Exhibit 2.1
-----------
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
-----------------------------------------------
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "First
Amendment"), is entered into as of November 28, 2001, among ANAM LLC, a Delaware
limited liability company ("Parent"), NHI ACQUISITION CORP., a Delaware
corporation ("Merger Sub"), and NEXTHEALTH, INC., a Delaware corporation
("Target").
R E C I T A L S
- - - - - - - -
A. Parent, Merger Sub and Target have heretofore executed and
entered into that certain Agreement and Plan of Merger, dated as of April 16,
2001 (the "Original Agreement"). Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in the Original
Agreement. To the extent that this First Amendment amends or otherwise changes
the meanings of any terms that are also defined in the Original Agreement, the
meanings ascribed to such terms in this First Amendment shall govern and be
binding for all purposes of this First Amendment and the Original Agreement.
B. Pursuant to Section 8.6 of the Original Agreement, Parent and
Target (with the approval of the Special Committee) may amend the Original
Agreement.
C. Parent, Merger Sub and Target desire to amend the Original
Agreement on the terms and subject to the conditions set forth in this First
Amendment.
D. The Special Committee has unanimously approved, and the Board of
Directors of Target has unanimously approved, this First Amendment and
determined that the terms of the Merger, the Original Agreement, as amended by
this First Amendment, and the transactions contemplated hereby and thereby are
advisable, fair to and in the best interests of Target's stockholders (other
than Buyer and the Controlling Affiliates of Buyer).
Accordingly, in consideration of the foregoing and the mutual
agreements set forth herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. References to the Agreement.
---------------------------
(a) All references to the "Agreement" contained in Exhibit
A, Recitals A, D and E and Sections 2.2(c), 2.9 (first paragraph
only), 2.10 (first paragraph only), 3.2(f), 3.13, 3.15, 3.19,
3.20, 3.22, 4.3, 4.4, 5.2, 5.3(b), 5.3(c), 5.3(e), 5.3(f), 5.6
(other than in the first sentence thereof), 5.7, 5.8, 5.9(a), 6.1
(first paragraph only), 6.1(a), 6.1(b), 6.1(d), 6.1(h), 6.2
(first paragraph only), 6.2(a), 6.2(b), 6.2(e), 7.1 (first
paragraph only), 7.1(c), 7.1(h), 7.3, 7.4, 8.2, 8.3, 8.5, 8.6,
8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13 and 8.14 of the Original
Agreement shall be deemed to be references to the Original
Agreement as amended by this
2
First Amendment. All other references to the "Agreement" contained in the
Original Agreement shall be deemed to be references to the Original
Agreement.
(b) All references to the word "hereof" contained in
Sections 1.1, 1.2, 2.1(a), 2.1(b), 2.1(d), 2.2(b), 2.2(e), 2.3,
2.6, 2.9 (first paragraph only), 2.9(a), 2.10 (first paragraph
only), 3.2(a), 3.2(c) (in the parenthetical defining the term
"Target Securities" only), 3.4, 3.8(b)(iv), 3.18, 5.1, 5.2(a),
5.2(c), 5.3(a) (other than in the second sentence therefor),
5.3(b), 5.3(c), 5.8 (but not the last word thereof), 6.1(b),
6.2(b), 7.1(c), 7.1(f), 7.1(g), 7.3, 7.4, 8.2, 8.6, 8.7 and 8.8
of the Original Agreement shall be deemed to be references to the
words "of the Original Agreement as amended by this First
Amendment". All other references to the word "hereof" contained
in the Original Agreement shall be deemed to be references to the
words "of the Original Agreement".
(c) All references to the word "hereby" contained in the
Original Agreement shall be deemed to be references to the words
"by the Original Agreement as amended by this First Amendment".
2. Per Share Merger Consideration. Section 2.1(a) of the Original
------------------------------
Agreement is amended by deleting the reference to "$5.65" therein and
substituting in its place "$5.10."
3. Warrants. Section 2.5 of the Original Agreement is amended to read,
--------
in its entirety, as follows:
2.5. Warrants.
--------
(a) Target shall adopt such resolutions or take such
other actions as are required to adjust the terms of all
outstanding Warrants to provide that, effective at the
Effective Time, (i) each outstanding warrant to purchase
Common Stock listed on Schedule 3.2(b) (a "Warrant") whether
---------------
or not then exercisable, shall become fully exercisable,
(ii) each Warrant that is then outstanding shall be canceled
and (iii) in consideration of such cancellation, and except
to the extent that Parent and the holder of any such Warrant
otherwise agree, Parent shall pay, promptly after the
Effective Time, to such holders of Warrants an amount in
respect thereof equal to the product of (x) the excess of
the Per Share Merger Consideration over the exercise price
thereof and (y) the number of shares of Common Stock subject
thereto (such payment to be net of taxes required by law to
be withheld with respect thereto); provided that the
--------
foregoing shall be subject to the obtaining of any necessary
consents of holders of Warrants, it being agreed that Target
and Parent will use their reasonable best efforts to obtain
any such consents; and provided further
-------- -------
3
that Target shall not be required to make any payments in
connection with obtaining such consents. Target shall not
grant any additional warrants or similar rights on or after
the date hereof.
(b) Notwithstanding anything to the contrary set
forth in Section 2.5(a), no later than the earlier of (i)
December 31, 2001, or (ii) the date that AP NH, LLC exercises
any of the Note Warrants (as defined below), Target and AP NH,
LLC shall enter into such documentation (collectively, the
"Warrant Amendment") as is necessary to effect an amendment to
the Warrant held by AP NH, LLC such that (i) a portion of the
Warrants held by AP NH, LLC which represent the right to
acquire an aggregate of 341,464 Common Shares (collectively,
the "Note Warrants") held by AP NH, LLC as of the date of this
First Amendment, whether or not then exercisable, shall become
fully exercisable, (ii) each Note Warrant that is then
outstanding shall be canceled and (iii) in consideration of
such cancellation, at the sole and exclusive option of Parent,
Parent shall, promptly after the Effective Time, either (A)
pay to AP NH, LLC the amounts payable with respect to the Note
Warrants as provided in Section 2.5(a), or (B) deliver to AP
NH, LLC a subordinated note in the aggregate principal amount
of $1,400,000 (the "Subordinated Note") from Parent or an
Affiliate of Parent which will directly own the Mortgaged
Property (as defined below) after the Merger, which
Subordinated Note shall contain the terms set forth in Section
2.5(c) of this First Amendment. The "Mortgaged Property" shall
consist of the land and improvements known as the Miraval Spa
and Resort, which property is comprised of a total of 106
guest rooms and other buildings related to the Miraval Spa and
Resort business upon 130 acres of land. Notwithstanding this
Section 2.5(b), the Warrant Amendment shall be null, void and
of no effect if the Original Agreement, as amended by this
First Amendment, is terminated in accordance with Article VII
thereof.
(c) The debt evidenced by the Subordinated Note shall
be (i) non-recourse except for customary institutional
exclusions and exceptions related to fraud and
misappropriation of funds, (ii) subordinated to the debt
financing related to the Mortgaged Property described in the
Proxy Statement (or any refinance, extension, amendment or
modification thereof) (as so refinanced, extended, amended or
modified, the "Senior Debt") as
4
provided in the Subordination Documents (as defined below),
and (iii) secured by a valid second mortgage on the
Mortgaged Property (the "Second Mortgage"). The Second
Mortgage shall be subordinated in all respects to the first
mortgage/deed of trust on the Mortgaged Property to be
granted to a senior lender (the "Miraval Lender") in
connection with the Senior Debt, but shall be senior in all
respects to all other mortgages, if any, on the Mortgaged
Property. The Subordinated Note shall mature on the second
anniversary of the Closing, and shall bear interest at the
rate of 12% per annum, payable quarterly, commencing on June
30, 2002. The principal amount of the Subordinated Note
shall be due upon maturity. The Subordinated Note may be
prepaid at any time without penalty.
(d) The form of the Subordinated Note, the Second
Mortgage and any other documents reasonably requested by the
Miraval Lender to evidence the subordination of the
Subordinated Note and the Second Mortgage (collectively with
the Subordinated Note and the Second Mortgage, the
"Subordination Documents") shall be reasonably acceptable to
AP NH, LLC, Parent and the Miraval Lender, it being agreed
that it shall not be deemed reasonable for the Miraval Lender
to not accept the form of the Subordination Documents if the
Miraval Lender does not accept such form because (i) the
Miraval Lender unreasonably withholds its approval of the
issuance of the Subordinated Note or the granting of the
Second Mortgage or (ii) such Subordination Documents prohibit
the payment of the principal amount of the Subordinated Note
upon maturity thereof (other than if an event of default
occurs and is continuing pursuant to an agreement with the
Miraval Lender entered into in connection with the Senior
Debt). It is further agreed that one or more inter-creditor
agreements shall be executed among AP NH LLC, the maker of the
Subordinated Note, the Miraval Lender and such other creditors
as may be necessary (which inter-creditor agreements shall be
deemed to be a part of the Subordination Documents) providing
(A) AP NH, LLC with the right to cure defaults on the Senior
Debt, and acknowledging the right of AP NH, LLC to receive
payment of the principal amount of the Subordinated Note upon
maturity thereof (other than if an event of default occurs and
is continuing pursuant to an agreement with the Miraval Lender
entered into in connection with the Senior Debt) even if the
Senior Debt is still outstanding, and
5
(B) the Miraval Lender and/or such other creditors with the
right to cure defaults on the Subordinated Debt.
4. The Closing. Section 2.8 of the Original Agreement is amended
-----------
to read, in its entirety, as follows:
2.8 The Closing. The closing of the transactions
-----------
contemplated by the Original Agreement as amended by this
First Amendment (the "Closing") shall take place at 10:00
A.M., New York City time, on March 22, 2001 or such other
time as Parent and Target, with the approval of the Special
Committee, shall agree in writing (the "Closing Date"), at the
offices of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 1221 Avenue of the
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as Parent and Target shall agree in writing.
5. Target's Deliveries at Closing.
------------------------------
(a) Section 2.9(a) of the Original Agreement is amended
by inserting, after the word "Agreement," the words
"this First Amendment,".
(b) Section 2.9(b) of the Original Agreement is amended
to read, in its entirety, as follows:
(b) Closing Certificate. A certificate executed on
-------------------
behalf of Target by its chief financial officer to
the effect that (i) the representations and
warranties of Target contained in the Original
Agreement were accurate and correct in all material
respects as of the date of the Original Agreement,
and are accurate and correct in all material respects
as of the time of the Closing, as if again made by
Target at such time (except for representations and
warranties which speak as of a specific date, in
which case, such representations and warranties shall
be accurate and correct as of such specific date),
(ii) the representations and warranties of Target
contained in this First Amendment were accurate and
correct in all material respects as of the date of
this First Amendment, and are accurate and correct in
all material respects as of the time of the Closing,
as if again made by Target at such time (except for
representations and warranties which speak as of a
specific date, in which case, such representations
and warranties shall be accurate and correct as of
such specific date), and (iii) Target has performed
in all material respects all of its covenants under
the Original Agreement, as amended by
6
this First Amendment, to be performed by it on or prior
to the Closing Date;
(c) Section 2.9(f) of the Original Agreement is hereby a
mended to read, in its entirety, as follows:
(f) Xxxxxxx Money. So long as the Special Committee
-------------
did not draw the full amount of the Letter of Credit
prior to the Closing, the original of the Letter of
Credit (as that term is defined in Section 7.5(a) of the
Original Agreement as amended by this First Amendment)
together with a termination certificate, in the form
attached as Exhibit B to the Letter of Credit, duly
executed by the members of the Special Committee; and
(d) The first grammatical paragraph of Exhibit C attached to
---------
the Original Agreement is hereby amended to read, in its entirety, as
follows:
We have acted as counsel to NextHealth, Inc., a Delaware
corporation (the "Company"), in connection with the
merger (the "Merger") of NHI Acquisition Corp. (the
"Merger Sub"), a wholly-owned subsidiary of Anam LLC
(the "Parent"), with and into the Company pursuant to
that certain Agreement and Plan of Merger (the "Original
Agreement") by and among the Company, the Merger Sub and
the Parent dated April 16, 2001, as amended by that
certain First Amendment to Agreement and Plan of Merger
(the "First Amendment") by and among the Company, the
Merger Sub and the Parent dated November 28, 2001. The
Original Agreement, as amended by the First Amendment,
together with the First Amendment, shall be referred to
collectively as the "Agreement."
6. Buyer's Documents Delivered at Closing.
--------------------------------------
(a) Section 2.10(a) of the Original Agreement is amended by
inserting, after the word "Agreement" the words ", this First
Amendment".
(b) Section 2.10(b) of the Original Agreement is amended to
read, in its entirety, as follows:
(b) Closing Certificate. A certificate executed on
-------------------
behalf of Parent by its chief executive officer to the
effect that (i) the representations and warranties of
Parent and Merger Sub contained in the Original
Agreement were accurate and correct in all material
respects as of the date of the Original Agreement, and
are accurate and correct in all material respects as of
the time of the Closing, as if again
7
made by Parent and Merger Sub at such time (except for
representations and warranties which speak as of a
specific date, in which case, such representations and
warranties shall be accurate and correct as of such
specific date), (ii) the representations and warranties
of Parent and Merger Sub contained in this First
Amendment were accurate and correct in all material
respects as of the date of this First Amendment, and
are accurate and correct in all material respects as of
the time of the Closing, as if again made by Parent and
Merger Sub at such time (except for representations and
warranties which speak as of a specific date, in which
case, such representations and warranties shall be
accurate and correct as of such specific date), and
(iii) Parent and Merger Sub have performed in all
material respects all of their covenants under the
Original Agreement, as amended by this First Amendment,
to be performed by them on or prior to the Closing.
7. Preparation of Proxy Statement, Etc.; Stockholders Meeting. Section
----------------------------------------------------------
5.2(a) of the Original Agreement is amended to read, in its entirety, as
follows:
(a) Proxy Statement, Etc. Promptly following the date of
---------------------
this Agreement, Target shall prepare a proxy statement
relating to a meeting of the holders of Target Capital Stock
having voting rights for the purpose of obtaining the
requisite stockholder votes necessary to approve of the
Merger and this Agreement (the "Proxy Statement"), and
Parent and Target shall prepare a Schedule 13E-3 under the
Exchange Act (the "Schedule 13E-3") with respect to the
transactions contemplated by this Agreement. Buyer will
cooperate in good faith with Target in connection with the
preparation of the Proxy Statement, the Schedule 13E-3 and
each amendment to the Proxy Statement to be filed after the
date of this First Amendment, including, but not limited to,
using Parent's reasonable commercial efforts to furnish to
Target, within five Business Days (defined as any day other
than a Saturday, Sunday, national holiday or day when banks
are authorized to be closed in New York City) after Parent's
receipt from Target of a written request therefor, any and
all information regarding Parent and its Affiliates required
by applicable law, or reasonably required by the SEC, to be
disclosed therein (including, without limitation, all
information required thereunder about the Affiliates' of
Parent and Parent's financing plans). The information
provided and to be provided by Buyer and Target,
respectively, for use in the Proxy Statement and the
Schedule 13E-3 shall, with respect to the
8
Proxy Statement, at the date it is first mailed to Target's
stockholders and on the date of the Stockholders Meeting
referred to in Section 5.2(c) hereof, and, with respect to
the Schedule 13E-3, at the time it is filed with the SEC, be
true and correct in all material respects and shall not omit
to state any material fact required to be stated therein or
necessary in order to make such information not misleading,
and Target and Buyer each agree to correct any information
provided by it for use in the Proxy Statement and the
Schedule 13E-3 which shall have become false or misleading.
8. Non-Solicitation.
----------------
(a) Section 5.3(a) of the Original Agreement is amended by replacing
the words "that did not result from a breach of this Section 5.3(a)," with
the words "or a Takeover Proposal solicited during the Additional
Solicitation Period, in either case that did not result from a breach of
this Section 5.3(a), as modified by Section 5.3(g),".
(b) Section 5.3 of the Original Agreement is amended by adding a new
Section 5.3(g) immediately following Section 5.3(f), which Section 5.3(g)
shall read as follows:
(g) Notwithstanding anything to the contrary set forth
in Section 5.3(a) of the Original Agreement, as amended
by this First Amendment, during the period beginning on
the date of this First Amendment and ending 30 days
thereafter (the "Additional Solicitation Period"),
Target and its Representatives shall have the right to
(i) solicit, initiate or encourage the submission of,
any Takeover Proposal from any Person and (ii)
participate in discussions or negotiations regarding,
or furnish (pursuant to a confidentiality agreement
substantially similar to the Confidentiality Agreement)
to any Person any non-public information with respect
to, or take any other action to facilitate any
inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to,
any Takeover Proposal, and it is contemplated and
expected that Target and its Representatives will do so
for the sole purpose of determining if any Takeover
Proposal constituting a Superior Proposal is available
to Target. Target agrees not to release any Person
from, or waive any material provision of, any
standstill or confidentiality agreement entered into
pursuant to this Section 5.3(g) to which any Company is
a party.
9
9. Confidentiality; Public Announcements. Section 5.4 of the Original
-------------------------------------
Agreement is amended to read, in its entirety, as follows:
5.4 Confidentiality; Public Announcements. The initial
-------------------------------------
press release with respect to the execution of the Original
Agreement shall be a joint press release subject to Section
5.3(e) of the Original Agreement, as amended by this First
Amendment, and otherwise acceptable to Parent and Target.
The initial press release with respect to the execution of
this First Amendment shall be a joint press release subject
to Section 5.3(e) of the Original Agreement, as amended by
this First Amendment, and otherwise acceptable to Parent and
Target. Except as provided in Section 5.3(e) of the Original
Agreement, as amended by this First Amendment, Parent and
Target agree not to make any additional public disclosures
without the prior consent of the other (which consent shall
not be unreasonably withheld or delayed) as to the content
and timing of such disclosure; provided, however, that
-------- -------
either party may make such disclosures as may be required to
comply with applicable law, regulations or NASDAQ
requirements, as long as the other party is afforded (to the
extent practicable) prior notice thereof.
10. Notification of Certain Matters.
-------------------------------
(a) Section 5.8 of the Original Agreement is amended by inserting,
after the word "Agreement" the words " or in this First Amendment".
(b) Section 5.8 of the Original Agreement is amended by deleting the
references to "hereunder" therein and substituting in their places "under
this Agreement, as amended by this First Amendment".
11. Conditions to Obligations of Buyer.
----------------------------------
(a) Section 6.1(a) of the Original Agreement is amended by
inserting, after the word "Agreement" the words " or in this First
Amendment".
(b) Section 6.1(f) of the Original Agreement is hereby deleted in
its entirety and the following language is substituted in its place:
(f) No Material Adverse Change. Since the date of this First
--------------------------
Amendment, there shall have been no Material Adverse Change. For
this purpose, "Material Adverse Change" shall mean a material
and adverse effect on the financial condition, assets, results
of operations or business of the Target and its Subsidiaries
taken as a whole that resulted solely from a Force Majeure (as
hereafter defined)
10
that occurred after the date of this First Amendment, in the
Phoenix or Tucson metropolitan areas, respectively, and that
(i) substantially destroyed the physical plant in which
either the Target's Sierra Tucson psychiatric hospital and
behavioral healthcare center business or the Target's
Miraval spa and resort business is conducted, or (ii) caused
either of the Target's Sierra Tucson psychiatric hospital
and behavioral healthcare center business or the Target's
Miraval spa and resort business to cease substantially all
operations for more than thirty (30) consecutive days solely
on account of damage to or destruction of the physical plant
of either such businesses, or (iii) caused the closure of
either the Tucson International Airport or Phoenix Sky
Harbor International Airport for a period of at least
fifteen (15) consecutive days. "Force Majeure" shall mean
war, insurrection, acts of terrorism, strikes, riots, fire,
an act of God, catastrophic event or operation of forces of
nature.
(c) Section 6.1(j) of the Original Agreement is amended to read,
in its entirety, as follows:
(j) Loan Agreement. On or prior to the Closing, Target
--------------
shall have paid in full, or caused to be paid in full, all
Indebtedness for Borrowed Funds of Target and its
Subsidiaries outstanding under the Loan Agreement dated as
of August 11, 1998 between Xxxxxx Brothers Holdings Inc. and
Sierra Health-Styles, Inc. and Sierra Tucson, LLC (the "Loan
Agreement").
(d) Section 6.1(l) of the Original Agreement is amended by
deleting the reference to "$35,000,000" therein and substituting in
its place "$50,000,000."
(e) Section 6.1 of the Original Agreement is amended by adding a
new Section 6.1(m) immediately following Section 6.1(l), which Section
6.1(m) shall read as follows:
(m) Note Warrants. (i) AP NH, LLC shall not have exercised,
-------------
sold or otherwise transferred the Note Warrants to any other
Person, (ii) AP NH, LLC, Parent and the Miraval Lender shall
have reasonably accepted the form of the Subordination
Documents as provided in Section 2.5(d), it being agreed
that the condition set forth in this clause (ii) of this
Section 6.1(m) shall be deemed to have been satisfied if the
Miraval Lender (subject to Section 2.5(d) of the Original
Amendment, as amended by this First Amendment) unreasonably
withholds approval of the issuance of the Subordinated Note
or the granting of the
11
Second Mortgage, and (iii) AP NH, LLC shall have executed
and delivered to Parent and/or the Miraval Lender such of
the Subordination Documents as are reasonably required to be
executed and delivered by AP NH, LLC.
12. Conditions to Obligations of Target. Section 6.2(a) of the
-----------------------------------
Original Agreement is amended by inserting, after the word "Agreement" the
words "or in this First Amendment".
13. Methods of Termination.
----------------------
(a) Section 7.1(b) of the Original Agreement is hereby deleted
in its entirety and the following language is substituted in its
place:
(b) by Parent, if all of the conditions set forth in
Section 6.1 of the Original Agreement, as amended by this
First Amendment, shall not have been satisfied or waived on
or prior to March 22, 2002, or such later date as is
mutually agreed upon by Parent and Target (with the approval
of the Special Committee and the Board of Directors of
Target pursuant to a vote in which Xxxxxx X. Xxxx and
Xxxxxxx X. X'Xxxxxxx, Xx. shall not participate) (such date,
the "Termination Date"); provided, however, that Parent
-------- -------
shall not have the right to terminate the Original
Agreement, as amended by this First Amendment, pursuant to
this subsection if such conditions have not been satisfied
due to Buyer's failure to fulfill or Buyer's breach of any
of its obligations under the Original Agreement, as amended
by this First Amendment, or this First Amendment;
(b) Section 7.1(c) of the Original Agreement is hereby deleted
in its entirety and the following language is substituted in its
place:
(c) by Target (acting by and through the Special Committee,
without need for any action being taken by Target's Board of
Directors), if all of the conditions set forth in Section
6.2 hereof shall not have been satisfied or waived on or
prior to the Termination Date; provided, however, that
-------- -------
Target shall not have the right to terminate this Agreement
pursuant to this subsection if such conditions have not been
satisfied due to Target's failure to fulfill or Target's
breach of any of its obligations under this Agreement; or
(c) Section 7.1(d) of the Original Agreement is hereby deleted
in its entirety and the following language is substituted in its
place:
12
(d) by Parent, if Target, Target's Board of Directors or
the Special Committee shall have breached any
representation, warranty or covenant set forth in the
Original Agreement, as amended by this First Amendment, or
this First Amendment, or if any such representation or
warranty shall have become untrue, in either case, such that
the conditions set forth in Section 6.1(a) or Section 6.1(b)
of the Original Agreement, as amended by this First
Amendment, would not be satisfied; provided that, as long as
--------
written notice of such breach is given to Target prior to
the Termination Date, if such breach is curable by Target
through the exercise of its reasonable best efforts and for
so long as Target continues to exercise such reasonable best
efforts, Parent shall not have the right to terminate the
Original Agreement, as amended by this First Amendment,
pursuant to this subsection unless such breach has not been
cured on or prior to the earlier of the following dates: (i)
the Termination Date or (ii) the date that is 30 days after
the giving of such written notice to Target.
(d) Section 7.1(e) of the Original Agreement is hereby deleted
in its entirety and the following language is substituted in its
place:
(e) by Target (with the approval of its Board of Directors
and the Special Committee), if Buyer shall have breached any
representation, warranty or covenant set forth in the
Original Agreement, as amended by this First Amendment, or
in this First Amendment, or if any such representation or
warranty shall have become untrue, in either case, such that
the conditions set forth in Section 6.2(a) or Section 6.2(b)
of the Original Agreement, as amended by this First
Amendment, would not be satisfied; provided that, as long as
--------
written notice of such breach is given to Buyer prior to the
Termination Date, if such breach is curable by Buyer through
the exercise of their reasonable best efforts and for so
long as Buyer continues to exercise such reasonable best
efforts, Target shall not have the right to terminate the
Original Agreement, as amended by this First Amendment,
pursuant to this subsection unless such breach has not been
cured on or prior to the earlier of the following dates: (i)
the Termination Date or (ii) the date that is 30 days after
the giving of such written notice to Buyer.
14. Mandatory Termination. Section 7.2 of the Original Agreement is
---------------------
hereby deleted in its entirety, and all references to Section 7.2 in the
Original Agreement, as amended by this First Amendment, shall be given no
force or effect.
13
15. Xxxxxxx Money. Section 7.5 of the Original Agreement is hereby deleted
-------------
in its entirety and the following language is substituted in its place:
7.5 Xxxxxxx Money.
-------------
(a) Upon the execution of this First Amendment, Parent shall
cause an irrevocable letter of credit issued by LaSalle Bank National
Association (the "Bank") in the amount of $3,000,000 substantially in
the form of Exhibit I attached hereto (the "Letter of Credit") to be
---------
delivered to the Special Committee.
(b) Simultaneously with the execution of this First Amendment,
Parent and Target shall execute and deliver to the Escrow Agent (as
defined below) a joint direction, in the form attached hereto as
Exhibit II, pursuant to Sections 8(g) and (i) of the Escrow Agreement,
----------
dated as of April 16, 2001 (the "Escrow Agreement"), among Parent,
Target and American National Bank and Trust Company of Chicago, as
escrow agent (the "Escrow Agent"), directing the Escrow Agent to
release, deliver and transfer to Parent the Irrevocable Letter of
Credit No. S531186, dated April 16, 2001, issued by the Bank in favor
of the Escrow Agent pursuant to the Escrow Agreement by delivering a
termination notice in the form of Exhibit B to such letter of credit
to the Bank (it being understood by the parties hereto that, in
accordance with Section 15 of the Escrow Agreement, the Escrow
Agreement shall terminate on the date that such letter of credit is so
released).
(c) If the Original Agreement, as amended by this First
Amendment, is terminated, and the Special Committee, in its sole
discretion, determines that such termination was not for a Refund
Reason (as defined in Section 7.5(e) of this First Amendment), then,
if the Special Committee has not previously drawn the full amount of
the Letter of Credit pursuant to Section 7.5(f), then the Special
Committee shall have the right to draw the full amount (and not less
than the full amount) of the Letter of Credit and deliver the proceeds
of such draw to Target and at the time of such termination Target
shall have the right to retain such proceeds (or any proceeds
delivered to Target by the Special Committee pursuant to Section
7.5(f)) as liquidated damages; provided, however, that if, after such
draw (or a draw pursuant to Section 7.5(f)), it is determined, by
either agreement of Parent and Target (with the approval of the
Special Committee and the Board of Directors of Target pursuant to a
vote in which Xxxxxx X. Xxxx and Xxxxxxx X. X'Xxxxxxx, Xx. shall not
participate) or a final order of a court of competent jurisdiction no
longer subject to appeal, that the Original Agreement, as amended by
this First Amendment, was in fact terminated for a Refund Reason,
Target shall promptly after
14
such determination deliver to Parent an amount of cash equal to the
amount of such drawing plus interest on such amount, at the Agreed
Rate (as defined in Section 7.5(h) of this First Amendment), from the
date of such drawing through the date that such payment is made.
(d) If the Original Agreement, as amended by this First
Amendment, is terminated for a Refund Reason, then Target shall cause
the Special Committee to deliver to Parent, promptly after such
termination, the original of the Letter of Credit together with a
termination certificate, in the form attached as Exhibit B to the
---------
Letter of Credit, duly executed by the members of the Special
Committee together with, if the Special Committee has drawn any
amounts against the Letter of Credit pursuant to Section 7.5(f) or
otherwise, an amount of cash equal to the amount of such drawing plus
interest on such amount, at the Agreed Rate, from the date of such
drawing through the date that such payment is made.
(e) For purposes of this Section 7.5, "Refund Reason" shall
mean:
(i) the termination of the Original Agreement, as amended
by this First Amendment, by Parent pursuant to Sections 7.1(b),
7.1(d), 7.1(f) (other than because shares of Common Stock
beneficially owned by Xxxxxxx X. X'Xxxxxxx, Xx. and Xxxxxx X.
Xxxx which are eligible to be voted were not voted in favor of
the Merger) or 7.1(h) of the Original Agreement, as amended by
this First Amendment;
(ii) the termination of the Original Agreement, as amended
by this First Amendment, by Target pursuant to Sections 7.1(f)
(other than because shares of Common Stock beneficially owned by
Xxxxxxx X. X'Xxxxxxx, Xx. and Xxxxxx X. Xxxx which are eligible
to be voted were not voted in favor of the Merger) or 7.1(g) the
Original Agreement, as amended by this First Amendment; or
(iii) the termination of the Original Agreement, as amended
by this First Amendment, by Parent and Target pursuant to Section
7.1(a) of the Original Agreement, as amended by this First
Amendment.
(f) On any date prior to the earlier of the Closing or the
termination of the Original Agreement, as amended by this First
Amendment, that is not more than five and not less than two Business
Days (as such term is defined in the Letter of Credit)
15
prior to the Planned Expiration Date (as such term is defined in the
Letter of Credit), the members of the Special Committee may (i) if the
Planned Expiration Date under the Letter of Credit may be extended,
deliver to the Bank a certificate in the form of Exhibit A to the
---------
Letter of Credit to extend the Planned Expiration Date for two months
beyond the then current Planned Expiration Date, or (ii) if the
Planned Expiration Date under the Letter of Credit may not be so
extended, collect the maximum amount then available under the Letter
of Credit and the proceeds thereof shall be delivered to Target.
(g) At all times prior to the earlier of the Closing or the
termination of the Original Agreement, as amended by this First
Amendment, Target shall take all necessary action to assure that the
Special Committee (i) remains as a committee of the Board of Directors
of Target, (ii) either (A) consists solely of Xxxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxx, the current members of the Special Committee, or (B)
consists solely of either Xxxxxxx X. Xxxxxx or Xxxx X. Xxxxxxx, and
(iii) has the power and authority to take all of the actions required
of it, or permitted by it, pursuant to the Original Agreement, as
amended by this First Amendment, this First Amendment and the Letter
of Credit. If at any time prior to the earliest to occur of (I) the
Closing, (II) the termination of the Original Agreement, as amended by
this First Amendment, or (III) the time that the Letter of Credit is
drawn against, either (w) Target breaches its obligations pursuant to
the first sentence of this Section 7.5(g), or (x) both of the current
members of the Special Committee cease serving on the Special
Committee for any reason, including if both of the current members of
the Special Committee die or become disabled and as a result thereof
become unable to fulfill their duties as a member the Special
Committee or if Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx (or if either of
them shall have died or become disabled and as a result thereof be
unable to fulfill his duties as a member the Special Committee, then
the one of Xxxxxxx X. Xxxxxx or Xxxx X. Xxxxxxx who did not die or
become so disabled) determines in their (or his) sole discretion that,
due to a conflict of interest or otherwise, it is no longer
appropriate for either of them to perform the functions permitted by
them pursuant to Section 7.5, then, in any such case, Target and the
Special Committee shall cause the Letter of Credit to be transferred
to the Escrow Agent by Target delivering to the Bank the original of
the Letter of Credit together with a certificate, in the form of
Exhibit D to the Letter of Credit, it being agreed that the Letter of
---------
Credit shall be held by the Escrow Agent pursuant to an escrow
agreement, in substantially the form of the Escrow Agreement (except
that any actions which the Escrow Agreement requires or permits to be
taken by agreement of Parent and Target shall be taken only by
16
agreement of Parent and Target (with the approval of the Board
of Directors of Target pursuant to a vote in which Xxxxxx X.
Xxxx and Xxxxxxx X. X'Xxxxxxx, Xx. shall not participate), to
be executed and delivered at such time by Parent, Target and
the Escrow Agent.
(h) For purposes of this First Amendment, the "Agreed
Rate" shall mean the rate earned, from time to time, on funds
invested in the One Group Prime Money Market Class A Shares
offered by the Escrow Agent.
(i) Except as expressly provided in Sections 7.5 (c)
or (f) of this First Amendment, the Special Committee shall
not have the right to make any draws against the Letter of
Credit. At the time that the Special Committee makes any draw
or draws against the Letter of Credit, or delivers any
certificates or other instrument or communication to the Bank
pursuant to this Section 7.5 or the Letter of Credit, the
Special Committee shall simultaneously deliver a copy of each
such certificate or other instrument or communication to
Parent using the same method of delivery employed in
delivering such certificate or other instrument or
communication to the Bank; provided, however, that if the
method of delivery of any such certificate or other instrument
or communication to the Bank is by hand delivery, then the
Special Committee shall simultaneously with such hand delivery
to the Bank both hand deliver a copy of such certificate or
other instrument or communication to Xxxx X. Xxxxxxx, counsel
to Parent, and send a copy of such certificate or other
instrument or communication to Parent by facsimile copy to
each of the following:
Anam LLC
Attention: Xxxxxx X. Xxxx
(000) 000-0000
Anam LLC
Attention: Xxxxxxx X. X'Xxxxxxx, Xx.
(000) 000-0000
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
Attention: Xxxx X. Xxxxxxx, Esq.
(000) 000-0000
and
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., L.P.A.
Attention Xxx Xxxxxxxx, Esq.
17
(000) 000-0000
(j) The provisions of this Section 7.5 shall survive the
termination of the Original Agreement as amended by this First
Amendment.
16. Successors and Assigns. Section 8.2 of the Original Agreement is
----------------------
amended by deleting the references to "hereunder" therein and substituting in
their places "under this Agreement, as amended by this First Amendment".
17. Notices. Section 8.4 of the Original Agreement is amended by deleting
-------
the references to "hereunder" therein and substituting in their places "under
this Agreement, as amended by this First Amendment".
18. Waivers, Amendments and Remedies. Section 8.6 of the Original Agreement
--------------------------------
is amended by deleting the references to "hereunder" therein and substituting in
their places "under this Agreement, as amended by this First Amendment".
19. Breaches. Section 8.14 of the Original Agreement is amended by deleting
--------
the references to "hereunder" therein and substituting in their places "under
this Agreement, as amended by this First Amendment".
20. Representations and Warranties of Target. Target hereby represents and
----------------------------------------
warrants to Buyer as follows:
(a) Authority Relative to First Amendment. Target has the corporate
-------------------------------------
power and authority to enter into this First Amendment and to carry out its
obligations hereunder. The Special Committee has the power and authority to
carry out its obligations hereunder and as contemplated by the Letter of
Credit. The execution and delivery of this First Amendment and the
performance by Target of its obligations hereunder have been duly approved
by the Special Committee and authorized by Target's Board of Directors, and
no other corporate proceedings on the part of Target are necessary to
authorize such execution, delivery and performance other than the requisite
approvals of the holders of the Common Stock and the Preferred Shares. This
First Amendment has been duly executed by Target and, assuming the due and
valid authorization, execution and delivery of this First Amendment by
Buyer, and subject to approval by Target's stockholders to the extent
required by the DGCL and the Organizational Documents, constitutes a valid
and legally binding obligation of Target enforceable against Target in
accordance with its terms, except as enforceability may be limited by
bankruptcy, moratorium, reorganization, receivership or similar laws
affecting the rights of creditors generally.
(b) Absence of Conflicts. The execution, delivery and performance by
--------------------
Target of this First Amendment, and the consummation of the transactions
contemplated hereby, do not and will not (i) conflict with or result in any
violation of, or constitute a breach or default under any term of the
Organizational
18
Documents of any Company or (ii) except as set forth in Schedule 3.6
------------
to the Original Agreement, constitute a breach or default, or require
Consents under, any agreement, permit or other instrument to which any
Company is a party, or by which any Company is bound or to which any
of the assets of any Company or the Business is subject, or any
Judgment to which any Company, the assets of any Company or the
Business is bound or subject or any Rule, and will not result in the
creation of any Lien upon any of the assets of any Company or the
Business, except in the case of (ii) for any of the foregoing that,
individually or in the aggregate, would not have a Material Adverse
Effect.
(c) Opinion of Financial Advisor. Target's Board of Directors
----------------------------
has received the opinion of Prudential Securities Incorporated, the
financial advisor to the Special Committee, to the effect that, as of
the date of this First Amendment, the consideration to be received in
the Merger by Target's stockholders (other than Buyer and its
Controlling Affiliates) is fair to the stockholders of Target (other
than Buyer and its Controlling Affiliates) from a financial point of
view. A copy of the written opinion will be promptly delivered to
Parent after receipt thereof by Target.
(d) Target Board Recommendation. The Board of Directors of
---------------------------
Target at a meeting duly called and held, and the Special Committee, at
a meeting duly called and held, has unanimously (i) determined that the
Merger, the Original Agreement, as amended by this First Amendment,
this First Amendment and the transactions contemplated thereby and
hereby are fair to and in the best interests of the stockholders of
Target (other than Buyer and its controlling affiliates) and (ii)
resolved to recommend that the stockholders of Target approve the
Merger, the Original Agreement, as amended by this First Amendment, and
the transactions contemplated thereby and hereby; provided that such
--------
recommendation may be withdrawn, modified or amended pursuant to
Section 5.3(b) of the Original Agreement, as amended by this First
Amendment.
(e) Indebtedness for Borrowed Funds. As of the date of this
-------------------------------
First Amendment, no Company has outstanding any Indebtedness for
Borrowed Funds other than as set forth on Exhibit III, which exhibit
-----------
lists the dollar amount of such Indebtedness for Borrowed Funds as of
the date of this First Amendment.
21. Representations and Warranties of Buyer. Parent and Merger
---------------------------------------
Sub, jointly and severally, hereby represent and warrant to Target as follows:
(a) Authority Relative to First Amendment. Each of Parent
-------------------------------------
and Merger Sub has the corporate or other entity power and authority
to enter into this First Amendment and to carry out its obligations
hereunder. The execution and delivery of this First Amendment and the
performance by Buyer of its obligations hereunder have been approved
by the Board of Directors or similar governing body of Parent and
Merger Sub and Parent as the sole stockholder of Merger Sub, and no
other corporate or other entity proceedings on the part of Buyer are
necessary to authorize such execution, delivery and performance. This
First
19
Amendment has been duly executed by Buyer and, assuming the due and valid
authorization, execution and delivery of this Agreement by Target,
constitutes the valid and legally binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as enforceability may be
limited by bankruptcy, moratorium, reorganization, receivership or similar
laws affecting the rights of creditors generally.
(b) Absence of Conflicts. The execution, delivery and performance by
--------------------
Buyer of this First Amendment, and the transactions contemplated hereby, do
not and will not (i) conflict with or result in any violation of, or
constitute a breach or default under any term of the Organizational
Documents of Buyer or (ii) constitute a material breach or default, or
require Consents under, any agreement, permit or other instrument to which
either Parent or Merger Sub is a party, or by which Buyer is bound or to
which any of the assets of Buyer or its business is subject, or any
Judgment to which Buyer, the assets of Buyer or the business of Buyer is
bound or subject or any Rule, and will not result in the creation of any
Lien upon any of the assets of Buyer or its business, except in the case of
(ii) for any of the foregoing that would not reasonably be expected to
prevent or materially delay consummation of the transactions contemplated
hereby.
22. Counterparts. This First Amendment may be executed in any number of
------------
counterparts. It shall not be necessary that the signature of or on behalf of
each party appears on each counterpart, but it shall be sufficient that the
signature of or on behalf of each party appears on one or more counterparts. All
counterparts shall collectively constitute a single agreement.
23. No Other Amendments. Except as expressly set forth herein, this First
-------------------
Amendment shall not by implication or otherwise alter, modify, amend or in any
way effect any of the terms, conditions, representations, warranties,
obligations, covenants or agreements contained in the Original Agreement, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect.
* * * * *
20
IN WITNESS WHEREOF, Parent. Merger Sub and Target have caused this First
Amendment to be duly executed as of the date first above written.
ANAM LLC
By: /s/ Xxxxxxx X. X'Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. X'Xxxxxxx, Xx.
Title: President
NHI ACQUISITION CORP.
By: /s/ Xxxxxxx X. X'Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. X'Xxxxxxx, Xx.
Title: President
NEXTHEALTH, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
APPROVED AS OF THE DATE FIRST ABOVE WRITTEN:
Special Committee of the Board of Directors of
NextHealth, Inc., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx X. Xxxxxxx
Being all of the members of the Special Committee
EXHIBIT I
FORM OF LETTER OF CREDIT
------------------------
IRREVOCABLE LETTER OF CREDIT
----------------------------
NO. _________
November __, 2001
The Special Committee of the Board of Directors of
NextHealth, Inc.
c/o Neal, Xxxxxx & Xxxxxxxxx
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Gentlemen:
The undersigned, LaSalle Bank N.A. ("Bank"), hereby establishes, at the request
and for the account of "Parent" (as defined below), in your favor, this
Irrevocable Letter of Credit No. ___________, effective November ___, 2001. This
Letter of Credit is established pursuant to that certain First Amendment to
Agreement and Plan of Merger, dated as of the date hereof (the "First
Amendment"), among NextHealth, Inc., a Delaware corporation ("NextHealth"), Anam
LLC, a Delaware limited liability company ("Parent"), and NHI Acquisition Corp.
1. Total Credit. The maximum aggregate amount of credit available under
------------
this Letter of Credit shall be Three Million Dollars ($3,000,000.00), which
amount is hereinafter referred to as the "Total Credit."
2. Expiration. The expiration date of this Letter of Credit (the "Stated
----------
Termination Date") shall be the earlier of:
(a) the date on which the Total Credit is reduced to zero because
payment of the full amount which may be drawn under this Letter of Credit
has been made by us to the Escrow Agent (as defined below),
(b) the "Planned Expiration Date" (defined below). "Planned
Expiration Date" as used herein shall mean, initially, March 31, 2002,
provided that the Planned Expiration Date may be extended for one (1) two
month period by delivering to the Bank, no earlier than five Business Days
(as defined below) prior to any then current Planned Expiration Date, a
certificate in the form of Exhibit A attached hereto, in which case the
---------
Planned Expiration Date shall be
2
extended to the date that is the two month anniversary date of the then
current Planned Expiration Date, and
(c) the date that you deliver to the Bank a termination notice in
the form of Exhibit B.
---------
In the event the Planned Expiration Date is not a Business Day (as
hereinafter defined), then this Letter of Credit shall expire on the next
succeeding Business Day. The term "Business Day" means any day other than (i) a
Saturday or Sunday or (ii) a day on which the New York Stock Exchange or our
offices in Chicago are closed.
3. Demands. The Bank hereby irrevocably authorizes you to draw on this
-------
Letter of Credit in accordance with the terms and conditions hereinafter set
forth, in one drawing by one of your drafts (any such draft being a "Demand"),
an amount equal to the Total Credit.
4. Method of Demand. Funds from the Bank under this Letter of Credit are
----------------
available to you against your Demand referring thereon to the number of this
Letter of Credit and accompanied by your completed certificate signed by Xxxxxxx
X. Xxxxxx and Xxxx X. Xxxxxxx substantially in the form of Exhibit C attached
---------
hereto (a "Certificate"). Each such Demand and Certificate shall be presented,
together with a copy of this Letter of Credit, to the Bank at LaSalle Bank N.A.,
000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention Xxx Xxxxx, or such
other address as we may notify you of (the "Bank's Office") on a Business Day. A
Demand may be delivered to us in person, by mail or by an express delivery
service, to the Bank's Office. A Demand shall be presented during our business
hours on a Business Day prior to the expiration hereof at the Bank's Office. If
the Bank receives any such Demand and Certificate at the Bank's Office in
conformity with the terms and conditions of this Letter of Credit, not later
than 12:00 P.M. ( Chicago time) on a Business Day prior to the expiration
hereof, then the Bank will honor such Demand by making available to you, before
2:00 P.M. (Chicago time) on the first Business Day following the one on which
the Bank shall have received such Demand, an amount equal to the amount of such
Demand in same day funds in accordance with your payment instructions. If the
Bank receives any such Demand and Certificate at the Bank's Office in conformity
with the terms and conditions of this Letter of Credit, after 12:00 P.M.
(Chicago time) on a Business Day prior to the expiration hereof, the Bank will
honor such Demand by making available to you, before 2:00 P.M. (Chicago time) on
the second Business Day following the date the Bank shall have received such
Demand, the amount of such Demand in same day funds in accordance with your
payment instructions.
Unless otherwise agreed, payment under this Letter of Credit shall be made
in immediately available funds in accordance with the instructions contained in
the Demand.
3
5. Transferability. This Letter of Credit is not transferable other than
---------------
that it may be transferred to American National Bank and Trust Company of
Chicago, as escrow agent. Any such transfer shall be evidenced by a transfer in
the form of Exhibit D.
---------
6. Uniform Customs and Practice. This Letter of Credit is issued and
----------------------------
subject to and the performance under this Letter of Credit by the Bank, its
correspondents and beneficiaries will be governed by, the rules of the "Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce, Publication No. 500" or such later revision as may be
published by the International Chamber of Commerce.
7. Address for Communication. Communications with respect to this Letter
-------------------------
of Credit shall be in writing and shall be addressed to us at the Bank's Office,
specifically referring thereon to our Irrevocable Letter of Credit No._________.
All notices, requests and other communications to you shall be in a
writing and shall be given at the following address:
The Special Committee of the Board of Directors of
NextHealth, Inc.
c/o Neal, Gerber & Xxxxxxxxx
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or at such other addresses as shall be furnished by you by like notice. Except
as otherwise expressly provided herein, each such notice, request or other
communication shall be effective upon the earlier of (i) actual receipt, and
(ii) receipt of confirmation of delivery, in each case at the address specified
in this section.
8. Complete Agreement. This Letter of Credit, including the exhibits
------------------
hereto, sets forth in full the terms of our undertaking. Reference in this
Letter of Credit to other documents or instruments is for identification
purposes only and such reference shall not modify or affect the terms hereof or
cause such documents or instruments to be deemed incorporated herein.
Very truly yours,
LaSalle Bank National Association
By: ____________________________________
Title:__________________________________
4
EXHIBIT A TO LETTER OF CREDIT
-----------------------------
CERTIFICATE IN CONNECTION WITH
EXTENSION OF EXPIRATION DATE
UNDER IRREVOCABLE LETTER OF CREDIT
NO. __________
The undersigned, being all of the members of the Special Committee of
the Board of Directors of NextHealth, Inc., a Delaware corporation (the "Special
Committee"), hereby direct LaSalle Bank National Association (the "Bank") with
reference to Irrevocable Letter of Credit No. ________ dated November ____, 2001
(as amended from time to time, the "Letter of Credit", the terms defined therein
and not otherwise defined herein being used herein as therein defined) issued by
the Bank in favor of the Special Committee to extend the Planned Expiration Date
of the Letter of Credit for an additional two month period to May 31, 2002.
If this instrument is signed by only one of Xxxxxxx X. Xxxxxx or Xxxx
X. Xxxxxxx, then such signatory here by certifies that the other has either died
or become disabled and as a result thereof is no longer able to serve on the
Special Committee.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Certificate as of the _____ day of April, 2002.
Special Committee of the Board of Directors
of NextHealth, Inc., a Delaware corporation
By: _______________________________________
Xxxxxxx X. Xxxxxx
[and/or]
By: _______________________________________
Xxxx X. Xxxxxxx
Being [all of the members] [the only member]
of the Special Committee
5
EXHIBIT B TO LETTER OF CREDIT
-----------------------------
TERMINATION NOTICE
UNDER IRREVOCABLE LETTER OF CREDIT
No. __________
The undersigned, being all of the members of the Special Committee of
the Board of Directors of NextHealth, Inc., a Delaware corporation (the "Special
Committee"), hereby direct LaSalle Bank National Association (the "Bank") with
reference to Irrevocable Letter of Credit No. ________ dated November __, 2001
(as amended from time to time, the "Letter of Credit", the terms defined therein
and not otherwise defined herein being used herein as therein defined) issued by
the Bank in favor of the Special Committee to terminate the Letter of Credit and
not honor any further Demands thereunder, and the Special Committee hereby
delivers to the Bank the original of the Letter of Credit.
If this instrument is signed by only one of Xxxxxxx X. Xxxxxx or Xxxx
X. Xxxxxxx, then such signatory here by certifies that the other has either died
or become disabled and as a result thereof is no longer able to serve on the
Special Committee.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Certificate as of the _____ day of _________, 2002.
Special Committee of the Board of Directors
of NextHealth, Inc., a Delaware corporation
By: _______________________________________
Xxxxxxx X. Xxxxxx
[and/or]
By: _______________________________________
Xxxx X. Xxxxxxx
Being [all of the members] [the only
member] of the Special Committee
6
EXHIBIT C TO LETTER OF CREDIT
-----------------------------
CERTIFICATE IN CONNECTION WITH A DRAWING
UNDER IRREVOCABLE LETTER OF CREDIT
No. ____________
The undersigned, being all of the members of the Special Committee of
the Board of Directors of NextHealth, Inc., a Delaware corporation (the "Special
Committee"), hereby certify to LaSalle Bank National Association (the "Bank")
with reference to Irrevocable Letter of Credit No. ________ dated November ___,
2001 (as amended from time to time, the "Letter of Credit", the terms defined
therein and not otherwise defined herein being used herein as therein defined)
issued by the Bank in favor of the Special Committee, that, pursuant to and in
accordance with the terms of either Section 7.5(c) or (f) of the First Amendment
(as defined in the Letter of Credit), the Special Committee is making a drawing
under the Letter of Credit in the amount of ______________ Dollars ($_________).
If this instrument is signed by only one of Xxxxxxx X. Xxxxxx or Xxxx
X. Xxxxxxx, then such signatory here by certifies that the other has either died
or become disabled and as a result thereof is no longer able to serve on the
Special Committee.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Certificate as of the _____ day of _________, 2002.
Special Committee of the Board of Directors
of NextHealth, Inc., a Delaware corporation
By: _______________________________________
Xxxxxxx X. Xxxxxx
[and/or]
By: _______________________________________
Xxxx X. Xxxxxxx
Being [all of the members] [the only
member] of the Special Committee
7
EXHIBIT D TO LETTER OF CREDIT
-----------------------------
TRANSFER OF
IRREVOCABLE LETTER OF CREDIT
No. ____________
_____________, 2001
LaSalle Bank N.A.
000 X. XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxx
Re: LaSalle Bank N.A. Letter of Credit No. ______
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
American National Bank and Trust Company of Chicago
000 X. XxXxxxx Xxxxxx
Mail Code IL1-1250
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
By this transfer, all rights of the undersigned beneficiary in such Letter
of Credit are transferred to the transferee and the transferee shall have the
sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now
existing or hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The original of such Letter of Credit is returned herewith, and in
accordance therewith we ask you to transfer the Letter of Credit to the
transferee and forward it directly to the transferee with your customary notice
of transfer, or that, if so requested
8
by the transferee, you issue a new irrevocable letter of credit in favor of the
transferee with provisions consistent with the Letter of Credit, except that all
of the Exhibits to the Letter of credit shall be amended to require the
signature of an authorized officer of American National Bank and Trust Company
of Chicago rather than the members of the Special Committee of the Board of
Directors of NextHealth, Inc., a Delaware corporation.
Very truly yours,
Special Committee of the Board of Directors
of NextHealth, Inc., a Delaware corporation
By: _______________________________________
_______________________________________
A member of the Special Committee
SIGNATURE AUTHENTICATED __________________________
__________________________ By________________________
(Authorized Signature) Title_____________________
EXHIBIT II
FORM OF JOINT DIRECTION
-----------------------
This Joint Direction (this "Direction"), is made this ___ day of November,
2001 by and between Anam LLC, a Delaware limited liability company ("Parent"),
and NextHealth, Inc., a Delaware corporation ("Target").
RECITALS
A. Parent, Target and American National Bank and Trust Company of Chicago,
as escrow agent ("Escrow Agent"), are parties to that certain Escrow Agreement,
dated April 16, 2001 (the "Escrow Agreement"). All capitalized terms used in
this Agreement which are not defined herein shall have the respective meanings
assigned to them in the Escrow Agreement.
B. Pursuant to the Escrow Agreement, Escrow Agent is holding the
Irrevocable Letter of Credit No. S531186, dated April 16, 2001, issued by the
Bank in favor of Escrow Agent (the "Letter of Credit").
DIRECTION
1. Direction. Pursuant to Sections 8(g) and (i) of the Escrow Agreement,
---------
the parties to this Direction hereby direct Escrow Agent to submit to the Bank a
Termination Certificate in the form of Exhibit B attached to the Letter of
---------
Credit along with the original of the Letter of Credit.
2. Termination of Escrow Agreement. Pursuant to Section 15 of the Escrow
-------------------------------
Agreement, the Escrow Agreement shall terminate upon Escrow Agent's completion
of the actions set forth in Section 1 above.
3. Counterparts. This Direction may be executed in two or more
------------
ounterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Direction
as of the date first written above.
ANAM LLC
By:___________________________
Name:
Title:
NEXTHEALTH, INC.
By:___________________________
Name:
Title:
EXHIBIT III
INDEBTEDNESS FOR BORROWED MONEY
-------------------------------
