excluded Assets"):
1. Cash and Cash Equivalents. All cash, cash equivalents, bank balances, certificates of deposit, money market fund balances, and other liquid investments of Seller, other than petty cash maintained at the eleven (11) clinic locations in an aggregate amount not to exceed $5,000 (which petty cash shall constitute a Purchased Asset and shall be transferred to Buyer at Closing).
2. Bank Accounts. All bank accounts of Seller, including but not limited to the following:
(a) Greaves Bancorp — operating checking account ending in x4837;
(b) Greaves Bancorp — payroll account ending in x9214;
(c) First Niagara Financial Group — money market savings account ending in x6052; and
(d) any other depository accounts, lockbox accounts, or investment accounts maintained by Seller.
3. Tax Refunds and Credits. All refunds, credits, rebates, overpayments, and similar items with respect to Taxes of Seller attributable to Pre-Closing Tax Periods, whether received before, on, or after the Closing Date.
4. Organizational Documents and Corporate Records. The certificate of formation, operating agreement, qualifications to do business as a foreign limited liability company, minute books, membership interest ledgers, corporate seals, and all Tax Returns (including all work papers and schedules related thereto) of Seller. For the avoidance of doubt, Seller shall retain all records necessary for the preparation and filing of Seller's Tax Returns for Pre-Closing Tax Periods and for the wind-down and dissolution of Seller following the Closing.
5. Rights Under the Agreement and Ancillary Documents. All rights of Seller and the Seller Members under the Agreement and the Ancillary Documents (as defined in the Agreement), including without limitation all rights to receive the Purchase Price, all rights to indemnification under Article IX of the Agreement, and all rights under the Escrow Agreement.
6. Excluded Contracts. All Contracts listed on Schedule 2.2(a) hereto (collectively, the "Excluded Contracts"), which Contracts are not being assigned to or assumed by Buyer.
7. Seller Insurance Policies. All rights of Seller under insurance policies maintained by or for the benefit of Seller, other than (a) rights to insurance proceeds relating to the Assumed Liabilities (which are Purchased Assets pursuant to Schedule 2.1, Item 12 above), and (b) the tail insurance policies described in Schedule 4.17 (which shall be maintained in accordance with the terms of the Agreement).
8. D&O and Professional Liability Insurance. The directors' and officers' liability insurance policy and professional liability insurance policies maintained for the benefit of Seller's managers, officers, and members in their capacity as such, provided that Seller shall maintain the tail coverage described in Schedule 4.17 in accordance with the terms of Section 7.11 of the Agreement.
9. Retained Name Rights. Seller's right, title, and interest in and to the trade name "Lakewood Regional Health Partners" and any variations thereof, solely to the extent required by Seller for wind-down, dissolution, final tax filing, and administrative purposes for a period not to exceed six (6) months following the Closing Date. Upon the expiration of such six (6)-month period, Seller shall cease all use of such name and shall execute and deliver to Buyer such documents as may be reasonably necessary to effectuate the full transfer of all rights in such name to Buyer.
10. Non-Business Assets. Any assets that are not used primarily in connection with the operation of the Business, including personal assets of the Seller Members and any assets held by Seller that relate exclusively to activities or operations other than the Business.
Schedule 2.2(a) — Excluded Contracts
The following Contracts are Excluded Contracts and are not being assigned to or assumed by Buyer:
1. Engagement Letter between Lakewood Regional Health Partners, LLC and Bellweather Partners LLP, dated March 8, 2025, pursuant to which Bellweather Partners LLP was retained to serve as exclusive financial advisor to Seller in connection with the sale of the Business (Daniel Kerrigan, Managing Director, engagement lead). Under the terms of the engagement letter, Bellweather Partners LLP is entitled to a success fee equal to 2.0% of the aggregate transaction value, which, based on a Purchase Price of $140,000,000, yields a success fee of $2,800,000, payable by Seller at and from the proceeds of the Closing. The engagement letter also provides for reimbursement of reasonable out-of-pocket expenses incurred by Bellweather Partners LLP in connection with the engagement. A copy of the engagement letter is available in the Data Room at VDR Folder 1.3.
2. Engagement Letter between Lakewood Regional Health Partners, LLC and Whitfield, Ames & Greer LLP, dated March 22, 2025, pursuant to which Whitfield, Ames & Greer LLP was retained to serve as legal counsel to Seller in connection with the negotiation, documentation, and consummation of the sale of the Business (Catherine Greer, Partner, lead engagement attorney). Fees are billed on a time-and-materials basis at standard hourly rates. All fees and expenses under this engagement letter are Seller Transaction Expenses. A copy of the engagement letter is available in the Data Room at VDR Folder 1.4.
3. Amended and Restated Operating Agreement of Lakewood Regional Health Partners, LLC, dated January 15, 2018, by and among Dr. Raymond Alcott (holding a 60% membership interest) and Dr. Nadia Petrosian (holding a 40% membership interest), governing the internal affairs, management, and operation of Seller as a New York limited liability company. This operating agreement sets forth the capital contribution obligations, profit and loss allocation provisions, distribution mechanics, governance structure, and transfer restrictions applicable to the membership interests in Seller. A copy of the operating agreement (as amended) is available in the Data Room at VDR Folder 1.1.
SCHEDULE 2.3 — ASSUMED CONTRACTS
Pursuant to Section 2.3 of the Agreement, the following Contracts shall be assigned by Seller to, and assumed by, Buyer at the Closing (collectively, the "Assumed Contracts"). Assignment and assumption of each Assumed Contract is subject to receipt of any required third-party consent identified in Schedule 4.3 and compliance with any notice requirements applicable thereto. Copies of all Assumed Contracts listed below (including all amendments, supplements, and side letters) have been made available in the Data Room (VDR Folder 5, with sub-folders as indicated).
Part A — Managed Care Agreements and Payor Contracts
Seller is a party to the following fourteen (14) managed care agreements and third-party payor contracts, each of which shall be assumed by Buyer at Closing:
1. Meridian Shield Health Plans, Inc. — Participating Provider Agreement, dated April 1, 2022 (as amended by First Amendment dated October 15, 2023). This agreement governs Seller's participation in the Meridian Shield preferred provider network across all eleven (11) clinic locations. Annual revenue attributable to this agreement for the trailing twelve-month period ended March 31, 2025 was approximately $17,248,000, representing approximately 22% of Seller's TTM net revenue of $78,400,000. The agreement has an initial three-year term with automatic annual renewal periods. Either party may terminate the agreement upon 180 days' prior written notice. The agreement contains a change-of-control provision requiring the prior written consent of Meridian Shield Health Plans, Inc. in connection with any change of ownership or control of the provider entity (see Schedule 4.3, Part B). VDR Folder 5.2.1.
2. Empire Ashford Specialty Insurance (Calderon Specialty Insurance, Inc.) — Provider Participation Agreement, dated January 1, 2021 (as amended by Amendment No. 1 dated July 1, 2023). Covers all New York clinic locations (eight facilities). Annual revenue attributable: approximately $10,192,000 (13% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control notice required (30 days). VDR Folder 5.2.2.
3. Marlowe Insurance Brokers — Participating Provider Agreement, dated March 1, 2020. Covers Rochester Main, Brighton, Henrietta, Syracuse, and Utica clinic locations. Annual revenue attributable: approximately $8,624,000 (11% of TTM net revenue). Auto-renewal with 120-day termination notice. Change-of-control consent required. VDR Folder 5.2.3.
4. Northpoint Casualty Group Health Inc. (a Ridgeline Group) — Physician Participation Agreement, dated September 1, 2021. Covers all eleven (11) clinic locations. Annual revenue attributable: approximately $7,056,000 (9% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control notice required (60 days). VDR Folder 5.2.4.
5. Meridian Assurance of New York, Inc. — Provider Agreement, dated February 1, 2022. Covers all New York clinic locations and, through a separate addendum, the three Pennsylvania clinic locations (Meridian Assurance of Pennsylvania, Inc. addendum dated February 15, 2022). Annual revenue attributable: approximately $6,272,000 (8% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control consent required. VDR Folder 5.2.5.
6. Highmark Inc. — Provider Participation Agreement, dated July 1, 2020. Covers Scranton, Wilkes-Barre, and Towanda clinic locations (Pennsylvania). Annual revenue attributable: approximately $4,704,000 (6% of TTM net revenue). Auto-renewal with 120-day termination notice. Change-of-control consent required. VDR Folder 5.2.6.
7. Hollowell Life Insurance Health and Life Insurance Company — Participating Provider Agreement, dated October 1, 2021. Covers all eleven (11) clinic locations. Annual revenue attributable: approximately $3,920,000 (5% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control notice required (30 days). VDR Folder 5.2.7.
8. MVP Health Care, Inc. — Provider Network Agreement, dated April 15, 2019 (as amended by Amendment No. 1, dated March 1, 2022). Covers Rochester Main, Brighton, Henrietta, and Utica clinic locations. Annual revenue attributable: approximately $3,136,000 (4% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control notice required (60 days). VDR Folder 5.2.8.
9. Fidelis Care New York, Inc. (Centene Corporation) — Provider Participation Agreement, dated January 1, 2020. Covers all New York clinic locations. Annual revenue attributable: approximately $2,744,000 (3.5% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control notice required (30 days). VDR Folder 5.2.9.
10. GEHA (Government Employees Health Association, Inc.) — Provider Network Agreement, dated May 1, 2022. Covers all eleven (11) clinic locations. Annual revenue attributable: approximately $1,568,000 (2% of TTM net revenue). Auto-renewal with 60-day termination notice. No change-of-control consent required; notice only. VDR Folder 5.2.10.
11. Tricare (administered by Pemberton Mutual Insurance, LLC) — TRICARE Authorized Institutional Provider Agreement, dated August 1, 2021. Covers all eleven (11) clinic locations. Annual revenue attributable: approximately $1,176,000 (1.5% of TTM net revenue). Auto-renewal. Change-of-control notice required. VDR Folder 5.2.11.
12. CDPHP (Capital District Physicians' Health Plan, Inc.) — Participating Provider Agreement, dated November 1, 2019. Covers Albany clinic location. Annual revenue attributable: approximately $784,000 (1% of TTM net revenue). Auto-renewal with 90-day termination notice. Change-of-control consent required. VDR Folder 5.2.12.
13. Emblem Health, Inc. — Provider Participation Agreement, dated June 1, 2022. Covers all New York clinic locations. Annual revenue attributable: approximately $549,000 (0.7% of TTM net revenue). Auto-renewal with 60-day termination notice. No change-of-control consent required; notice only. VDR Folder 5.2.13.
14. Workers' Compensation Board of the State of New York / Pennsylvania Bureau of Workers' Compensation — Seller is authorized as a provider under the workers' compensation programs in both New York and Pennsylvania. Annual revenue attributable from workers' compensation payors (aggregate across all carriers): approximately $627,000 (0.8% of TTM net revenue). Various provider agreements with individual workers' compensation carriers are on file in VDR Folder 5.2.14.
The aggregate annual revenue attributable to the above fourteen (14) managed care agreements and payor contracts is approximately $68,600,000, representing approximately 87.5% of Seller's TTM net revenue. The remainder of Seller's revenue is derived from Medicare fee-for-service reimbursement (approximately $5,488,000, or 7%), Medicaid fee-for-service reimbursement (approximately $2,352,000, or 3%), self-pay and patient cost-sharing obligations (approximately $1,176,000, or 1.5%), and miscellaneous other revenue sources (approximately $784,000, or 1%).
Part B — Equipment Leases
1. Marlowe Asset Management Medical Equipment Finance, LLC — Master Lease Agreement, dated March 15, 2023 (the "Marlowe Asset Management Master Lease"), between Lakewood Regional Health Partners, LLC, as lessee, and Marlowe Asset Management Medical Equipment Finance, LLC, as lessor (principal office: 400 Interstate North Parkway, Suite 1500, Atlanta, Georgia 30339). The Marlowe Asset Management Master Lease governs the leasing of medical imaging and diagnostic equipment at certain of Seller's clinic locations. The following Equipment Schedules have been executed under the Marlowe Asset Management Master Lease:
(a) Schedule No. VML-2023-1140 — Calderon Industries MAGNETOM Altea 1.5T MRI System, installed at the Rochester Main clinic (450 East Ridge Road, Rochester, NY 14621). Monthly lease payment: $24,750. Lease commencement date: April 1, 2023. Lease expiration date: March 31, 2027. Remaining payments as of the Closing Date (estimated August 15, 2025): 20 monthly payments. Aggregate remaining lease obligation: approximately $495,000. Fair market value purchase option at lease expiration.
(b) Schedule No. VML-2023-1141 — Pemberton Partners LLC Revolution EVO 128-Slice CT Scanner, installed at the Syracuse clinic (1840 West Genesee Street, Syracuse, NY 13204). Monthly lease payment: $38,200. Lease commencement date: May 1, 2023. Lease expiration date: April 30, 2027. Remaining payments as of the Closing Date (estimated August 15, 2025): 21 monthly payments. Aggregate remaining lease obligation: approximately $802,200. Fair market value purchase option at lease expiration.
(c) Schedule No. VML-2024-0219 — Philips EPIQ Elite Premium Ultrasound System, installed at the Albany clinic (78 Patroon Creek Boulevard, Suite 200, Albany, NY 12206). Monthly lease payment: $8,150. Lease commencement date: February 1, 2024. Lease expiration date: January 31, 2027. Remaining payments as of the Closing Date (estimated August 15, 2025): 18 monthly payments. Aggregate remaining lease obligation: approximately $146,700.
As of the anticipated Closing Date of August 15, 2025, the aggregate outstanding lease obligations under all Equipment Schedules to the Marlowe Asset Management Master Lease are estimated at approximately $1,443,900. When combined with the present value of the remaining lease obligations and any end-of-term obligations, the total aggregate outstanding lease obligation is approximately $2,870,000, as such amount has been determined in consultation with Seller's independent auditor. Consent of Marlowe Asset Management Medical Equipment Finance, LLC to the assignment of the Marlowe Asset Management Master Lease and all Equipment Schedules thereunder is required (see Schedule 4.3, Part B, Item 4). VDR Folder 5.3.1.
Part C — Technology and Software Agreements
1. Clearpath Health Systems, Inc. — Enterprise EHR License Agreement No. CP-ENT-2022-0487, dated June 1, 2022, between Lakewood Regional Health Partners, LLC and Clearpath Health Systems, Inc. (principal office: 2300 Windy Ridge Parkway, Suite 1200, Atlanta, Georgia 30339). This agreement licenses the Clearpath ClinicalEdge electronic health records software platform on an enterprise-wide basis for use at all eleven (11) of Seller's clinic locations, and includes implementation, data migration, cloud hosting, system maintenance, technical support, and quarterly software updates. Annual license fee: $840,000 (payable in equal monthly installments of $70,000). Initial term: five (5) years, expiring December 31, 2027, with one (1) automatic three-year renewal period unless either party provides written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The agreement contains a change-of-control provision requiring sixty (60) days' prior written notice to Clearpath Health Systems, Inc. of any change of ownership or control of the licensee entity, and granting Clearpath the right to terminate the agreement upon ninety (90) days' notice in the event of a change of control if Clearpath reasonably determines that the successor entity does not meet its standard creditworthiness and operational requirements (see Schedule 4.3, Part B, Item 3). VDR Folder 5.4.1.
2. Brightmoor Partners LLC — Ashgrove Software Enterprise E3 Subscription Agreement (through authorized reseller, Vraxen International Corp.), covering approximately 435 user licenses for email, Office applications, Aldermere Systems, Teams, and cloud services. Annual subscription cost: approximately $198,000. Agreement auto-renews annually. No change-of-control consent required. VDR Folder 5.4.2.
3. Nuance Communications, Inc. (a Kestrel Partners LLC) — Dragon Medical One License Agreement, dated September 15, 2022, for clinical speech recognition and documentation software. Annual license fee: approximately $62,000 (covering 62 physician and NP/PA users). Auto-renewal with 90-day termination notice. VDR Folder 5.4.3.
4. InstaMed (a Kestrel Trust Bank) — Patient Payment Platform Services Agreement, dated January 1, 2023, for patient billing and payment processing services. Transaction-based fee structure; estimated annual cost: approximately $84,000. Auto-renewal with 60-day termination notice. VDR Folder 5.4.4.
5. Harborline Data Systems Health (Harborline Data Systems, Inc.) — Revenue Cycle Management Software License Agreement, dated March 1, 2022, for claims management, denial management, and revenue cycle analytics. Annual license fee: approximately $132,000. Auto-renewal with 90-day termination notice. VDR Folder 5.4.5.
6. Verkada Inc. — Physical Security Platform Subscription, dated July 1, 2023, for cloud-based video surveillance and access control systems at all eleven (11) clinic locations. Annual subscription fee: approximately $46,000. Three-year initial term expiring June 30, 2026. VDR Folder 5.4.6.
7. Westmark Health IT — Unified Communications as a Service (UCaaS) Agreement, dated February 1, 2023, for cloud-based phone system, messaging, and video conferencing services across all clinic locations. Annual service fee: approximately $72,000. Auto-renewal with 30-day termination notice. VDR Folder 5.4.7.
Part D — Reference Laboratory Services
1. Redstone Diagnostics, Inc. — Laboratory Services Agreement, dated September 1, 2023, between Lakewood Regional Health Partners, LLC and Redstone Diagnostics, Inc. (principal office: 6 Davis Drive, Research Triangle Park, North Carolina 27709). Under this agreement, Redstone Diagnostics provides clinical reference laboratory testing services (including blood chemistry panels, hematology, urinalysis, pathology, microbiology, and specialized diagnostic testing) for patients of Seller across all eleven (11) clinic locations. Specimens are collected at Seller's facilities and transported to Redstone's regional processing center in Albany, New York. Annual spend: approximately $1,600,000 (based on TTM volume as of March 31, 2025). The agreement has an initial two-year term expiring August 31, 2025, with automatic annual renewal periods. Either party may terminate the agreement upon 90 days' prior written notice. Consent or notice of assignment to Buyer is required (see Schedule 4.3, Part B, Item 5). VDR Folder 5.5.1.
Part E — Real Property Leases
All nine (9) real property lease agreements identified and described in Schedule 4.6(b) of these Schedules, including all amendments, modifications, extensions, and renewals thereof, are Assumed Contracts and shall be assigned to Buyer at Closing, subject to receipt of required landlord consents as set forth in Schedule 4.3, Part C.
Part F — Professional Services and Consulting Agreements
1. Marchand Healthcare Regulatory Advisors, LLC — Healthcare Regulatory Consulting Agreement, dated April 15, 2024 (Anne-Marie Marchand, engagement lead; principal office: 1225 Eye Street NW, Suite 600, Washington, D.C. 20005). Monthly retainer: $15,000. The agreement provides for ongoing healthcare regulatory compliance advisory services, government audit support, and compliance program oversight. Auto-renewal with 60-day termination notice. VDR Folder 5.6.1.
2. Northern Crest Insurance Brokers, LLC — Insurance Brokerage Services Agreement, dated January 1, 2020 (as amended), for placement and servicing of all insurance programs described in Schedule 4.17 (Michael Torrance, Account Executive; principal office: 1 Landmark Square, Suite 508, Stamford, CT 06901). Commission-based compensation. Auto-renewal annually. VDR Folder 5.6.2.
3. Pinnacle Billing Solutions, Inc. — Medical Billing and Coding Services Agreement, dated June 1, 2021, for supplemental medical billing and coding support for the Syracuse, Utica, and Binghamtonhamton clinic locations. Monthly service fee: approximately $28,500. Auto-renewal with 90-day termination notice. VDR Folder 5.6.3.
4. Harrington Accounting Group, P.C. — Accounting and Tax Preparation Services Agreement, dated February 1, 2019 (as amended). Annual fee: approximately $95,000 for monthly bookkeeping, financial statement preparation, and tax return preparation services. Auto-renewal with 30-day termination notice. VDR Folder 5.6.4.
Part G — Other Material Contracts
1. Pemberton Partners LLC — Regulated Medical Waste Management Services Agreement, dated April 1, 2022, for collection, transportation, treatment, and disposal of regulated medical waste generated at all eleven (11) clinic locations. Annual cost: approximately $156,000. Auto-renewal with 60-day termination notice. VDR Folder 5.7.1.
2. Vireo Group Industries, Inc. — Janitorial and Facility Maintenance Services Agreement, dated January 15, 2023, for daily cleaning, floor care, and facility maintenance services at all eleven (11) clinic locations. Annual cost: approximately $312,000. Auto-renewal with 90-day termination notice. VDR Folder 5.7.2.
3. Cintas Corporation — Uniform Rental and Laundry Services Agreement, dated March 1, 2022, for provision and laundering of medical scrubs, lab coats, and floor mats across all clinic locations. Annual cost: approximately $84,000. Auto-renewal with 60-day termination notice. VDR Folder 5.7.3.
4. Westmark Holdings — Medical Supplies Distribution Agreement, dated October 1, 2021, for the procurement and delivery of medical supplies, pharmaceuticals, and consumables to all eleven (11) clinic locations. Annual spend: approximately $2,400,000 (varies based on ordering volume). The agreement contains volume-based pricing tiers and rebate provisions. Auto-renewal with 90-day termination notice. VDR Folder 5.7.4.
5. AMN Healthcare Services, Inc. — Temporary Staffing Services Agreement, dated August 1, 2023, for temporary placement of locum tenens physicians, nurse practitioners, and registered nurses as needed across clinic locations. Annual spend: approximately $640,000 (varies based on utilization). Auto-renewal with 30-day termination notice. VDR Folder 5.7.5.
6. Ashford Enterprises — Records Storage and Management Services Agreement, dated May 1, 2020, for off-site storage and management of archived patient records and business records. Annual cost: approximately $38,000. Auto-renewal with 60-day termination notice. VDR Folder 5.7.6.
7. Larkspur Systems, LLC — Payroll Processing Services Agreement, dated January 1, 2019 (as amended by Amendment No. 2, dated July 1, 2023), for payroll processing, tax filing, and human resources information system (HRIS) services for approximately 410 employees. Annual cost: approximately $78,000. Auto-renewal with 60-day termination notice. VDR Folder 5.7.7.
SCHEDULE 2.4 — ASSUMED LIABILITIES
Pursuant to Section 2.4 of the Agreement, the following liabilities and obligations shall be assumed by Buyer at the Closing (collectively, the "Assumed Liabilities"):
1. Accrued Paid Time Off (PTO). All accrued but unused paid time off obligations owing to Transferred Employees (as defined in the Agreement) as of 11:59 p.m. Eastern Time on the day immediately preceding the Closing Date. The estimated aggregate amount of accrued PTO as of the anticipated Closing Date is approximately $1,340,000, based on Seller's PTO records and accrual calculations as of June 1, 2025. The final amount of accrued PTO will be determined and reflected in the Closing Statement prepared in accordance with Section 3.3 of the Agreement and the Working Capital methodology set forth in Schedule 3.3. A detailed schedule of accrued PTO by employee, organized by clinic location, will be provided by Seller to Buyer no later than five (5) Business Days prior to the Closing Date.
2. Equipment Lease Obligations. All obligations of Seller, as lessee, arising under the Marlowe Asset Management Medical Equipment Finance, LLC Master Lease Agreement, dated March 15, 2023, and the Equipment Schedules described in Schedule 2.3, Part B (Schedule Nos. VML-2023-1140, VML-2023-1141, and VML-2024-0219), to the extent such obligations accrue from and after the Closing Date. As of the anticipated Closing Date, the aggregate outstanding lease obligations under the Marlowe Asset Management Master Lease are estimated at approximately $2,870,000.
3. Real Property Lease Obligations. All obligations of Seller, as tenant or lessee, arising under the nine (9) real property leases described in Schedule 4.6(b), to the extent such obligations accrue from and after the Closing Date, including all obligations to pay base rent, additional rent, operating expense pass-throughs, property taxes, insurance, common area maintenance charges, and other charges payable thereunder. The aggregate annual base rent for all nine (9) leased properties is approximately $2,740,000.
4. Trade Payables. All accounts payable and accrued expenses of Seller incurred in the ordinary course of business consistent with past practice, to the extent such amounts are included in the calculation of Closing Working Capital as set forth in Schedule 3.3. For the avoidance of doubt, Seller Transaction Expenses, as defined in the Agreement, are not included in trade payables assumed by Buyer and constitute Excluded Liabilities.
5. Assumed Contract Obligations. All obligations of Seller arising under the Assumed Contracts listed on Schedule 2.3, to the extent such obligations accrue from and after the Closing Date or, in the case of executory obligations under executory contracts, to the extent constituting post-Closing performance obligations. For the avoidance of doubt, Buyer does not assume any liability arising from any breach of, or default under, any Assumed Contract occurring prior to the Closing Date.
6. Patient Liabilities. All obligations of Seller to patients for pre-paid services (including patient credit balances on account), to the extent such obligations are reflected in the calculation of Closing Working Capital. Estimated aggregate patient credit balances as of the anticipated Closing Date: approximately $215,000.
Note: The Assumed Liabilities expressly exclude the Excluded Liabilities as defined in Section 2.5 of the Agreement and as set forth in Schedule 2.5 of these Schedules. Without limiting the generality of the foregoing, Buyer does not assume and shall have no liability for (a) any Taxes of Seller for any Pre-Closing Tax Period, (b) any liability arising from or related to the OIG inquiry disclosed in Schedule 4.10, Item 2, to the extent arising from conduct occurring prior to the Closing Date, (c) Seller Transaction Expenses, or (d) any indebtedness for borrowed money of Seller.
SCHEDULE 2.5 — EXCLUDED LIABILITIES
Pursuant to Section 2.5 of the Agreement, the following liabilities and obligations are expressly excluded from the Assumed Liabilities and shall be retained by Seller (collectively, the "Excluded Liabilities"):
1. Indebtedness. All indebtedness for borrowed money of Seller, including but not limited to any outstanding principal, accrued and unpaid interest, prepayment premiums or penalties, breakage costs, and other fees or amounts payable in connection with the repayment or retirement of any loans, revolving credit facilities, lines of credit, term loans, promissory notes, or other debt instruments or obligations of Seller, whether secured or unsecured. This includes the outstanding balance under the Greaves Bancorp revolving credit facility (outstanding principal balance as of May 31, 2025: approximately $4,200,000), which shall be repaid in full at or prior to Closing from the proceeds of the Purchase Price.
2. Pre-Closing Tax Liabilities. All liabilities for Taxes of Seller (or any predecessor of Seller) for any Pre-Closing Tax Period, including all federal, state, and local income taxes, franchise taxes, employment taxes, sales and use taxes, property taxes (to the extent attributable to the Pre-Closing Tax Period), and all other Taxes of every kind and description, together with all interest, penalties, and additions to tax attributable thereto. Pre-Closing Tax Period means, with respect to any Tax, any taxable period ending on or before the Closing Date and, with respect to any Straddle Period, the portion of such taxable period ending on and including the Closing Date.
3. Seller Transaction Expenses. All costs, fees, and expenses incurred by Seller or the Seller Members in connection with the negotiation, documentation, and consummation of the transactions contemplated by the Agreement, including without limitation:
(a) the Bellweather Partners LLP success fee in the amount of $2,800,000 (2.0% of the Purchase Price of $140,000,000), together with reimbursable expenses;
(b) all legal fees and expenses of Whitfield, Ames & Greer LLP incurred in connection with the transactions;
(c) all accounting fees and expenses incurred in connection with the preparation of audited financial statements, quality of earnings analyses, and other accounting work performed in connection with the transactions;
(d) all other advisory, consulting, and professional fees incurred by Seller or the Seller Members in connection with the transactions; and
(e) any change-of-control payments, transaction bonuses, retention bonuses, or similar payments payable to any employee, officer, or manager of Seller as a result of, or in connection with, the consummation of the transactions contemplated by the Agreement.
4. OIG Inquiry Liabilities. All liabilities, losses, damages, fines, penalties, costs, and expenses (including reasonable attorneys' fees and costs of investigation and defense) arising from or related to the OIG inquiry described in Schedule 4.10, Item 2, to the extent arising from conduct occurring prior to the Closing Date, including any overpayment liability, civil monetary penalty, treble damages under the False Claims Act, or any other amount payable to any Governmental Authority in connection therewith.
5. Employee Benefit Plan Liabilities. All liabilities and obligations arising from or related to Seller's employee benefit plans (as defined in Section 3(3) of ERISA), other than accrued PTO assumed pursuant to Schedule 2.4, Item 1, including but not limited to any funding obligations, withdrawal liability, continuation coverage obligations under COBRA (to the extent attributable to qualifying events occurring prior to the Closing Date), and any liabilities arising from the termination of any employee benefit plan of Seller.
6. Excluded Asset Liabilities. All liabilities and obligations arising from or related to the Excluded Assets, including but not limited to liabilities related to Seller's bank accounts, organizational documents, and Excluded Contracts.
7. Inter-Company Payables. All inter-company payables, loans, advances, and other obligations owing by Seller to the Seller Members, any Affiliate of Seller, or any Affiliate of the Seller Members.
SCHEDULE 3.3 — WORKING CAPITAL METHODOLOGY
Pursuant to Section 3.3 of the Agreement, the following sets forth the agreed-upon methodology for the determination of Closing Working Capital and the calculation of any Purchase Price adjustment:
1. Working Capital Target
The parties have agreed that the "Working Capital Target" shall be $6,200,000. The Working Capital Target was established based on a review of Seller's historical monthly working capital levels over the twenty-four (24)-month period ended March 31, 2025, as analyzed by Ridgepoint Advisory Group, LLC (Buyer's financial due diligence advisor) and discussed during the course of negotiations between the parties and their respective financial advisors.
2. Working Capital Collar
No Purchase Price adjustment shall be made if the finally determined Closing Working Capital is within the range of $5,700,000 to $6,700,000 (i.e., within a collar of plus or minus $500,000 of the Working Capital Target). If the finally determined Closing Working Capital exceeds $6,700,000, the Purchase Price shall be increased on a dollar-for-dollar basis by the amount of such excess. If the finally determined Closing Working Capital is less than $5,700,000, the Purchase Price shall be decreased on a dollar-for-dollar basis by the amount of such shortfall.
3. Purchase Price Adjustment Escrow
An amount equal to $3,500,000 of the Purchase Price shall be deposited at Closing into escrow (the "Working Capital Escrow") with Apex Title & Escrow Services, LLC, as escrow agent, pursuant to the terms of the Escrow Agreement executed concurrently with the Closing.
Escrow Agent: Apex Title & Escrow Services, LLC Escrow Officer: Denise Kowalski
Address: 1 Penn Plaza, Suite 4210, New York, New York 10119
Telephone: (212) 555-8700
Email: dkowalski@apextitle.com
The Working Capital Escrow shall serve as security for any downward Purchase Price adjustment resulting from the Working Capital true-up process. If no downward adjustment is required, or if the finally determined Closing Working Capital exceeds $6,700,000 (resulting in an upward adjustment), the full amount of the Working Capital Escrow (together with any earnings thereon) shall be released to Seller promptly following the final determination of Closing Working Capital.
4. Working Capital True-Up Deadline
Buyer shall deliver the Closing Statement to Seller within ninety (90) days following the Closing Date. Based on the anticipated Closing Date of August 15, 2025, the Working Capital True-Up Deadline is November 13, 2025.
5. Included Current Asset Line Items
For purposes of calculating Closing Working Capital, the following current asset categories shall be included:
(a) Accounts receivable (net of allowance for doubtful accounts, determined consistently with Seller's historical methodology);
(b) Unbilled receivables for services rendered but not yet billed;
(c) Inventory (medical supplies, pharmaceuticals, and consumables);
(d) Prepaid expenses and deposits (to the extent constituting Purchased Assets);
(e) Other current assets included in Seller's historical balance sheet in the ordinary course.
6. Included Current Liability Line Items
For purposes of calculating Closing Working Capital, the following current liability categories shall be included:
(a) Accounts payable (trade payables);
(b) Accrued expenses (including accrued compensation, accrued PTO, and other accrued operating expenses);
(c) Patient credit balances and prepaid patient services;
(d) Current portion of deferred revenue;
(e) Other current liabilities included in Seller's historical balance sheet in the ordinary course.
7. Excluded Items
The following items shall be excluded from the calculation of Closing Working Capital:
(a) Cash and cash equivalents (other than petty cash not exceeding $5,000);
(b) Indebtedness for borrowed money (including the current portion thereof);
(c) Seller Transaction Expenses;
(d) Income tax receivables and payables;
(e) Inter-company receivables and payables;
(f) Any liabilities constituting Excluded Liabilities.
8. Accounting Principles
Closing Working Capital shall be calculated in accordance with GAAP as applied consistently with the accounting methods, practices, policies, and procedures used in the preparation of Seller's audited financial statements for the fiscal year ended December 31, 2024, as audited by Blackwell & Crane, LLP.
9. Dispute Resolution
In the event Seller disputes any item or amount reflected in the Closing Statement, the dispute resolution procedures set forth in Section 3.3(d) of the Agreement shall apply. The independent accounting firm appointed to resolve any such dispute shall be Tindall Tanaka CPAs LLP (or such other nationally recognized accounting firm as may be mutually agreed upon by the parties), and the determination of such firm shall be final and binding upon the parties.
SCHEDULE 4.1 — ORGANIZATION AND QUALIFICATION
Pursuant to Section 4.1 of the Agreement, the following information is provided regarding the organization and qualification of Seller:
Full Legal Name: Lakewood Regional Health Partners, LLC
Entity Type: Limited liability company
Jurisdiction of Formation: State of New York
Date of Formation: September 12, 2014. Articles of Organization filed with the New York Department of State, Division of Corporations, on September 12, 2014 (filing receipt number DOS-2014-0912-4487).
Employer Identification Number (EIN): 46-5183294
National Provider Identifier (NPI): 1497821035
Principal Office Address: 450 East Ridge Road, Rochester, New York 14621
Governing Document: Amended and Restated Operating Agreement of Lakewood Regional Health Partners, LLC, dated January 15, 2018 (see Schedule 2.2(a), Item 3).
Members and Membership Interests:
Officers:
Foreign Qualifications:
Seller is qualified to do business as a foreign limited liability company in the Commonwealth of Pennsylvania, having filed an Application for Registration as a Foreign Limited Liability Company with the Pennsylvania Department of State on October 3, 2014 (filing number 6247831). Seller operates three (3) clinic locations in Pennsylvania: Scranton, Wilkes-Barre, and Towanda.