NINETEENTH JUDICIAL DISTRICT COURT PARISH OF EAST BATON ROUGE STATE OF LOUISIANA BOARD OF SUPERVISORS OF * NUMBER: (WiGStS JISIANA STATE UNIVE! : LOUISIANA STATE UNIVERSITY AND DIVISION: AGRICULTURAL AND MECHANICAL SE C Ap & Sg Z / COLLEGE VERSUS BIOMEDICAL RESEARCH FOUNDATION OF NORTHWEST LOUISIANA, INC., BRF HOSPITAL HOLDINGS, L.L.C., BRFHH SHREVEPORT, L.L.C., and BRFHH MONROE, L.L.C. PETITION FOR DECLARATORY JUDGMENT AND INJUNCTION NOW INTO COURT, through undersigned counsel, comes BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE (“LSU”), a public corporation organized and existing under the Constitution and laws of the State of Louisiana, which alleges as follows: PARTIES L Defendant Biomedical Research Foundation of Northwest Louisiana (“BRF*) is a fit Lauisiana corporation organized and existing under the laws of the State of Louisiana uritant to 1,8, R.S. 12:201 et seq, with its principal place of business in the State of Louisiana wm li 2. J Defendant BRF Hospital Holdings, L.1.C. (“BRFHH") is a Louisiana liraited liability ‘mized and existing under the laws of the State of Louisiana pursuant to La, RS. 12:1302 et seq., with its principal place of business in the State of Louisiana, 3. BRF is the sole member of BRFHH. iss240.64 Defendant BRFHH SHREVEPORT, L.L.C. (“BRFHH Shreveport”) is a Louisiana limited liability company organized and existing under the laws of the State of Louisiana Pursuant to La. RS, 12:1301 et seq., with its principal place of business in the Sta‘e of Louisiana, 5. Defendant BRFHH MONROE, L.L.C. (“BRFHH Monroe,” collectively with BRF, BRFHH, and BRFHH Shreveport the “BRF Parties”) is a Louisiana limited liability company organized and existing under the laws of the State of Louisiana pursuant to La. RS, 12:1301 et seq., with its principal place of business in the State of Louisiana. 6. BRFHH is the sole member of both BRFHH Shreveport and BRFHH Montoe. 7. LSU is a public corporation created by Article VIII, Section 7 of the Louisiana Constitution and charged with supervising and managing the institutions, statewide agricultural programs, and other programs administered through its system As set forth herein, LSU has declared the BRF Parties to be in breach of the Public Purpose set forth in Article 1.1 of that certain Amended and Restated Cooperative Endeavor Agreement (the “CEA,” attached hereto as Exhibit 1) effective September 30, 2013, by and among LSU, BRF, BRFHH, and the State of Louisiana through the Division of Administration (Doa"), 9. ‘The BRF Parties have failed to cure the Public Purpose Breach, and pursuant to Section 134 of the CEA, LSU now seeks, among other relief, to compel the withdrawal of BRF as the sole member af BRFHH. 1135280610. Venue is proper in this Court because this proceeding arises directly out of and relates directly to the CEA, which states at Section 16.9 that Any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction may be brought in the Nineteenth Judicial District for the Parish of East Baton Rouge, Louisiana, or, if it has or can acquire jurisdiction, in the United States District Court for the Middle District of Louisiana, and each of the Parties imevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction in any other court. BACKGROUND 1 1SU is charged by statute with the ownership and operation of ten State-owned hospitals including among others the Louisiana State University Hospital at Shreveport (the “Shreveport Hospital”), and the B.A. Conway Medical Center at Monroe (“E.A. Conway,” collectively with Shreveport Hospital the “Hospitals”) 12, Pursuant to La. R.S. 17:3215, the Louisiana State University Health Sciences Center at Shreveport (“LSUHSC-S”), is one of the institutions within the LSU system end under the ‘sion and management of the LSU Board of Supervisors, 13, Pursuant t0 La. RS. 17:1516 et seq, and La. R.S. 17:3215, the LSU School of Medicine at Shreveport, the Shreveport Hospital, and E.A. Conway are all part of LSUHSC-8 and Constitute an “academic medical center,” wherein a medical school (the LSU School of Provide education and training to residents, students, and other health care professionals. 14. LSU, through LSUHSC-S and other LSU institutions, is committed to educeting medical and clinical professionals in Louisiana through accredited residency, fellowship and other fracluate medical educational programs and undergraduate medical and allied health programs, niss240.615. Pursuant to La. R.8. 17:1517 and La. RS. 17:1518, LSU is obligated to provide medical and surgical treatment for the medically indigent, underserved, and uninsured residents of the State of Louisiana at the Shreveport Hospital and F.A. Conway. 16. Prior to the Effective Date of the CEA, the operations of the LSU School of Medicine, the Shreveport Hospital, and E.A. Conway were fully integrated under the umbrelia of LSUHSC- s. 17. The DOA is an agency existing within the Office of the Governor, within the executive branch of the State of Louisiana, with duties and powers established by law. 18, ‘The Louisiana Department of Health and Hospitals (“DHH") is a department of the executive branch of the State of Louisiana, with powers and duties established by law. 19, Atticle VIL, Section 14(C) of the Louisiana Constitution permits the State and its political subdivisions or political corporations to engage in cooperative endeavors with any public or Private association, conporation or individual 20. During 2013-14, LSU, DOA, and DAH entered into a series of public-private Parznerships pursuant to which private entities leased certain ofthe LSU-owned hospital facilities and equipment from LSU and began operating the hospitals and collaborating with LSU in providing education ard training to residents, students, and other health care professionals, 21 The public-private partnerships were all established through cooperative endeavor agreements by and among LSU, DOA, DHH, and the private entities. 22. Among others, hospital cooperative endeavor agreements were executed for the Me Center of Louisiana at New Orleans (also known as “Big Charity”), University Medical Center Hiss2s06in Lafayette, Leonard J. Chabert Medical Center in Houma, and Bogalusa Medical Center in Bogalusa. Additional cooperative endeavor agreements were executed for the operation of Certain outpatient clinics associated with the former Earl K. Long Medical Center in Baton Rouge and the former W.O. Moss Regional Medical Center in Lake Charles, 23. Effective September 30, 2013 (the “Effective Date”), LSU, BRF, BRFHH, and DOA. ‘entered into the CEA pursuant to which BRFHH agreed to operate the Shreveport Hospital and E.A. Conway, to provide free or reduced-cost health care to medically indigent and uninsured! Patients of the two hospitals, and to collaborate with LSU in providing education and training to residents, students, and other health care professionals. 24, Tn connection with the transition of hospital operations from LSU to the BRF Parties, numerous LSU hospital employees were laid off from their LSU employment and immediately rehired by the BRF Parties to begin working in their same capacities for the BRF Parties (or for ‘one of their subsidiaries, BRFHH Shreveport and BRFHH Monroe). 25. AS of the Effective Date of the CEA, LSU, BRFHH, DOA, and the State of Louisiana entered into a lease (as amended, the “Master Hospital Lease”), pursuant to which LSU leased Gerain facilities and associated outpatient clinics al the Shreveport Hospital and E.A. Conway to BRFHH in exchange for monthly rental payments. 26. As of the Effective Date of the CEA, LSU and BRFHH entered into a lease, pursuant to which LSU leased certain furniture, fixtures, equipment and personal property within the Shreveport Hospital and E.A. Conway to BRFHH in exchange for monthly rental payments. 27. Section 1.1 of the CEA sets forth the purpose and cause (the “Public Purpose") of the CEA: The Parties enter into this Agreement for the public purpose of maintaining an academic medical center in which the Parties continuously work in collabovation and are committed and aligned in their actions and activities, in a mannet consistent with a sustainable business model and adequate funding levels, to serve niss280.6the State and its citizens: (a) as a premier site for graduate medical education, capable of competing in the health care marketplace, comparable among i's peers, with the goal of attracting the best faculty, residents and students, to enrich the State’s health care workforce and their training experience; (b) in fulfilling the State's historical mission of assuring access to Safety Net Services to all citizens of the State, including its Medically Indigent, high tisk Medicaid and State inmate Populations; and (c) by focusing on and supporting the Key Service Lines, as defined and agreed by the Parties, necessary to assure high quality GME Programs and access to Safety Net Services. 28. ‘The BRF Parties were the only one of LSU's hospital partners never to bave previously operated a hospital. 29, With the exception of the partnership with the BRF Parties, LSU and its hospital partners have generally enjoyed cooperative, collaborative relationships with the parties committed and aligned in their goals and committed to resolving disputes when they arise in a constructive manner that respects the interests of all parties, 30. Unlike LSU's other hospital partnerships, LSU has encountered numerous and ongoing Problems and difficulties from inception of its partnership with the BRF Parties 31. Since the Effective Date of the CEA, the BRF Patties have failed to support and promote ‘he academic mission of LSUHSC-S in maintaining the academic medical center es required by the Public Purpose. 32. Since the Effective Date of the CEA, the BRF Patties have filed to act eollahoratively and cooperatively with LSU and to align their actions and activi with LSU in maintaining the academic medical center as required by the Public Purpose. 33, Since the Effective Date of the CEA, the BRF Parties have failed tc establish a Sustairable and competitive business model in maintaining the academic medical center as required by the Public Purpose. ss2nas34, Since the Effective Date of the CEA (and even prior thereto), the BRF Parties have consistently engaged in actions and activities that are contrary and oftentimes antagonistic to the best interests of LSU and the State of Louisiana, that have damaged and undermined LSUHSC- 8's reputation in the community, that have threatened the finances of LSUHSC-S, and that have threatened the stability of Shreveport Hospital and E.A. Conway. 35. ‘The BRF Parties have never embraced the full scope of the Public Purpose and have never given anything more than lip-service to the education and training components of the Publie Purpose; instead, they have wrongfully focused all of their effort on converting the Hospitals (which are critical components of a larger publicly-owned academic medical center) into private hospitals, which was never the intent of the CEA. FAILURE TO SUPPORT AND PROMOTE LSU'S ACADEMIC MISSION AND REPUTATION \CADEMIC MISSION AND REPUTATION 36. ‘The BRF Parties have failed to work in collaboration with and to commit and align their actions and activities to serve the State and its citizens as a premicr site for graduate medical ‘stueation, capable of competing in the health care marketplace, comparable among its peers, with the goal of attracting the best faculty, residents and students, to enrich the State's health care workforce and their training experience, all as required by the Public Purpose, specifically with regard to LSU's teaching mission, as set forth in Paragraphs 37 - 96 below. Eailure to Support LSUHSC-S Leadership 31. From the beginning of the hospital partnership, the BRF Parties have sough: the removal of senior leadership of LSUHSC'S, including the Chancellor, the Vice-Chancellor for Clinical Affeirs, and the Vice-Chancellor for Administration, 38. Although unsuccessful, the BRF Parties’ attempts to remove the senior leadership of LSUHSC-S demonstrate that from the very beginning, the BRF Parties? attitude towards the 1882606hospital partnership was poisoned and the BRF Parties had no intention of supporting and promoting LSU's academie mission and reputation Failure To Support LSU's Teaching Mission ; The Master Affiliation Agreement 39, Nothing better illustrates the BRF Parties’ lack of support for LSU’s teaching mission and the failure of the academic components of the Public Purpose as the BRF Parties’ bad-fait negotiation of the Master Affiliation Agreement and the inability of the parties, now two years into the partnership, to reach agreement on the Master Affiliation Agreement. 40. The CEA defines the Master Affiliation Agreement as the agreement “between LSU and BRFHH in such form as LSU and BRFHH may agree, which documents the GME [graduate medical education] responsibilities between LSU, LSUHSC-8 and BRFHH and describes the LSUHSC-S GME Programs.” The CEA also states that the Master Affiliation Agreement would identify Core Services (those services curently being provided to the North Louisiana Region through the Hospitals), and Key Service Lines (those services that are critical not only to comprehensive patient care, but also to the mission of providing robust medical education and clinical research experiences). 4L ‘The Master Affiliation Agreement is one of the comerstone documents of the Public Purpose, and execution and delivery of the Master A¥filiation Agreement on ot prior to the Effective Date of the CEA is specifically identified in Article XIL of the CEA as a condition precedent to the obligations of the parties under the CEA. 42. The Master Afiiliation Agreement is one of the Contemplated Transactions within the meaning of the CEA. 48. Failure to complete the Contemplated Transactions (including without limitation the Master Affiliation Agreement) no later than September 30, 2013, is a Terminating Event within the meaning of the CEA. ss2e0s44, Prior to the Effective Date, the parties exhaustively negotiated the terms of the Master Affiliation Agreement, culminating in a multi-day face-to-face meeting in May 2013 at which the parties finalized the key terms of the agreement, 45. After reaching agreement at the May 2013 meeting, the BRF Patties then circulated a revised draft of the Master Affiliation Agreement that substantially changed key terms to which the parties had agreed at the May meeting, 46. Despite the BRF Parties reneging on the May 2013 agreement (a pattern of behavior that has repeated itself many times through the present date), the parties again met face-to-face in September 2013, just weeks prior to the Effective Date of the CEA, to review the BRF Parties’ proposed revisions to the Master Affiliation Agreement, and once again the parties finalized the key terms of the agreement, 47. Then, just one week prior to the Effective Date of the CEA, the BRF Parties once again reneged on the agreed-to terms of the Master Affiliation Agreement, this time because they suddenly took the entirely new position that LSU’s involvement in Hospital operations to assure adequate academic support as set forth in the Master Affiliation Agreement made LSU and the BRF Parties “related parties” within the meaning of the law. 48. On September 30, 2013, the Effective Date of the CEA, the BRF Parties circulated an extensively revised draft of the MAA that unacceptably reduced LSU's role to providing doctors and residents fo work at the Hospitals under the BRF Parties” direction and control, in derogation of the Public Purpose and LSU's obligations to the Accreditation Council for Graduate Medical Education (“ACGME”), iss2so.s49. LSU has repeatedly informed the BRF Parties that their September 30, 2013 draft of the Master Affiliation Agreement, which rewrote a document the parties had twice previously agreed upon, is totally unacceptable, 50, Notwithstanding LSU having repeatedly informed the BRF Parties that their September 30, 2013 draft of the Master Affiiation Agreement is totally unacceptable, the BRF Parties continue to take the position that their September 30 draft should be the starting point for further negotiation of the document, Sh. ‘The BRF Parties characterize their disagreement over the Master Affiliation Agreement 2s nothing more than “legitimate legal concerns over the amount of control LSU insists on maintaining over Hospital actions and policies.” 52. LSU strongly disagrees with the BRF Parties” stated “legal concems”; however, it is ‘cqually significant that the BRF Parties never mentioned any of their supposed “legal concems” When they reneged on the first agreement in May 2013, nor did they mention any such “concerns” until the eve of the Effective Date of the CEA. 53, ‘The BRF Parties’ supposed “legal concems” appear to have been nothing sore than a last-minute pretext to strengthen their bargaining position in the negotiations over the Master Affiliation Agreement, 54. The BRF Parties” refusal to honor the terms of a document which the parties had twice Previously agreed upon, and waiting until just prior to the Effective Date of the CEA to spring their newfound “concern” on LSU, demonstrates that the BRF Parties have no intention of aligning their actions and activities with those of LSU. -10- uss280.655. Two years into the partnership, the parties remain irreconcilably divided over the Master Affiliation Agreement. The BRF Parties continue to take the position that their September 30, 2013 draft should be the starting point for further negotiation of the document, and LSU continues to refuse to renegotiate terms that the parties previously agreed upon twice, especially when the BRF Parties" proposed revisions unacceptably reduce LSU’s role to providing dectors and residents to work at the Hospitals under the BRF Parties’ direction and contrcl, in derogation of the Public Purpose and LSU's ACGME obligations. 56. In their July 29, 2015 “Detailed Response to Breach Notice,” the BRF Parties state “we are willing to execute a compliant MAA. Since it appears necessary at this point to involve a neutral arbitrator, we suggest that we begin that process as soon as possible.” 57, Nothing better evidences that there has never been a “meeting of the minds” with respect {o fundamental aspects of the Public Purpose than the mere fact that the BRF Panes propose arbitration to negotiate the disputed terms of the Master Affiliation Agreement, a document that is fundamental to the Public Purpose and that is defined by the CEA to be “in such form as LSU and BRFHH may agree,” and the execution of which is a condition precedent to the entire CEA, 58, TSU emphasizes that the BRF Parties aze proposing arbitration not to resolve a dispute over past conduct (such as a breach of contract); instead, they are proposing arbitration to force the parties (o negotiate the terms of a contract in the first instance that they have not yet been able to agree to, 59, {n its July 29, 2015 “Detailed Response to Breach Notice,” the BRF Parties incorrectly state that LSU has never provided any response to the draft of the September 30, 2013 Master Affiliation Agreement received from the BRF Parties. In fact, LSU has repeatedly reminded the BRE Parties that the September 30, 2013 draft unacceptably rewrote a document twice previously agreed to by the parties. sue ss240660. Failure to complete the Master Affiliation Agreement is not only a component of BRF’s Public Purpose Breach under Section 13.4 of the CEA, itis aiso its own independent basis for terminating the relationship as a condition precedent and Terminating Event under the CEA. Failure To Support LSU’s Teaching Mission : Failure to Support Graduate Medical Education 61 One of the core components of the Public Purpose is for the parties to continuously workc in collaboration, committed and aligned in their actions and activities, to serve the State and its citizens as a premier site for graduate medical education, capable of competing in the health care marketplace, comparable among its pecrs, with the goal of attracting the best faculty, residents and students, to enrich the State’s health care workforce and their ‘training experience. 62, The BRE Parties have failed to establish and promote an environmen: conducive to ‘taining, including as required by the Accreditation Council for Graduate Medical Education ACGME”, as illusirated by the following non-exclusive list of BRF actions and/or inactions. 63. ‘The BRF Partics have discouraged and/or not encouraged the meaningful participation by residents and fellows in quality improvement programs, which are key components of the ACGME program for clinical learning environment review. 64, ‘The BRE Parties have discouraged and/or not encouraged the meaningful participation by residents and fellows in patient safety programs and initiatives atthe Hospitals, which are key cornponents of the ACGME program for clinical leaning environment review, 65, ‘The designated representative of the BRF Parties routinely fails to attend regularly- scheduled meetings of the Graduate Medical Education Committee, a standing committee that, among other responsibilities, ensures that individual departmental programs meet ACGME institutional requirements. -12- 188280566. The BRE Parties have promulgated new policies at the Hospitals without seeking input fora LSUHSC-S as to how those policies will affect graduate medical education ané training. 67. The BRE Parties have not allowed residents and fellows access to Hospital data and other Tesourees necessary to perform research, and/or have made such access impractical and cumbersome, thereby adversely affecting the ability of residents and fellows to satisfy the research and scholarly activity requirements of ACGME, 68 Residents and fellows are often required to perform clerical functions, to the exclusion of ‘heir medical training, because the BRF Parties have not scheduled adequate staffing coverage at the Hospitals. 69. A consultant retained by LSUHSC-S in the Fall 2014 identified multiple problems plaguing the relationship and specifically concluded that “LSUHSC-S also must pursue affiliations with other hospital partners through growing current programs, developing additional Subspecialty programs, exploring further GME training opportunities, and discussing potential financial mission support arrangements.” 70. Contrary to the consultant’s conclusion that LSU should pursue afiliaticns with other hospital partners, the BRF Parties have actively opposed LSU's efforts to expand and diversify its graduate medical education and taining opportunities by pursuing affiliations with other hospiual partners. n. As set forth in Paragraphs 126 - 131 below, the BRF Parties falsely accused LSUHSC-S Physicians and residents of inappropriately caring for the uninsured, clearly implying a discriminatory dual-system of care: one for insured patients and one for uninsured patients -13- 113825055nR. At the conclusion of a clinical learning environment review site visit in February 2015, ACGME representatives stated to LSUHSC-S administrators and representatives that LSU's biggest challenge was to convince the BRF Parties of the importance of and need to support graduate medical education at the Hospitals. B. The fundamental lack of understanding and support by the BRF Parties for LSU's education mission as a component of the Public Purpose is neatly summed up in the comments of Mr, Rogney Hucbbers, the former Chief Executive Officer of BRFHH, who told the ACGME. representatives in February 2015 that “the major focus of [BRFHH] is the transition from a state. run medical school entity to a private hospital,” which was never the intent of the CEA. 74. After the conclusion of the February 2015 clinical learning environment review site visit and the subsequent publication of the site visit report, ACGME encouraged LSU to submit a response clarifying any issues raised in the report. LSU representatives scheduled several Imectings with representatives of the BRF Pasties to discuss the preparation of respon: however, on each such occasion, the representatives of the BRF Parties either canceled the meeting or failed to attend the meeting. LSU was never able to submit a response because it could never get any input from the BRE Parties, 75. ‘The BRF Parties’ lack of interest in LSU's academic mission at the Hospitals demonstrates that the BRF Parties have no intention of aligning their actions and activities with those of LSU. Failure To Support LSU's Research Mission Cessation of BRF Support for LSUHSC-S Research In 2000, years before the hospital CEA transaction, LSU executed a separate cooperative endeavor agreement and lease with BRF pursuant to which LSU leased space from BRF in BRIs Virginia K. Shehee Biomedical Research Institute building; in exchange, BRF agreed to provide annual funding to support LSUHSC-S research projects. -14- H1ss250676. BRF’s commitment to provide research funding was to remain in place through June 30, 2015, as long as LSU's pre-existing lease of space from the BRF building remained in effect 7. {mn connection with the 2013 hospital CEA transaction, and at the BRF Parties" request, LSU agreed to lease additional space in the Biomedical Research Institute building and t9 increase the square-foot amount that LSU was paying to BRP for space in the building; accordingly, a new lease was written to replace the original lease and to significantly benefit BRF, 78. Because LSU entered into the new substitute lease at the request of the BRF Parties and agreed to pay a substantially increased square-foot amount over what was being paid under the existing original lease, it was a complete surprise to LSU that the BRF Parties then used the termination of the original lease as technical grounds to halt further research funding for LSUHC-S, even though the original lease was replaced by a much more lucrative lease in favor of BRF. 79. By letter dated December 10, 2014, Dr. John George, President of BRF, confirmed that the BRF Parties were not going to continue the research funding pursuant to the original agreement; however, despite the appearance that BRF had taken advantage of LSU's good faith in executing the new lease, Dr. George stated in the same leter that “we fully intend to support TSU research, and the BRF has allocated money to LSU research in our budget.” Dr. George Concluded the letter by requesting LSU to provide additional information about its future research plans. 80. In an eight-page letter dated January 21, 2015, and hand-delivered to BRF, LSU ‘meticulously provided in detail all of the information requested by Dr. George in his December 10, 2014 letter, but BRF did not provide the promised additional funding, “15. risses0681. Each time LSU inquired of BRF the status of the promised additional fmding, BRF representatives responded that “we're working on it.” 82 To date, BRF has not provided any of the promised additional funding 83, BRF’s bad-faith discontinuance of its support for LSU research based on the termination of a lease that was immediately replaced at the request of BRF with a more lucrative lease Pursuant to which LSU paid BRF a greatly increased rental amount, followed by BRF"s reneging on Dr. George's promise that “we fully intend to support LSU research, and the BRF has allocated money to LSU research in our budget,” demonstrates that the BRF Parties have no intention of aligning their actions and activities with those of LSU. Failure To Support LSU's Research Mission : ‘The Failed Negotiation of a Clinical Research Agreement After the Effective Date of the CEA, LSUHSC-S attempted to negotiate a Clinical Research Agreement with the BRF Parties pursuant to which LSUHSC-S faculty physicians and employees would perform clinical trials and other research in the Hospitals, 84, LSU originally submitted a proposed agreement to the BRF Parties pursuant to which LSUHS' ~S would enter into clinical trial agreements with third-party study sponsors and Provide the principal investigators for the clinical tial studies, and LSUHSC-S would pay the BRE Parties for support services at the Hospitals, 85. ‘The BRF Pariies then responded with a new draft of the agreement that was almost entirely rewritten and that reversed the roles of the parties ~ such that BRF would engage with the study sponsors for clinical trials and possibly contract with LSUHSC-S for the services of its Physicians as principal investigators ~ essentially co-opting a traditional medical schoo! function and responsibility. -16- 1S5280686. To date, LSU and the BRF Parties have yet to finalize a Clinical Reseatch Agreement, and the BRF Parties continue to insist that the agreement include provisions that would ‘unacceptably limit LSU's ability to conduct clinical research, 87. The BRF Parties have insisted on overly burdensome and unnecessary requirements for ESUHSC-S to continue conducting clinical trials and research in the Hospitals, threatening LSU's ability to remain competitive with other institutions for clinical trial studies, sponsors, and funding, 88. The BRF Parties’ unreasonable demands of LSU with respect to clinical trials and research in the Hospitals demonstrates that the BRF Parties have no intention of aligning their actions and activities with those of LSU. Fajlure To Support LSU's Research Mission : Damage to LSUHSC-S's Reputation 89, As set forth in detail in Paragraphs 126 - 131 below, the BRF Parties, without first discussing their concems with LSU, falsely and gratuitously accused HSC-$ physicians of inappropriately caring for the uninsured, while contemporancously releasing its report to the local news media, 90. The false, gratuitous, and public allegation of disparate and discriminatory care by LSU Physicians substantially damaged the reputation of LSU and its faculty physicians in the community. 91. The false, gratuitous, and public allegation of disparate and discriminatory care by LSU Physicians resulted in a unanimous vote of “no confidence” in BRF by the Department Chairs of the LSU Shreveport Medical School on the grounds that the partnership with BRF was “irretrievably broken,” 17. lisszs0.s22. BRF President Dr. John George was recorded in April 2015 making race-based remarks #1 a meeting of a Shreveport neighbothood association, Dr. George stated that Aftican ‘Americans in the community did not care if a local property tax Was renewed because African ‘Americans do not own property valuable enough to be subject to the tax: “If you have a $75,000 home you don’t have to pay taxes, That's why the black community usually passes all the taxes, okay. Because they, their housing, they’re below that rate. They don’t have any property.” 93. Dr. George's comments were widely reported in the Shreveport news media as, among other descriptions, “controversial” “shocking,” and “racial trouble,” and it was reported that Dr. George failed to return calls from the media, 94, Dr. George eventually issued a written apology for his statements, 95. At Teast one Shreveport television station reported the story by superimposing Dr. George's written apology over a large “LSU Health” sign as a backdrop, further damaging the reputation of LSU aad its faculty physicians by directly essociating them with Dr. George’s comments, 96. LSU, a public institution charged with owning and operating public assets and facilites for the benefit ofall of the citizens of the State of Louisiana, cannot and should not be associated with the race-based comments of Dr. George, the President of BRE. EAILURE TO WORK COLLABORATIVELY WITH LSU 97. ‘The BRE Parties have failed to act collaboratively and cooperatively with LSU and to align their actions and activities with LSU as required by the Public Purpose as set forth in Paragraphs 98 - 160 below. Information Technology Issues -18- ss230.5Is across the state, LSU was in the process of implementing a single, integrated database of electronic health reeords (“EPIC”) and interrelated eleetronic health information technology systems (collectively with EPIC the “Shared Systems”) that was designed and intended to service the entite state-wide network of all LSU hospitals, 99, ‘The Shared Systems were administered on behalf of the entire state-wide network of all TSU hospitals by LSU information-technology staff’ based primarily at LSUHSC-S ia Shreveport. 100, At the time of the transition, many of the LSU IT employees who were administering the Shated Systems went to work for the BRF Parties (the “Former LSU IT Employees”), 101. ‘Upon their departure from LSU, the Former LSU IT Employees took with them all of their administrator passwords and account credentials for the LSU computer networks, including both the Shared Systems and the intemal LSUHSC-$ computer networks, effectively giving the BRP Parties control of the LSU infrastructure and denying LSU any management control over its own IT systems, including servers, switches, routers and firewalls, 102, Subsequent to the transition and at the direction of the BRF Pauties, the Former LSU IT Employees changed certain administrator passwords to the LSU computer networks end thereby restricted or eliminated LSU's access rights to many of these same systems, futher denying LSU ‘management control over its own IT systems, e-mail operations, and management of the website for the LSU School of Medicine in Shreveport. 103 Since the transition and the BRF Parties’ takeover of LSU’s computer networks, LSU has struggled against the active opposition of the BRF Parties to regain LSU’s rightful access to and conirol over its computer networks, -19- ss2a0.s104, Since the transition, the BRF Parties have repeatedly created obstacles to transitioning LSU's Shared Systems to a “shared” model, including without limitation by actions such es denying LSU domain administrative access to the HIS Shared Domain, occupyirg LSU's public JP address space, and repeatedly failing to inform LSU of changes being made to technology systems and to systems that impact the entire School of Medicine campus. 105. With the tran tion of the LSU hospitals to different hospital partners across the state, it became necessary to transition the Shared Systems from a single, integrated sysiem servicing a netwrork of hospitals all under the LSU umbrella, to a system that is “shared” among multiple, urzelated hospital partners operating multiple, unrelated hospitals. 106. Because it was not feasible from either a cost, technological, or timing perspective to physically segregate each LSU hospital's records within the integrated system, LSU and its hospital partners had to put contractual safeguards in place prohibiting the unauthorized access by one hospital partner of the electronie health records of another hospital’s patients, in onder to Protect against potential violations of the Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Foonomic and Clinical Health Act, and the regulations promulgated thereunder, as amended (collectively, “HIPAA”), 107. The solution that was crafted by LSU and its hospital partners was the Agreement for HIPAA Compliance, a contract signed by LSU and each of its hospital partners and including reeiprocal commitments and indemnification obligations intended to protect each of the parties ‘fom any potential unauthorized and/or unlawful actions of all of the other partes, Any hospital Parsner that had access to EPIC ot any of the Shared Systems was required to sign the Agreement for HIPAA Compliance. -20- ss2a05108. As late as June 2014 — nine months into the partnership and at a time when the Agreement for HIPAA Compliance had already been signed by all of LSU’s cther hospital Partners using the shared EPIC systems ~ the BRF Parties were refusing to sign the contract, 109. The BRF Parties alone contended that the Agreement for HIPAA Compliance wes unnecessary, despite the fact that an armada of HIPAA experts and attomeys from across the country, representing LSU and each ofits other partners, agreed the contract was necessary and Jeintly and exhaustively negotiated the contract as the only way to adequately protect the Partners from the potentially unauthorized actions of all of the other parties arising out of their shared access to the Shared Systems. 110, In June 2014, long after the other hospital partners sharing the Shared Systems had signed the Agreement for HIPAA Compliance, LSU was forced to convene a day-long face-to- face meeting between the senior leadership of the parties just to obtain the BRF Parties! commitment to sign the Agreement for HIPAA Compliance. ii. The BRF Parties’ refusal to sign the Agreement for HIPAA Compliance exposed LSU and its other hospital partners to significant potential liability, and the fact that LSU was forced ‘© posh the partnership fo the brink in June 2014 simply to induce the BRF Paetcs to sign an Agrecment that operated to everyone’s mutual benefit and protection clearly demonstrates that the BRF Parties have never had any intention of aligning their actions and activities with those of LSU and its other hospital partners, 112. For months, LSU repeatedly requested that the BRF Parties execute a transition services agreement to document the IT services that LSU had been providing to the BRF Parties, since the Effective Date of the CEA, at a cost of millions of dollars to LSU. -21- sses0113, It was not until September 2014 that the BRF Parties finally executed a Master IT ‘Transition Services Agreement that was intended in part (particularly through Section 13 and Exhibit “B” thereto) to define once and for all the parties’ obligations to coordinate the operation, maintenance, de-linking and separation of the integrated School of Medicine and Shreveport Hospital networks. 114, ‘The BRF Parties have repeatedly breached their obligations under Section 13 and Exhibit “3” of the Master IT Transition Services Agreement and continue to resist LSU’s efforts to regain control of its own computer networks. 115. In April 2015, LSU learned that the BRF Parties had established their own EPIC system and were intending to copy and upload protected health information and confidential content (collectively “PHI") from the “old” LSU version of EPIC into the “new” BRF version of EPIC. 116. To provide appropriate safeguards and protections in connection with the BRF Parties’ iment fo copy and upload PH from the “old” LSU version of EPIC (including PHI belonging to 1SU's other hospital partners) into their own “new” version of EPIC as referred 0 above, LSU sent the BRF Parties an additional HIPAA compliance agreement that was intended to specifically address the legal issues raised thereby. 117, mn response to receiving from LSU the HIPAA compliance agreement referred to above, the BRF Parties expressly acknowledged in writing on May 1, 2015, that “we agree that we need ‘0 put some type of IIPAA compliance agreement in place and will work diligent'y with you to do.so. ... We will send a revised draft of the HCA with our comments fo you next week...” 118, Later that same day, LSU responded in writing to legal counsel for the BRF Parties that LSU would not object to the BRF Parties uploading protected health information into the “new” 22. 11582806BRF version of EPIC “subject to and contingent upon your representation that BRF will work diligently with us to sign a reasonably acceptable version of the HCA before May 31,2015.” 119. Despite their written acknowledgment and affirmative representation that a new agreement was necessary, that they would work diligently with LSU to negotiate the agreement, and that they would promptly send LSU their proposed revisions, the BRF Parties never sent LSU a revised draft of the HIPAA compliance agreement and simply ignored several of LSU's subsequent inquiries regarding the status of the document, 120, Directly contrary to their representations to LSU, the BRF Parties subsequently uploaded the PHI from the “old” LSU version of EPIC (including PHI belonging to LSU’s other hospital partners) into the “new” BRE version of EPIC without LSU's consent or approval and contrary (9 LSU's specific written express restriction, once again demonstrating that the BRF Parties have no intention of aligning their actions and activities with those of LSU and its other hospital partners. 121, Since establishing their own version of EPIC, the BRF Parties have wrongly taken the Position that they are required by federal Stark and Anti-Kickback laws te charge LSU Significant sums of money in exchange for LSU’s needed access to the billing coraponent of the “new” BRF version of EPIC. 122, In response to the BRF Parties” transparent attempt to extort money from LSU for access (0 the “new” BRF version of EPIC, LSU advised the BRF Parties that the Stark and Antic Kickback laws include exceptions for academic medical centers such as LSUHCS-S, and that there was no legal requirement to charge LSU for the needed access. 123, The BRF P then changed tactics and stated in a letter to LSU dated July 29, 2015, that “regardless of Stark and anti-kickback laws, under current IRS regulations, BRFHH cannot provide LSU physicians with free access to EPIC if there is cost involved in doing so.” +23. senso124, The BRF Parties’ reference to IRS regulations wrongfully implies that providing LSU Physicians with access to EPIC’s billing capacity at no charge would result in impermissible Private benefit or inurement in violation of the hospital’s tax exempt status. However, the TRS has never taken the position, in regulations or otherwise, that a nonprofit, tax-exempt hospital ‘tat isa key component of an integrated academic medical center must charge another nonprofit entity that is also a key component of the same integrated academic medical center for ‘eckmological access and support or risk losing its tax-exempt status, There is no guidance, Precedent or other indication that providing LSU with the requested access to EPIC would raise concerns of private benefit or inurement for the IRS or otherwise jeopardize the hospitals’ tax- exempt status, 125, ‘The BRF Paris’ flailing about for some legal basis'— any legal basis — to charge LSU for access to the “new” BRF version of EPIC demonstrates that the BRF Parties have no intention of aligning their actions and cetivities with those of LSU, Report to the Centers for Medicare and Medicaid Services (“CMS”) 126. In August 2014, the BRP Parties self-reported to CMS, a federal agency, that their operation of the Shreveport Hospital's outpatient clinics was not compliant with certain administrative requirements necessary for a hospital-based clinic to receive higher Medicare and ‘Medicaid reimbursement. 127, Rather than simply self-report their own failure, the BRF Parties chose to include in their report gratuitous allegations falsely accusing LSUHSC-S physicians of inapproprialy caring for the uninsured, clearly implying a discriminatory dual-system of care: one for insured patients and one for uninsured patients. 24. iss2a06128, The BRF Parties included LSU in their report to CMS and made these false accusations of discriminatory care against LSU and its physicians without first consulting with LSU or discussing their concerns with LSU. 129, At the same time that the BRF Parties ambushed LSU with their sel&report and false allegations, they also simultaneously released their report to the local news media, 130. Asa result of the events described in Paragraphs 126 - 129 above, the Department Chairs of the LSUHSC-S School of Medicine gave a unanimous vote of “no confidence” in the BRF Parties 131, ‘The BRF Parties’ false accusations against LSU of discriminatory care, delivered without any meaningful notice to LSU while simultaneously being provided to the local media, demonstrates that the BRF Parties have no intention of aligning their actions and aeivities with these of LSU, The BRF Parties have consistently chosen to act as antagonists towards LSU rather than collaborative partners invested in a shared goal. Refusal To Complete Documents And Pay Debts Owed LSU 132. The CEA defines the “Contemplated Transactions” as “all of the transactions contemplated by this Agreement.” 133, As of the Effective Date of the CEA, numerous Contemplated Transactions remained incomplete; in some instances, there was not even a first rough draft of such agreements. 134, Included among the Contemplated Transactions that remained incomplete as of the Effective Date were: (a) a Master Affiliation Agreement to establish the responsibilities of the Parties with respect to the graduate medical education and clinical training of LSU residents and fellows; (b) a Master IT Transition Services Agreement for LSU to maintain and make aveilable +25 - ssoto the BRE Parties certain information technology services, as was done in other LSU hospital CBAs: (¢) Master Collaborative Agreement to address issues such as accountable care services, provider numbers, medical records, cost reporting, and other matters necessary to give effect to the CEA; (a) a Shared Services Agreement to separate the responsibility for certain support services that had, prior to the Effective Date, been provided by LSU as integrated services to the Shreveport Hospital and the LSU School of Medicine; (e) an Assignment And Assumption Agroement to address the assignment of certain capital leases and other contracts from LSU to the BRF Parties (1) a Physician Services Agreement for LSU to provide faculty physicians to perform physician, medical, and teaching services at EA. Conway; and (g) an Allied Health Professionals Services Agreement to provide allied health professionals and services at E.A. Conway, 135, As late as August 2014, eleven months into the term of the CEA, none of the documents referred to above had been completed and the BRF Parties owed LSU a net amount of nearly cighteen million dollars ($18,000,000.00) for physician, transition, and other services and out-of: pocket expenses. 136, Afler repeated failed attempts to complete the Contemplated ‘Transactions, LSU was forced to send a demand letter dated August 18, 2014, to compel the BRE Parties to complete documents and pay the money it owed to LSU. 137, A clear pattern has emerged with respect to the BRF Parties’ willingness to complete equited documents and pay debts owed to LSU: the BRF Parties delay completing documents and paying debts untit LSU is left with no choice but to invoke formal measures and push the Partnership to the brink. LSU was forced to do so in June 2014, when LSU convened a day- Tong, face-to-face meeting of senior leadership simply to induce the BRF Parties to sign the Agreement for HIPAA Compliance; and LSU was again forced to do so in August 2014, when LSU sent a demand letter to compel the completion of additional documents and payment of a muiti-million-dollar debt owed to LSU. -26- iss290.5Parking and Office Space 138 ‘The Master Hospital Lease contains an exhibit that enumerated twelve (12) specific parking lots on and around the LSUHSC-S campus being leased to the BRF Parties as part of the CEA, 139, Since the Effective Date of the CEA, the BRF Parties and their employees have used TSU parking Tots far in excess of what was leased to the BRF Parties under the Master Hospital Lease, thereby displacing LSU employees and students. 140, In February 2015, LSU and the BRF Parties reached an agreement for LSU to lease ‘additional parking lots to the BRF Parties, all at no additional cost to the BRF Parties. 141. When LSU prepared an amendment to the Master Hospital Lease to reflect the revised Perking lot allocation agreed to by the partis in February 2015, the BRE Partiss suddenly reneged on their February 2015 agreement, refused to sign the amendment, and insisted that LSU should lease still more parking to the BRF Parties at no additional cost. 142. In addition to the LSU-owned parking lots, at least one parking lot adjacent to the LSUHSC-S campus was leased for many years by LSU from a third-party, at significant annual cost io LSU. This lot was not included in the lots leased to the BRF Parties under the Master Hospital Lease; however, for a period of approximately eighteen (18) months beginning on the Effective Date of the CEA, employees of the BRF Parties used eighty-seven percent (87%) of the Spaces in that lot, all while LSU continued to pay one hundred percent (100%) of the rent owed to the third-party, 143, To date, the BRF Parties deny any liability for their use ofthe aforementioned third-party lot and have refused to reimburse LSU its proportionate share (approximately $248,000.00) of ESU’s actual out-of pocket cost paid to the third-party owner of the aforementioned lot, 27. 11552806144, The Master Hospital Lease defined the specific facilities on the LSUHSC-S campus to be leased to the BRF Parties; however, since the Effective Date, LSU has continued to occupy certain office and storage space that was leased to the BRP Parties, and the BRF Parties have oveupied certain office and storage space that was not leased to them, 145, As far back as February 2015, the parties reached agreement on the net amount owed to LSU after factoring the additional amounts owed back-and-forth between the parties for the additional office and storage space referred to above. 146, Although the parties reached agreement on the additional office and storage space as far buck as February 2015, the BRF Parties to date still have not paid LSU. ‘The amount currently owed - which increases every month as the BRF Parties continue to occupy the additional space ~ is more than five hundred thousand dotlars ($500,000.00), with the precise amount owed to be proven at trial 147. In the BRF Parties’ July 29, 2015 “Detailed Response to Breach Notice,” they write that the BRE Parties are “prepared to make such payment to LSU.” However, no payment has been made and is simply one more manifestation of the same pattern of behavior on the part of the BRF Parties; they do not dispute that the debt is owed, but they resist LSU's attempts to collect the debt (going at least back to February 2015) until LSU is forced to take formal sieps to resolve the dispute (such as by filing this suit) 148. The BRE Parties’ pattem of repeatedly forcing LSU to push the partnership to the brink simply to complete documents and pay debts demonstrates that the BRF Pasties have no intention of aligning their actions and activities with those of LSU. Repeated Use of the Media Against LSU -28- 11552806149, Section 165 of the CEA (“Public Announcements”) states thet “any public ‘announcement, press release or similar publicity with respect to entering this Agreement or the Contemplated Transactions will be issued in the best interests of the Parties,” 150, ‘The BRF Parties have continued to blatantly violate Section 16.5 by repeatedly issuing antagonistic press releases and publicity that are intended to serve only the interests of the BRF Panties. st. Rather than working collaboratively with LSU to resolve potential disputes as they right arise, the BRF Partics have repeatedly resorted to using news releases and press statements to Publicly air the disputes, Examples include the immediate release of the CMS report to the news ‘media as referred to in Paragraphs 126 - 131 above; the immediate release to the media of the BRF Parties’ response to LSU’s August 2014 breach lettet; and the immediate release to the ‘media of an informal mecting in Baton Rouge on July 9, 2015, when LSU inquired whether BRE might voluntarily withdraw rather than resorting to a formal cure process under Section 13.4 of the CEA. 152, The website “preventshreveporthealthcrsis.com” bas repeatedly levied personal attacks ‘against LSU board members and administrators, including on July 21, 2015, multiple attacks on Avgust 4, 2015, and August 8, 2015. While the website does not purport to be directly associated with the BRF Parties, itis significant that since LSU demanded at the August 10, 2015 meeting (see Paragraoh 191 below) that the BRF Parties halt further personal attacks on TSU board members and administrators, no further attacks have appeared on the reventshreveporthealtherisis website. 153, Pethaps most egregious of all is “uhwarriorcampaign.com,” a new website that surfaced on or about August 5, 2015. -29- Lss2a06154, The uhwarriorcampaign website states “We Believe. We Fight. We Win.” 155, ‘The ubwarriorcampaign website urges visitors to “take action and sign the petition to register your support for University Health and BRF (Biomedical Research Foundation). Visit ImWithU.org to sign the petition and notify your elected officials and the LSU Board of Supervisors to voice your opinion.” 156. Clicking on the “I'm With U” link on the ubwarriorcampaign website directed visitors to & new page, “imwithu.org,” which describes itself as “a grassroots movement started by University Health employees to voice theit support of University Health and the Biomedical Reseurch Foundation (BRE). With the BRF at the helm since the hospital system: changed from Public to private in 2013, University Health has improved services, facilities, cost efficiency and working conditions for employees. We need to protect our hospitals, our jobs, and the healtheare options for everyone in our communities.” 157. ‘The positions stated on the uhwarriorcampaign and imwithu websites clearly conflict with LSU’s stated positions in the ongoing dispute with the BRF Parties. 158. In yet another example of the BRF Parties’ active disregard of its IT commitments to LSU, the uhws campaign website is hosted on LP address space that is exclusively ovmed by and vias specifically reserved to LSU pursuant to Section 13 and Exhibit “B” of the Master IT ‘Transition Services Agreement executed by the parties in September 2014, 159, By hosting the uhwarriorcampaign website on LSU IP address space, the BRF Parties have both blatantly breached their contractual obligations under the Master IT Transition Services Agreement and the CEA while at the same time using those hijacked LSU assets and resources to rally support against LSU in the ongoing dispute with the BRF Parties. ss2a0s160. ‘The BRF Parties’ repeated use of the news media to publicly air disputes and to attack LSU, to the point that the BRF Parties have now hijacked LSU’s own IP address space to assist in their media campaign while simultaneously breaching their obligations under the Master IT Transition Services Agreement and the CEA, demonstrates that the BRF Parties have no intention of aligning their actions and activities with those of LSU. FAILURE TO ESTABLISH A. SUSTAINABLE AND COMPETITIVE BL MODEL, 161. ‘The BRF Parties have failed to establish a sustainable end competitive business model with adequate funding levels as required by the Public Purpose as set forth in Peragraphs 162 - 177 below, Failure to Provide Management Expertise 162. At the time of the transition of hospital operations from LSU to the BRE Parties, BRFHEL did rot have a permanent management team in place to run the Hospitals; instead, BRFHH hired consultants Alvarez and Marsal (“A&M”) to provide the senior leadership to manage the Hospitals. 163. Fight months into the partnership, in May 2014, the BRF Parties changed leadership at the Hospitals when they recruited Mr, Rod Huebbers as the Hospitals’ permanent chief executive, 164. In March 2015, less than one year after hiring Mr. Huebbers, the BRF Pacties suddenly ‘erinated the employment of Mr. Huebbers and many of the same persons he had previously hired. 165. The BRF Parties have acknowledged that Mr. Huebbers’ tenure was a failure, chavacterizing his hiring as “a misstep.” -31- hassz806166. Upon terminating Mr. Huebbers, the BRF Parties were forced to change leadership at the Hospitals once again, and re-engaged the prior consultant, A&M, to return to the Hospitals, 167. As of the date on which this Petition is filed, two years into the partnership, the BRF Parties continue to rely on consultants to run the Hospitals and have not established permanent senior leadership for the Hospitals, 168. The leadership turmoil at BRFHH extends beyond the immediate senior leadership; just within the last few months, the chief compliance officer has resigned and his responsibilities Consolidated into another position, the chief operating officer was reassigned from BRFHH to BRF, and there has been tumover in the directorship for mental health services and for the physical plant. 169, Now, two years into the partnership, the BRF Parties have failed to establish any consistency whatsoever in the leadership of the Hospitals and have thereby failed tc establish a sustainable and competitive business model as required by the Public Purpose. Lack of Financial Resources 170. ‘The BRE Parties have not developed a financially sustainable business model 7 The BRF Parties repeatedly fail to pay their third-party vendors, and their third-party vendors have repeatedly contacted LSU secking assistance in collecting debts owed by the BRF Parti 172, TSU has leamed that the BRF Parties were recently sued in a state court in Virginia by a third-party vendor that had not been paid for medical and surgical supplies sold to the BRF Parties. -32- 11552606173, LSU has been repeatedly contacted by a third-party vendor because the BRF Partics reftse to complete the paperwork required to assign a pre-existing contract from LSU to BRF 174, Asa cost-saving measure, the BRF Parties recently elected to discontinue their agreement with LSUHSC-S police to provide security at the Hospitals, opting instead to contract with a third-party security service. 175. After LSU expressed serious reservations that the third-party vendor would be able to Provide adequate security at the hospital and clinics, and that the BRF Parties were sacrificing security at the Hospitals in order to save money, the BRF Parties reversed course and elected to have LSUHSC-S police continue providing security. 176. As set forth in Paragraph 143 above, the BRF Parties have refused to reimburse LSU almest $250,000 for their use of a third-party parking lot that was not leased to the SRF Parties under the Master Hospital Lease. LSU reserves the right to amend this Petition and to assert a claim for reimbursement of such amount. 177, The BRF Parties acknowledge owing LSU more than $500,000.00 for the use of additional office, laboratory, and storage space above and beyond what was leased to the BRF Parties under the Master Hospital Lease. Although the BRF Parties have owed! this debt for ‘many months and were presented many months ago with a lease amendment memorializing the debt and use of the space, they have to date failed to sign and failed to pay. LSU reserves the right to amend this Petition and to assert a claim for reimbursement of such amount. 178, ‘The BRF Parties have failed to perform required maintenance and make other necessary and needed capital investments at the Hospital facilities, -33- 11582806PUBLIC PURPOSE BREACH 179, Section 13.4 of the CEA sets forth a process whereby LSU may terminate the CEA or compel BRF to withdraw as the member of BRFHH upon BRFHH’s failure to perform its material obligations under Section 1.1 of the CEA (which establishes the Public Purpose) and such failure has a material adverse effect on the Public Purpose. 180. Pursuant to Section 13.4(a) of the CEA, LSU submitted a notice of Public Purpose Breach (the “Breach Notice,” a copy of which is attached hereto as Exhibit 2) to the BRF Parties on July 10, 2015, said notice being submitted via electronic mail and United States mail 181 LSU's Breach Notice stated that: BRP has repeatedly failed to act collaboratively with LSU and the State of Louisiana (wach is also a party to the CEA), failed to support and promote the academic mission of the LSU Health Sciences Cente:-Shreveport (“HSC-S"), and failed to establish a sustainable and competitive business model. To the contrary, as set forth below, BRF has consistently engaged in actions and activities ‘hat arc contrary, and in fact antagonistic, to the best interests of LSU and the State, have damaged and undermined HSC-S's reputation in the community, and’ have threatened the finances of HSC-S and the stability of the former LSU hospital in Shreveport and EA Conway Hospital in Monroe 182, Breack Notice further stated that the Public Purpose Breach was not narrovly focused on individual documents, facts, and circumstances, but was instead focused on the bigger issue of the BRF Patties’ systemic, continuing inability, demonstrated again and again over a two (2)-year period, to work cooperatively and collaboratively with LSU. 183. BRF acknowledged that it received the Breach Notice on July 14, 2015, 184, Pursuant to Section 13.4(a) of the CEA, the BRF Parties then had a fifteen (15)-day period, or until July 29, 2015, to cure the Public Purpose Breach -34- iss230.6185. Following receipt of the Breach Notice, the BRF Parties proposed to LSU and DOA a potential cure to the Public Purpose Breach that would include BRF’s withdrawal as the sole member of BRFHH, 186. As a gesture of good faith to facilitate the BRF Parties’ proposed cure, LSU agreed to suspend the running of the cure period for seven (7) days while the parties worked on documents to memorialize the proposal. 187, On July 24, 2015, the BRF Parties sent a letter to LSU stating that “we strongly dispute that any breach has occurred.” Remarkably, considering it was the BRF Parties that approached LSU and DOA with the proposal to withdraw just days before, the letter did not mention or even ackrowledge the BRF Parties’ proposal to withdraw. 188, On July 29, 2015, the BRF Parties submitied a written response denying thar uny Public Purpose Breach had occurred and declining to provide a written corrective action plan to cure the breach as requested by LSU. 189, Pursuant to Section 13.4(b) of the CEA, because the Public Purpose Breach had not been cured, the parties then went into the next stage of the process, a fifteen (15)-day Consultative Process period beginning on July 30, 2015, to attempt to resolve the dispute 190, On July 31, 2015, the BRF Parties informed LSU (without any mention or acknowledgment of the BRF Parties’ earlier proposal) that “BRF has no intention of voluntarily withdrawing as the sole member of BRFHH.” Clearly, the BRF Parties’ previous proposal to withdraw was nothing more than a “bait-and-switch” delay tactic. 191. Representatives of the parties met face-to-face in Shreveport, Louisiana, on August 10, 2015, Day 12 of the Consultative Process, -35- Hss2an6192, At the August 10, 2015 meeting, the BRF Parties once again tried to shift the focus to curing problems with individual documents and issues; however, LSU continued to insist that individual documents and issues were only symptoms of the Public Purpose Breach, that the brecch itself was the misalignment of the BRF Parties’ actions and attitudes with the best interests of LSU and the BRF Parties’ systemic inability to work cooperatively and collaboratively with LSU over a two (2)-year period, and that any cure must focus on those bigger issues. 193, At the conclusion of the August 10, 2015 meeting, the parties reached an agreement in Principle for the BRF Parties to cure the Public Purpose Breach, the core component of the! agreement being BRF's agreement to voluntarily withdraw as the sole member of BRFHH. 194, In order to give the parties time to work out the details of the August 10 agreement in Principle, LSU agreed to suspend the running of the time periods set forth in Section 13.4 of the CEA through Friday, August 21, 2015 195, During the period August 11-21, representatives of the parties continued to consult directly with one another to iron out the details of the August 10 agreement in principle. 196, Because the parties were making substantial progress in their consultations during the Period August 11-21, LSU agreed to extend the suspension of the time periods through August 26, 2025 197, On August 24, 2015, LSU provided to the BRF Parties a draft Cure and Withdrawal Agreement incorporating the terms of the August 10 agreement in principle end of the subsequent consultations between the party representatives. -36- ss2806198. The BRF Parties did not respond to the draft agreement from LSU prior to the close of business on August 26, 2015, and so the time periods began running again on August 27, 2015, Day 13 of the Consultative Process. LSU informed the BRF Pasties that although the suspension was lifted, LSU was confident the agreement could be finalized within the remaining time period set forth in Section 13.4 of the CEA. 199, Pursuant to Section 13.4(c) of the CEA, since the Public Purpose Breach was not resolved at the conclusion of the fiftcen (15)-day Consultative Process on August 29, 2015, the Parties then went into the next stage of the process, a fifteen (15)-day Executive Level Negotiations period beginning on August 30, 2015, to attempt to resolve the Public Purpose Breach. 200. On Tuesday, September 1, 2015, the BRF Parties finally retumed their propesed edits to the draft Cure and Withdrawal Agreement. ‘The document as revised by the BRF Parties represented a near complete rewrite of the key terms of the original document and included Provisions that were contrary 10 the August 10 agreement in principle and the subsequent conversations between the parties, 201. ‘The BRF Parties’ September 1, 2015 revisions to the draft Cure and Withdrawal Agreement included a prohibition against LSU selecting either Willis-Knighton Heelth System CWillis Knighton”) or the Franciscan Missionaries of Our Lady Health System (“FMOL") as LSU’s new hospital partner upon the withdrawal of BRF from BRFHH, 202, Also on September 1, 2015, the BRF Parties informed LSU in writing thet “we simply ‘cannot agree to a process that could result in Willis Knighton or FMOL running the hospitals.” 203. LSU has repeatedly told the BRF Parties that as part of any proposed cure, LSU cannot ‘agree fo any term or provision that would limit LSU’s ability to select its new hospital partner, -37- Lsseaa204. At no point during the August 10 face-to-face meeting in Shreveport or during subsequent consultations during the period August 11-31 had the BRF Parties ever told LSU they could not agree to a process that could result in Willis-Knighton or FMOL running the hospitals. It was not until September 1 that the BRF Parties suddenly informed LSU of their position with respect to Willis-Knighton and FMOL. 205. Clearly, the August 10 agreement in principle to have BRF withdraw from BRFHH was nothing more than another “bait-and-switch” by the BRF Parties, 206. ‘The BRF Parties’ insistence that the proposed cure include a term prohibiting LSU from selecting either Willis-Knighton or FMOL as its new hospital partner ~ a term that LSU has repeatedly said is unacceptable to LSU — clearly shows that the BRP Parties never had any intention of attempting a good-faith cure to its Public Purpose Breach. 207. On Thursday, September 3, 2015, LSU informed the BRF Parties that it was not willing to negotiate over terms the parties previously agreed upon. 208. To address the dispute between the parties as to the specific dates when the Executive Levei Negotiations began and ended, the parties agreed that the Executive Level Negotiations would end on September 21, 2015, 209. Party representatives continued to negotiate during the period for Executive Level Negotiations; however, the BRF Parties never submitted any other proposals that addressed how the BRF Parties would cure the specific breaches noted in LSU’s July 10 Breach Notice. 210. The period for Executive Level Negotiations expired on September 21, 2015, without any agreement between the parties to cure ot resolve the BRE Parties’ Public Purpose Breach. 38 iss28a.621 Pursuant to Section 13.4(@) of the CEA: If the Public Purpose Breach is not cured or resolved pursuant to the procedures set forth above ... LSU may declare its intent to terminate this Agreement by delivery of written notice of such intent to BRF and BRFHH and this Agreement will terminate fifteen (15) days later unless LSU elects to require BRP withdraw {sic] as a member of BRFHH, in which case LSU will deliver a BRF Withdrawal Notice ... to BRF within five (5) days of the expiration of the negotiation period set forth in subsection (c) above, and BRF will withdraw as a member of BRFHH on the tenth (10th) day after LSU delivers the Withdrawal Notice, 212 Pursuant to Section 13.4(d) of the CBA, if the Public Purpose Breach is aot cured or resolved pursuant to the process set forth in Section 13.4, LSU has the option to either terminate the CEA or to compel BRF to withdraw as the sole member of BRFHH on the tenth (L0th) day following delivery of the Withdrawal Notice, 213. LSU elected to compel BRF to withdraw as the sole member of BRIHH and, on September 24, 2015. in conformity with Section 13.4(d) of the CE, , LSU hand-delivered « 214. In response to delivery of the Withdrawal Notice on September 24, 2015, BRFHH Published @ news release on its University Health website that “the BRF will aggressively challenge LSU's allegations in the courts,” and the Chairman of the Board of BRFHH was quoted overnight in newspapers as saying “we're not going to withdraw” and describing the ‘Withdrawal Notice as “illegal” and a “sham.” Even prior to delivery of the Withdrawal Notice, the BRF Parties informed LSU in waiting that “BRP has no intention of voluntarily withdrawing as the sole member of BRFHH,” and they called a special meeting of the hospital medical staff on September 4, 2015, where they reportedly said they were not “backing down” and that they were “going fo court” over the dispute. Finally, the BRF Parties’ tactics during the Public Purpose Breach negotiations — including repeatedly engaging in bad-faith “bait-and-switch” tactics and insisting that any possible cure include terms and provisions that they know LSU can -39- 11589806never accept ~ demonstrate that BRF has never had any intention of complying with its p withdrawal obligation under the CEA. CLAIM FOR DECLARATORY JUDGMENT. 215: Pursuant to Article 1871 et seq. of the Louisiana Code of Civil Procedure, LSU secks a declaratory judgment that the actions and inactions of the BRF Parties as set forth herein constitute a breach of the Public Purpose set forth in Section 1.1 of the CBA, that the Public Purpose Breach was not cured or resolved pursuant to the process spelled out in the CEA, that BRE must withdraw as the sole member of BRFHH on the tenth (10th) day following delivery of the Withdrawal Notice, and that LSU is entitled to compel the withdrawal of BRE as the sole member of BRFHH in the event BRF fails to withdraw as the sole member of BRFHH on the tenth (10th) day following delivery of the Withdrawal Notice, cL ICTION 216. Pursuant to Section 16,10 of the CEA: Each Party acknowledges and agrees that the other Parties would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any Breach of this Agreement by a Party could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or remedy to which a Party may be entitled, at law or in equity, it shall be entitled to enforce any provision of this Agreement by a dectee of specifie performance and to temporary, preliminary and Permanent injunctive relief to prevent breaches or threatened breaches pursant to ‘Legal Requirements, without posting any bond or other undertaking 217. Pursuant to Section 13.4(d) of the CEA: If the Public Purpose Breach is not cured or resolved pursuant to the procedures set forth above ... LSU may declare its intent to terminate this Agreement by delivery of written notice of such intent to BRF and BRFHH and this Agreement will terminate fifteen (15) days later unless LSU elects to require BRF withdraw [sic] as a member of BRFHH, in which case LSU will deliver a BRE Withdrawal Notice ... to BRF within five (5) days of the expiration of the negotiation seriod set forth in subsection (c) above, and BRE will withdraw as a member of BRFHH on the tenth (10th) day after LSU delivers the Withdrawal Notice. ussato218. Pursuant to Article 3601 et seq. of the Louisiana Code of Civil Procedure and Section 134 of the CEA, LSU seeks preliminary and permanent mandatory injunctive relief compelling BRF to withdraw as the sole member of BRFHH in the event BRF fails to withdraw from BRFHH within ten (10) days of delivery of the Withdrawal Notice. 219. Pursuant to Section 16.10 of the CEA, and as a public entity, LSU is not required to post bond or other security as a condition for the issuance of injunctive relief, 220. Under Section 13.4 of the CEA, BRF must withdraw as a member from BRFHH on the tenth (10th) day after receiving the Withdrawal Notice. Section 13.4(d) is entitled “Termination Right” and says “if the Public Purpose Breach is not cured or resolved pursuant to the procedures set forth above ... BRF will withdraw as a member of BRFHIH.” Section 13.4 is also prefaceé “notwithstanding anything in this Agreement to the contrary.” ‘The partics having now failed te cure or resolve the Public Purpose Breach after going through the process that was negotiated by the parties and that is described in Section 13.4 of the CEA, and LSU having delivered a Withdrawal Notice to BRE, BRF has no right to remain as the member of BREHH1 and must withdraw on the tenth (10th) day after delivery of the Withdrawal Notice. If BRF believes it is being wrongfully compelled to withdraw, it may assert a claim for damages against LSU (which LSU will vigorously defend); however, BRF has no right to remain as member of BRFHH and hhas ro right to an injunction or other remedy that would allow it to remain as the member of BRFHH after the tenth (10th) day following delivery of the Withdrawal Notice, 221 Pursuant to Article 3601 et seq. of the Louisiana Code of Civil Procedure, and pending further orders and rulings of this Court (including without limitation any order ot ruling compelling BRF to withdraw as the sole member of BRFHU), LSU seeks preliminary and Permanent probibitory injunctive relief ordering the BRF Parties to maintain the status quo with respect to the Hospitals, Hospital operations, and the Medicaid and Medicare provider numbers for the Hospitals, and further ordering the BRF Parties to not take any action, fail to take any -41- 1552806action, move any assets of, and/or enter into any agreement or consummate any transaction that would adversely affect the Hospitals, BRFHH, BRFHH Shreveport, and/or BRFEH Monroe, 22. Pending further orders and rulings of this Court, and considering that BRF has no tight to remain as the member of BRFHH and must immediately withdraw from BRFEH on the tent (10th) day following delivery of the Withdrawal Notice, LSU seeks an Order of this Court that any payments received by any of the BRF Partics from the Louisiana Department of Health and Hospitals or any other state agencies related to the performance of obligations and/or services under the CEA or any of the Contemplated Transactions shall be immediately deposited by such Party into the registry of this Court and disbursed to recipients subject to appropticte oversight by this Court to ensure such funds are not spent or used for any purpose other than normal and ordinary Hospital operations. CLAIM FOR ATTORNEY FEES 223. Pursuant to Section 16.10 of the CEA, “in the event that either Party elects to incur legal expenses t0 enforce or interpret any provision of this Agreement, the prevailing Party will be entitled to recover such legal expenses, including, without limitation, reasonable attomey fees, costs and necessary disbursements, in addition to any other relief to which such Pa:ty shall be entitled.” 224. LSU prays for trial by jury om ail issues so triable. WHERFFORE, LSU respectfully prays for judgment as set forth herein, including: (1) declaratory judgment that the actions and inactions of the BRF Parties as sot forth herein constitute a breach of the Public Purpose set forth in Section 1.1 of the CEA, that the Public Purpose Breach was not cured or resolved pursuant to the process spelled out in the CEA, that BRP must withdraw as the sole member of BRFHIT on the tenth (10th) day following delivery of the Withdrawal Notice, and that LSU is entitled to compel the withdrawal of BRF as the sole -42- 11ss280.6member of BRFHH in the event BRF fails to withdraw as the sole member of BRFHH on the tenth (10th) day following delivery of the Withdrawal Notice., 2) preliminary and permanent injunctive relief compelling BRF to withdraw as the sole member of BREHH on the tenth (10th) following delivery of the Withdrawal Notice due to its breach of the Public Purpose set forth in the CEA and its failure to cure or resolve the breach, and (except for compelling BRF to withdraw as the sole member of BRFHH) otherwise ordering the BRE Parties to maintain the Status quo with respect to the Hospitals, Hospital operations, and the Medicaicl and Medicare Provider numbers for the Hospitals, and further ordering the BRF Parties to not take any action, fail to take any action, move any assets of, and/or enter into any agreement or consummate any ansaction that would adversely affect the Hospitals, BRFHH, BRFHH Shreveport, and/or BRFHH Monroe, (3) preliminary and permanent injunctive relief ccompelling the BRF Parties to not make any public announcement and/or press release, and to not give any simnilar public with respect to the partnership, including without limitation the CEA, the Contemplatee ‘Transactions, and any and all disputed related thereto, that are not in the best interests of all patties, (4) junctive relief pending further orders and rulings of this Court that any payments received by any of the BRE Parties from the Louisiana Department of Health and Hospitals or any other state agencies related to the performance of obligations and/or services under the CEA oF any of the Contemplated Transactions shall be immediately deposited by such party into the registry of this Court and disbursed to recipients subject to appropriate oversight by this Court to ensure such funds are not spent or used for any purposes other than normal and ordinary Hospital operations, (5).for LSU's reasonable attorney fees incurred enforcing its rights under the CEA, including LSU's right to compel the withdrawal of BRE as the sole member of BRFIH on the tenth (10th) day following delivery of the Withdrawal Notice due to the BRF Patties’ breach of the Public Purpose set forth in the CEA and their failure to cure or resolve the breech, (6) for legal and judicial interest, and (7) for all other legal, equitable, and other relief to which LSU is entitled under the premises. -43- 1352806Respectfully Submitted By Attorneys, TAYLOR, PORTER, BROO! y/| lips, Jr., Bar # 2047 Patrick D. Seiter, Bar # 22153 Mare S. Whitfield, Bar # 1 Robert W. Barton, Bar # 22836 Jobn P. Murrill, Bar # 23878 Amy C. Lambert, Bar #24348 JonN, "Blue" Loupe, Bar #30920 Cynthia M. Amedee, Bar # 31597 Erin S, Kenny, Bar # 34079 & PHILLIPS LLP. 451 Florida Street, 8th Floor (70801) P.O. Box 2471 Baton Rouge, LA 70821-2471 Telephone: (225) 387-3221 Facsimile: (225) 346-8049 Attorneys for Board of Supervisors of Louisiana ‘State University and Agricultural and Mechanical College PLEASE SERVE: Biomedical Research Foundation of Northwest Louisiana ‘Through its agent for service of process, James D. Dean 2031 Kings Highway Shreveport, Louisiana 71103 BRF Hospital Holdings, L.L.C. Through its agent for service of process, Vinson J. Knight 909 Poydras Street Suite 2600 ‘New Orleans, Louisiana 70112 BRFHH Shreveport, LLL.C. Through its agent for service of process, Vinson J. Knight 909 Poydras Street Suite 2600 New Orleans, Louisiana 70112 BRFHH Monroe, L.L.C. Through its agent for service of process, Vinson J. Knight 909 Poydras Street Suite 2600 New Orleans, Louisiana 70112 -44- ssoa0.sAMENDED AND RESTATED ‘COOPERATIVE ENDEAVOR AGREEMENT BY AND AMONG RIOMEDICAL RESEARCH FOUNDATION OF NORTHWEST LOUISIANA; [ARF HOSPITAL HOLDINGS, LLC. BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE; AND THE STATE OF LOUISIANA THROUGH THE DIVISION OF ADMINISTRATION ‘EFFECTIVE SEPTEMBER 30, 2013,‘ARTICLE STATEMENT OF PUBLIC PURPOSE wovnwennneeenementret-e rene Section 1.1. Public Purpose of Cooperative Endeavor. Section 12, Contract Mott enenrnnnnen Section 2.1, BRFHH Leese ofthe Hospitals’ Operntions and Facilities. ‘BREF Lense of Certain Equipment nena. ‘Asset Transfer ‘ARTICLE IX REPRESENTATIONS AND WARRANTIES OF THE STAT Een cseeeeeoorenencca-16 Section9.1. Organization; Standing Section 9.2 Section 93,Section 9.4 Seetion9.5. Full Disolosure. ARTICLE X BRVFH REPRESENTATIONS AND WARRANTIES wweernpnecneres-eosnene-enenaelS Seaton 10.1. Section 10.2: Section 10.3. ‘Section 1044. Section 10.5, Section 10.6. Section 10.7. Farther Acts and ASsuranve@ nncrorso ARTICLE XT TERM AND TERMINATION. Section 13.1. Tort. Section 13.2. Eaciy Termination... oo Section 133. BRF/BREHH’s Right to Exercise Without Cause Terminetion Section 13.4, Termination or Forced Withdrawal by LSU fer Breach of Pubic Parpone Section 13.8. Termination P10 amnesic, Section 13.6. Wind Down Period Upon Termination, eminem ARTICLE XIV CUMULATIVE REMEDIES; WAIVER. Scetion 14.1. Remedies Cxunulatve Section 14.2,Jn this Agrocment, unless « clear contrary intention ‘Legal Representation of tho Parties. Jariediction:| an 30. Enfonoement of Agreement; Lega Foos aad Goa. I. Rntine Agreement and Modification... s a efi siorawinaa manner ‘Not-Discriminstion Clause... == Section 16.25,AMENDED AND RESTATED COOPERATIVE ENDEAVOR AGREEMENT. THIS AMENDED AND RESTATED COOPERATIVE ENDEAVOR AGREEMENT (Agmesinent) is made aod enterd into effective the 30th dey of September, 2013 (“Efecive Date"), by amd among the BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE (‘LSID’), « public constitutional corporation of fhe, State of Louisima, BIOMEDICAL RESEARCH FOUNDATION OF NORTHWEST LOUISIANA, 8 Louisisas nonprofit corporation (“BRE”), BRF HOSPITAL HOLDINGS, (LLC. a RECITALS WHEREAS, BRF is 2 nonprofit Louisinsa corporation organized and existing under the laws of ‘the State of Louisiana pursuant to LA RS. 12:201, et seq; WHEREAS, BRFHH is « Louisiane limited liability company organizod end existing under the ‘ws of the State of Louisiana pursuant to LA.R.S. 12:1301, et seq, having BRF as its sole meriber end ‘8 a result thereof being considered a disregarded entity for federal tx purposes; WHEREAS, LSU is « public comporation created by La, Const. Art Vill, Section 7, with duties ind powers authorized by the laws of the State of Louisiana, and LSU's medical schools and hogytals nro imder LSU's supervision and management pursvent 10 La. Const. Art. VII, Section 7 ana La, RS, 173215; SHEREAS, LSU; through the Louisiana State University Health Sclence Center at Shroveport CLSULSCS”) « division under LSU's supervision and management, s commited to educating mecieal and clinieal professionals in Louisiane through accredized residency, fellowship and other gradusie ‘medical educational programs and undergraduate medical and allied heelth programe: WHEREAS, the Louisiana Division of Administration (“DOA”) is an agency existing within the Ofice of the Govemer, within the executive branch of the State, with duties and powers cstebished by law; WHEREAS, the Louisiana Department of Health and Hospitals ("DH") is a department of the executive branch of the State with powers and duties established by lav WHERFAS, LSU is obligated by Louisiana law pursuant to Le, RS, 17:1517 anc La RS. 17:1518 to provide medical and surgical treatment for the Medically Indigent residents of Louisiane at the Shreveport Hospital and E.. Conway,WHEREAS, LSU, BRE, BRFHH and the Stat, recognize the need to work collaboretively and SRetese their best efforts o secure funding from the State forthe cost of services to uninsured paticas at {he Hospitals and to develop and maintain nationally recognized GME Programs with soproprists i ” WHEREAS, the State's purpose for this initiative, which is recognized by BRF, BRFHH end FaUL et provide Meisid recipients with integrated, coordinated cares management of chronic dieass; feprovement in access to preventive and diagnostic services for children end adults: and improved Plot satisfaction with ascese to care and the care experience and to provide the Sino with improved WHEREAS, each Party has agreed to participate in and contribute to the Collaborative, and each Pasty will contribute significant financial and operational resources to the Collaborative lo sue i, ‘suecess and achieve the purposes described in this Agreement; WHEREAS, the Louisiana Constitution in Article VIL, Section 14(C) permits the Stave and its politcal subdivisions or political corporations to engage in cooperative endeevors with ary publie or ‘rivate association, corporation or individual; WHEREAS, the Parties previously entered into the Original CEA, pursuant to which various ‘commitments and obligations were agreed to by the Parti WHEREAS, DH did not receive approval ffom CMS in connection with the funding provisions contemplated by the Origins] CEA; and MeRERPAS, this Agreement shall supersede in toiaiy the Original CHA entered int by and among the Parties und DHH as of the Effective Date, NOW THEREFORE, in consideration of the foregoing and the mutual covensnts herein contsined, LSU, BRE, BRFHH and the State hereby agree as follows: ARTICLE I STATEMENT OF PUBLIC PURPOSE. Section 1. Fs In accordance with Article VII, Snot gC) ofthe Louisons Constitution, the Parties enter int his Agreement forthe puble purpose cf maintsning an scademic medical center in which the Parties continuously work in collaboraton axa 2 camunitted and aligned in their actions and activities, in a manner consistent with a sustalssbie business model and adequate funding levels, ro serve the State and its citizens: (a) 28 a premier ee wr ‘sduate medical education, capable of competing inthe healthcare merkeiplacs, comperable song te peers, withthe goal of attracting the best faculty, residents and students, to enrich the Sute’s bealth cae ‘Reziforce and thei training experience; 2) in ffling the State's historical mission of assuring aces & Safety Net Services to all citizens ofthe Stu, including its Medically Indigent, hig risk Metesd ot Sute inmate populations; and (¢) by focusing on and supporting the Key Service Lines, as defined ont ‘ngvoed by the Parties, nocessary to assure high quality OME Programe and access to Safty Net ServicesSection 12. Commust Monitor, LSU shall appoint a contract monitor (the “Contract ‘Monitor’ whose role sall be to monitor the Paris’ compliance withthe terms OF this Agreeman he Contact Monitor sll be an employee of LSU or a successor of related institution mer tne rupervisien ARTICLE IT LEASE OF FACILITIES AND EQUIPMENT AND ASSET TRANSFER Secon 2. | BREE Lease of the Hoepitls’ Operations and Facilities, Conteaporaneous ith and subject tothe tonne and conéttions ofthis Agreemeri, LSU, the State and BRFHH foal ance Gig, Be Master Hospital Lease Agroment inthe form atteched ss Exhitit 2.1 Master Hanglal Lae; Under the Master Hospital Lease, LSU agrees to take all che necessary actions required i teenies Ppazwtions of the Hospitals as going concerna and posseesion of the Hospitals’ Facilites 9 ERFYIET The Pasar Lovnial Lease shal neue all propery set forth in tho Master Flopital Lease ihe “Lane Price” ot all not include any ilens, clei secuny intrens, charges, pivlgcs, pleas Soion22. BREEH Lease of Crain Equipment. Contemporancous with and subject tothe Fh na conditions ofthis Agreement, LSU and BRFHH wil enor into an Equipment Lease Anrsonee in te form attached as Exhibit 22 (Ge “Equipment Lasso". which will govern the leas Sh ecesee gipueet necessary for BRFHII's operation of the Hospitals. The real payments paid by IRIS ac ‘the Hospitel Equipment will represent fir market value, as st forth inthe Equipment Cease Section 23, | Asset Transiz, Upon the terms and subject to the conditions set forth in this eregmant the Master Lease Agreement, and the Equipment Lease including but not linilee Scola Brae lowing & Terminating Event, LSU will, effective as of the Commencement Date, deli ve FAT, te following assets und properties of LSU and the following assets end propetie seca oy hang GR conection withthe operation ofthe Hospitals, asthe same exist on the Commenconer Bere (the “Transfored Assets): @ All usable inventories of (a) supplies, drugs, food, and othe: cisposables; ang (e) tangible assets valued at less than One Thousand and Nerog Dollar ($1,000) and tat ere untagged and untracked by LSU and DOA, and are neceeary forthe ‘operation ofthe Hospitals and that ae on hacdlt tho Hospitals as of the Commencement Le, (&) __, Pettonsl Broperty Leases, To the extent permitted by law and the terms of je [underiying lease the leases of tangible personal (corporeal movable) propery. used ia Stanpaion with the operation of the Hospials that ae identified in Schedule 2.3) (w be {tsched on oF before the Commencement Date) as to which LSUHSC-S is the Iesaue co aut Jessee (collectively, the “Personal Property Leases") shall be assigned to BREHH,©), , Assumes Agresments. To the extent assignable, al sights and interests of TELAT LSUHSC-S inthe contrac, conmtimens, Inass and agreements described in Schule © ,,Fenits. To the extent arsignable, all Permits utilized in tho operation of {Exe Hospitals including applications therefor) described in Schedule 2.3(4) (tobe attached on oe (©) gp innts tne Records, All Rooks end Records used oF held for nse in the QBeration of the Hospitals or otherwise relating 10 the Transferred Assets, other them tne minues opk or related corporate dociments and compra seal fay, of LSUHSC-S (the “Hook and gLite. To the exent ponte by law, ell rights of LSUHSC-S under any Shims, warantios, guaranties, refunds, causes of action, rights of recovery, rights of sctoff sel ‘rights of recoupment of every kind and nature relating to the Transferred Ascott qq tslietual Propeny, To the extent permitted by law and necessary forthe ‘ordinary operations of the Hospitals, all intellectual property (including any trademarks ne {opvrighs) of LSU used in connection with the operation of the Hospitals whic intellectual propery will be ensfered via license 10 BRFHH on terms comptcable and ‘consistent with the terms of this Agreement. Section 24, Retained Lisbilhiet, LSU will retain ail isbilites arising in connection with the Pane. f the Hospitals prior 1 the Commencement Date, including, but not Fimited fo, (1) ll otiee TET EIRC'S Pension blgations (b) any end all civil servant termination pey, uneimploytens aipsdon, thes we PastemploymentbeoeSt obligations to civil servants; (6) al libities and obligaion’ae oo ist party payors, including eny governmental payor, arting in connection with the oteemion

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