EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
HCA INC.,
HERCULES HOLDING II, LLC
AND
HERCULES ACQUISITION CORPORATION
JULY 24, 2006
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................1
Section 1.1. Definitions...........................................................1
Section 1.2. Terms Generally.......................................................8
ARTICLE II THE MERGER............................................................................9
Section 2.1. The Merger............................................................9
Section 2.2. Closing...............................................................9
Section 2.3. Effective Time........................................................9
Section 2.4. Effects of the Merger.................................................9
Section 2.5. Organizational Documents.............................................10
Section 2.6. Directors and Officers of Surviving Corporation......................10
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS...........10
Section 3.1. Conversion of Securities.............................................10
Section 3.2. Payment of Cash for Merger Shares....................................11
Section 3.3. Treatment of Options and Other Awards................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................15
Section 4.1. Corporate Existence and Power........................................15
Section 4.2. Corporate Authorization..............................................16
Section 4.3. Governmental Authorization...........................................16
Section 4.4. Non-Contravention....................................................17
Section 4.5. Capitalization.......................................................17
Section 4.6. Company Subsidiaries and Joint Ventures..............................18
Section 4.7. Reports and Financial Statements.....................................19
Section 4.8. Undisclosed Liabilities..............................................20
Section 4.9. Disclosure Documents.................................................20
Section 4.10. Absence of Certain Changes or Events.................................20
Section 4.11. Litigation...........................................................21
Section 4.12. Taxes................................................................21
Section 4.13. ERISA................................................................22
Section 4.14. Compliance With Laws.................................................23
Section 4.15. Finders' Fees........................................................23
Section 4.16. Opinion of Financial Advisors........................................23
Section 4.17. Affiliate Transactions...............................................24
Section 4.18. Rights Agreement; Anti-Takeover Provisions...........................24
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...............................24
Section 5.1. Corporate Existence and Power........................................24
Section 5.2. Corporate Authorization..............................................24
Section 5.3. Governmental Authorization...........................................25
Section 5.4. Non-Contravention....................................................25
Section 5.5. Disclosure Documents.................................................25
Section 5.6. Finders' Fees........................................................25
Section 5.7. Financing............................................................25
Section 5.8. Equity Rollover Commitment...........................................26
Section 5.9. Guarantees...........................................................27
Section 5.10. Operations of Parent and Merger Sub..................................27
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER...............................................27
Section 6.1. Conduct of the Company and Subsidiaries..............................27
Section 6.2. Conduct of Parent and Merger Sub.....................................30
Section 6.3. No Control of Other Party's Business.................................30
ARTICLE VII ADDITIONAL AGREEMENTS...............................................................30
Section 7.1. Stockholder Meeting; Proxy Material..................................30
Section 7.2. Reasonable Best Efforts..............................................32
Section 7.3. Access to Information................................................33
Section 7.4. Solicitation.........................................................34
Section 7.5. Director and Officer Liability.......................................38
Section 7.6. Takeover Statutes....................................................39
Section 7.7. Public Announcements.................................................39
Section 7.8. Notice of Current Events.............................................39
Section 7.9. Employee Matters.....................................................40
Section 7.10. Financing............................................................41
Section 7.11. Actions with Respect to Existing Debt................................44
Section 7.12. Actions with Respect to Foundation Options and HTI Warrant...........44
Section 7.13. Insurance Matters....................................................45
Section 7.14. Section 16(b)........................................................45
Section 7.15. Resignation of Directors.............................................45
ARTICLE VIII CONDITIONS TO THE MERGER...........................................................45
Section 8.1. Conditions to the Obligations of Each Party..........................45
Section 8.2. Conditions to the Obligations of Parent and Merger Sub...............46
Section 8.3. Conditions of the Obligations of the Company.........................46
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ARTICLE IX TERMINATION..........................................................................47
Section 9.1. Termination..........................................................47
Section 9.2. Termination Fee......................................................48
Section 9.3. Effect of Termination................................................50
ARTICLE X MISCELLANEOUS.........................................................................50
Section 10.1. Notices..............................................................50
Section 10.2. Representations and Warranties.......................................52
Section 10.3. Expenses.............................................................52
Section 10.4. Amendment............................................................52
Section 10.5. Waiver...............................................................53
Section 10.6. Successors and Assigns...............................................53
Section 10.7. Governing Law........................................................53
Section 10.8. Counterparts; Effectiveness; Third Party Beneficiaries...............53
Section 10.9. Severability.........................................................53
Section 10.10. Entire Agreement.....................................................53
Section 10.11. Remedies.............................................................54
Section 10.12. Jurisdiction.........................................................54
Section 10.13. Authorship...........................................................55
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of this 24th day of July, 2006 by and among HCA Inc., a Delaware
corporation (the "Company"), Hercules Holding II, LLC, a Delaware limited
liability company ("Parent") and Hercules Acquisition Corporation, a Delaware
corporation and a direct wholly owned subsidiary of Parent ("Merger Sub").
RECITALS
WHEREAS, the parties intend that Merger Sub be merged with and into the
Company (the "Merger"), with the Company surviving the Merger as a wholly owned
subsidiary of Parent.
WHEREAS, the Board of Directors of the Company, acting upon the
unanimous recommendation of the Special Committee, has (i) determined that it is
in the best interests of the Company and its stockholders, and declared it
advisable, to enter into this Agreement, (ii) approved the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, including the Merger and (iii) resolved to recommend
adoption of this Agreement by the stockholders of the Company.
WHEREAS, the Boards of Directors of Parent and Merger Sub have
unanimously approved this Agreement and declared it advisable for Parent and
Merger Sub, respectively, to enter into this Agreement.
WHEREAS, certain existing stockholders of the Company desire to
contribute Shares to Parent immediately prior to the Effective Time in exchange
for shares of capital stock of Parent.
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe certain conditions to the Merger, as set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein,
intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For purposes of this Agreement, the following
terms have the respective meanings set forth below:
"Acceptable Confidentiality Agreement" has the meaning set forth in
Section 7.4(f)(i).
[Agreement and Plan of Merger Signature Page]
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"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning set forth in the Preamble.
"Business Day" means any day other than the days on which banks in New
York, New York are not required or authorized to close.
"Certificate" has the meaning set forth in Section 3.1(c).
"Certificate of Merger" has the meaning set forth in Section 2.3.
"CIA" has the meaning set forth in Section 4.14(b).
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in Section 3.1(a).
"Company" has the meaning set forth in the Preamble.
"Company Acquisition Proposal" has the meaning set forth in Section
7.4(f)(ii).
"Company Benefit Plans" has the meaning set forth in Section 4.13(a).
"Company Disclosure Letter" has the meaning set forth in the preamble
to Article IV.
"Company Employees" means any current, former or retired employee,
officer, consultant, independent contractor or director of the Company or any of
its Subsidiaries.
"Company Joint Venture" means the Persons or other joint venture
arrangements set forth in Section 4.6(b) of the Company Disclosure Letter.
"Company Options" means outstanding options to acquire Shares from the
Company granted under the Company Stock Plans.
"Company Proxy Statement" has the meaning set forth in Section 4.9.
"Company SEC Reports" has the meaning set forth in Section 4.7(a).
"Company Securities" has the meaning set forth in Section 4.5(b).
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"Company Stockholder Meeting" has the meaning set forth in Section
7.1(a).
"Company Stock Plans" means the Company's 2005 Equity Incentive Plan,
the Columbia/HCA Healthcare Corporation Outside Directors Stock and Incentive
Compensation Plan, as amended, the Amended and Restated Columbia/HCA Healthcare
Corporation 1992 Stock and Incentive Plan, the Colombia/HCA Healthcare
Corporation 2000 Equity Incentive Plan, the HCA-Hospital Corporation of America
Nonqualified Initial Option Plan and the Value Health, Inc. 1991 Stock Plan, as
amended.
"Compensation" has the meaning set forth in Section 7.9(a).
"Confidentiality Agreements" means the Confidentiality Agreement with
each of (i) Xxxx Capital Partners, LLC, dated April 22, 2006, as supplemented by
the addendum dated May 26, 2006, (ii) Kohlberg Kravis Xxxxxxx & Co. L.P., dated
April 23, 2006, as supplemented by the addendum dated May 26, 2006 and (iii)
Xxxxxxx Xxxxx Global Partners, Inc., dated April 22, 2006, as supplemented by
the addendum dated May 26, 2006.
"Contract" has the meaning set forth in Section 4.4.
"Current Employee" has the meaning set forth in Section 7.9(a).
"Current Policy" has the meaning set forth in Section 7.5(b).
"Damages" has the meaning set forth in Section 7.5(a).
"Debt Financing" has the meaning set forth in Section 5.7.
"Debt Financing Commitments" has the meaning set forth in Section 5.7.
"Debt Tender Offers" has the meaning set forth in Section 7.11.
"DGCL" has the meaning set forth in Section 2.1.
"Dissenting Shares" has the meaning set forth in Section 3.1(d).
"DOJ" has the meaning set forth in Section 7.2(b).
"Effective Time" has the meaning set forth in Section 2.3.
"Employee Benefit Plan" has the meaning set forth in Section 3(3) of
ERISA.
"End Date" has the meaning set forth in Section 9.1(b)(i).
"Equity Financing" has the meaning set forth in Section 5.7.
"Equity Financing Commitments" has the meaning set forth in Section
5.7.
"Equity Rollover Commitment" has the meaning set forth in Section 5.8.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Excluded Party" has the meaning set forth in Section 7.4(b).
"Financing" has the meaning set forth in Section 5.7.
"Financing Commitments" has the meaning set forth in Section 5.7.
"Foundation Options" means outstanding options to purchase Shares from
the Company granted pursuant to Stock Pledge Agreements, dated as of October 9,
1997 and February 25, 1999, between Columbia/HCA Healthcare Inc. and
Columbia/HCA Healthcare Foundation, Inc.
"FTC" has the meaning set forth in Section 7.2(b).
"GAAP" means United States generally accepted accounting principles.
"Go Shop Termination Fee" means $300,000,000.
"Governmental Authority" means any nation or government or any agency,
public or regulatory authority, instrumentality, department, commission, court,
arbitrator, ministry, tribunal or board of any nation or government or political
subdivision thereof, in each case, whether foreign or domestic and whether
national, supranational, federal, provincial, state, regional, local or
municipal.
"Guarantees" has the meaning set forth in Section 5.9.
"Guarantors" has the meaning set forth in Section 5.9.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"HTI Warrant" means the warrant to purchase 16,910 Shares for an
exercise price of $2.29 per Share exercisable until September 17, 2007.
"Indenture" means the Indenture, dated as of December 15, 1993, by and
between Columbia Healthcare Corporation and The First National Bank of Chicago,
as supplemented by (i) the First Supplemental Indenture dated as of May 25,
2000, by and between HCA -- The Healthcare Company (successor-in-interest to
Columbia Healthcare Corporation) and Bank One Trust Company, N.A.
(successor-in-interest to The First National Bank of Chicago), (ii) the Second
Supplemental Indenture, dated as of July 1, 2001, by and between HCA Inc.
(successor-in-interest to HCA -- The Healthcare Company) and Bank One Trust
Company, N.A. and (iii) the Third Supplemental Indenture, dated as of December
5, 2001, by and between HCA Inc. and The Bank of New York (successor trustee to
Bank One Trust Company, N.A).
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"Insurance Amount" has the meaning set forth in Section 7.5(b).
"Intercompany Debt" means any loan, advance or other obligation solely
among the Company and/or any of its wholly-owned Subsidiaries.
"Knowledge" means the actual knowledge of the Persons set forth in
Section 1.1 of the Company Disclosure Letter.
"Law" means applicable, statutes, common laws, rules, ordinances,
regulations, codes, orders, judgments, injunctions, writs, decrees, governmental
guidelines or interpretations having the force of law or bylaws, in each case,
of a Governmental Authority.
"Liens" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Marketing Period" has the meaning set forth in Section 7.10(b).
"Material Adverse Effect on the Company" means any event, state of
facts, circumstance, development, change, effect or occurrence (an "Effect")
that is materially adverse to the business, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole, other than (i)
any Effect resulting from (A) changes in general economic or political
conditions or the securities, credit or financial markets in general, (B)
general changes or developments in the industries in which the Company and its
Subsidiaries operate, including general changes in law or regulation across such
industries, (C) the announcement of this Agreement or the pendency or
consummation of the Merger, including any labor union activities related
thereto, (D) the identity of Parent or any of its Affiliates as the acquiror of
the Company, (E) compliance with the terms of, or the taking of any action
required by, this Agreement or consented to by Parent, (F) any acts of terrorism
or war (other than any of the foregoing that causes any damage or destruction to
or renders unusable any facility or property of the Company or any of its
Subsidiaries), (G) changes in generally accepted accounting principles or the
interpretation thereof, or (H) any weather related event, except, in the case of
the foregoing clauses (A) and (B), to the extent such changes or developments
referred to therein would reasonably be expected to have a materially
disproportionate impact on the Company and its Subsidiaries, taken as a whole,
relative to other for profit participants in the industries and in the
geographic markets in which the Company conducts its businesses after taking
into account the size of the Company relative to such other for profit
participants, or (ii) any failure to meet internal or published projections,
forecasts or revenue or earning predictions for any period (provided that the
underlying causes of such failure shall be considered in determining whether
there is a Material Adverse Effect on the Company).
"Material Subsidiaries" means the Subsidiaries of the Company set forth
in Section 4.1 of the Company Disclosure Letter.
"Merger" has the meaning set forth in the Recitals.
"Merger Consideration" has the meaning set forth in Section 3.1(c).
"Merger Shares" has the meaning set forth in Section 3.1(c).
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"Merger Sub" has the meaning set forth in the Preamble.
"New Financing Commitments" has the meaning set forth in Section 5.7.
"Notice Period" has the meaning set forth in Section 7.4(d)(ii).
"Nonvoting Common Stock" has the meaning set forth in Section 3.1(a).
"No-Shop Period Start Date" has the meaning set forth in Section
7.4(a).
"OIG" has the meaning set forth in Section 4.14(b).
"Other Antitrust Laws" means any Law, other than the HSR Act, enacted
by any Governmental Authority relating to antitrust matters or regulating
competition.
"Parent" has the meaning set forth in the Preamble.
"Parent Expenses" has the meaning set forth in Section 9.2(c).
"Paying Agent" has the meaning set forth in Section 3.2(a).
"Permits" means any licenses, franchises, permits, certificates,
consents, approvals or other similar authorizations of, from or by a
Governmental Authority possessed by or granted to or necessary for the ownership
of the material assets or conduct of the business of, the Company or its
Subsidiaries.
"Permitted Liens" means (i) Liens for Taxes, assessments and
governmental charges or levies not yet due and payable or that are being
contested in good faith and by appropriate proceedings; (ii) mechanics,
carriers', workmen's, repairmen's, materialmen's or other Liens or security
interests that secure a liquidated amount that are being contested in good faith
and by appropriate proceedings; or (iii) leases, subleases and licenses (other
than capital leases and leases underlying sale and leaseback transactions); (iv)
Liens imposed by applicable Law; (v) pledges or deposits to secure obligations
under workers' compensation Laws or similar legislation or to secure public or
statutory obligations; (vi) pledges and deposits to secure the performance of
bids, trade contracts, leases, surety and appeal bonds, performance bonds and
other obligations of a similar nature, in each case in the ordinary course of
business; (vii) easements, covenants and rights of way (unrecorded and of
record) and other similar restrictions of record, and zoning, building and other
similar restrictions, in each case that do not adversely affect in any material
respect the current use of the applicable property owned, leased, used or held
for use by the Company or any of its Subsidiaries; (viii) Liens the existence of
which are specifically disclosed in the notes to the consolidated financial
statements of the Company included in any Company SEC Report filed prior to the
date of this Agreement; and (x) any other Liens that do not secure a liquidated
amount, that have been incurred or suffered in the ordinary course of business
and that would not, individually or in the aggregate, have a material effect on
the Company or the ability of Parent to obtain the Debt Financing.
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"Person" means any individual, corporation, company, limited liability
company, partnership, association, trust, joint venture or any other entity or
organization, including any government or political subdivision or any agency or
instrumentality thereof.
"Preferred Stock" has the meaning set forth in Section 4.5(a).
"Proceeding" has the meaning set forth in Section 4.11.
"Recommendation" has the meaning set forth in Section 7.1(a).
"Recommendation Withdrawal" has the meaning set forth in Section
7.1(a).
"Representatives" has the meaning set forth in Section 7.4(a).
"Required Financial Information" has the meaning set forth in Section
7.10(a).
"Requisite Stockholder Vote" has the meaning set forth in Section
4.2(a).
"Restricted Share" has the meaning set forth in Section 3.3(b).
"RSU" has the meaning set forth in Section 3.3(c).
"Schedule 13E-3" has the meaning set forth in Section 4.9.
"SERP" has the meaning set forth in Section 7.9(c).
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shares" has the meaning set forth in Section 3.1(a).
"Short-Dated Notes" has the meaning set forth in Section 7.11.
"Special Committee" means a committee of the Company's Board of
Directors, the members of which are not affiliated with Parent or Merger Sub and
are not members of the Company's management, formed for the purpose of, among
other things, evaluating, and making a recommendation to the full Board of
Directors of the Company with respect to, this Agreement and the Merger.
"Stock Purchase" has the meaning set forth in Section 3.3(d).
"Subsidiary", with respect to any Person, means any other Person of
which the first Person owns, directly or indirectly, securities or other
ownership interests having voting power to elect a majority of the board of
directors or other persons performing similar functions (or, if there are no
such voting interests, more than 50% of the equity interests of the second
Person). With respect to the Company, Subsidiary shall not include any Company
Joint Venture.
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"Superior Proposal" has the meaning set forth in Section 7.4(f)(iii).
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Surviving Corporation Plan" has the meaning set forth in Section
7.9(b).
"Takeover Statute" has the meaning set forth in Section 4.18.
"Tax" means (i) all federal, state, local, foreign and other taxes
(including withholding taxes), customs, duties, imposts and other similar
governmental charges of any kind or nature whatsoever, together with any
interest and any penalties, additions or additional amounts with respect
thereto, (ii) any liability for payment of amounts described in clause (i)
whether as a result of transferee liability, joint and several liability for
being a member of an affiliated, consolidated, combined, unitary or other group
for any period, or otherwise by operation of law, and (iii) any liability for
the payment of amounts described in clause (i) or (ii) as a result of any tax
sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to pay or indemnify any other Person.
"Tax Return" means any return, declaration, report, statement,
information statement or other document filed or required to be filed with
respect to Taxes, including any claims for refunds of Taxes, any information
returns and any amendments or supplements of any of the foregoing.
"Termination Fee" means $500,000,000, except (i) in the event that this
Agreement is terminated by the Company pursuant to Section 9.1(c)(ii) in order
to enter into a definitive agreement with respect to a Company Acquisition
Proposal with an Excluded Party, or (ii) in the event that this Agreement is
terminated by Parent or Merger Sub pursuant to Section 9.1(d)(ii) in a
circumstance in which the event giving rise to the right of termination is based
on the submission to the Company of a Company Acquisition Proposal by an
Excluded Party, in which cases the Termination Fee shall mean the Go Shop
Termination Fee.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation",
unless the context expressly provides otherwise. All references herein to
Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be
deemed references to Sections, paragraphs, subparagraphs or clauses of, or
Exhibits or Schedules to this Agreement, unless the context requires otherwise.
Unless otherwise expressly defined, terms defined in this Agreement have the
same meanings when used in any Exhibit or Schedule hereto, including the Company
Disclosure Letter. Unless otherwise specified, the words "this Agreement",
"herein", "hereof", "hereto" and "hereunder" and other words of similar import
refer to this Agreement as a whole (including the Schedules, Exhibits and the
Company Disclosure Letter) and not to any particular provision of this
Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to
the extent" shall mean the degree to which a subject or other thing extends, and
such phrase shall not mean simply "if". Any Contract, instrument or Law defined
or referred to herein or in any Contract or instrument that is referred to
herein means such Contract, instrument or
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Law as from time to time amended, modified or supplemented, including (in the
case of Contracts or instruments) by waiver or consent and (in the case of Laws)
by succession of comparable successor Laws and references to all attachments
thereto and instruments incorporated therein. References to a Person are also to
its permitted successors and assigns.
ARTICLE II
THE MERGER
Section 2.1. The Merger. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the General Corporation Law of
the State of Delaware (the "DGCL"), at the Effective Time, Merger Sub will merge
with and into the Company (the "Merger"), the separate corporate existence of
Merger Sub will cease and the Company will continue its corporate existence
under Delaware law as the surviving corporation in the Merger (the "Surviving
Corporation").
Section 2.2. Closing. Unless otherwise mutually agreed in writing by
the Company and Merger Sub, the closing of the Merger (the "Closing") will take
place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. on the third Business Day after the
satisfaction or waiver of the conditions set forth in Article VIII (excluding
conditions that, by their terms, cannot be satisfied until the Closing but
subject to the satisfaction or waiver of such conditions at the Closing);
provided, however, that if the Marketing Period has not ended at the time of the
satisfaction or waiver of the conditions set forth in Article VIII (excluding
conditions that, by their terms, cannot be satisfied until the Closing but
subject to the satisfaction or waiver of such conditions at the Closing), the
Closing shall occur on the date following the satisfaction or waiver of such
conditions that is the earliest to occur of (a) a date during the Marketing
Period to be specified by Merger Sub on no less than three Business Days' notice
to the Company, (b) the final day of the Marketing Period, and (c) the End Date.
The date on which the Closing actually occurs is hereinafter referred to as the
"Closing Date".
Section 2.3. Effective Time. Subject to the provisions of this
Agreement, at the Closing, the Company will cause a certificate of merger (the
"Certificate of Merger") to be executed, acknowledged and filed with the
Secretary of State of the State of Delaware in accordance with Section 251 of
the DGCL. The Merger will become effective at such time as the Certificate of
Merger has been duly filed with the Secretary of State of the State of Delaware
or at such later date or time as may be agreed by the Company and Merger Sub in
writing and specified in the Certificate of Merger in accordance with the DGCL
(the effective time of the Merger being hereinafter referred to as the
"Effective Time").
Section 2.4. Effects of the Merger. The Merger shall have the effects
set forth in this Agreement and the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, from and after
the Effective Time, all property, rights, privileges, immunities, powers,
franchises, licenses and authority of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities, obligations, restrictions
and duties of each of the Company and Merger Sub shall become the debts,
liabilities, obligations, restrictions and duties of the Surviving Corporation.
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Section 2.5. Organizational Documents. At the Effective Time, (a) the
Certificate of Incorporation of the Surviving Corporation shall be amended to
read in its entirety as the Certificate of Incorporation of Merger Sub read
immediately prior to the Effective Time, except that the name of the Surviving
Corporation shall be HCA Inc. and the provision in the Certificate of
Incorporation of Merger Sub naming its incorporator shall be omitted and (b) the
bylaws of the Surviving Corporation shall be amended so as to read in their
entirety as the bylaws of Merger Sub as in effect immediately prior to the
Effective Time, until thereafter amended in accordance with applicable law,
except the references to Merger Sub's name shall be replaced by references to
HCA Inc.
Section 2.6. Directors and Officers of Surviving Corporation. The
directors of Merger Sub and the officers of the Company (other than those who
Merger Sub determines shall not remain as officers of the Surviving
Corporation), in each case, as of the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation or bylaws of the Surviving Corporation.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
Section 3.1. Conversion of Securities. At the Effective Time, pursuant
to this Agreement and by virtue of the Merger and without any action on the part
of the Company, Merger Sub or the holders of the Shares:
(a) Each share of Common Stock, par value $.01 per share, of
the Company (the "Common Stock") and each share of Nonvoting Common
Stock, par value $.01 per share, of the Company (the "Nonvoting Common
Stock" and, together with the shares of Common Stock, the "Shares")
held by the Company as treasury stock or otherwise owned by Parent
immediately prior to the Effective Time (including any Shares acquired
by Parent immediately prior to the Effective Time pursuant to the
Equity Rollover Commitment or other agreements with holders of Shares
(including Restricted Shares)) shall be canceled and retired and shall
cease to exist, and no payment or distribution shall be made or
delivered with respect thereto. Each Share owned by any wholly-owned
Subsidiary of Parent or any wholly-owned Subsidiary of the Company
shall remain outstanding after the Effective Time.
(b) Each share of common stock, par value $.01 per share, of
Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and become one newly issued, fully paid
and non-assessable share of common stock of the Surviving Corporation.
(c) Each Share (including any Restricted Shares) issued and
outstanding immediately prior to the Effective Time (other than Shares
to be canceled or to remain outstanding pursuant to Section 3.1(a) and
Dissenting Shares), automatically shall be canceled and converted into
the right to receive $51.00 in cash, without interest (the
11
"Merger Consideration"), payable to the holder thereof upon surrender
of the stock certificate formerly representing such Share (a
"Certificate") in the manner provided in Section 3.2. Such Shares,
other than those canceled or that remain outstanding pursuant to
Section 3.1(a) and Dissenting Shares, sometimes are referred to herein
as the "Merger Shares."
(d) Notwithstanding any provision of this Agreement to the
contrary, if required by the DGCL (but only to the extent required
thereby), Shares that are issued and outstanding immediately prior to
the Effective Time (other than Shares to be canceled pursuant to
Section 3.1(a)) and that are held by holders of such Shares who have
not voted in favor of the adoption of this Agreement or consented
thereto in writing and who have properly exercised appraisal rights
with respect thereto in accordance with, and who have complied with,
Section 262 of the DGCL (the "Dissenting Shares") will not be
convertible into the right to receive the Merger Consideration, and
holders of such Dissenting Shares will be entitled to receive payment
of the fair value of such Dissenting Shares in accordance with the
provisions of such Section 262 unless and until any such holder fails
to perfect or effectively withdraws or loses its rights to appraisal
and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right,
such Dissenting Shares will thereupon be treated as if they had been
converted into and have become exchangeable for, at the Effective Time,
the right to receive the Merger Consideration, without any interest
thereon, and the Surviving Corporation shall remain liable for payment
of the Merger Consideration for such Shares. At the Effective Time, any
holder of Dissenting Shares shall cease to have any rights with respect
thereto, except the rights provided in Section 262 of the DGCL and as
provided in the previous sentence. The Company will give Parent (i)
notice of any demands received by the Company for appraisals of Shares
and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to such notices and demands. The Company
shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or settle any such
demands.
(e) If between the date of this Agreement and the Effective
Time the number of outstanding Shares is changed into a different
number of shares or a different class (other than the conversion of any
shares of Nonvoting Common Stock to shares of Common Stock), by reason
of any stock dividend, subdivision, reclassification, recapitalization,
split-up, combination, exchange of shares or the like, other than
pursuant to the Merger, the amount of Merger Consideration payable per
Share shall be correspondingly adjusted.
(f) For the avoidance of doubt, the parties acknowledge and
agree that the contribution of Shares (including Restricted Shares) to
Parent pursuant to the Equity Rollover Commitment or other agreements
with holders of Shares (including Restricted Shares) shall be deemed to
occur immediately prior to the Effective Time and prior to any other
above-described event.
Section 3.2. Payment of Cash for Merger Shares. (a) Prior to the
Closing Date, the Company shall (i) designate a bank or trust company that is
reasonably satisfactory to Parent (the "Paying Agent") and (ii) enter into a
paying agent agreement, in form and substance
12
reasonably satisfactory to Parent, with such Paying Agent, to serve as the
Paying Agent for the Merger Consideration and payments in respect of the Company
Options and RSUs, unless another agent is designated as provided in Section
3.3(a). Immediately following the Effective Time, the Surviving Corporation will
deposit, or Parent shall cause the Surviving Corporation to deposit, with the
Paying Agent cash in the aggregate amount sufficient to pay the Merger
Consideration in respect of all Merger Shares outstanding immediately prior to
the Effective Time plus any cash necessary to pay for Company Options and RSUs
outstanding immediately prior to the Effective Time pursuant to Section 3.3(a).
Pending distribution of the cash deposited with the Paying Agent, such cash
shall be held in trust for the benefit of the holders of Merger Shares, RSUs and
Company Options outstanding immediately prior to the Effective Time and shall
not be used for any other purposes; provided, however, that the Surviving
Corporation may direct the Paying Agent to invest such cash in (i) obligations
of or guaranteed by the United States of America or any agency or
instrumentality thereof, (ii) money market accounts, certificates of deposit,
bank repurchase agreement or banker's acceptances of, or demand deposits with,
commercial banks having a combined capital and surplus of at least
$1,000,000,000 (based on the most recent financial statements of such bank which
are publicly available), or (iii) commercial paper obligations rated P-1 or A-1
or better by Standard & Poor's Corporation or Xxxxx'x Investor Services, Inc.
Any profit or loss resulting from, or interest and other income produced by,
such investments shall be for the account of the Surviving Corporation.
(b) As promptly as practicable after the Effective Time, the
Surviving Corporation shall send, or cause the Paying Agent to send, to
each record holder of Merger Shares entitled to receive the Merger
Consideration a letter of transmittal and instructions for exchanging
their Merger Shares for the Merger Consideration payable therefor. The
letter of transmittal will be in customary form and will specify that
delivery of Certificates (or effective affidavits of loss in lieu
thereof) will be effected, and risk of loss and title will pass, only
upon delivery of the Certificates (or effective affidavits of loss in
lieu thereof) to the Paying Agent. Upon surrender of Certificate or
Certificates (or effective affidavits of loss in lieu thereof) to the
Paying Agent together with a properly completed and duly executed
letter of transmittal and any other documentation that the Paying Agent
may reasonably require, the record holder thereof shall be entitled to
receive the Merger Consideration payable in exchange therefor, less any
amounts required to be withheld for Tax. Until so surrendered and
exchanged, each such Certificate shall, after the Effective Time, be
deemed to represent only the right to receive the Merger Consideration,
and until such surrender and exchange, no cash shall be paid to the
holder of such outstanding Certificate in respect thereof.
(c) If payment is to be made to a Person other than the
registered holder of the Merger Shares formerly represented by the
Certificate or Certificates surrendered in exchange therefor, it shall
be a condition to such payment that the Certificate or Certificates so
surrendered shall be properly endorsed or otherwise be in proper form
for transfer and that the Person requesting such payment shall pay to
the Paying Agent any applicable stock transfer taxes required as a
result of such payment to a Person other than the registered holder of
such Merger Shares or establish to the reasonable satisfaction of the
Paying Agent that such stock transfer taxes have been paid or are not
payable.
13
(d) After the Effective Time, there shall be no further
transfers on the stock transfer books of the Company of the Shares that
were outstanding immediately prior to the Effective Time other than to
settle transfers of Shares that occurred prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent, such shares shall be
canceled and exchanged for the consideration provided for, and in
accordance with the procedures set forth, in this Article III.
(e) If any cash deposited with the Paying Agent remains
unclaimed twelve months after the Effective Time, such cash shall be
returned to the Surviving Corporation upon demand, and any holder who
has not surrendered such holder's Certificates for the Merger
Consideration prior to that time shall thereafter look only to the
Surviving Corporation for payment of the Merger Consideration.
Notwithstanding the foregoing, none of Merger Sub, the Company, the
Surviving Corporation or the Paying Agent shall be liable to any holder
of Certificates for any amount paid to a public official pursuant to
any applicable unclaimed property laws. Any amounts remaining unclaimed
by holders of Certificates as of a date immediately prior to such time
that such amounts would otherwise escheat to or become property of any
Governmental Authority shall, to the extent permitted by applicable
Law, become the property of the Surviving Corporation on such date,
free and clear of any claims or interest of any Person previously
entitled thereto.
(f) No dividends or other distributions with respect to
capital stock of the Surviving Corporation with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate, including Dissenting Shares.
(g) From and after the Effective Time, the holders of Shares
(other than Dissenting Shares) outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such
Shares, other than the right to receive the Merger Consideration as
provided in this Agreement.
(h) In the event that any Certificate has been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed, in addition
to the posting by such holder of any bond in such reasonable amount as
the Surviving Corporation or the Paying Agent may direct as indemnity
against any claim that may be made against the Surviving Corporation
with respect to such Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the proper
amount of the Merger Consideration in respect thereof entitled to be
received pursuant to this Agreement.
(i) Parent, the Surviving Corporation and the Paying Agent
shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable hereunder and any amounts to be paid hereunder in
respect of Company Options or RSUs any amounts required to be deducted
and withheld under any applicable Tax Law. To the extent any amounts
are so withheld, such withheld amounts shall be timely paid to the
applicable Tax authority and shall be treated for all purposes as
having been paid to the holder from whose Merger Consideration (or
amounts payable hereunder with respect to Company Options or RSUs) the
amounts were so deducted and withheld.
14
Section 3.3. Treatment of Options and Other Awards. (a) As of the
Effective Time, except as otherwise agreed by Parent and a holder of Company
Options with respect to such holder's Company Options, each Company Option will
be cancelled and extinguished, and the holder thereof will be entitled to
receive an amount in cash equal to the excess (if any) of (A) the product of (i)
the number of Shares subject to such Company Option and (ii) the Merger
Consideration over (B) the aggregate exercise price of such Company Option,
without interest and less any amounts required to be deducted and withheld under
any applicable Law. All payments with respect to canceled Company Options shall
be made by the Paying Agent (or such other agent reasonably acceptable to Parent
as the Company shall designate prior to the Effective Time) as promptly as
reasonably practicable after the Effective Time from funds deposited by or at
the direction of the Surviving Corporation to pay such amounts in accordance
with Section 3.2(a).
(b) As of the Effective Time, except as otherwise agreed by
Parent and a holder of Restricted Shares with respect to such holder's
Restricted Shares, each Share outstanding immediately prior to the
Effective Time subject to vesting or other lapse restrictions pursuant
to any Company Stock Plan or any applicable restricted stock award
agreement (each a "Restricted Share") which is outstanding immediately
prior to the Effective Time shall vest and become free of such
restrictions as of the Effective Time and shall, as of the Effective
Time, be canceled and converted into the right to receive the Merger
Consideration in accordance with Section 3.1(c).
(c) The Company shall use reasonable best efforts to ensure
that except as otherwise agreed by Parent and a holder of RSUs with
respect to such holder's RSUs, (i) immediately prior to the Effective
Time, each award of a right under any Company Stock Plan entitling the
holder thereof to Restricted Shares, shares of Common Stock or cash
equal to or based on the value of Common Stock (collectively, "RSUs")
which, in each case, is outstanding as of the Effective Time, shall
vest and become free of any lapse restriction (without regard to
whether the RSUs are then vested or the applicable restrictions have
lapsed) and, as of the Effective Time be canceled, and (ii) at the
Effective Time, the holder thereof shall be entitled to receive an
amount in cash equal to the (1) product of (A) the number of shares
previously subject to such RSU and (B) the Merger Consideration, and
the (2) the value of any deemed dividend equivalents accrued but unpaid
with respect to such RSUs, less any amounts required to be withheld
under any applicable Law. All payments with respect to canceled RSUs
shall be made by the Paying Agent (or such other agent reasonably
acceptable to Parent as the Company shall designate prior to the
Effective Time) as promptly as reasonably practicable after the
Effective Time from funds deposited by or at the direction of the
Surviving Corporation to pay such amounts in accordance with Section
3.2(a).
(d) At the Effective Time, except as otherwise agreed by
Parent and a participant, all amounts withheld by the Company on behalf
of the participants in the HCA Employee Stock Purchase Plan and the HCA
Inc. Amended and Restated Management Stock Purchase Plan (the "Stock
Purchase Plans", and such participants, the "Participants")) from the
beginning of the applicable existing salary deferral periods through
the Effective Time will be deemed to have been used to purchase Common
Stock pursuant to the terms of the Stock Purchase Plans, using the
Effective Time as the last date
15
of the applicable offering period under the Stock Purchase Plans (the
"Deemed Purchase") and each such share of Common Stock will be deemed
to have been cancelled and converted into the right to receive the
Merger Consideration, such that, as of the Effective Time, on a net
basis, each Participant shall be entitled to receive, without interest
and less any amounts required to be deducted and withheld under any
applicable Law, (i) refund by the Company of all deferrals made to the
Stock Purchase Plans by the Participant during the applicable existing
salary deferral periods and (ii) an amount in cash equal to the excess
(if any) of (A) the product of (1) the number of Shares that the
Participant is deemed to have acquired pursuant to the terms of the
applicable Stock Purchase Plan pursuant to the applicable Deemed
Purchase and (2) the Merger Consideration, over (B) the aggregate
amount of the Participant's purchase price deemed to have been paid in
the Deemed Purchase (such cash amount described in (ii) being the "Net
SPP Payment"). All Net SPP Payments shall be paid by the Paying Agent
(or such other agent reasonably acceptable to Parent as the Company
shall designate prior to the Effective Time) as promptly as reasonably
practicable after the Effective Time from funds deposited by or at the
direction of the Surviving Corporation to pay such amounts in
accordance with Section 3.2(a). However, in connection with the
foregoing, if and to the extent permitted by the applicable Stock
Purchase Plan, on or after the date of this Agreement, in no event (i)
shall any person who is not currently participating in any Stock
Purchase Plan be permitted to begin participating in any Stock Purchase
Plan, and (ii) shall any person who is currently participating in any
Stock Purchase Plan be permitted to increase the amount of salary that
may otherwise be deferred and deemed used to purchase shares of Common
Stock under any Stock Purchase Plan from that level of salary deferral
amount in effect as of the date of this Agreement; and provided,
further, that in no event may any new salary deferral period commence
after the date hereof and prior to the Effective Time.
(e) Prior to the Effective Time, the Company will adopt such
resolutions and will take such other actions as may be reasonably
required to effectuate the actions contemplated by this Section 3.3,
without paying any consideration or incurring any debts or obligations
on behalf of the Company or the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections or subsections of the
disclosure letter delivered to Parent and Merger Sub by the Company concurrently
with entering into this Agreement (the "Company Disclosure Letter") or as may be
disclosed in reasonable detail in the Company SEC Reports filed prior to the
date of this Agreement, the Company hereby represents and warrants to Merger Sub
that:
Section 4.1. Corporate Existence and Power. Each of the Company and
each Material Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction (with respect to jurisdictions that
recognize the concept of good standing), except in the case of the Material
Subsidiaries, where the failure to be so organized, existing and in good
standing has not had, and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company. Each of the
Company, each Material Subsidiary and, to the Knowledge of the Company, each
Company Joint Venture has all
16
corporate or similar powers and authority required to own, lease and operate its
respective properties and to carry on its business as now conducted, except in
the case of the Material Subsidiaries and the Company Joint Ventures, where the
failure to have such power and authority has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company. Each of the Company and each Material Subsidiary is duly
licensed or qualified to do business in each jurisdiction in which the nature of
the business conducted by it or the character or location of the properties and
assets owned or leased by it makes such qualification necessary, except where
the failure to be so licensed or qualified has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company. Neither the Company nor any Material Subsidiary nor, to the
Company's knowledge, any Company Joint Venture, is in violation of its
organizational or governing documents in any material respect.
Section 4.2. Corporate Authorization. (a) The Company has the corporate
power and authority to execute and deliver this Agreement and, subject to the
adoption of this Agreement by the affirmative vote of the holders of a majority
of the outstanding shares of Common Stock (the "Requisite Stockholder Vote"), to
consummate the Merger and the other transactions contemplated hereby and to
perform each of its obligations hereunder. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Merger and the other transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the Company. Except for the
adoption of this Agreement by the Requisite Stockholder Vote, no other corporate
proceedings on the part of the Company are necessary to approve this Agreement
or to consummate the Merger or the other transactions contemplated hereby. The
Board of Directors of the Company has taken all actions necessary to ensure that
the supermajority voting provisions of Article Fourteenth of the Company's
Restated Certificate of Incorporation are not applicable to the Merger or the
adoption of the Merger Agreement by the stockholders of the Company. The Board
of Directors of the Company, acting upon the unanimous recommendation of the
Special Committee, at a duly held meeting has (i) determined that it is in the
best interests of the Company and its stockholders (other than holders of Shares
that are Affiliates of Parent or holders of Shares being contributed to Parent
in connection with the Merger), and declared it advisable, to enter into this
Agreement, (ii) approved the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including the Merger, and (iii) resolved to recommend that the stockholders of
the Company approve the adoption of this Agreement and directed that such matter
be submitted for consideration of the stockholders of the Company at the Company
Stockholder Meeting.
(b) This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due and valid execution and
delivery of this Agreement by Parent and Merger Sub, constitutes a
legal, valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or
similar Laws affecting the enforcement of creditors' rights generally
and general equitable principles.
Section 4.3. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the
17
Company do not and will not require any consent, approval, authorization or
permit of, action by, filing with or notification to any Governmental Authority,
other than (i) the filing of the Certificate of Merger; (ii) compliance with the
applicable requirements of the HSR Act; (iii) the applicable requirements of the
Exchange Act including the filing of the Company Proxy Statement and the
Schedule 13E-3; (iv) compliance with the rules and regulations of the New York
Stock Exchange; (v) compliance with any applicable foreign or state securities
or blue sky laws; (vi) the consents and/or notices listed in Section 4.3 of the
Company Disclosure Letter; and (vii) any such consent, approval, authorization,
permit, action, filing or notification the failure of which to make or obtain
would not (A) individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or (B) reasonably be expected to prevent
or materially delay the consummation of the Merger.
Section 4.4. Non-Contravention. The execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
Merger and the other transactions contemplated hereby do not and will not (i)
contravene or conflict with the organizational or governing documents of (A) the
Company or (B) any of its Subsidiaries or, to the Company's Knowledge, Company
Joint Ventures; (ii) assuming compliance with the matters referenced in Section
4.3 and the receipt of the Requisite Stockholder Vote, contravene or conflict
with or constitute a violation of any provision of any Law binding upon or
applicable to the Company or any of its Subsidiaries or Company Joint Ventures
or any of their respective properties or assets; (iii) require the consent,
approval or authorization of, or notice to or filing with any third party with
respect to, result in any breach or violation of or constitute a default (or an
event which with notice or lapse of time or both would become a default) or
result in the loss of benefit under, or give rise to any right of termination,
cancellation, amendment or acceleration of any right or obligation of the
Company or any of its Subsidiaries, or result in the creation of any Lien on any
of the properties or assets of the Company or its Subsidiaries under any loan or
credit agreement, note, bond, mortgage, indenture, contract, agreement, lease,
license, permit or other instrument or obligation (each, a "Contract") to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or its or any of their respective properties or assets are
bound, except in the case of clauses (i)(B), (ii) and (iii) above, which would
not (A) individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or (B) reasonably be expected to prevent
or materially delay the consummation of the Merger.
Section 4.5. Capitalization. (a) The authorized share capital of the
Company consists of 1,600,000,000 shares of Common Stock, 50,000,000 shares of
Nonvoting Common Stock and 25,000,000 shares of Preferred Stock (the "Preferred
Stock"). As of June 30, 2006, there were (i) (A) 388,237,497 shares of Common
Stock issued and outstanding (including 6,158,958 Restricted Shares), (B)
21,000,000 shares of Nonvoting Common Stock issued and outstanding and (C) no
shares of Preferred Stock issued and outstanding, (ii) Company Options to
purchase an aggregate of 24,764,222 shares of Common Stock, with a weighted
average exercise price of $39.08 per share, issued and outstanding, (iii)
Foundation Options to purchase an aggregate of 3,104,006 shares of Common Stock,
with a weighted average exercise price of $20.34 per share, issued and
outstanding and (iv) 5,685,444 shares of Common Stock available for issuance
under the Stock Purchase Plans. All outstanding Shares are duly authorized,
validly issued, fully paid and non-assessable, and are not subject to and were
not issued in violation of
18
any preemptive or similar right, purchase option, call or right of first refusal
or similar right. No Subsidiaries of the Company own any Shares or any other
equity securities of the Company.
(b) Except as set forth in this Section 4.5, except with
respect to the Stock Purchase Plans and except for the 21,000,000
shares of Common Stock which have been reserved for issuance upon the
conversion of the shares of Nonvoting Common Stock, there have not been
reserved for issuance, and there are no outstanding (i) shares of
capital stock or other voting securities of the Company; (ii)
securities of the Company or any of its Subsidiaries convertible into
or exchangeable for shares of capital stock or voting securities of the
Company or its Subsidiaries, other than Company Options, Foundation
Options and HTI Warrants; (iii) Company Options or other rights or
options to acquire from the Company or its Subsidiaries, or obligations
of the Company or its Subsidiaries to issue, any shares of capital
stock, voting securities or securities convertible into or exchangeable
for shares of capital stock or voting securities of the Company or such
Subsidiary, as the case may be; or (iv) equity equivalent interests in
the ownership or earnings of the Company or its Subsidiaries or other
similar rights (the items in clauses (i) through (iv) collectively,
"Company Securities"). There are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire
any Company Securities. There are no preemptive rights of any kind
which obligate the Company or any of its Subsidiaries to issue or
deliver any Company Securities. There are no stockholder agreements,
voting trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party or by which it is bound
relating to the voting or registration of any shares of capital stock
of the Company or any of its Subsidiaries or preemptive rights with
respect thereto.
(c) Other than the issuance of Shares upon exercise of Company
Options, since June 30, 2006 to the date of this Agreement, the Company
has not declared or paid any dividend or distribution in respect of any
Company Securities, and neither the Company nor any of its Subsidiaries
has issued, sold, repurchased, redeemed or otherwise acquired any
Company Securities, and their respective Boards of Directors have not
authorized any of the foregoing.
(d) Neither the Company nor any of its Subsidiaries has
entered into any commitment, arrangement or agreement, or are otherwise
obligated, to contribute capital, loan money or otherwise provide funds
or make additional investments in any Company Joint Venture or any
other Person, other than Intercompany Debt and any such commitment,
arrangement or agreement in the ordinary course of business consistent
with past practice.
(e) No bonds, debentures, notes or other indebtedness having
the right to vote on any matters on which stockholders of the Company
may vote are outstanding.
Section 4.6. Company Subsidiaries and Joint Ventures. (a) Section
4.6(a) of the Company Disclosure Letter sets forth a list of all Unrestricted
Subsidiaries (as such term is defined in the Indenture).
19
(b) Section 4.6(b) of the Company Disclosure Letter sets forth
a list of all Company Joint Ventures. All equity interests of any
Subsidiary of the Company and the Company Joint Ventures held by the
Company or any other Subsidiary of the Company are validly issued,
fully paid and non-assessable and were not issued in violation of any
preemptive or similar rights, purchase option, call, or right of first
refusal or similar rights. All such equity interests are free and clear
of any Liens or any other limitations or restrictions on such equity
interests (including any limitation or restriction on the right to
vote, pledge or sell or otherwise dispose of such equity interests)
other than Permitted Liens.
Section 4.7. Reports and Financial Statements. (a) The Company has
filed all forms, reports, statements, certifications and other documents
(including all exhibits, amendments and supplements thereto) required to be
filed by it with the SEC pursuant to the Exchange Act or other applicable United
States federal securities Laws since January 1, 2003 (all such forms, reports,
statements, certificates and other documents filed since January 1, 2003, with
any amendments thereto, collectively, the "Company SEC Reports"), each of which,
including any financial statements or schedules included therein, as finally
amended prior to the date of this Agreement, has complied as to form in all
material respects with the applicable requirements of the Securities Act and
Exchange Act as of the date filed with the SEC. None of the Company's
Subsidiaries is required to file periodic reports with the SEC. None of the
Company SEC Reports contained, when filed with the SEC and, if amended, as of
the date of such amendment, any untrue statement of a material fact or omitted
to state a material fact required to be stated or incorporated by reference
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements of the
Company and its Subsidiaries included (or incorporated by reference) in
the Company SEC Reports (including the related notes and schedules,
where applicable) fairly presents (subject, in the case of the
unaudited statements, to the absence of notes and normal year-end audit
adjustments as permitted by the rules related to Quarterly Reports on
Form 10-Q promulgated under the Exchange Act), in all material
respects, the results of the consolidated operations and changes in
stockholders' equity and cash flows and consolidated financial position
of the Company and its Subsidiaries for the respective fiscal periods
or as of the respective dates therein set forth. Each of such
consolidated financial statements (including the related notes and
schedules, where applicable) complies in all material respects with
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto and each of such financial
statements (including the related notes and schedules, where
applicable) were prepared in accordance with GAAP consistently applied
during the periods involved, except in each case as indicated in such
statements or in the notes thereto or, in the case of unaudited
statements, as permitted by the rules related to Quarterly Reports on
Form 10-Q promulgated under the Exchange Act.
(c) Except as has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company, the management of the Company (i) has
implemented and maintains disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that material
20
information relating to the Company, including its consolidated
Subsidiaries, is made known to the chief executive officer and the
chief financial officer of the Company by others within those entities
and (ii) has disclosed, based on its most recent evaluation prior to
the date of this Agreement, to the Company's outside auditors and the
audit committee of the Board of Directors of the Company (x) any
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) which are reasonably likely to
adversely affect the Company's ability to record, process, summarize
and report financial information and (y) any fraud, known to the
Company, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls over financial reporting.
Section 4.8. Undisclosed Liabilities. Except (i) for those liabilities
that are reflected or reserved against on the consolidated balance sheet of the
Company (including the notes thereto) included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2005, (ii) for liabilities incurred in
the ordinary course of business consistent with past practice since December 31,
2005, (iii) for liabilities that have been discharged or paid in full prior to
the date of this Agreement in the ordinary course of business consistent with
past practice, (iv) for liabilities incurred in connection with the transactions
contemplated hereby, or (v) for liabilities that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company, neither the Company nor any of its Subsidiaries has incurred any
liability of any nature whatsoever (whether absolute, accrued or contingent or
otherwise and whether due or to become due).
Section 4.9. Disclosure Documents. The proxy statement (the "Company
Proxy Statement") and the Rule 13e-3 Transaction Statement on Schedule 13E-3
(the "Schedule 13E-3") relating to the Merger and the other transactions
contemplated hereby, to be filed by the Company with the SEC in connection with
seeking the adoption of this Agreement by the stockholders of the Company will
not, at the time it is filed with the SEC, or, in the case of the Company Proxy
Statement, at the time it is first mailed to the stockholders of the Company or
at the time of the Company Stockholder Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company will cause
the Company Proxy Statement, the Schedule 13E-3 and all related SEC filings to
comply as to form in all material respects with the requirements of the Exchange
Act applicable thereto as of the date of such filing. No representation is made
by the Company with respect to statements made in the Company Proxy Statement or
the Schedule 13E-3 based on information supplied, or required to be supplied, by
Parent, Merger Sub or any of their Affiliates specifically for inclusion or
incorporation by reference therein.
Section 4.10. Absence of Certain Changes or Events. Since December 31,
2005, (i) no Effect has occurred which has had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company and (ii) to the date of this Agreement, the Company and its
Subsidiaries, and, to the Company's Knowledge, the Company Joint Ventures, have
carried on their respective businesses in all material respects in the ordinary
course of business.
21
Section 4.11. Litigation. Neither the Company, any of its Subsidiaries
nor, to the Company's Knowledge, any Company Joint Venture is a party to any,
and there are no pending or, to the Company's Knowledge, threatened, legal,
administrative, arbitral or other material proceedings, claims, actions or
governmental or regulatory investigations (a "Proceeding") of any nature against
the Company or any of its Subsidiaries or any Company Joint Ventures, except for
any Proceeding which has not had, or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Neither the Company, any of its Subsidiaries, to the Knowledge of the Company,
any Company Joint Venture nor any of their businesses or properties are subject
to or bound by any injunction, order, judgment, decree or regulatory restriction
of any Governmental Authority specifically imposed upon the Company, any of its
Subsidiaries, any Company Joint Venture or their respective properties or
assets, except for any injunction, order, judgment, decree or regulatory
restriction which has not had, or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Section 4.12. Taxes. The representations and warranties contained in
Section 4.7(b), Section 4.12 and Section 4.13 are (i) the only representations
and warranties being made by the Company with respect to Taxes related to the
Company, any of its Subsidiaries, or any Company Joint Venture or this Agreement
or its subject matter, and no other representation and warranty contained in any
other section of this Agreement shall apply to any such Tax matters and no other
representation or warranty, express or implied, is being made with respect
thereto, and (ii) limited to the Company's Knowledge to the extent such
representations and warranties relate to any Company Joint Venture:
(a) All Tax Returns required to be filed by or with respect to
the Company, any of its Subsidiaries, or any Company Joint Venture have
been properly prepared and timely filed, and all such Tax Returns
(including information provided therewith or with respect thereto) are
true, correct and complete, except for Tax Returns as to which the
failure to so file or be true, complete and correct would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company.
(b) The Company, its Subsidiaries and the Company Joint
Ventures have fully and timely paid all Taxes (whether or not shown to
be due on the Tax Returns referred to in Section 4.12(a)), except for
Taxes being contested in good faith and for which adequate reserves
have been established in accordance with GAAP and for Taxes as to which
the failure to pay would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on the Company, and
have made adequate provision in the applicable financial statements in
accordance with GAAP for any material Tax that is not yet due and
payable for all taxable periods, or portions thereof, ending on or
before the date of this Agreement.
(c) No audit or other proceeding by any Governmental Authority
is pending or threatened in writing with respect to any Taxes due from
or with respect to the Company or any of its Subsidiaries or any
Company Joint Venture, except for such audits and proceedings that
would not reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect on the Company.
22
(d) There are no Tax sharing agreements (or similar
agreements) under which the Company, any of its Subsidiaries or, to the
Company's Knowledge, any Company Joint Venture could be liable for the
Tax liability of an entity that is neither the Company nor any or its
Subsidiaries, nor, to the Company's Knowledge, any Company Joint
Venture, except for such agreements that would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect on the Company.
(e) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code in the two years prior to the
date of this Agreement.
(f) None of the Company or any of its Subsidiaries has entered
into a "listed transaction" that has given rise to a disclosure
obligation under Section 6011 of the Code and the Treasury Regulations
promulgated thereunder and that has not been disclosed in the relevant
Tax Return of the Company or relevant Subsidiary.
Section 4.13. ERISA. (a) With respect to each Employee Benefit Plan,
including multiemployer plans within the meaning of ERISA Section 3(37) and all
stock purchase, stock option, severance, employment, change-in-control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and
other material employee benefit plans, agreements, programs, policies or other
arrangements, whether or not subject to ERISA, whether formal or informal, under
which any Company Employee has any present or future right to benefits,
maintained or contributed to by the Company or any of its Subsidiaries or under
which the Company or any of its Subsidiaries has any present or future liability
(the "Company Benefit Plans"), individually and in the aggregate, no event has
occurred and, to the Knowledge of the Company, there exists no condition or set
of circumstances, in connection with which the Company or any of its
Subsidiaries could be subject to any liability that would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company under ERISA, the Code or any other applicable Law and no nonexempt
"prohibited transaction" (as such term is defined in Section 406 of ERISA and
Section 4975 of the Code) or "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA and Section 412 of the Code (whether or not
waived)) has occurred with respect to any Company Benefit Plan which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
(b) There has been no amendment to, announcement by the
Company or any of its Subsidiaries relating to, or change in employee
participation or coverage under, any Company Benefit Plan that would
increase materially the annual expense of maintaining such plan above
the level of the expense incurred therefor for the most recent fiscal
year. No Company Benefit Plan or Company Stock Plan exists that could
(i) result in the payment to any Company Employee of any money or other
property, (ii) accelerate or provide any other rights or benefits
(including funding of compensation or benefits through a trust or
otherwise) to any Company Employee, or (iii) limit or restrict the
ability of the Company or its Subsidiaries to merge, amend or terminate
any Company Benefit Plan, in each case, as a result of the execution of
this Agreement or otherwise related in any way to the transactions
contemplated by this Agreement; and no such payment would reasonably
23
be expected to constitute a material parachute payment within the
meaning of Code Section 280G.
(c) Schedule 4.13(c) of the Company Disclosure Letter sets
forth a list of all material Company Benefit Plans. The Company has
made available to Parent true and complete copies of all material
Company Benefit Plans.
(d) All Company Options have been granted in accordance with
the terms of the applicable Company Stock Plan and applicable Law
(including, without limitation, Section 409A of the Code), with an
exercise price at least equal to the fair market value of the
underlying Common Stock on the date of any such grant, except for such
failures, if any, to be so granted which would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect on the Company.
Section 4.14. Compliance With Laws. (a) The Company, each of its
Subsidiaries and, to the Knowledge of the Company, each of the Company Joint
Ventures is, and at all times since December 31, 2003 has been, in compliance
with all Laws applicable to the Company, its Subsidiaries, the Company Joint
Ventures and their respective businesses and activities, except for such
noncompliance that has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
(b) The Company is, and at all times since December 14, 2000
has been, in compliance in all material respects with the requirements
of the Corporate Integrity Agreement (the "CIA"), dated as of December
14, 2000, between the Company and the Office of Inspector General of
the United States Department of Health and Human Services (the "OIG").
(c) The Company has not received any written, or to the
Company's Knowledge, oral notice from the OIG that the Company is not
in compliance in all material respects with the terms of the CIA.
(d) The Company and each Subsidiary of the Company has and
maintains in full force and effect, and is in compliance with, all
Permits and all orders from Governmental Authorities necessary for the
Company and each Subsidiary to carry on their respective businesses as
currently conducted, except as has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company.
Section 4.15. Finders' Fees. No agent, broker, investment banker,
financial advisor or other firm or person except Credit Suisse Securities (USA)
LLC and Xxxxxx Xxxxxxx & Co, Incorporated is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement. The Company has disclosed to
Parent all material terms of the engagement of Credit Suisse Securities (USA)
LLC and Xxxxxx Xxxxxxx & Co., Incorporated, including the amount of such fees
and any right of first offer or other "tail" provisions.
Section 4.16. Opinion of Financial Advisors. Credit Suisse Securities
(USA) LLC and Xxxxxx Xxxxxxx & Co, Incorporated have each delivered to the
Special Committee, an
24
opinion to the effect that, as of the date of this Agreement, the consideration
to be received by holders of Shares (other than holders of Shares that are
Affiliates of Parent or holders of Shares being contributed to Parent in
connection with the Merger) in the Merger is fair, from a financial point of
view, to such holders.
Section 4.17. Affiliate Transactions. Except for this Agreement and the
Merger, there are no transactions, or series of related transactions,
agreements, arrangements or understandings, nor are there any currently proposed
transactions, or series of related transactions, between the Company or any of
its Subsidiaries, on the one hand, and the Company's Affiliates (other than
Company Subsidiaries or the Company Joint Ventures), on the other hand, that
would be required to be disclosed under Item 404 of Regulation S-K promulgated
under the Securities Act.
Section 4.18. Rights Agreement; Anti-Takeover Provisions. The Company
does not have any stockholder rights plans in effect. The Board of Directors of
the Company has taken all necessary action so that the provisions of Section 203
of the DGCL and any takeover, anti-takeover, moratorium, "fair price", "control
share" or other similar Law enacted under any Law applicable to the Company
(each, a "Takeover Statute") do not, and will not, apply to this Agreement, the
Merger or the other transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company that:
Section 5.1. Corporate Existence and Power. Each of Parent and Merger
Sub is duly organized, validly existing and in good standing under the laws of
the State of Delaware and has all corporate or limited liability company, as
applicable, power and authority required to execute and deliver this Agreement
and to consummate the Merger and the other transactions contemplated hereby and
to perform each of its obligations hereunder.
Section 5.2. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation by
Parent and Merger Sub of the Merger and the other transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of Parent
and Merger Sub. Except for the adoption of this Agreement by Parent as the sole
stockholder of Merger Sub (which shall have occurred prior to the Effective
Time), no other corporate proceedings other than those previously taken or
conducted on the part of Parent and Merger Sub are necessary to approve this
Agreement or to consummate the Merger or the other transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Parent and Merger Sub and, assuming the due and valid execution and delivery of
the Agreement by the Company, constitutes a legal, valid and binding agreement
of Parent and Merger Sub, respectively, enforceable against Parent and Merger
Sub in accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the
enforcement of creditors' rights generally and general equitable principles.
25
Section 5.3. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation by
Parent and Merger Sub of the Merger and the other transactions contemplated by
this Agreement do not and will not require any consent, approval, authorization
or permit of, action by, filing with or notification to any Governmental
Authority, other than (i) the filing of the Certificate of Merger; (ii)
compliance with the applicable requirements of the HSR Act; (iii) compliance
with the applicable requirements of the Exchange Act including the filing of the
Schedule 13E-3; (iv) compliance with any applicable foreign or state securities
or blue sky laws; (v) the consents and/or notices listed in Section 4.3 of the
Company Disclosure Letter; and (vi) any such consent, approval, authorization,
permit, action, filing or notification the failure of which to make or obtain
would not reasonably be expected to adversely affect in any material respect, or
prevent or materially delay the consummation of the Merger or Parent's or Merger
Sub's ability to observe and perform its obligations hereunder.
Section 5.4. Non-Contravention. The execution, delivery and performance
by Parent and Merger Sub of this Agreement and the consummation by Parent and
Merger Sub of the Merger and the transactions contemplated hereby do not and
will not (i) contravene or conflict with the organizational or governing
documents of Parent or Merger Sub, (ii) assuming compliance with the items
specified in Section 5.3, contravene, conflict with or constitute a violation of
any provision of any Law binding upon or applicable to Parent or Merger Sub, or
any of their respective properties or assets, or (iii) require the consent,
approval, or authorization of, or notice to or filing with any third party with
respect to, result in any breach or violation of or constitute a default (or any
event which with notice or lapse of time or both would become a default), or
give rise to any right of termination, cancellation or acceleration of any right
or obligation of Merger Sub or to a loss of any material benefit to which Merger
Sub is entitled under any Contract.
Section 5.5. Disclosure Documents. None of the information supplied or
to be supplied by Parent or Merger Sub or any of their respective Affiliates
specifically for inclusion in the Company Proxy Statement or Schedule 13E-3
will, at the time it is filed with the SEC, or, in the case of the Company Proxy
Statement, at the time it is first mailed to the stockholders of the Company or
at the time of the Company Stockholder Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
Section 5.6. Finders' Fees. No agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee from the Company in
connection with any of the transactions contemplated by this Agreement in the
event that the Merger is not consummated.
Section 5.7. Financing. Parent has delivered to the Company true and
complete copies of (i) the commitment letter, dated as of the date of this
Agreement, among Parent and Bank of America, N.A., Banc of America Bridge LLC,
Banc of America Securities LLC, JPMorgan Chase Bank, N.A., X.X. Xxxxxx
Securities Inc., Citigroup Global Markets Inc., Xxxxxxx Xxxxx Capital
Corporation and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the "Debt
Financing Commitments"), pursuant to which the lenders
26
party thereto have committed, subject to the terms thereof, to lend the amounts
set forth therein (the "Debt Financing"), and (ii) the equity commitment
letters, dated as of the date of this Agreement, from (i) Xxxx Capital Fund IX,
L.P., (ii) KKR Millennium Fund, L.P. and KKR PEI Investments, L.P., and (iii) ML
Global Private Equity Fund, L.P. (the "Equity Financing Commitments" and
together with the Debt Financing Commitments, the "Financing Commitments"),
pursuant to which such parties have committed, subject to the terms thereof, to
invest the cash amounts set forth therein (the "Equity Financing" and together
with the Debt Financing, the "Financing"). Prior to the date of this Agreement,
(i) none of the Financing Commitments has been amended or modified, and (ii) the
respective commitments contained in the Financing Commitments have not been
withdrawn or rescinded in any respect. Each of the Equity Financing Commitments,
in the form so delivered, is in full force and effect and is a legal, valid and
binding obligation of Parent and the other parties thereto. Each of the Debt
Financing Commitments, in the form so delivered, is in full force and effect as
of the date of this Agreement and is a legal, valid and binding obligation of
Parent and, to the knowledge of Parent, the other parties thereto for so long as
it remains in full force and effect. Notwithstanding anything in this Agreement
to the contrary, one or more Debt Financing Commitments may be superseded at the
option of Parent after the date of this Agreement but prior to the Effective
Time by instruments (the "New Financing Commitments") which replace existing
Debt Financing Commitments and/or contemplate co-investment by or financing from
one or more other or additional parties; provided, that the terms of the New
Financing Commitments shall not (a) expand upon the conditions precedent to the
Financing as set forth in the Debt Financing Commitments in any material respect
or (b) reasonably be expected to delay the Closing. In such event, the term
"Financing Commitments" as used herein shall be deemed to include the Financing
Commitments that are not so superseded at the time in question and the New
Financing Commitments to the extent then in effect. As of the date of this
Agreement, no event has occurred which, with or without notice, lapse of time or
both, would constitute a default or breach on the part of Parent under any term
or condition of the Financing Commitments. As of the date of this Agreement,
Parent has no reason to believe that it will be unable to satisfy on a timely
basis any term or condition of closing to be satisfied by it contained in the
Financing Commitments. Parent has fully paid any and all commitment fees
incurred in connection with the Financing Commitments. Assuming the satisfaction
of the conditions set forth in Sections 8.2(a) and 8.2(b), the Financing
Commitments, when funded, will provide the Surviving Corporation with financing
immediately after the Effective Time sufficient to consummate the Merger upon
the terms contemplated by this Agreement and to pay all related fees and
expenses associated therewith, including payment of all amounts under Article
III of this Agreement.
Section 5.8. Equity Rollover Commitment. Parent has delivered to the
Company a true and complete copy of the equity rollover letter, dated as of the
date hereof, from Frisco Inc. and Frisco Partners (the "Equity Rollover
Commitment"), pursuant to which such party has committed to contribute to Parent
that number of Shares set forth in such letter in exchange for shares of capital
stock of Parent immediately prior to the Effective Time (which Shares shall be
cancelled in the Merger, as provided in Section 3.1(a)). As of the date of this
Agreement, the Equity Rollover Commitment is in full force and effect.
27
Section 5.9. Guarantees. Concurrently with the execution of this
Agreement, Parent has delivered to the Company the guarantees of each of (i)
Xxxx Capital Fund IX, L.P., (ii) KKR Millennium Fund, L.P., (iii) ML Global
Private Equity Fund, L.P. and (iv) Frisco Inc. and Frisco Partners (the
"Guarantors") with respect to certain matters on the terms specified therein
(the "Guarantees") and prior to the close of business on the third Business Day
after the date of this Agreement, Parent will cause to be delivered an opinion
of counsel for each Guarantor set forth in Section 5.9 of the Company Disclosure
Letter, and Parent will use reasonable best efforts to cause to be delivered an
opinion of counsel for each other Guarantor, in each case, in form and substance
reasonably satisfactory to the Company, as to the enforceability of the
Guarantee of such Guarantor and such other matters reasonably requested by the
Company, which opinion has not been withdrawn or modified.
Section 5.10. Operations of Parent and Merger Sub. Each of Parent and
Merger Sub has been formed solely for the purpose of engaging in the
transactions contemplated hereby and prior to the Effective Time will have
engaged in no other business activities and will have incurred no liabilities or
obligations other than as contemplated herein, including in connection with
arranging the Financing.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1. Conduct of the Company and Subsidiaries. Except for
matters set forth in Section 6.1 of the Company Disclosure Letter or as
otherwise contemplated by or specifically provided in this Agreement, or as
subsequently consented to in writing by Parent (which consent shall not be
unreasonably withheld), from the date of this Agreement until the Effective
Time, the Company shall use its reasonable best efforts to, and shall use its
reasonable best efforts to cause its Subsidiaries to, conduct their respective
businesses in the ordinary and usual course consistent with past practice, and
shall use its reasonable best efforts to (i) preserve substantially intact its
and its Subsidiaries' present business organization and capital structure; (ii)
maintain in effect all material Permits that are required for the Company or its
Subsidiaries to carry on their respective businesses; (iii) keep available the
services of present officers and key employees; and (iv) maintain the current
relationships with its providers, suppliers and other Persons with which the
Company or its Subsidiaries have significant business relationships. Without
limiting the generality of the foregoing, and except for matters set forth in
Section 6.1 of the Company Disclosure Letter or as expressly contemplated or
permitted by this Agreement, without the prior written consent of Parent and
Merger Sub (which consent shall not be unreasonably withheld), the Company shall
not, and shall not permit its Subsidiaries to:
(a) adopt any change in its organizational or governing
documents;
(b) merge or consolidate the Company or any of its
Subsidiaries with any Person (other than the Merger and other than such
transactions solely among the Company and/or its wholly-owned domestic
Subsidiaries that would not result in a material increase in the Tax
liability of the Company or its Subsidiaries;
(c) sell, lease or otherwise dispose of a material amount of
assets or securities, including by merger, consolidation, asset sale or
other business combination
28
(including by formation of a material Company joint venture), other
than such transactions solely among the Company and/or its wholly-owned
domestic Subsidiaries that would not result in a material increase in
the Tax liability of the Company or its Subsidiaries;
(d) (i) make any material acquisition, by purchase or other
acquisition of stock or other equity interests, by merger,
consolidation or other business combination (including by formation of
a material Company joint venture); or (ii) make any material property
transfers or material purchases of any property or assets, in or from
any Person, in each case, other than such transactions solely among the
Company and/or wholly-owned Subsidiaries of the Company;
(e) other than in connection with drawdowns or repayments with
respect to existing credit facilities in the ordinary course of
business consistent with past practice, redeem, repurchase, prepay,
defease, cancel, incur or otherwise acquire, or modify in any material
respect the terms of, indebtedness for borrowed money or assume,
guarantee or endorse or otherwise become responsible for, whether
directly, contingently or otherwise, the obligations of any Person,
other than the incurrence, assumption or guarantee of indebtedness (i)
between the Company, on the one hand, and any of its Subsidiaries, on
the other hand, or (ii) not in excess of $10,000,000 in the aggregate;
(f) offer, place or arrange any issue of debt securities or
commercial bank or other credit facilities that would reasonably be
expected to compete with or impede the Debt Financing or cause the
breach of any provisions of the Debt Financing Commitments or cause any
condition set forth in the Debt Financing Commitments not to be
satisfied;
(g) make any material loans, advances or capital contributions
to, or investments in, any other Person in excess of $20,000,000 in the
aggregate for all such loans, advances, contributions and investments,
except for (i) transactions solely among the Company and/or
wholly-owned Subsidiaries of the Company, or (ii) as required by
existing contracts set forth in Section 6.1(g) of the Company
Disclosure Letter;
(h) authorize any capital expenditures in excess of
$20,000,000 in the aggregate, other than expenditures provided for in
the Company's budget for the remaining portion of fiscal year 2006 (a
copy of which 2006 budget has been provided to Parent) and for any
portion of fiscal year 2007 prior to the Closing Date (a copy of which
budget has been provided to Parent);
(i) pledge or otherwise encumber shares of capital stock or
other voting securities of the Company or any of its Subsidiaries;
(j) mortgage or pledge any of its material assets, tangible or
intangible, or create, assume or suffer to exist any Lien thereupon
(other than Permitted Liens);
(k) enter into or amend any Contract with any executive
officer, director or other Affiliate of the Company or any of its
Subsidiaries or any Person beneficially owning 1% or more of the Shares
or the voting power of the Shares;
29
(l) enter into, renew, extend, amend or terminate any Contract
that is or would be material to the Company and its Subsidiaries, taken
as a whole, other than in the ordinary course of business consistent
with past practice;
(m) (i) split, combine or reclassify any Company Securities or
amend the terms of any Company Securities, (ii) declare, establish a
record date for, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of Company Securities other than (x) a dividend or distribution
by a wholly-owned Subsidiary of the Company to its parent corporation
in the ordinary course of business, (y) payment on September 1, 2006 of
the previously declared regularly quarterly dividend of $0.17 per
Share, and (z) payment of a regular quarterly dividend not to exceed
$0.17 per share for the fourth quarter of 2006; provided, that the
record date for such dividend shall be no earlier than December 1, 2006
and that no such dividend shall be payable if the Effective Time occurs
on or prior to the record date; (iii) issue or offer to issue any
Company Securities, or redeem, repurchase or otherwise acquire or offer
to redeem, repurchase, or otherwise acquire, any Company Securities,
other than in connection with (A) the exercise of Company Options
outstanding on the date of this Agreement in accordance with their
original terms, (B) the withholding of Company Securities to satisfy
Tax obligations with respect to Company Options or Restricted Shares,
(C) the acquisition by the Company of Company Securities in connection
with the net exercise of Company Options in accordance with the terms
thereof and (D) acquisitions by or issuances to Company Benefit Plans
identified in Section 6.1(m) of the Company Disclosure Letter in the
ordinary course of business consistent with past practice;
(n) except as required pursuant to existing written agreements
or Company Benefit Plans in effect on the date of this Agreement or as
required by applicable Law, (i) adopt, amend in any material respect or
terminate any Company Benefit Plan, (ii) take any action to accelerate
the vesting or payment, or fund or in any other way secure the payment,
of compensation or benefits under any Company Benefit Plan, (iii)
except in connection with promotions or new hires made in the ordinary
course of business consistent with past practice, increase in any
manner the cash compensation or welfare or pension benefits of Company
Employees, or (iv) change any actuarial or other assumption used to
calculate funding obligations with respect to any Company Benefit Plan
or change the manner in which contributions to any Company Benefit Plan
are made or determined;
(o) settle or compromise any litigation, or release, dismiss
or otherwise dispose of any claim or arbitration, other than
settlements or compromises of litigation, claims or arbitration that do
not exceed $10,000,000 in the aggregate (net of insurance recoveries)
and do not impose any material restrictions on the business or
operations of the Company or any of its Subsidiaries or any Company
Joint Venture;
(p) other than in the ordinary course of business consistent
with past practice or except to the extent required by Law, make or
change any material Tax election, settle or compromise any material Tax
liability of the Company or any of its Subsidiaries, agree to an
extension of the statute of limitations with respect to the assessment
or determination of material Taxes of the Company or any of its
Subsidiaries, file any
30
amended Tax Return with respect to any material Tax, enter into any
closing agreement with respect to any material Tax or surrender any
right to claim a material Tax refund;
(q) make any change in financial accounting methods or method
of Tax accounting, principles or practices materially affecting the
reported consolidated assets, liabilities or results of operations of
the Company and its Material Subsidiaries, except insofar as may have
been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation,
dissolution, restructuring, recapitalization or other reorganization of
the Company or any of its Material Subsidiaries, or enter into a letter
of intent or agreement in principle with respect thereto, (other than
the Merger and other than such transactions solely among the Company
and/or its wholly-owned domestic Subsidiaries that would not result in
a material increase in the Tax liability of the Company or its
Subsidiaries);
(s) take any action or fail to take any action that is
intended to, or would reasonably be expected to, individually or in the
aggregate, prevent, materially delay or materially impede the ability
of the Company to consummate the Merger or the other transactions
contemplated by this Agreement; or
(t) authorize, agree or commit to do any of the foregoing.
Section 6.2. Conduct of Parent and Merger Sub. Each of Parent and
Merger Sub agrees that, from the date of this Agreement to the Effective Time,
it shall not take any action or fail to take any action that is intended to, or
would reasonably be expected to, individually or in the aggregate, prevent,
materially delay or materially impede the ability of Parent and Merger Sub to
consummate the Merger or the other transactions contemplated by this Agreement.
Section 6.3. No Control of Other Party's Business. Nothing contained in
this Agreement is intended to give Parent, directly or indirectly, the right to
control or direct the Company's or its Subsidiaries' operations prior to the
Effective Time, and nothing contained in this Agreement is intended to give the
Company, directly or indirectly, the right to control or direct Parent's or its
Subsidiaries' operations. Prior to the Effective Time, each of Parent and the
Company shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its and its Subsidiaries'
respective operations.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1. Stockholder Meeting; Proxy Material. (a) The Company shall
(i) take all action necessary to duly call, give notice of, convene and hold a
meeting of its stockholders (the "Company Stockholder Meeting") for the purpose
of having this Agreement adopted by the stockholders of the Company in
accordance with applicable Law as promptly as reasonably practicable after the
SEC clears the Company Proxy Statement and the Schedule 13E-3, (ii) use
reasonable best efforts to solicit the adoption of this Agreement by the
stockholders of the Company, and (iii) subject to the immediately succeeding
sentence, include in the Company Proxy Statement the recommendation of the Board
of Directors of the Company that the
31
stockholders of the Company adopt this Agreement (the "Recommendation"). Neither
the Board of Directors of the Company nor any committee thereof shall directly
or indirectly (x) withdraw (or modify or qualify in a manner adverse to Parent
or Merger Sub), or publicly propose to withdraw (or modify or qualify in a
manner adverse to Parent or Merger Sub), the Recommendation or (y) take any
other action or make any other public statement in connection with the Company
Stockholder Meeting inconsistent with such Recommendation (any action described
in this clause (x) or (y) being referred to as a "Recommendation Withdrawal");
provided, that at any time prior to obtaining the Requisite Stockholder Vote,
the Board of Directors of the Company (acting through the Special Committee if
such committee still exists) may effect a Recommendation Withdrawal (subject to
the Company having complied with its obligations under Section 7.4) if such
Board of Directors (or the Special Committee, as applicable) determines in good
faith (after consultation with outside counsel) that failure to take such action
could violate its fiduciary duties under applicable Law. Notwithstanding any
Recommendation Withdrawal, unless this Agreement is terminated pursuant to, and
in accordance with, Section 9.1, this Agreement shall be submitted to the
stockholders of the Company at the Company Stockholders Meeting for the purpose
of adopting this Agreement. If, at any time prior to the Effective Time, any
information relating to the Company, Parent or Merger Sub or any of their
respective Affiliates should be discovered by the Company, Parent or Merger Sub
which should be set forth in an amendment or supplement to the Company Proxy
Statement or Schedule 13E-3, as applicable, so that the Company Proxy Statement
or Schedule 13E-3, as applicable, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, the party that
discovers such information shall promptly notify the other parties and, to the
extent required by applicable Law, the Company shall disseminate an appropriate
amendment thereof or supplement thereto describing such information to the
Company's stockholders.
(b) In connection with the Company Stockholder Meeting, the
Company will (i) as promptly as reasonably practicable (and, with
respect to filing with the SEC, in any event within 15 Business Days
from the date of this Agreement) prepare and file with the SEC the
Company Proxy Statement, (ii) respond as promptly as reasonably
practicable to any comments received from the SEC with respect to such
filings and will provide copies of such comments to Merger Sub promptly
upon receipt, (iii) as promptly as reasonably practicable prepare and
file (after Parent and Merger Sub have had a reasonable opportunity to
review and comment on) any amendments or supplements necessary to be
filed in response to any SEC comments or as required by Law, (iv) use
its reasonable best efforts to have cleared by the SEC and will
thereafter mail to its stockholders as promptly as reasonably
practicable, the Company Proxy Statement and all other customary proxy
or other materials for meetings such as the Company Stockholder
Meeting, (v) to the extent required by applicable Law, as promptly as
reasonably practicable prepare, file and distribute to the stockholders
of the Company any supplement or amendment to the Company Proxy
Statement if any event shall occur which requires such action at any
time prior to the Company Stockholder Meeting, and (vi) otherwise use
commercially reasonable efforts to comply with all requirements of Law
applicable to the Company Stockholder Meeting and the Merger. Parent
and Merger Sub shall cooperate with the Company in connection with the
preparation and filing of the Company Proxy Statement, including
furnishing the Company upon request with any and all information as may
be
32
required to be set forth in the Company Proxy Statement under the
Exchange Act. The Company will provide Parent and Merger Sub a
reasonable opportunity to review and comment upon the Company Proxy
Statement, or any amendments or supplements thereto, prior to filing
the same with the SEC. In connection with the filing of the Company
Proxy Statement, the Company and Merger Sub will cooperate to (i)
concurrently with the preparation and filing of the Company Proxy
Statement, jointly prepare and file with the SEC the Schedule 13E-3
relating to the Merger and the other transactions contemplated hereby
and furnish to each other all information concerning such party as may
be reasonably requested in connection with the preparation of the
Schedule 13E-3, (ii) respond as promptly as reasonably practicable to
any comments received from the SEC with respect to such filings and
will consult with each other prior to providing such response, (iii) as
promptly as reasonably practicable after consulting with each other,
prepare and file any amendments or supplements necessary to be filed in
response to any SEC comments or as required by Law, (iv) have cleared
by the SEC the Schedule 13E-3 and (v) to the extent required by
applicable Law, as promptly as reasonably practicable prepare, file and
distribute to the stockholders of the Company any supplement or
amendment to the Schedule 13E-3 if any event shall occur which requires
such action at any time prior to the Company Stockholders Meeting.
Section 7.2. Reasonable Best Efforts. (a) Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions, to file, or cause to be filed, all
documents and to do, or cause to be done, all things necessary, proper or
advisable to consummate the transactions contemplated by this Agreement,
including preparing and filing as promptly as practicable all documentation to
effect all necessary filings, consents, waivers, approvals, authorizations,
Permits or orders from all Governmental Authorities or other Persons. In
furtherance and not in limitation of the foregoing, each party hereto agrees to
make an appropriate filing of a Notification and Report Form pursuant to the HSR
Act with respect to the transactions contemplated by this Agreement as promptly
as practicable after the date hereof (and in any event within 15 Business Days)
and to make, or cause to be made, the filings and authorizations, if any,
required under the Other Antitrust Laws of jurisdictions other than the United
States as promptly as reasonably practicable after the date hereof and to supply
as promptly as reasonably practicable any additional information and documentary
material that may be requested pursuant to the HSR Act or the Other Antitrust
Laws of jurisdictions other than the United States and use its reasonable best
efforts to take or cause to be taken all other actions necessary, proper or
advisable consistent with this Section 7.2 to cause the expiration or
termination of the applicable waiting periods, or receipt of required
authorizations, as applicable, under the HSR Act or the Other Antitrust Laws of
jurisdictions other than the United States as soon as practicable. Without
limiting the foregoing, the parties shall request and shall use reasonable best
efforts to obtain early termination of the waiting period under the HSR Act.
(b) Each of Parent and Merger Sub, on the one hand, and the
Company, on the other hand, shall, in connection with the efforts
referenced in Section 7.2(a) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement, use
its reasonable best efforts to (i) cooperate in all respects with each
other in connection with any filing or submission and in connection
with any investigation or other inquiry, including any proceeding
initiated by a private party; (ii) keep the other party
33
reasonably informed of any communication received by such party from,
or given by such party to, the Federal Trade Commission (the "FTC"),
the Antitrust Division of the --- Department of Justice (the "DOJ") or
any other Governmental Authority and of any communication received
or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby; and (iii)
permit the other party to review any communication given by it to, and
consult with each other in advance of any meeting or conference with,
the FTC, the DOJ or any other Governmental Authority or, in connection
with any proceeding by a private party, with any other person, and to
the extent permitted by the FTC, the DOJ or such other applicable
Governmental Authority or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of
the parties contained in Sections 7.2(a) and (b), if any objections are
asserted with respect to the transactions contemplated hereby under any
Law or if any suit is instituted (or threatened to be instituted) by
the FTC, the DOJ or any other applicable Governmental Authority or any
private party challenging any of the transactions contemplated hereby
as violative of any Law or which would otherwise prevent, materially
impede or materially delay the consummation of the transactions
contemplated hereby, each of Merger Sub and the Company shall use its
reasonable best efforts to resolve any such objections or suits so as
to permit consummation of the transactions contemplated by this
Agreement, including in order to resolve such objections or suits
which, in any case if not resolved, would reasonably be expected to
prevent, materially impede or materially delay the consummation of the
Merger or the other transactions contemplated hereby; provided,
however, that no party shall be required to, and the Company may not
(without the prior written consent of Merger Sub) take any such actions
to resolve any such objections or suits which actions would reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect on the Company.
(d) Subject to the obligations under Section 7.2(c), in the
event that any administrative or judicial action or proceeding is
instituted (or threatened to be instituted) by a Governmental Authority
or private party challenging the Merger or any other transaction
contemplated by this Agreement, or any other agreement contemplated
hereby, each of Merger Sub and the Company shall cooperate in all
respects with each other and use its respective reasonable best efforts
to contest and resist any such action or proceeding and to have
vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order, whether temporary, preliminary or permanent,
that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
Section 7.3. Access to Information. (a) Subject to applicable Law, the
Company will provide and will cause its Subsidiaries and its and their
respective Representatives to provide Parent and Merger Sub and their respective
authorized Representatives, during normal business hours and upon reasonable
advance notice (i) such access to the offices, properties, books and records of
the Company and such Subsidiaries (so long as such access does not unreasonably
interfere with the operations of the Company) as Parent or Merger Sub reasonably
may request and (ii) all documents that Merger Sub reasonably may request.
Notwithstanding
34
the foregoing, Parent, Merger Sub and their respective Representatives shall not
have access to any books, records and other information the disclosure of which
would, in the Company's good faith opinion after consultation with legal
counsel, result in the loss of attorney-client privilege with respect to such
books, records and other information. The parties will use their reasonable best
efforts to make appropriate substitute arrangements under circumstances in which
the restrictions of the preceding sentence apply.
(b) No investigation by any of the parties or their respective
Representatives shall affect the representations, warranties, covenants
or agreements of the other parties set forth herein.
(c) All information obtained pursuant to this Section 7.3
shall be kept confidential in accordance with the applicable
Confidentiality Agreement.
Section 7.4. Solicitation. (a) Notwithstanding any other provision of
this Agreement to the contrary, during the period beginning on the date of this
Agreement and continuing until 11:59 p.m. (EST) on September 12, 2006 (the
"No-Shop Period Start Date"), the Company and its Subsidiaries and their
respective officers, directors, employees, consultants, agents, advisors,
affiliates and other representatives ("Representatives") shall have the right
(acting under the direction of the Special Committee) to directly or indirectly:
(i) initiate, solicit and encourage Company Acquisition Proposals (as
hereinafter defined), including by way of providing access to non-public
information pursuant to (but only pursuant to) one or more Acceptable
Confidentiality Agreements (as hereinafter defined); provided that the Company
shall promptly provide to Parent any material non-public information concerning
the Company or its Subsidiaries that is provided to any Person given such access
which was not previously provided to Parent; and (ii) enter into and maintain
discussions or negotiations with respect to Company Acquisition Proposals or
otherwise cooperate with or assist or participate in, or facilitate any such
inquiries, proposals, discussions or negotiations.
(b) Subject to Section 7.4(c), from the No-Shop Period Start
Date until the Effective Time or, if earlier, the termination of this
Agreement in accordance with Article IX, none of the Company, the
Company's Subsidiaries nor any of their respective Representatives
shall, directly or indirectly, (A) initiate, solicit or knowingly
encourage (including by way of providing information) the submission of
any inquiries, proposals or offers or any other efforts or attempts
that constitute or may reasonably be expected to lead to, any Company
Acquisition Proposal or engage in any discussions or negotiations with
respect thereto or otherwise knowingly cooperate with or knowingly
assist or participate in, or knowingly facilitate any such inquiries,
proposals, discussions or negotiations, or (B) approve or recommend, or
publicly propose to approve or recommend, a Company Acquisition
Proposal or enter into any merger agreement, letter of intent,
agreement in principle, share purchase agreement, asset purchase
agreement or share exchange agreement, option agreement or other
similar agreement providing for or relating to a Company Acquisition
Proposal or enter into any agreement or agreement in principle
requiring the Company to abandon, terminate or fail to consummate the
transactions contemplated hereby or breach its obligations hereunder or
propose or agree to do any of the foregoing. Subject to Section 7.4(c)
and except with respect to any Company Acquisition Proposal received
prior to the No-Shop Period Start Date with respect to which
35
the requirements of Sections 7.4(c)(i), (ii) and (iii) have been
satisfied as of the No-Shop Period Start Date (any such Person so
submitting a Company Acquisition Proposal, an "Excluded Party"), as
determined, with respect to any Excluded Party, by the Special
Committee no later than the later of (i) the No-Shop Period Start Date
and (ii) the Business Day following the date on which the Company
received such Excluded Party's written Company Acquisition Proposal (it
being understood, that following the No-Shop Period Start Date until
such time as the Special Committee determines that a Person is an
Excluded Party, the Company shall not be permitted to take any action
with respect to such Person that it would be prohibited from taking
with respect to a non-Excluded Party pursuant to Section 7.4(c)), on
the No-Shop Period Start Date the Company shall immediately cease and
cause to be terminated any solicitation, encouragement, discussion or
negotiation with any Persons conducted theretofore by the Company, its
Subsidiaries or any Representatives with respect to any Company
Acquisition Proposal. Notwithstanding anything contained in Section 7.4
to the contrary, any Excluded Party shall cease to be an Excluded Party
for all purposes under this Agreement at such time as the Company
Acquisition Proposal made by such party fails, in the reasonable
judgment of the Special Committee, to satisfy the requirements of
Section 7.4(c).
(c) Notwithstanding anything to the contrary contained in
Section 7.4(b), if at any time following the date of this Agreement and
prior to obtaining the Requisite Stockholder Vote, (i) the Company has
received a written Company Acquisition Proposal from a third party that
the Board of Directors of the Company (acting through the Special
Committee if such committee still exists) believes in good faith to be
bona fide, (ii) the Board of Directors of the Company (acting through
the Special Committee if such committee still exists) determines in
good faith, after consultation with its independent financial advisors
and outside counsel, that such Company Acquisition Proposal constitutes
or could reasonably be expected to result in a Superior Proposal and
(iii) after consultation with its outside counsel, the Board of
Directors of the Company (acting through the Special Committee if such
committee still exists) determines in good faith that the failure to
take such action could violate its fiduciary duties under applicable
Law, then the Company may (A) furnish information with respect to the
Company and its Subsidiaries to the Person making such Company
Acquisition Proposal and (B) participate in discussions or negotiations
with the Person making such Company Acquisition Proposal regarding such
Company Acquisition Proposal; provided, that the Company (x) will not,
and will not allow Company Representatives to, disclose any non-public
information to such Person without entering into an Acceptable
Confidentiality Agreement, and (y) will promptly provide to Parent any
non-public information concerning the Company or its Subsidiaries
provided to such other Person which was not previously provided to
Parent. Notwithstanding anything to the contrary contained in Section
7.4(b) or this Section 7.4(c), prior to obtaining the obtaining the
Requisite Stockholder Vote, the Company shall be permitted to take the
actions described in clauses (A) and (B) above with respect to any
Excluded Party. From and after the No-Shop Period Start Date, the
Company shall promptly (within one Business Day) notify Parent in the
event it receives a Company Acquisition Proposal from a Person or group
of related Persons, including the material terms and conditions
thereof, and shall keep Parent apprised as to the status and any
material developments, discussions and negotiations concerning the same
on a current basis (and in any event no later than 48 hours after the
occurrence of such developments, discussions or negotiations). Without
36
limiting the foregoing, the Company shall promptly (within one Business
Day) notify Parent orally and in writing if it determines to begin
providing information or to engage in negotiations concerning a Company
Acquisition Proposal from a Person or group of related Persons pursuant
to this Section 7.4(c). Within 24 hours of the No-Shop Period Start
Date, the Company shall notify Parent of the number of Excluded Parties
and provide Parent a written summary of the material terms and
conditions of each Company Acquisition Proposal received from any
Excluded Party.
(d) Notwithstanding anything in this Agreement to the
contrary, if, at any time prior to obtaining the Requisite Stockholder
Vote, the Company receives a Company Acquisition Proposal which the
Board of Directors of the Company (acting through the Special
Committee, if such committee still exists) concludes in good faith
constitutes a Superior Proposal after giving effect to all of the
adjustments which may be offered by Parent pursuant to clause (ii)
below, the Board of Directors of the Company (acting through the
Special Committee, if such committee still exists) may (x) effect a
Recommendation Withdrawal and/or (y) terminate this Agreement to enter
into a definitive agreement with respect to such Superior Proposal if
the Board of Directors of the Company (acting through the Special
Committee, if such committee still exists) determines in good faith,
after consultation with outside counsel, that failure to take such
action could violate its fiduciary duties under applicable Law;
provided, however that the Company shall not terminate this Agreement
pursuant to the foregoing clause (y), and any purported termination
pursuant to the foregoing clause (y) shall be void and of no force or
effect, unless concurrently with such termination the Company pays the
Termination Fee payable pursuant to Section 9.2(a); and provided,
further, that the Board of Directors may not effect a Recommendation
Withdrawal pursuant to the foregoing clause (x) or terminate this
Agreement pursuant to the foregoing clause (y) unless:
(i) the Company shall have provided prior written
notice to Parent and Merger Sub, at least five calendar days
in advance (the "Notice Period"), of its intention to effect a
Recommendation Withdrawal in response to such Superior
Proposal or terminate this Agreement to enter into a
definitive agreement with respect to such Superior Proposal,
which notice shall specify the material terms and conditions
of any such Superior Proposal (including the identity of the
party making such Superior Proposal), and shall have
contemporaneously provided a copy of the relevant proposed
transaction agreements with the party making such Superior
Proposal and other material documents; and
(ii) prior to effecting such Recommendation
Withdrawal or terminating this Agreement to enter into a
definitive agreement with respect to such Superior Proposal,
the Company shall, and shall cause its financial and legal
advisors to, during the Notice Period, negotiate with Parent
and Merger Sub in good faith (to the extent Parent and Merger
Sub desire to negotiate) to make such adjustments in the terms
and conditions of this Agreement so that such Company
Acquisition Proposal ceases to constitute a Superior Proposal.
In the event of any material revisions to the Superior Proposal, the
Company shall be required to deliver a new written notice to Parent and Merger
Sub and to comply with the
37
requirements of this Section 7.4(d) with respect to such new written notice,
except that the Notice Period shall be reduced to three Business Days.
(e) The Company agrees that any violations of the restrictions
set forth in this Section 7.4 by any Representative of the Company or
any of its Subsidiaries, shall be deemed to be a breach of this Section
7.4 by the Company.
(f) As used in this Agreement, the term:
(i) "Acceptable Confidentiality Agreement" means a
confidentiality and standstill agreement that contains
provisions that are no less favorable in the aggregate to the
Company than those contained in the Confidentiality
Agreements;
(ii) "Company Acquisition Proposal" means any
inquiry, proposal or offer from any Person or group of Persons
other than Parent, Merger Sub or their respective Affiliates
relating to any direct or indirect acquisition or purchase of
a business that constitutes 15% or more of the net revenues,
net income or assets of the Company and its Subsidiaries,
taken as a whole, or 15% or more of any class or series of
Company Securities, any tender offer or exchange offer that if
consummated would result in any Person or group of Persons
beneficially owning 15% or more of any class or series of
capital stock of the Company, or any merger, reorganization,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving the Company (or any Subsidiary or
Subsidiaries of the Company whose business constitutes 15% or
more of the net revenues, net income or assets of the Company
and its Subsidiaries, taken as a whole);
(iii) "Superior Proposal" means a Company Acquisition
Proposal that the Board of Directors of the Company (acting
through the Special Committee, if such committee still exists)
in good faith determines, would, if consummated, result in a
transaction that is more favorable from a financial point of
view to the stockholders of the Company than the transactions
contemplated hereby (x) after receiving the advice of a
financial advisor (who shall be a nationally recognized
investment banking firm), (y) after taking into account the
likelihood of consummation of such transaction on the terms
set forth therein (as compared to the terms herein) and (z)
after taking into account all appropriate legal (with the
advice of outside counsel), financial (including the financing
terms of any such proposal), regulatory or other aspects of
such proposal and any other relevant factors permitted by
applicable Law; provided that for purposes of the definition
of "Superior Proposal", the references to "15% or more" in the
definition of Company Acquisition Proposal shall be deemed to
be references to "a majority".
(g) Nothing contained in this Section 7.4 or elsewhere in this
Agreement shall prohibit the Company from taking and disclosing to its
stockholders a position contemplated by Rule 14d-9 and 14e-2(a)
promulgated under the Exchange Act; provided, any such disclosure
(other than a "stop, look and listen" letter or similar communication
of the type contemplated by Rule 14d-9(f) under the Exchange Act) shall
be deemed to be a Recommendation Withdrawal unless the Board of
Directors of the Company (acting through the Special Committee if such
committee still exists) expressly publicly reaffirms
38
at least two Business Days prior to the Company Stockholder Meeting its
recommendation in favor of the adoption of this Agreement.
(h) The parties hereby agree that, in order to facilitate any
due diligence process that one or more third parties, who have been
provided with and have agreed in writing to comply with the subject
matter limitations of this section, may undertake in connection with a
Company Acquisition Proposal, Xx. Xxxxxx X. Xxxxx, Xx. ("Xx. Xxxxx")
shall not be prevented from engaging in a due diligence discussion with
each such third party regarding the Company if specifically requested
to do so by the Special Committee or Credit Suisse Securities (USA)
LLC; provided, however, that the parties acknowledge and agree that
except for public disclosure obligations required by applicable law,
(i) Xx. Xxxxx shall not be permitted to disclose to such third party
any information regarding the transactions contemplated by this
Agreement, or any agreements, understandings or arrangements in
connection therewith or any assumptions, information, evaluations or
views of Parent and its Affiliates and (ii) Xx. Xxxxx shall not be
permitted to have any discussions, agreements, understandings or
arrangements with any third party regarding any participation,
investment, involvement or interest of any nature whatsoever in any
form of transaction similar to, or in the alternative to, the
transactions contemplated by this Agreement, including the Merger.
Section 7.5. Director and Officer Liability.
(a) From and after the Effective Time, the Surviving
Corporation shall to the greatest extent permitted by Law to indemnify
and hold harmless (and comply with all of the Company's and its
Subsidiaries' existing obligations to advance funds for expenses) (i)
the present and former officers and directors thereof against any and
all costs or expenses (including reasonable attorneys' fees and
expenses), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any actual or threatened
claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative ("Damages"), arising out of,
relating to or in connection with any acts or omissions occurring or
alleged to occur prior to or at the Effective Time, including, without
limitation, the approval of this Agreement, the Merger or the other
transactions contemplated by this Agreement or arising out of or
pertaining to the transactions contemplated by this Agreement; and
(ii) such persons against any and all Damages arising out of acts or
omissions in connection with such persons serving as an officer,
director or other fiduciary in any entity if such service was
at the request or for the benefit of the Company or any of its
Subsidiaries.
(b) As of the Effective Time, the Company shall have
purchased, and, following the Effective Time, the Surviving Corporation
shall maintain, a tail policy to the current policy of directors' and
officers' liability insurance maintained on the date hereof by the
Company (the "Current Policy") which tail policy shall be effective for
a period from the Effective Time through and including the date six
years after the Closing Date with respect to claims arising from facts
or events that existed or occurred prior to or at the Effective Time,
and which tail policy shall contain substantially the same coverage and
amount as, and contain terms and conditions no less advantageous, in
the aggregate, than the coverage currently provided by the Current
Policy; provided, however, that in no event
39
shall the Surviving Corporation be required to expend annually in
excess of 300% of the annual premium currently paid by the Company
under the Current Policy (the "Insurance Amount"); provided, however,
that if the premium of such insurance coverage exceeds the Insurance
Amount, the Company shall be obligated to obtain, and the Surviving
Corporation shall be obligated to maintain, a policy with the greatest
coverage available for a cost not exceeding the Insurance Amount.
(c) This Section 7.5 shall survive the consummation of the
Merger and is intended to be for the benefit of, and shall be
enforceable by, present or former directors or officers of the Company
or its Subsidiaries, their respective heirs and personal
representatives and shall be binding on the Surviving Corporation and
its successors and assigns. In the event that the Surviving Corporation
or any of its successors or assigns (i) consolidates with or merges
into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers
or conveys all or substantially all of its properties and assets to any
person (including by dissolution), then, and in each such case, Parent
shall cause proper provision to be made so that the successors and
assigns of the Surviving Corporation assume and honor the obligations
set forth in this Section 7.5. The agreements and covenants contained
herein shall not be deemed to be exclusive of any other rights to which
any such present or former director or officer is entitled, whether
pursuant to Law, contract or otherwise. Nothing in this Agreement is
intended to, shall be construed to or shall release, waive or impair
any rights to directors' and officers' insurance claims under any
policy that is or has been in existence with respect to the Company or
any of its Subsidiaries or their respective officers, directors and
employees, it being understood and agreed that the indemnification
provided for in this Section 7.5 is not prior to or in substitution for
any such claims under any such policies.
Section 7.6. Takeover Statutes. The parties shall use their respective
reasonable best efforts (i) to take all action necessary so that no Takeover
Statute is or becomes applicable to the Merger or any of the other transactions
contemplated by this Agreement and (ii) if any such Takeover Statute is or
becomes applicable to any of the foregoing, to take all action necessary so that
the Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such Takeover Statute on the
Merger and the other transactions contemplated by this Agreement.
Section 7.7. Public Announcements. Except with respect to any
Recommendation Withdrawal or any action taken pursuant to, and in accordance
with, Section 7.4 or Article IX, so long as this Agreement is in effect, the
parties will consult with each other before issuing any press release or making
any public statement with respect to this Agreement or the transactions
contemplated hereby and, except for any press release or public statement as may
be required by applicable Law or any listing agreement with the New York Stock
Exchange, will not issue any such press release or make any such public
statement without the consent of the other parties (not to be unreasonably
withheld or delayed).
Section 7.8. Notice of Current Events. From and after the date of this
Agreement until the Effective Time, the Company and Parent shall promptly notify
each other orally and in writing of (i) the occurrence, or non-occurrence, of
any event that, individually or
40
in the aggregate, would reasonably be expected to cause any condition to the
obligations of any party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied or (ii) the failure of such
party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it pursuant to this Agreement which, individually
or in the aggregate, would reasonably be expected to result in any condition to
the obligations of any party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied; provided, however, that the
delivery of any notice pursuant to this Section 7.8 shall not cure any breach of
any representation or warranty requiring disclosure of such matter prior to the
date of this Agreement or otherwise limit or affect the remedies available
hereunder to the party receiving such notice.
Section 7.9. Employee Matters.
(a) Without limiting any additional rights that any Company
Employee employed by the Company or any of its Subsidiaries at the
Effective Time ("Current Employee") may have under any Company Benefit
Plan, the Surviving Corporation and each of its Subsidiaries, for the
period commencing at the Effective Time and ending on the first
anniversary thereof, shall maintain for each Current Employee (i) his
or her salary or hourly wage rate, commission structure and
opportunities, and/or target cash bonus opportunities under annual
programs (but, except as otherwise agreed with Parent or the Surviving
Corporation, excluding any equity or equity equivalent award
opportunities, and any other equity-based compensation) (collectively,
"Compensation"), that in the aggregate are no less favorable than, and
(ii) severance, pension and welfare benefits (excluding any value
attributable to any equity-based benefits) provided under the Company
Benefit Plans that in the aggregate are no less favorable than, the
Compensation and benefits, as applicable, maintained for and provided
to such Current Employees immediately prior to the Effective Time;
provided, however, that subject to the foregoing and Section 7.9(c),
nothing herein shall prevent the amendment or termination of any
Company Benefit Plans or interfere with the Surviving Corporation's
right or obligation to make such changes as are necessary to conform
with applicable Law. Nothing in this Section 7.9 shall limit the right
of the Surviving Corporation or any of its Subsidiaries to terminate
the employment of any Current Employee at any time.
(b) As of and after the Effective Time, the Surviving
Corporation shall give Current Employees full credit for all purposes
(but not benefit accruals under any newly-established defined benefit
pension plans, except for vacation and severance, if applicable, under
the Company Benefit Plans), under any new employee compensation and
incentive plans, benefit (including vacation) plans, programs, policies
and arrangements maintained for the benefit of Current Employees as of
and after the Effective Time by the Surviving Corporation or any of its
Subsidiaries for the Company Employees' service with the Company, its
Subsidiaries and their predecessor entities (each, a "Surviving
Corporation Plan") to the same extent recognized by the Company
immediately prior to the Effective Time. With respect to each Surviving
Corporation Plan that is a "welfare benefit plan" (as defined in
Section 3(1) of ERISA), the Surviving Corporation or its Subsidiaries
shall (i) cause there to be waived any pre-existing condition or
eligibility limitations and (ii) give effect, for the applicable plan
year in which the
41
Closing occurs, in determining any deductible and maximum out-of-pocket
limitations, to claims incurred and amounts paid by, and amounts
reimbursed to, Current Employees under similar plans maintained by the
Company and its Subsidiaries immediately prior to the Effective Time.
(c) In connection with the foregoing, (i) prior to the
Effective Time, the Company shall take all actions necessary to
eliminate any obligation of the Company or any of its Subsidiaries to
make any contributions to any grantor trust maintained for the benefit
of participants with respect to obligations under the Company
Supplemental Executive Retirement Plan (the "SERP") or any other
non-qualified retirement plan, and (ii) prior to the Effective Time,
the Company shall take all actions necessary to provide that the SERP
shall, except as may be required by applicable Law, in no event be
terminated, or amended in a manner that would adversely affect any of
the participants in the SERP as of the date hereof, at least until such
time as each such participant has become fully vested in the maximum
benefit available to each such participant under the SERP (including
achieving the maximum years of service under the SERP).
(d) At the Effective Time, each of the nine "Covered Officers"
(as defined in the Company's 2005 Equity Incentive Plan) who are
participants in the Company's 2006 Senior Officer Performance
Excellence Program (the "PEP") will be paid out in cash at the level of
their "2006 Target" bonus amount set forth in the PEP, pursuant to the
terms of the Company's 2005 Equity Incentive Plan. The Company may take
all actions necessary to effectuate the provisions of this Section
7.9(d).
(e) The provisions of this Section 7.9 are for the sole
benefit of the parties to this Agreement and nothing herein, expressed
or implied, is intended or shall be construed to confer upon or give to
any person (including for the avoidance of doubt any Company
Employees), other than the parties hereto and their respective
permitted successors and assigns, any legal or equitable or other
rights or remedies (with respect to the matters provided for in this
Section 7.9) under or by reason of any provision of this Agreement.
Section 7.10. Financing. (a) Prior to the Effective Time, the Company
shall provide, and shall cause its Subsidiaries to, and shall use its reasonable
best efforts to cause their respective Representatives, including legal and
accounting, to provide all cooperation reasonably requested by Parent in
connection with the arrangement of the Debt Financing (provided that such
requested cooperation does not unreasonably interfere with the ongoing
operations of the Company and its Subsidiaries), including (i) participation in
a reasonable number of meetings, presentations, road shows, due diligence
sessions and sessions with rating agencies, (ii) assisting with the preparation
of materials for rating agency presentations, offering documents, private
placement memoranda, bank information memoranda, prospectuses and similar
documents required in connection with the Debt Financing; provided that any
private placement memoranda or prospectuses in relation to high yield debt
securities need not be issued by the Company or any of its Subsidiaries;
provided further that, any such memoranda or prospectuses shall contain
disclosure and financial statements with respect to the Company or the Surviving
Corporation reflecting the Surviving Corporation and/or its Subsidiaries as the
obligor, (iii) executing and delivering any pledge and security documents, other
definitive financing documents, or other
42
certificates, legal opinions or documents as may be reasonably requested by
Parent (including a certificate of the chief financial officer of the Company or
any Subsidiary with respect to solvency matters and consents of accountants for
use of their reports in any materials relating to the Debt Financing) and
otherwise reasonably facilitating the pledging of collateral, (iv) furnishing
Parent and its Financing sources as promptly as practicable (and in any event no
later than 25 Business Days prior to the End Date) with financial and other
pertinent information regarding the Company as may be reasonably requested by
Parent, including all financial statements and financial data of the type
required by Regulation S-X and Regulation S-K under the Securities Act and of
the type and form customarily included in private placements under Rule 144A of
the Securities Act to consummate the offerings of debt securities contemplated
by the Debt Financing Commitments at the time during the Company's fiscal year
such offerings will be made (the "Required Financial Information"), (v) using
reasonable best efforts to obtain accountants' comfort letters, legal opinions,
surveys and title insurance as reasonably requested by Parent, (vi) providing
monthly financial statements (excluding footnotes) within the time frame, and to
the extent, the Company prepares such financial statements, (vii) taking all
actions reasonably necessary to (A) permit the prospective lenders involved in
the Financing to evaluate the Company's current assets, cash management and
accounting systems, policies and procedures relating thereto for the purpose of
establishing collateral arrangements and (B) establish bank and other accounts
and blocked account agreements and lock box arrangements in connection with the
foregoing, (viii) entering into one or more credit or other agreements on terms
satisfactory to Parent in connection with the Debt Financing immediately prior
to the Effective Time; provided that, subject to taking the actions required by
clause (ix) below, the Company shall not be required to enter into any purchase
agreement for any high-yield debt financing (other than bridge financing), (ix)
taking all corporate actions, subject to the occurrence of the Closing,
reasonably requested by Parent to permit the consummation of the Debt Financing
and the direct borrowing or incurrence of all of the proceeds of the Debt
Financing, including any high yield debt financing, by the Surviving Corporation
immediately following the Effective Time, and (x) assisting Parent with any
presentation to the SEC with regard to the recording of the Merger as a
recapitalization for financial reporting purposes in accordance with GAAP and
cooperating in good faith with Parent, if so requested by Parent, in order to
develop alternative means of recording the Merger as a recapitalization for
financial reporting purposes in accordance with GAAP; provided that none of the
Company or any of its Subsidiaries shall be required to pay any commitment or
other similar fee or incur any other cost or expense that is not simultaneously
reimbursed by Parent in connection with the Debt Financing prior to the
Effective Time. Parent shall, promptly upon request by the Company, reimburse
the Company for all reasonable and documented out-of-pocket costs incurred by
the Company or its Subsidiaries in connection with such cooperation and shall
indemnify and hold harmless the Company, its Subsidiaries and their respective
Representatives for and against any and all losses suffered or incurred by them
in connection with the arrangement of the Debt Financing and any information
utilized in connection therewith (other than information provided by the Company
or the Subsidiaries). The Company hereby consents to the use of its and its
Subsidiaries' logos in connection with the Debt Financing; provided that such
logos are used solely in a manner that is not intended to nor reasonably likely
to harm or disparage the Company or any of it Subsidiaries or the reputation or
goodwill of the Company or any of its Subsidiaries and its or their marks. All
non-public or otherwise confidential information
43
regarding the Company obtained by Parent, Merger Sub or their Representatives
pursuant to this Section 7.10(a) shall be kept confidential in accordance with
the Confidentiality Agreement.
(b) Parent shall use its reasonable best efforts to arrange
the Debt Financing as promptly as practicable taking into account the
expected timing of the Marketing Period and the End Date on the terms
and conditions described in the Debt Financing Commitments, including
using reasonable best efforts to (i) negotiate definitive agreements
with respect thereto on the terms and conditions contained therein or
on other terms no less favorable to Parent and (ii) to satisfy on a
timely basis all conditions applicable to Parent in such definitive
agreements that are within its control. In the event that all
conditions to the Financing Commitments (other than in connection with
the Debt Financing, the availability or funding of any of the Equity
Financing) have been satisfied in Parent's good faith judgment, and
subject in the case of bridge financing to the fifth sentence of this
Section 7.10(b), Parent shall use its reasonable best efforts to cause
the lenders and the other Persons providing such Financing to fund the
Financing required to consummate the Merger on the Closing Date
(including by taking enforcement action to cause such lenders and other
Persons providing such Financing to fund such Financing). In the event
any portion of the Debt Financing becomes unavailable on the terms and
conditions contemplated in the Debt Financing Commitments, Parent shall
use its reasonable best efforts to arrange to obtain alternative
financing from alternative sources on terms no less favorable to Parent
(as determined in the reasonable judgment of Parent) as promptly as
practicable following the occurrence of such event but no later than
the final day of the Marketing Period or if, earlier, the End Date.
Parent shall keep the Company reasonably apprised of material
developments relating to the Financing. For the avoidance of doubt, in
the event that (x) all or any portion of the Debt Financing structured
as high yield financing has not been consummated, (y) all closing
conditions contained in Article VIII (other than those contained in
Section 8.2(c) and Section 8.3(c)) shall have been satisfied or waived
and (z) the bridge facilities contemplated by the Debt Financing
Commitments (or alternative bridge financing obtained in accordance
with this Agreement) are available on the terms and conditions
described in the Debt Financing Commitments (or replacements thereof),
then Parent shall cause the proceeds of such bridge financing to be
used to replace such high yield financing no later than the final day
of the Marketing Period or, if earlier, the End Date. For purposes of
this Agreement, "Marketing Period" shall mean the first period of 20
consecutive Business Days after the date hereof throughout which (A)
Parent shall have the Required Financial Information that the Company
is required to provide to Parent pursuant to Section 7.10(a) and (B)
the conditions set forth in Section 8.1 shall be satisfied and nothing
has occurred and no condition exists that would cause any of the
conditions set forth in Sections8.2(a) or 8.2(b) to fail to be
satisfied assuming the Closing were to be scheduled for any time during
such 20 consecutive Business Day period; provided, that if the
Marketing Period has not ended on or prior to December 19, 2006, the
Marketing Period shall commence no earlier than January 2, 2007; and
provided, further, that the "Marketing Period" shall not be deemed to
have commenced if, prior to the completion of the Marketing Period,
Ernst &Young LLP shall have withdrawn its audit opinion with respect to
any financial statements contained in the Company SEC Reports.
44
(c) Notwithstanding anything in the Confidentiality Agreements
to the contrary, Parent, Merger Sub and their respective Affiliates may
enter into discussions, negotiations, arrangements or understanding
with respect to equity financing or equity financing commitments in
respect of the Merger or the other transactions contemplated by the
Merger Agreement with any Person listed on Section 7.10(c) of the
Company Disclosure Letter.
Section 7.11. Actions with Respect to Existing Debt. As soon as
reasonably practicable after the receipt of any written request by Parent to do
so, the Company shall commence offers to purchase with respect to all of the
outstanding aggregate principal amount of those series of the Company debt
securities listed on Schedule 7.11 (the "Short-Dated Notes"), on such terms and
conditions, including pricing terms, that are proposed, from time to time, by
Parent (each a "Debt Tender Offer" and collectively, the "Debt Tender Offers")
and Parent shall assist the Company in connection therewith. Notwithstanding the
foregoing, the closing of the Debt Tender Offers shall be conditioned on the
occurrence of the Closing, and the parties shall use their reasonable best
efforts to cause the Debt Tender Offers to close on the Closing Date. The
Company shall provide, and shall cause its Subsidiaries to, and shall use its
reasonable best efforts to cause their respective Representatives to, provide
all cooperation requested by Parent in connection with the Debt Tender Offers.
With respect to any series of Short-Dated Notes, if requested by Parent in
writing, in lieu of commencing a Debt Tender Offer for such series (or in
addition thereto), the Company shall, to the extent permitted by the Indenture
and the Debt Securities (as defined in the Indenture) for such Short-Dated
Notes, (A) issue not less than 30 days and not more than 60 days prior to the
Effective Time a notice of optional redemption for all of the outstanding
aggregate principal amount of Short-Dated Notes of such series pursuant to
Section 1204 of the Indenture or (B) take any actions reasonably requested by
Parent to facilitate the satisfaction and/or discharge of such series pursuant
to Section 401 or Article 14 of the Indenture, and shall redeem or satisfy
and/or discharge, as applicable, such series in accordance with the terms of the
Indenture at the Effective Time; provided that prior to the Company being
required to take any of the actions described in clause (A) or (B) above that
cannot be conditioned upon the occurrence of the Closing, Parent shall have, or
shall have caused to be, deposited with the trustee under the Indenture
sufficient funds to effect such redemption or satisfaction and discharge. If
this Agreement is terminated (other than pursuant to Section 9.1(c)(ii) or
9.1(d)) prior to the consummation of the Merger, Parent shall reimburse the
Company for its reasonable out-of-pocket fees and expenses incurred pursuant to,
and in accordance with, this Section 7.11. If the Effective Time does not occur,
Parent shall indemnify and hold harmless the Company, its Subsidiaries and their
respective officers and directors and each Person, if any, who controls the
Company within the meaning of Section 20 of the Exchange Act from and against
any and all damages suffered or incurred by them in connection with any actions
taken pursuant to this Section 7.11; provided, however, that Parent shall not
have any obligation to indemnify and hold harmless any such party or Person to
the extent that any such damages suffered or incurred arose from disclosure
regarding the Company that is determined to have contained a material
misstatement or omission.
Section 7.12. Actions with Respect to Foundation Options and HTI
Warrant. As soon as practicable following the date of this Agreement, (a) the
Company shall use its reasonable best efforts to obtain such consents as are
necessary under the HTI Warrant to amend the HTI Warrant in order to provide for
the cancellation of the HTI Warrants immediately prior
45
to the Effective Time in exchange for the payment by the Surviving Corporation
to each holder thereof of cash in an amount equal to (A) the number of shares of
Common Stock subject to the HTI Warrant held by such holder multiplied by (B)
the excess of the Merger Consideration over the per share exercise price
applicable to the HTI Warrant and (b) recommend to the board of directors (or
equivalent governing body) of HCA Healthcare Foundation Inc. that the Foundation
Options be exercised prior to the Effective Time.
Section 7.13. Insurance Matters. To the extent requested by Parent, the
Company shall use its reasonable best efforts to purchase by the Effective Time
tail policies to the current fiduciary liability and excess hospital
professional liability polices maintained on the date hereof by the Company and
its Subsidiaries, which tail policies shall be effective for a period from the
Effective Time through a reasonable period specified by Parent and shall contain
the coverage and amount reasonably requested by Parent.
Section 7.14. Section 16(b). The Company shall take all steps
reasonably necessary to cause the transactions contemplated by this Agreement
and any other dispositions of equity securities of the Company (including
derivative securities) in connection with the transactions contemplated by this
Agreement by each individual who is a director or executive officer of the
Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 7.15. Resignation of Directors. At the Closing, except as
otherwise may be agreed by Parent, the Company shall deliver to Parent evidence
reasonably satisfactory to Parent of the resignation of all directors of the
Company. Upon the request of Parent, as specified by Parent reasonably in
advance of the Closing, the Company will seek to obtain the resignation of all
directors of Subsidiaries of the Company, in each case, effective at the
Effective Time.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) Stockholder Approval. This Agreement shall have been
adopted by the Requisite Stockholder Vote.
(b) Regulatory Approval. Any applicable waiting period under
the HSR Act (and any extension thereof) relating to the Merger shall
have expired or been terminated.
(c) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other
judgment or order issued by a court or agency of competent jurisdiction
or other Law shall be in effect which prohibits, restrains or renders
illegal the consummation of the Merger.
46
Section 8.2. Conditions to the Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or valid waiver of the following further conditions:
(a) Representations and Warranties. The representations and
warranties (i) set forth in Section 4.5 shall be true and correct in
all material respects as of the Effective Time as if made at and as of
such time, (ii) set forth in Section 4.6(a) shall be true and correct
in all respects as of the Effective Time as if made at and as of such
time, except in the case of this clause (ii) where the failure to be so
true and correct has not had a material adverse effect on Parent's
ability to obtain the Debt Financing on the terms and conditions set
forth in the Debt Financing Commitments, (iii) set forth in Section
4.14(b) shall be true and correct in all material respects as of the
Effective Time as if made at and as of such time, and (iv) set forth in
Article IV, other than those described in clauses (i), (ii) and (iii)
above, shall be true and correct as of the Effective Time as if made at
and as of such time (without giving effect to any qualification as to
"Material Adverse Effect" set forth therein), except in the case of
this clause (iv) where the failure to be so true and correct,
individually or in the aggregate, has not had, and would not reasonably
be expected to have, a Material Adverse Effect on the Company; provided
that representations made as of a specific date shall be required to be
so true and correct (subject to such qualifications) as of such date
only.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations, and
complied in all material respects with the agreements and covenants,
required to be performed by or complied with by it hereunder.
(c) Officer's Certificate. Parent and Merger Sub shall have
received a certificate signed by a senior officer of the Company
certifying as to the matters set forth in Section 8.2(a) and Section
8.2(b).
Section 8.3. Conditions of the Obligations of the Company. The
obligation of the Company to consummate the Merger is subject to the
satisfaction or valid waiver of the following further conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement that
are qualified as to materiality shall be true and correct as of the
Effective Time as if made at and as of such time and those which are
not so qualified shall be true and correct in all material respects as
of the Effective Time as if made at and as of such time, except where
the failure of such representations and warranties to be so true would
not prevent the consummation of the Merger; provided that
representations made as of a specific date shall be required to be true
as of such date only.
(b) Performance of Obligations of Parent and Merger Sub.
Parent and Merger Sub shall have performed in all material respects all
obligations, and complied in
47
all material respects with the agreements and covenants, required to be
performed by or complied with by it hereunder.
(c) Officer's Certificate. The Company shall have received a
certificate signed by a senior officer of Parent and Merger Sub
certifying as to the matters set forth in Section 8.3(a) and Section
8.3(b).
ARTICLE IX
TERMINATION
Section 9.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any prior adoption of this Agreement by the stockholders of the Company):
(a) by mutual written consent of the Company, on the one hand,
and Parent or Merger Sub, on the other hand;
(b) by either the Company, on the one hand, or Parent or
Merger Sub, on the other hand, if:
(i) the Effective Time shall not have occurred on or
before December 19, 2006, or if the Marketing Period has not
ended on or before December 19, 2006 (the "End Date"), the End
Date shall be extended to January 31, 2007 (and in such event
the term "End Date" shall mean January 31, 2007); unless the
failure of the Effective Time to occur by such date is the
result of, or caused by, the failure of the party seeking to
exercise such termination right to perform or observe any of
the covenants or agreements of such party set forth in this
Agreement;
(ii) there shall be any final and nonappealable Law
that makes consummation of the Merger illegal or otherwise
prohibited; or
(iii) at the Company Stockholder Meeting or any
adjournment thereof at which this Agreement has been voted
upon, the stockholders of the Company fail to adopt this
Agreement by the Requisite Stockholder Vote;
(c) by the Company:
(i) if a breach of any representation, warranty,
covenant or agreement on the part of Parent or Merger Sub set
forth in this Agreement shall have occurred which would cause
any of the conditions set forth in Sections 8.3(a) or (b) not
to be satisfied, and such breach is incapable of being cured
by the End Date; provided, however, that the Company is not
then in material breach of this Agreement so as to cause any
of the conditions set forth in Section 8.1, 8.2(a) or 8.2(b)
not to be satisfied;
(ii) prior to obtaining the Requisite Stockholder
Vote, in accordance with, and subject to the terms and
conditions of, Section 7.4(d); or
48
(iii) if all of the conditions set forth in Sections
8.1, 8.2(a) and 8.2(b) have been satisfied and Parent has
failed to consummate the Merger no later than 5 calendar days
after the final day of the Marketing Period.
(d) by Parent or Merger Sub, if:
(i) a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in
this Agreement shall have occurred which would cause any of
the conditions set forth in Sections 8.2(a) or (b) not to be
satisfied, and such breach is incapable of being cured by the
End Date; provided, however, that neither Parent nor Merger
Sub is then in material breach of this Agreement so as to
cause any of the conditions set forth in Section 8.1, 8.3(a)
or 8.3(b) not to be satisfied; or
(ii) the Board of Directors of the Company or any
committee thereof (A) shall have effected a Recommendation
Withdrawal, or publicly proposed to effect a Recommendation
Withdrawal, (B) shall have approved or recommended to the
stockholders of the Company a Company Acquisition Proposal
other than the Merger, or shall have resolved to effect the
foregoing or (C) the Company fails to include the
Recommendation in the Company Proxy Statement.
Section 9.2. Termination Fee. (a) In the event that this Agreement is
terminated by the Company pursuant to Section 9.1(c)(ii) or by Parent or Merger
Sub pursuant to Section 9.1(d)(ii), then the Company shall pay the Termination
Fee as directed in writing by Parent, at or prior to the time of termination in
the case of a termination pursuant to Section 9.1(c)(ii) or as promptly as
possible (but in any event within two Business Days) following termination of
this Agreement in the case of a termination pursuant to Section 9.1(d)(ii).
(b) In the event that this Agreement is terminated by Parent
or Merger Sub, on the one hand, or the Company, on the other hand,
pursuant to Section 9.1(b)(iii) (or is terminated by the Company
pursuant to a different section of Section 9.1 at a time when this
Agreement was terminable pursuant to Section 9.1(b)(iii)) or by Parent
or Merger Sub pursuant to Section 9.1(d)(i) (or is terminated by the
Company pursuant to a different section of Section 9.1 at a time when
this Agreement was terminable pursuant to Section 9.1(d)(i)) and, at
any time after the date of this Agreement and prior to the Company
Stockholder Meeting (in the case of a termination pursuant to Section
9.1(b)(iii)) or prior to the breach giving rise to the right of
termination (in the case of a termination pursuant to Section
9.1(d)(i)), a bona fide, written Company Acquisition Proposal involving
the purchase of not less than a majority of the outstanding voting
securities of the Company shall have been publicly announced or
publicly made known and, in the case of termination pursuant to Section
9.1(b)(iii), not publicly withdrawn at least two Business Days prior to
the Company Stockholder Meeting, and, if within twelve months after
such termination pursuant to Section 9.1(b)(iii) or Section 9.1(d)(i)
the Company or any of its Subsidiaries enters into a definitive
agreement with respect to, or consummates, any Company Acquisition
Proposal involving the purchase of not less than a majority of the
outstanding voting securities of the Company (whether or not the same
as that originally announced or consummated), then, on the date of such
execution or consummation, the Company shall
49
pay the Termination Fee as directed in writing to Parent, less the
amount of any Parent Expenses previously paid to Parent by the Company.
(c) In the event that this Agreement is terminated by Parent
or Merger Sub, on the one hand, or the Company, on the other hand,
pursuant to Section 9.1(b)(iii) (or is terminated by the Company
pursuant to a different section of Section 9.1 at a time when this
Agreement was terminable pursuant to Section 9.1(b)(iii)) or by Parent
or Merger Sub pursuant to Section 9.1(d)(i) (or is terminated by the
Company pursuant to a different section of Section 9.1 hereof at a time
when this Agreement was terminable pursuant to Section 9.1(d)(i)) under
circumstances in which the Termination Fee is not payable pursuant to
this Section 9.2, then the Company shall pay as promptly as possible
(but in any event within two Business Days) following receipt of an
invoice therefor all of Parent's actual and reasonably documented
out-of-pocket fees and expenses (including reasonable legal fees and
expenses) actually incurred by Parent and its Affiliates on or prior to
the termination of this Agreement in connection with the transactions
contemplated by this Agreement ("Parent Expenses") as directed by
Parent in writing, which amount shall not be greater than $50 million;
provided, that the existence of circumstances which could require the
Termination Fee to become subsequently payable by the Company pursuant
to Section 9.2(b) shall not relieve the Company of its obligations to
pay the Parent Expenses pursuant to this Section 9.2(c); and provided,
further that the payment by the Company of Parent Expenses pursuant to
this Section 9.2(c) shall not relieve the Company of any subsequent
obligation to pay the Termination Fee pursuant to Section 9.2(b) except
to the extent indicated in Section 9.2(b).
(d) In the event that this Agreement is terminated by the
Company pursuant to (i) Section 9.1(b)(i) and at the time of such
termination the conditions set forth in Sections 8.1, 8.2(a) and 8.2(b)
have been satisfied, (ii) Section 9.1(c)(i) and at the time of such
termination there is no state of facts or circumstances that would
reasonably be expected to cause the conditions set forth in Section
8.1, 8.2(a) and 8.2(b) not to be satisfied on or prior to the End Date,
or (iii) Section 9.1(c)(iii), then Parent shall pay the Company the
Termination Fee as promptly as possible (but in any event within two
Business Days) following such termination by the Company.
(e) Any amount that becomes payable pursuant to Section
9.2(a), 9.2(b) or 9.2(c) or 9.2(d) shall be paid by wire transfer of
immediately available funds to an account designated by the party
entitled to receive such payment.
(f) Each of the Company, Parent and Merger Sub acknowledges
that the agreements contained in this Section 9.2 are an integral part
of the transactions contemplated by this Agreement, that without these
agreements the Company, Parent and Merger Sub would not have entered
into this Agreement, and that any amounts payable pursuant to this
Section 9.2 do not constitute a penalty. If the Company fails to pay as
directed in writing by Parent any amounts due to Parent or Merger Sub
pursuant to this Section 9.2 within the time periods specified in this
Section 9.2 or Parent fails to pay the Company any amounts due to the
Company pursuant to this Section 9.2 within the time periods specified
in this Section 9.2, the Company or Parent, as applicable, shall pay
the costs and expenses (including reasonable legal fees and expenses)
incurred by Parent or the
50
Company, as applicable, in connection with any action, including the
filing of any lawsuit, taken to collect payment of such amounts,
together with interest on such unpaid amounts at the prime lending rate
prevailing during such period as published in The Wall Street Journal,
calculated on a daily basis from the date such amounts were required to
be paid until the date of actual payment. Notwithstanding anything to
the contrary in this Agreement, the Company's right to receive payment
of the Termination Fee from Parent pursuant to this Section 9.2 or the
guarantee thereof pursuant to the Guarantees shall be the sole and
exclusive remedy of the Company and its Subsidiaries against Parent,
Merger Sub, the Guarantors and any of their respective former, current,
or future general or limited partners, stockholders, managers, members,
directors, officers, Affiliates or agents for the loss suffered as a
result of the failure of the Merger to be consummated, and upon payment
of such amount, none of Parent, Merger Sub, the Guarantors or any of
their respective former, current, or future general or limited
partners, stockholders, managers, members, directors, officers,
Affiliates or agents shall have any further liability or obligation
relating to or arising out of this Agreement or the transactions
contemplated by this Agreement (except that Parent shall also be
obligated with respect to the second sentence of this Section 9.2(f)
and the indemnification and reimbursement obligations of Parent
contained in Sections 7.10(a) and 7.11, and that Parent and Merger Sub
shall also be obligated with respect to the provisions of Sections
7.3(c) and the last sentence of Section 7.10(a), it being understood
that no other Person (including the Guarantors) shall have any
liability or obligation under or with respect to such Sections 7.3(c)
and such last sentence of Section 7.10(a).
Section 9.3. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.1, this Agreement shall forthwith become null and void and
there shall be no liability or obligation on the part of the Company, Parent,
Merger Sub or their respective Subsidiaries or Affiliates, except that the
Guarantees referred to in Section 5.9, the indemnification and reimbursement
provisions of Sections 7.10(a) and 7.11, and the provisions of Section 7.3(c),
the last sentence of Section 7.10(a), Sections 9.2 and 9.3 and Article X will
survive the termination hereof; provided, however, that nothing herein shall
relieve the Company from liabilities for Damages incurred or suffered by Parent
or Merger Sub as a result of any willful breach by the Company of any of its
representations, warranties, covenants or other agreements set forth in this
Agreement that would reasonably be expected to cause any of the conditions set
forth in Sections 8.1, 8.2(a) or 8.2(b) not to be satisfied.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices, requests and other communications
to any part hereunder shall be in writing (including facsimile or similar
writing) and shall be given:
if to Parent or Merger Sub, to:
c/o:
ML Global Private Equity Fund, L.P.
c/o Merrill Xxxxx Global Private Equity
51
Four World Financial Xxxxxx, Xxxxx 00
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Xxxxxxxxxxx Xxxxxxx
Fax: (000) 000-0000
c/o:
Xxxx Capital Fund IX, L.P.
c/o Bain Capital Partners, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
c/o:
KKR Millennium Fund, L.P.
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Xx. X.X.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
if to the Company, to:
HCA Inc.
Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with copies (which shall not constitute notice) to:
Bass, Xxxxx & Xxxx PLC
AmSouth Center
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx III., Esq.
52
J. Page Davidson, Esq.
Fax: (000) 000-0000
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X'Xxxxx, Esq.
Xxxxxxxxx O'X. Xxxxxx, Esq.
Fax: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify by
notice to the other parties hereto. Each such notice, request or other
communication shall be effective (i) if given by telecopier, when such telecopy
is transmitted to the facsimile number specified above and electronic
confirmation of transmission is received or (ii) if given by any other means,
when delivered at the address specified in this Section 10.1.
Section 10.2. Representations and Warranties. None of the
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for those covenants and agreements contained herein and therein
which by their terms apply in whole or in part after the Effective Time and then
only to such extent. Each of Parent, Merger Sub and the Company acknowledges and
agrees that, except for the representations and warranties expressly set forth
in this Agreement (a) no party makes, and has not made, any representations or
warranties relating to itself or its businesses or otherwise in connection with
the Merger, (b) no person has been authorized by any party to make any
representation or warranty relating to itself or its businesses or otherwise in
connection with the Merger and, if made, such representation or warranty must
not be relied upon as having been authorized by such party, and (c) any
estimates, projections, predictions, data, financial information, memoranda,
presentations or any other materials or information provided or addressed to any
party or any of its Representatives are not and shall not be deemed to be or to
include representations or warranties unless any such materials or information
is expressly the subject of any representation or warranty set forth in this
Agreement.
Section 10.3. Expenses. Except as otherwise expressly provided in
Sections 7.10, 7.11 and 9.2, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
Section 10.4. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
(in the case of the Company, acting through the Special Committee if such
committee still exists) at any time prior to the Effective Time, whether before
or after adoption of this Agreement by the stockholders of the Company;
provided, however, that, after adoption of this Agreement by the stockholders of
the Company, no amendment may be made which under applicable Law requires the
further approval of the stockholders of the Company without such further
approval. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
53
Section 10.5. Waiver. At any time prior to the Effective Time, any
party hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) subject to the requirements of
applicable law, waive compliance with any of the agreements or conditions
contained for the benefit of such party contained herein; provided that for so
long as the Special Committee exists, the Company may not take any such action
unless previously authorized by the Special Committee. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby. The failure of any party to assert any
rights or remedies shall not constitute a waiver of such rights or remedies.
Section 10.6. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto (and any purported assignment
without such consent shall be void and without effect), except that each of
Parent and Merger Sub may assign all or any of its rights and obligations
hereunder to any Affiliate of Parent; provided, however, that no such assignment
shall relieve the assigning party of its obligations hereunder.
Section 10.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section 10.8. Counterparts; Effectiveness; Third Party Beneficiaries.
This Agreement may be executed by facsimile signatures and in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective only when actually signed by each party hereto and each
such party has received counterparts hereof signed by all of the other parties
hereto. No provision of this Agreement is intended to or shall confer upon any
Person other than the parties hereto any rights or remedies hereunder or with
respect hereto, except as otherwise expressly provided in Section 7.5.
Section 10.9. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by virtue of any
Law, or due to any public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby
are fulfilled to the extent possible.
Section 10.10. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to its subject matter and
supersedes all oral or written prior or contemporaneous agreements and
understandings among the parties with respect to such subject matter.
54
Section 10.11. Remedies. (a) The Company agrees that to the extent it
has incurred losses or damages in connection with this Agreement, (i) the
maximum aggregate liability of Parent and Merger Sub for such losses or damages
shall be limited to $500 million and any amounts owed pursuant to Sections
7.10(a) and 7.11, (ii) the maximum liability of each Guarantor, directly or
indirectly, shall be limited to the express obligations of such Guarantor under
its Guarantee, and (iii) in no event shall the Company seek to recover any money
damages in excess of such amount from Parent, Merger Sub, the Guarantors, or
their respective Representatives and Affiliates in connection therewith.
(b) The parties hereto agree that irreparable damage would
occur in the event that any provision of this Agreement were not
performed by the Company in accordance with the terms hereof and that,
prior to the termination of this Agreement pursuant to Section 9.1,
Parent and Merger Sub shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity. The
parties acknowledge that the Company shall not be entitled to an
injunction or injunctions to prevent breaches of this Agreement by
Parent or Merger Sub or to enforce specifically the terms and
provisions of this Agreement and that the Company's sole and exclusive
remedy with respect to any such breach shall be the remedy set forth in
Sections 9.2(d) and 10.11(a); provided, however, that the Company shall
be entitled to specific performance against Parent and Merger Sub to
prevent any breach by Parent or Merger Sub of Section 7.3(c) and the
last sentence of Section 7.10(a).
Section 10.12. Jurisdiction.
(a) In any action or proceeding between any of the parties
arising out of or relating to this Agreement or any of the transactions
contemplated by this Agreement, each of the parties hereto: (i)
irrevocably and unconditionally consents and submits, for itself and
its property, to the exclusive jurisdiction and venue of the Court of
Chancery of the State of Delaware (or, in the case of any claim as to
which the federal courts have exclusive subject matter jurisdiction,
the Federal court of the United States of America, sitting in
Delaware); (ii) agrees that all claims in respect of such action or
proceeding must be commenced, and may be heard and determined,
exclusively in the Court of Chancery of the State of Delaware (or, if
applicable, such Federal court); (iii) waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such action or proceeding
in the Court of Chancery of the State of Delaware (and, if applicable,
such Federal court); and (iv) waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in the Court of Chancery of the State of Delaware
(or, if applicable, such Federal court). Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each party to this
Agreement irrevocably consents to service of process in the manner
provided for notices in Section 10.1. Nothing in this Agreement shall
affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY
55
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV)
EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
10.12.
Section 10.13. Authorship. The parties agree that the terms and
language of this Agreement were the result of negotiations between the parties
and their respective advisors and, as a result, there shall be no presumption
that any ambiguities in this Agreement shall be resolved against any party. Any
controversy over construction of this Agreement shall be decided without regard
to events of authorship or negotiation.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first written above.
HCA INC.
By: /s/ Xxxx X. Xxxxxxxx, Xx.
--------------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Title: Chairman and Chief Executive
Officer
HERCULES HOLDING II, LLC
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: President
HERCULES ACQUISITION CORPORATION
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: President
