CBS HOSPITAL TRANSACTION Summary of Changes to the Asset Purchase Agreement (“APA” As stated in last week’s press release, a delay in completing the compliance assessment prior to the sale of Sitka Community Hospital (“SCH”) has resulted in certain changes to the transaction. SEARHC will assume the provider numbers for home health and long-term care, and will move acute care hospital and emergency services to Mt. Edgecumbe hospital on the day the sale closes. No changes will occur to outpatient clinic- based services. These changes are reflected in the revised APA as follows, and copies of the revisions will be made available to the public. APA CHANGES: 1.1(k) – This section addresses provider numbers as assets to be acquired. CBS will keep the acute care provider numbers, and SEARHC will assume the provider numbers for long-term care (the skilled nursing facility, or “SNF”) and home health (the home health agency, or “HHA”). 1.2(p) – This section addresses provider numbers as excluded assets. All provider numbers other than SNF and HHA are now excluded assets. Critical Access Hospital (CAH) services, including swing bed services, are thus expressly listed as excluded assets. 1.4(c) and (d) – Excludes liabilities for failure to comply with regulations, and now is not limited to the period of time prior to the Effective Time. This is because SEARHC is not assuming the acute care provider numbers. 1.4(h) – Excludes both known and unknown liabilities for overpayments and reimbursement adjustments. 1.7(a) – Requires escrow for liabilities of SNF and HHA (previously required escrow for acute care liabilities, as well). The current language in this subsection will likely change to reflect the contents of the upcoming compliance report. Changes could affect the amount required for escrow, as well as the timing for disbursement of those funds. 1.7(b) – Permits payment of amounts relating to SNF and HHA under certain circumstances. 2.9(a) – Adds provision for hospital closure, because the provider number is not being assumed by SEARHC and CBS will not continue to operate SCH. (Long-term care services will remain at SCH.) 2.10(c) – States the City will not seek to rescind or revoke any licenses except the hospital license, as provided in 2.9(a). 3.3 – States that SEARHC has performed its own investigation sufficient to acquire SCH assets, except for investigating liabilities required to settle with the government. 6.1(a) – City promises to cease hospital operations at least two (2) days before the Effective Time. 6.1(h) – Provision requiring closure of the hospital and performance of necessary notifications. 6.11 – SCH’s provider numbers for SNF and HHA will be used to bill transition patient services until SEARHC gets its own numbers, and the City will terminate provider agreements for the hospital. 6.15(b) – Interim services will be furnished at SEARHC locations. Exhibit A, Definitions – “Payment Date” applies only for SNF and HHA. None of these changes appear unusual given the status of the transaction. Indeed, the change to exclude the acute care provider number will in all probability work to CBS’ significant advantage, in that the City will not be required to tie up as much money in escrow. This means that CBS will have greater flexibility in how it accesses and disburses its funds. .