Exhibit 2.2
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of May
4, 2004, by and among IASIS Investment LLC, a Delaware limited liability company
("Purchaser"), IASIS Healthcare Corporation, a Delaware corporation (the
"Company"), and each of the stockholders of the Company, holders of In-the-Money
Options other than Rollover Options (each, as defined in the Merger Agreement
(as defined below)) and members of JLL Healthcare LLC, a Delaware limited
liability company ("JLL Healthcare"), in each case as set forth on Schedule I to
this Agreement (collectively, the "Stockholders").
W I T N E S S E T H:
WHEREAS, Purchaser, Titan Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Purchaser ("Merger Sub"), and the
Company are parties to that certain Agreement and Plan of Merger dated as of the
date hereof ("Merger Agreement"); and
WHEREAS, pursuant to the Merger Agreement, Merger Sub shall
merge into the Company (the "Merger"), the separate existence of Merger Sub
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation"), and as a result of which, Purchaser shall be the sole
stockholder of the Surviving Corporation; and
WHEREAS, immediately prior to the Merger, JLL Healthcare shall
be merged with and into the Company (the "JLL Healthcare Reorganization"), with
the Company continuing as the surviving corporation; and
WHEREAS, in connection with the Merger Agreement and the
consummation of the transactions contemplated thereby, including the Merger, the
Stockholders wish to indemnify Purchaser against certain Losses (as defined
below) and to enter into certain covenants and agreements with Purchaser and the
Company and among each other.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
SECTION 1.01. Certain Definitions. Terms used, but not
defined herein, shall have the meaning set forth in the Merger Agreement. As
used in this Agreement, the following terms shall have the meanings set forth or
as referenced below:
"Agreement" shall mean this Agreement, as the same may be
amended or supplemented from time to time in accordance with the terms hereof.
"Cap" shall have the meaning set forth in Section 4.02 hereof.
"Claim" shall mean either a Third Party Claim, a Voluntary
Disclosure Claim, or both, depending on the context.
"Claim Facts" shall have the meaning set forth in Section
4.03(d).
"Common Stock" shall mean the common stock, par value of $.01
per share, of the Company.
"Deductible" shall have the meaning set forth in Section 4.02
hereof.
"Indemnifiable Losses" shall have the meaning set forth in
Section 4.01 hereof.
"Indemnified Parties" shall have the meaning set forth in
Section 4.01 hereof.
"JLL Healthcare" shall have the meaning set forth in the
recitals hereto.
"JLL Healthcare Reorganization" shall have the meaning set
forth in the recitals hereto.
"LLC Agreement" shall mean the Operating Agreement of JLL
Healthcare, dated as of October 7, 1999, as amended.
"Losses" shall mean: repayments, refunds, retroactive
adjustments or reimbursement reductions, payments, direct damages or set-offs of
any reimbursement previously received or to be received under any federal
healthcare program (as defined in 42 U.S.C. Section 1320a-7(b)(f)), together
with any penalties, assessments, fines, other obligations, interest (including
prejudgment interest), costs and expenses (including court costs and reasonable
attorneys' fees and expenses (including in connection with the enforcement of
this Agreement) and costs of investigating, preparing or defending any claims)
related thereto.
"Merger" shall have the meaning set forth in the recitals
hereto.
"Merger Agreement" shall have the meaning set forth in the
recitals hereto.
"Merger Sub" shall have the meaning set forth in the preamble
hereto.
"Percentage Interest" shall mean, with respect to any
Stockholder, the proportional liability (stated as a percentage) of such
Stockholder hereunder, as set forth on Schedule I hereto opposite the name of
such Stockholder.
"Purchaser" shall have the meaning set forth in the preamble
hereto.
"Stockholders" shall have the meaning set forth in the
preamble hereto.
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"Stockholders' Representative" shall have the meaning set
forth in Section 5.04 hereof.
"Surviving Corporation" shall have the meaning set forth in
the recitals hereto.
"Third Party Claim" shall have the meaning set forth in
Section 4.03(a)(i).
"Voluntary Disclosure Claim" shall have the meaning set forth
in Section 4.01.
SECTION 1.02. Other Terms. Other terms may be defined
elsewhere in the text of this Agreement and, unless otherwise indicated, shall
have such meaning throughout this Agreement.
SECTION 1.03. Other Definitional Provisions.
(a) The words "hereof", "herein", "hereto", "hereunder" and
"hereinafter" and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The term "dollars" and character "$" shall mean United
States dollars.
(d) The word "including" shall mean including, without
limitation, and the words "include" and "includes" shall have corresponding
meanings.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND CONSENT OF THE STOCKHOLDERS
SECTION 2.01. Representations and Warranties. Each of the
Stockholders, severally and not jointly, hereby represents and warrants to each
other party hereto, solely to the extent that any of the following
representations and warranties is applicable to such Stockholder, as follows:
(a) Authority; Binding Effect. Such Stockholder has the
requisite power, capacity and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of such Stockholder, and no other
action on the part of such Stockholder, or the stockholders, members or partners
of such Stockholder, is required to authorize the execution, delivery and
performance hereof by such Stockholder and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
Stockholder and constitutes the valid and binding obligation of such Stockholder
enforceable against such Stockholder in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization,
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moratorium or other laws of general application affecting enforcement of
creditors' rights or by principles of equity.
(b) Title to Company Shares. Such Stockholder (other than any
Option holder) is, or immediately after the JLL Healthcare Reorganization will
be, the record and beneficial owner, and has, or will have immediately after the
JLL Healthcare Reorganization, good and valid title to, all of the Company
Shares listed as owned by it (or to be owned by it) on Schedule I hereto, free
and clear of all Liens other than those arising under the Credit Agreement and
the Stockholders Agreement.
(c) Consents and Approvals; No Violation.
(i) The execution and delivery of this Agreement by such
Stockholder do not, and the performance by such Stockholder of this
Agreement and the consummation of the transactions contemplated hereby
will not, require such Stockholder to obtain any Consent from any
Governmental Authority, or any third party, other than filings under
the HSR Act, if required, on behalf of JLL Partners Fund IV, L.P.
and/or CIBC (as defined in the Merger Agreement).
(ii) Assuming that all filings required by the HSR Act are
duly made and all applicable waiting periods thereunder have expired or
have been terminated, the execution and delivery of this Agreement by
such Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby will not (x) conflict with or violate
its certificate of incorporation or by-laws, limited liability company
agreement or similar organizational documents if such Stockholder is
not an individual, in each case, as currently in effect, (y) conflict
with, violate or result in a loss of rights or trigger new obligations
under any Laws or Orders applicable to such Stockholder or by which its
properties or assets are bound or are subject, or (z) result in any
material breach of, or constitute a material default (or an event that
with notice or lapse of time, or both, would constitute a material
default) under, or give to others any material right of termination,
amendment, acceleration or cancellation of, or require material
payments or otherwise change in any material respect the existing
rights or obligations of such Stockholder under, or result in the
creation of a Lien on any of the properties or assets of such
Stockholder under, any material note, bond, mortgage, indenture,
Contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Stockholder is a party or by
which its properties or assets are bound or subject.
(d) Absence of Litigation. No Litigation pending, or to the
knowledge of such Stockholder, threatened against such Stockholder, if adversely
determined, nor any judgment, order or decree of any Governmental Authority to
which such Stockholder is a party or subject to, (i) has had or would reasonably
be expected to have a Material Adverse Effect (as defined in the Merger
Agreement), (ii) could materially impair such Stockholder's ability to perform
its obligations hereunder or to consummate the transactions contemplated hereby
or (iii) could materially impair the ability of the Company or any Subsidiary to
conduct their respective businesses after the Closing in substantially the
manner as they are now being conducted.
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(e) Brokers. No Person is or will become entitled, by reason
of any agreement or arrangement entered into or made by or on behalf of such
Stockholder, to receive any commission, brokerage, finder's fee or other similar
compensation in connection with the consummation of the transactions
contemplated by this Agreement.
(f) Compliance. Such Stockholder is not excluded from
participation in Medicare or Medicaid, or barred for cause from participation in
any federal heath care program (as defined in 42 U.S.C. Section 1320a-7(b)(f)).
SECTION 2.02. Consent. Each Stockholder hereby approves and
consents to the Merger and the other transactions contemplated by the Merger
Agreement for all purposes of the DGCL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 3.01. Representations and Warranties. Purchaser
hereby represents and warrants to each other party hereto as follows:
(a) Authority; Binding Effect. Purchaser has the requisite
power, capacity and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary limited liability company action on the part of Purchaser, and
no other action on the part of Purchaser or its members, is required to
authorize the execution, delivery and performance hereof by Purchaser and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Purchaser and constitutes the valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by principles of equity.
(b) Consents and Approvals; No Violation.
(i) The execution and delivery of this Agreement by
Purchaser does not, and the performance by Purchaser of this Agreement
and the consummation of the transactions contemplated hereby will not,
require Purchaser to obtain any Consent from any Governmental
Authority, or any third party, other than filings under the HSR Act, if
required.
(ii) Assuming that all filings required by the HSR Act are
duly made and all applicable waiting periods thereunder have expired or
have been terminated, the execution and delivery of this Agreement by
Purchaser and the consummation by Purchaser of the transactions
contemplated hereby will not (x) conflict with or violate its limited
liability company agreement, (y) conflict with, violate or result in a
loss of rights
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or trigger new obligations under any Laws or Orders applicable to
Purchaser or by which its properties or assets are bound or are
subject, or (z) result in any material breach of, or constitute a
material default (or an event that with notice or lapse of time, or
both, would constitute a material default) under, or give to others any
material right of termination, amendment, acceleration or cancellation
of, or require material payments or otherwise change in any material
respect the existing rights or obligations of Purchaser under, or
result in the creation of a Lien on any of the properties or assets of
Purchaser under, any material note, bond, mortgage, indenture,
Contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Purchaser is a party or by which its
properties or assets are bound or subject.
ARTICLE IV
INDEMNIFICATION
SECTION 4.01. Subject to Sections 4.02 and 4.03 hereof, from
and after the Effective Time, the Stockholders severally but not jointly hereby
agree to indemnify and hold, to the extent of their Percentage Interest set
forth on Schedule I hereto, Purchaser and its Affiliates, directors, officers,
employees, agents, shareholders, members and partners (collectively, the
"Indemnified Parties") harmless from and against any and all Losses suffered by
an Indemnified Party or by the Company based upon, attributable to or resulting
from a Third Party Claim (as defined below) or a voluntary disclosure or
rebilling that has been made or submitted to a Governmental Authority and has
not been made or submitted in response to a Third Party Claim (each, a
"Voluntary Disclosure Claim") relating to (i) the submission, prior to the
Effective Time, by the Company or any Subsidiary of any improper xxxx to any
federal health care program (as defined in 42 U.S.C. Section 1320a-7(b)(f))
(such Losses to be computed net of any additional revenue received by any
Facility as a result of rebillings after the Effective Time for services
rendered prior to the Effective Time), or (ii) a violation of 42 U.S.C. Section
1320a-7b occurring prior to the Effective Time. For purposes of this Section, an
improper xxxx includes (without limitation) any xxxx submitted as part of any
pattern or practice of billing federal health care programs in a manner that
violates applicable laws or regulations, including, without limitation, the
following practices: (i) upcoding; (ii) unbundling; (iii) miscoding; (iv)
double-billing; (v) submitting a xxxx that is prohibited to be submitted due to
a violation of 42 U.S.C. Section 1395nn and the regulations promulgated
thereunder; or (vi) submitting a xxxx for services rendered if the services are
related to an arrangement that violates any Health Care Regulatory Laws. Losses
for which indemnification is required pursuant to the first sentence of this
Section 4.01 shall be referred to herein as "Indemnifiable Losses."
SECTION 4.02. Limitations on Indemnification. The
Stockholders shall not have any liability under Section 4.01:
(a) unless and until it is finally determined that the total
amount of Indemnifiable Losses to the Indemnified Parties equals or exceeds, in
the aggregate, $10,000,000 (the "Deductible"), and then only to the extent that
such Indemnifiable Losses exceed the Deductible;
(b) in an aggregate amount exceeding $50,000,000 (the "Cap");
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(c) for any Indemnifiable Loss arising from a Third Party
Claim or Voluntary Disclosure Claim as to which notice, under the circumstances
and in the manner specified in Section 4.03 has not been provided within
eighteen (18) months of the Closing Date; or
(d) for any individual Stockholder, in amplification of the
foregoing, (i) with respect to any particular Claim, in an amount greater than
the product of (A) the amount of Indemnifiable Losses in respect of such Claim
and (B) such Stockholder's Percentage Interest, and (ii) for all Claims which
may be made under Section 4.01, in an aggregate amount exceeding the product of
the Cap and the Percentage Interest of such Stockholder.
SECTION 4.03. General Indemnification Procedures.
(a) Any Claim for indemnification shall be made by providing
notice of an expected Indemnifiable Loss within eighteen (18) months of the
Closing Date as follows:
(i) With respect to an expected Indemnifiable Loss related to
a Third Party Claim for which an Indemnified Party seeks indemnification under
this Article IV, by giving written notice promptly after such Indemnified Party
receives notice or otherwise becomes aware of the commencement of the judicial
(criminal or civil), administrative or arbitral action, suit (including
cross-claims and counter-claims), proceeding (public or private), investigation,
claim, demand, hearing, inquiry, subpoena, governmental allegation or
proceeding, including any of the foregoing as to which the response may be a
voluntary disclosure or rebilling (each, a "Third Party Claim"), against such
Indemnified Party, the Company or any Subsidiary. Such notice shall be delivered
to counsel for the Stockholders (designated by the Stockholders' Representative)
pursuant to a common interest agreement and shall: (aa) identify the
provision(s) of this Agreement upon which such Claim is based, (bb) include true
and correct copies of any written document related to such Claim furnished to
the Indemnified Party by the Person asserting such Claim, including all
correspondence received from the applicable Governmental Authority involved in
such Claim, and (cc) describe in reasonable detail the nature of the Claim and
the facts and circumstances giving rise thereto, including a good faith estimate
of the amount believed to be in controversy and the basis for such estimate, the
Governmental Authority involved and specifying the Facility or Facilities and
the relevant service, contract or transaction to which the Claim relates. The
parties agree that the good faith estimate of the amount believed to be in
controversy shall be the basis for a determination as to whether the Deductible
has been met.
(ii) With respect to any expected Indemnifiable Loss related
to a Voluntary Disclosure Claim for which an Indemnified Party seeks
indemnification, by giving written notice promptly upon making such voluntary
disclosure or upon submitting such rebilling. Such notice shall be delivered to
counsel for the Stockholders (designated by the Stockholders' Representative)
pursuant to a common interest agreement and shall (aa) identify the provision(s)
of this Agreement upon which such Claim is based and (bb) describe in reasonable
detail the nature of the Claim and the facts and circumstances giving rise
thereto, including a good faith estimate of the amount believed to be in
controversy, and the Governmental Authority involved and specifying the Facility
or Facilities and the relevant service, contract or transaction to which the
Claim relates. With respect to Indemnifiable Losses relating to any Voluntary
Disclosure
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Claim, the Indemnified Party may estimate the size of the expected Indemnifiable
Loss in good faith based upon all information available (and shall provide all
such information to the Stockholders' Representative) in order to determine
whether the Deductible has been met. Prior to any voluntary disclosure or
rebilling which may result in an Indemnifiable Loss hereunder, the Indemnified
Party shall notify the Stockholders' Representative of the potential voluntary
disclosure or rebilling and shall consult with the Stockholders' Representative,
or Stockholders' counsel reasonably satisfactory to the Indemnified Party, with
respect thereto. Subject to Section 4.03(e), no Indemnified Party shall settle
or compromise any Voluntary Disclosure Claim or make any admission of guilt or
liability with respect thereto without the prior written consent of the
Stockholders' Representative, which shall not be unreasonably withheld, unless
such settlement or compromise does not involve any Indemnifiable Losses for
which an Indemnified Party is entitled to indemnification pursuant to Section
4.01. Any Indemnifiable Losses incurred as a result of (i) a voluntary
disclosure or rebilling which is made in response to or after being contacted by
a Governmental Authority or (ii) an action taken by a Governmental Authority
that would constitute a Third Party Claim which is taken in response to a
voluntary disclosure or rebilling shall be treated as a Third Party Claim for
all purposes under this Agreement and, among other things, the procedures set
forth in Sections 4.03(a)(i) through (a)(iv) and 4.03(b) shall apply.
(iii) The Stockholders shall have the right, at their sole
option and expense, to assume control of the defense of any Third Party Claim
(other than those related to a self-disclosure or rebilling not related to an
inquiry by any Governmental Authority) which relates to any Indemnifiable Losses
hereunder with respect to which an Indemnified Party is seeking indemnification
hereunder, with counsel reasonably satisfactory to the Indemnified Party.
Notwithstanding the foregoing, however, the Stockholders may not assume control
of the defense of any Third Party Claim to the extent that (i) the Third Party
Claim relates to or arises in connection with any criminal liability of the
Indemnified Party, (ii) the Third Party Claim seeks an injunction or equitable
relief against the Indemnified Party, or (iii) the Indemnified Party reasonably
believes an adverse determination with respect to the Third Party Claim would be
materially detrimental to the Indemnified Party's reputation or future business
prospects, but in any event, the Stockholders shall remain subject to their
indemnification obligations set forth in this Article IV. Nothing in this
paragraph shall be construed to impair the right of the Stockholders to
participate in the defense of any Third Party Claim for which an Indemnified
Party is seeking indemnification under this Agreement.
(iv) The Indemnified Party shall have the right to employ
separate counsel in the defense (including any decision as to voluntary
disclosure or rebilling) of any Third Party Claim and to participate in the
defense thereof at its own expense; provided such separate counsel may be
retained at the expense of the Stockholders if (i) the retention of such counsel
has been specifically authorized by the Stockholders, (ii) in the written
opinion of counsel to the Indemnified Party a conflict of interests exists, or
(iii) the Stockholders fail to take reasonable steps to diligently defend such
claim. So long as the Stockholders are diligently defending any Third Party
Claim, or if the Stockholders are not permitted to assume the defense of such
Third Party Claim as the result of the second sentence of Section 4.03(a)(iii),
the Indemnified Party shall not settle any Third Party Claim or make any
admission of guilt or liability with respect
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thereto without the consent of the Stockholders, which consent shall not be
unreasonably withheld or delayed. If the Stockholders do not elect to assume the
defense of such Third Party Claim, the Indemnified Party shall have the right,
in addition to any other right or remedy it may have hereunder, at the
Stockholders' expense, to defend such Third Party Claim; provided that (i) the
Indemnified Party shall not have any obligation to participate in the defense
of, or defend, any such Third Party Claim; and (ii) the Indemnified Party's
defense of or participation in the defense of any such claim shall not in any
way diminish or lessen the obligations of the Stockholders under this Article
IV.
(b) Subject to Section 4.03(e), the Stockholders shall
not settle or compromise any Third Party Claim with respect to which an
Indemnified Party is seeking indemnification hereunder unless (i) the
Indemnified Party consents (which consent shall not be unreasonably withheld if
such settlement or compromise includes no admission or concession of wrongdoing
by the Indemnified Party) or (ii) the relief consists solely of money damages
and the Indemnified Party is given a full and complete release in a form
reasonably satisfactory to the Indemnified Party of any and all liability by all
relevant parties to such Third Party Claim. The parties hereto agree to
cooperate fully with each other in connection with the defense, negotiation or
settlement of any such Third Party Claim.
(c) The failure of an Indemnified Party to give prompt
notice of any Claim as described in the first sentence of Section 4.03(a) shall
not release, waive or otherwise affect the Stockholders' obligations with
respect thereto, except to the extent that the Stockholders can demonstrate
actual loss and prejudice as a result of such failure; provided that nothing in
this Section shall be deemed to extend or otherwise affect the 18-month period
within which any Claim for indemnification must be submitted pursuant to Section
4.02(c).
(d) The scope of any Claim made hereunder shall be
limited to the facts and circumstances set forth in the notice of such Claim, as
described in Section 4.03(a) (the "Claim Facts"); provided, however, that such
limitation shall not limit or reduce the scope of Indemnifiable Losses in
respect of such Claim, regardless of when such Losses are identified or
incurred, which may include (i) other Losses based upon, attributable to or
resulting from the facts and circumstances underlying the Claim Facts, in the
case of a Third Party Claim, (ii) Losses based upon, attributable to or
resulting from actions of the type described in the last sentence of Section
4.03(a)(ii) taken in response to the Claim Facts and (iii) Losses based upon,
attributable to or resulting from the expansion of a governmental investigation
or proceeding that is the subject of, or which, in the circumstances described
in the immediately preceding clause (ii), is taken in response to, the Claim
Facts.
(e) In making any determination regarding whether the
withholding of consent to the settlement or compromise of any Third Party Claim
or Voluntary Disclosure Claim, or the admission of guilt or liability with
respect thereto, is reasonable, the Stockholder's Representative or Indemnified
Party, as the case may be, shall make its determination based on an objective
standard, taking into account solely the size and merits of the claims made and
applicable defenses, and the projected effect upon the Company, and without
regard to the indemnification obligations or the limitations on such obligations
as established by this Agreement. If (i) an Indemnified Party requests the
consent of the Stockholders' Representative,
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and such consent is not received within fifteen (15) days of such request (or
such shorter period as may be demanded by the other parties to the proposed
settlement, compromise or admission), and (ii) the Indemnified Party determines
in good faith that the withholding of consent with respect to the proposed
settlement or compromise is unreasonable in accordance with the standard set
forth in the preceding sentence, then the Indemnified Party may settle or
compromise the matter at issue, and the fact of such action (including, without
limitation, the conditions upon, or the manner or form of such settlement or
compromise) shall not impair the Indemnified Party's right to indemnification
hereunder in respect of such settlement or compromise, subject to a final
judicial determination of (x) whether the Indemnified Party is entitled to
indemnification hereunder and/or the amount of indemnification, if any, that
such Indemnified Party is entitled to receive under this Article IV with respect
to the claim so settled or compromised and (y) whether withholding of consent
was reasonable pursuant to the aforesaid standard.
SECTION 4.04. Treatment of Indemnity Payments. The
Stockholders and the Indemnified Parties agree that for Federal, state and local
income tax purposes, all indemnification payments made in accordance with this
Article IV will be treated by the parties as an adjustment to the Aggregate
Purchase Price and the Per Share Merger Consideration.
SECTION 4.05. Sole Remedy. Each of the Company and Purchaser
acknowledges and agrees that the sole and exclusive remedy of all Indemnified
Parties from and after the Closing, with respect to any and all claims (whether
relating to third-party claims or otherwise) relating to the subject matter
described in Article IV of this Agreement and the Merger Agreement, shall be
pursuant to the provisions set forth in this Article IV. In furtherance of the
foregoing, each of the Company and Purchaser hereby waives, to the fullest
extent permitted under applicable Law, any and all rights, including any rights
it may have to seek punitive or consequential damages from the other parties
hereto, and all claims and causes of action it may have against the other
parties hereto from and after the Closing arising under any federal, state,
local or foreign statute, Law ordinance, rule or regulation (including, without
limitation, any such right, claim or cause of action arising under or based upon
common law or otherwise). The foregoing limitations and waivers shall not apply
in respect of claims for fraud in the inducement or any claim arising under any
agreement other than this Agreement or the Merger Agreement.
ARTICLE V
COVENANTS
SECTION 5.01. Confidentiality. From and after the Closing
Date, each of the Stockholders shall hold, and shall cause its Affiliates,
advisors, accountants, attorneys and representatives to hold, any material
non-public information concerning or relating to the Company, the Surviving
Corporation or any of the Subsidiaries in confidence except for such disclosures
as may be (i) consented to by Purchaser in writing or (ii) required by Law.
SECTION 5.02. Termination of Stockholders Agreement. With
respect to the transactions contemplated by the Merger Agreement, each
Stockholder hereby waives the
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applicability of and such Stockholder's rights under any preemptive right, right
of first refusal or any similar right that such Stockholder has or may have
under or pursuant to the Stockholders Agreement. Each Stockholder who is a party
to the Stockholders Agreement hereby covenants and agrees with the other
Stockholders, the Company and Purchaser that, effective immediately upon the
Closing, the Stockholders Agreement shall terminate and be deemed canceled in
its entirety, and each Stockholder unconditionally and forever releases and
discharges each other party to the Stockholders Agreement from all obligations
and liabilities arising thereunder. From and after the Closing, Purchaser agrees
that the Company and its successors and assigns unconditionally release and
forever discharge each party to the Stockholders Agreement (other than the
Company) from all obligations and liabilities arising thereunder. The foregoing
termination of the Stockholders Agreement and Purchaser's covenant in this
paragraph shall be of no force or effect unless and until the Closing shall have
occurred and shall have no effect on any Eligible Holder's right to receive the
Per Share Merger Consideration for each Company Share (as applicable), and the
Stockholders Agreement shall remain in full force and effect in accordance with
its terms unless and until such time as the Closing has occurred.
SECTION 5.03. Release. Effective as of the Effective Time,
each Stockholder unconditionally and irrevocably and forever releases and
discharges the Company, its successors and assigns, and any present or former
directors, officers, employees or agents of the Company (collectively, the
"Released Parties"), of and from, and hereby unconditionally and irrevocably
waives, any and all claims, debts, losses, expenses, proceedings, covenants,
liabilities, suits, judgments, damages, actions and causes of action,
obligations, accounts, liabilities of any kind or character whatsoever, known or
unknown, suspected or unsuspected, in contract or in to, direct or indirect, at
law or in equity, arising out of or relating to the business, affairs and
management of the Company and the transactions contemplated by the Merger
Agreement (collectively, "Released Claims"), that each such Stockholder ever
had, now has or ever may have or claim to have against any Released Party, for
or by reason of any matter, circumstance, event, action, inaction, omission,
cause or thing whatsoever arising prior to the Effective Time; provided,
however, that this release does not extend to (a) claims to enforce the terms or
any breach of this Agreement or the Merger Agreement or any document or
agreement delivered hereunder or thereunder or any of the provisions set forth
herein or therein, or (b) any claim for indemnification or contribution by a
Stockholder in his, or her or its capacity as a former officer, director or
fiduciary of the Company. In addition, nothing in this Section 5.04 affects a
Stockholder's rights to recover wages, bonuses, employee benefits, and other
compensatory amounts that are due to him or her in the ordinary course of
business, consistent with past practice, or to receive the Per Share Merger
Consideration, Option Consideration or any other payment otherwise due to such
Stockholder under the Merger Agreement.
SECTION 5.04. Stockholders' Representative.
(a) Each Stockholder hereby irrevocably appoints JLL
Partners, Inc. (the "Stockholders' Representative") as its agent and
attorney-in-fact, with full power, by and in the name of such Stockholder, to
execute any and all instruments or other documents on behalf of such
Stockholder, and to do any and all other acts or things on behalf of such
Stockholder, which the Stockholders' Representative may deem necessary or
advisable, or which may be required
11
pursuant to this Agreement or otherwise, in connection with the consummation of
the transactions contemplated by this Agreement and the Merger Agreement and the
performance of all obligations hereunder or thereunder at or following the
Closing. Without limiting the generality of the foregoing, the Stockholders'
Representative shall have the full and exclusive authority to (i) agree with
Purchaser with respect to any matter or thing required or deemed necessary by
the Stockholders' Representative in connection with the provisions of this
Agreement calling for the agreement of Stockholders, give and receive notices
and receive service of process on behalf of all Stockholders, and act on behalf
of Stockholders in connection with any matter as to which Stockholders are or
may be obligated under the Merger Agreement or this Agreement, all in the
absolute discretion of the Stockholders' Representative; provided, however, that
the Stockholders' Representative shall not be required to make any payments on a
behalf of any Stockholder pursuant to Article IV hereof; (ii) in general, do all
things and perform all acts, including without limitation executing and
delivering all agreements, certificates, receipts, consents, elections,
instructions, and other instruments or documents contemplated by, or deemed by
the Stockholders' Representative to be necessary or advisable in connection
with, the Merger Agreement or this Agreement; and (iii) take all actions
necessary or desirable in connection with the performance of obligations under
Articles II and III of the Merger Agreement, including to withhold funds for
satisfaction of expenses or other liabilities and obligations.
(b) Notwithstanding anything to the contrary contained
herein, without the prior written consent of the Stockholders, the Stockholders'
Representative shall not agree to any amendment or modification of this
Agreement, enter into any other contract, agreement, arrangement or
understanding or execute any document or instrument, that would: (i) expand the
indemnification obligations of the Stockholders under Article IV of this
Agreement; (ii) impose any obligations on the Stockholders not set forth in this
Agreement as of the date hereof (other than administrative, technical or
procedural matters relating to the performance of this Agreement and the
discharge of the Stockholders' obligations hereunder); or (iii) materially alter
the economic terms of the Merger as set forth in the Merger Agreement as of the
date hereof.
(c) The Stockholders shall cooperate with the
Stockholders' Representative and any accountants, attorneys or other agents whom
it may retain to assist in carrying out its duties hereunder. All decisions by
the Stockholders' Representative shall be binding upon all Stockholders, and no
Stockholder shall have the right to object, dissent, protest or otherwise
contest the same. The Stockholders' Representative may communicate with any
Stockholder or any other Person concerning its responsibilities hereunder, but
it is not required to do so. The Stockholders' Representative has a duty to
serve in good faith the interests of the Stockholders and to perform its
designated role under this Agreement, but the Stockholders' Representative shall
have no financial liability whatsoever to any Person relating to its service
hereunder (including any action taken or omitted to be taken), except that it
shall be liable for harm which it directly causes by its gross negligence or an
act of willful misconduct.
(d) The Stockholders severally but not jointly hereby
agree to indemnify and hold, to the extent of their Percentage Interest set
forth on Schedule I hereto, harmless the Stockholders' Representative against
any out-of-pocket loss, reasonable expense (including
12
reasonable attorney's fees) or other liability arising out of its service as
Stockholders' Representative under this Agreement, other than for harm directly
caused by its gross negligence or an act of willful misconduct; provided,
however, that no Stockholder shall be required to indemnify the Stockholders'
Representative against any loss, expense or liability arising from an action,
suit, proceeding or other claim brought by another Stockholder. The
Stockholders' Representative may resign at any time by notifying in writing
Purchaser and the Stockholders. The Stockholders' Representative shall not
appoint any substitute or replacement Stockholders' Representative without the
prior written consent of Stockholders holding a majority of the aggregate
percentage interest set forth on Schedule I hereto, which consent shall not be
unreasonably withheld. The term Stockholders' Representative shall include any
substitute appointed pursuant hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Notices. All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended, if delivered
by registered or certified mail, return receipt requested, or by a national
courier service, or if sent by telecopier, provided that the telecopy is
promptly confirmed by telephone confirmation thereof, to the person at the
address set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
To the Stockholders' Representative:
JLL Partners, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
Email: x.xxxxxxxx@xxxxxxxxxxx.xxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxxx.xxx
13
To any Stockholder:
To such Stockholder's address
as set forth on Schedule I hereto
To the Company:
IASIS Healthcare Corporation
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxxxxx.xxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxxx.xxx
To Purchaser:
IASIS Investment LLC
c/o Texas Pacific Group
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxxxxxxx@xxxxxx.xxx
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
Any such notification shall be deemed delivered (i) upon
receipt, if delivered personally, (ii) on the next Business Day, if sent by
national courier service for next business day delivery or (iii) the Business
Day received, if sent by telecopier.
14
SECTION 6.02. Amendment; Waiver, etc. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Purchaser, the Company
and the Stockholders' Representative, or in the case of a waiver, by the party
against whom the waiver is to be effective; provided, however, that any
amendment or waiver of Section 5.04(b) shall require the prior written consent
of all Stockholders. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Except as
specifically provided otherwise herein, the rights and remedies herein provided
are cumulative and none is exclusive of any other, or of any rights or remedies
that any party may otherwise have at law or in equity.
SECTION 6.03. Assignment. No party to this Agreement may
assign any of its rights or obligations under this Agreement without the prior
written consent of the other parties hereto and any attempt to assign this
Agreement without such consent shall be void and of no effect; provided that
Purchaser shall be entitled to assign its rights and obligations hereunder, in
part or in full, to an Affiliate so long as Purchaser shall remain liable for
its obligations hereunder.
SECTION 6.04. Governing Law; Jurisdiction Waiver of Jury
Trial.
(a) This Agreement shall be governed by the laws of the State
of New York, its rules of conflict of laws notwithstanding. Each party hereby
agrees and consents to be subject to the jurisdiction of the courts of the State
of New York situated in the Borough of Manhattan or the United States District
Court for the Southern District of New York in any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby. Each
party hereby irrevocably consents to the service of any and all process in any
such suit, action or proceeding by the delivery of such process to such party at
the address and in the manner provided in Section 6.01. Each of the parties
hereto irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) a court of the State of New York
situated in the Borough of Manhattan or (ii) the United States District Court
for the Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH 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 BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF
15
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 SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.04(b).
SECTION 6.05. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same agreement.
SECTION 6.06. Headings. The heading references herein and in
the table of contents hereto are for convenience purposes only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
[SIGNATURE PAGES FOLLOW]
16
IN WITNESS WHEREOF, the Company, Purchaser and each of the
Stockholders have executed and delivered the agreement, or caused this Agreement
to be executed and delivered by their duly authorized representatives, as of the
date first written above.
THE COMPANY:
IASIS HEALTHCARE CORPORATION
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman, CEO & President
PURCHASER:
IASIS INVESTMENT LLC
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
17
STOCKHOLDERS:
JLL PARTNERS FUND III, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Managing Director
CIBC MB, INC.
By:
-------------------------------------
Name:
Title:
JPMP CAPITAL, LLC
By:
-------------------------------------
Name:
Title:
XX XXXXXX CAPITAL CORPORATION 2
By:
-------------------------------------
Name:
Title:
FCA VENTURES II, LP
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Managing Partner
BTIP/XXXXXXXX XXXXXXX
By: Berenson & Company, Inc. its general
partner
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
18
GENERAL ELECTRIC CAPITAL CORPORATION
By:
-------------------------------------
Name:
Title:
TRIUMPH III INVESTORS, LP
By:
-------------------------------------
Name:
Title:
TRIUMPH PARTNERS III, LP
By:
-------------------------------------
Name:
Title:
MFP PARTNERS, LP
By: MFP Partners/Yale University
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title:
X.X. XXXXXX CAPITAL, L.P.
By: X.X. Xxxxxx Capital Management
Company, L.P., as General Partner
By: X.X. Xxxxxx Capital Management
Company, L.L.C., as General Partner
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
19
TRIMARAN FUND II, L.L.C.
by: Trimaran Fund Management, L.L.C., its
investment manager
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title:
TRIMARAN PARALLEL FUND II, L.P.
by: Trimaran Fund Management, L.L.C., its
investment manager
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title:
TRIMARAN CAPITAL, L.L.C.
by: Trimaran Fund Management, L.L.C., its
investment manager
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title:
CIBC EMPLOYEE PRIVATE EQUITY PARTNERS
(TRIMARAN)
by: Trimaran Fund Management, L.L.C., its
investment manager
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title:
CIBC MB, INC.
by: Trimaran Fund Management, L.L.C., its
investment manager
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title:
20
TRIUMPH III INVESTORS, L.P.,
a Delaware limited partnership
By: Triumph III Investors, Inc.,
its general partner
By: /s/ Xxxxxxxxx X. XxXxxxxx III
-------------------------------------
Name: Xxxxxxxxx X. XxXxxxxx III
Title: Vice President and Secretary
WASHINGTON & CONGRESS CAPITAL
PARTNERS, L.P.,
a Delaware limited partnership
By: Washington & Congress Advisors, LLC,
its general partner
By: /s/ Xxxxxxxxx X. Xxxxxxx XX
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx XX
Title: Chief Executive Officer
GPSF-F, Inc.,
A Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
21
FCA VENTURE PARTNERS I, L.P.
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Managing Partner
FCA VENTURE PARTNERS II, L.P.
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Managing Partner
22
