Exhibit 99.5
Confidentiality Agreement, dated as of October 7, 1998, by and between Parent
and the Company.
CONFIDENTIALITY AGREEMENT
This Agreement is made and entered into on the date last below written by
and between INTENSIVA HEALTHCARE CORPORATION, a Delaware corporation, having its
principal office at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000
("INTENSIVA"), and SELECT MEDICAL CORPORATION having its principal office at
0000 Xxx Xxxxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "COMPANY"). It
is hereby agreed as follows:
1. PURPOSE OF AGREEMENT. It is understood that the Company is interested in
exploring a possible transaction with Intensiva that is material to Intensiva
and is outside the existing business relationship between Intensiva and the
Company, including, without limitation, an acquisition of all or a significant
portion of the assets or equity interest in Intensiva or its affiliates, a
merger or consolidation or other business combination involving Intensiva and
one or more third parties, an acquisition of Intensiva or a significant portion
of its common equity, assets or business, a recapitalization or restructuring of
Intensiva, a joint venture, a strategic alliance or any other similar
transaction, and desires to review certain information concerning Intensiva
which is non-public, confidential, and/or proprietary in nature for the purpose
of making an evaluation of Intensiva in connection therewith.
2. CONFIDENTIALITY OF INFORMATION. Subject to Paragraph 3 below, as an
inducement to Intensiva to furnish information to the Company, the Company
agrees to treat confidentially such information and any other information that
Intensiva or its Representatives (as defined) furnish to the Company, whether in
oral, written, electronic, or other format and whether furnished on, before, or
after the date of this Agreement, together with analyses, compilations, studies,
or other documents or records prepared by the Company, its directors, officers,
employees, agents, advisors, or representatives (collectively,
"REPRESENTATIVES") which contain or otherwise reflect or are generated from such
information (collectively, the "INFORMATION").
3. LIMITED USE OF INFORMATION. The Company agrees that the Information will
not be used other than for the purpose described above, and in no event for
purposes of competition with Intensiva or any of its Affiliates (defined below),
and that such Information shall be kept confidential by the Company and its
Representatives, provided, however, that, notwithstanding any other provision
hereof, (i) any such Information may be disclosed to Representatives who
reasonably need to know same for the purpose described above (it being
understood that such Representatives shall be informed by the Company of the
confidential nature of such Information and shall be directed by the Company to
treat such Information confidentially and not to use it other than for the
purpose described herein); and (ii) any disclosures to which Intensiva consents
in writing may be made or as provided herein. The Company will take all
reasonable efforts to safeguard the Information from disclosure to anyone other
than as permitted herein and shall be responsible for any breach of this
Agreement by its Representatives or any of its Affiliates. For purposes of this
Agreement, an "Affiliate" of a party is any person or entity that controls, is
controlled by, or is under common control with that party.
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4. CONFIDENTIALITY OF DISCUSSIONS. Without the prior written consent of
Intensiva, the Company shall not, and shall direct its Representatives not to,
disclose to any person either the fact that the information has been made
available to the Company or that the Company has inspected any portion of the
Information, the fact that discussions are taking place between Intensiva and
the Company or other facts with respect to such discussions, including the
status thereof; provided, however, that the Company may make disclosure
concerning such discussions if and to the extent that the Company determines in
good faith that such disclosure is required by law or legal process; but
provided further, however, that no such disclosure will be made unless Intensiva
has been advised of the Company's intent to make same and, to the extent
reasonable in the circumstances (as determined by the Company in good faith),
Intensiva has had a reasonable opportunity to discuss the matter with the
Company and/or seek a protective order, as provided below. The term "person" as
used in this Agreement shall be broadly interpreted to include without
limitation any corporation, partnership, joint venture, limited liability
company, individual, or other entity.
5. COMPULSORY DISCLOSURE. In the event that the Company is requested or
required (by oral question, interrogatories, requests for information or
documents, subpoena, civil investigative demand, or similar process) to disclose
any of the Information, the Company shall promptly notify Intensiva of such
request or requirement so that Intensiva may seek an appropriate protective
order or waive the Company's compliance with the provisions of this Agreement.
If, in the absence of a protective order or the receipt of a waiver hereunder,
the Company determines in good faith that it is compelled to disclose any part
of the Information, the Company may disclose such part (but no other part) of
the information to any party compelling such disclosure. The Company shall not
be liable for the disclosure of information pursuant to the preceding sentence
unless such disclosure was caused by or resulted from disclosure by the Company
not permitted by this Agreement.
6. WHAT IS NOT INFORMATION. The following will not constitute Information for
purposes of this Agreement: (i) information which is or becomes generally
available to the public other than as a result of a disclosure by the Company or
its Representatives; (ii) information which was available to the Company on a
non-confidential basis prior to its disclosure to the Company by Intensiva or
its Representatives; or (iii) information which becomes available to the Company
on a non-confidential basis from a source other than Intensiva or its
Representatives, provided that, to the knowledge of the Company after due
inquiry, such source is not subject to any prohibition against transmitting the
Information to the Company. The fact that information included within the
Information is or becomes otherwise available to the Company or its
Representatives under the above exclusion shall not relieve the Company and its
Representatives of the obligations imposed by this Agreement relative to all
other non-excluded information contained within the Information.
7. RETURN OF INFORMATION. The Company shall use reasonable efforts to keep a
record of the Information furnished, and all copies thereof and the location of
such Information and all copies thereof. The written Information, except for
that portion of the Information that may be found in analyses, compilations,
studies, or other documents prepared by or for the Company, shall be returned to
Intensiva or destroyed promptly after Intensiva's request. That
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portion of the Information prepared by or for the Company not so returned shall
be destroyed and the Company shall so certify any such destruction in writing at
Intensiva's request.
8. NO WARRANTY OR LIABILITY. It is understood that Intensiva has or will
endeavor to include in the Information materials which it believes to be
reliable and relevant for the purpose of the Company's evaluation, but the
Company acknowledges that Intensiva and Representatives of Intensiva have not
and do not make any representation or warranty as to the accuracy or
completeness of the information by reason of supplying it or by virtue of
executing this Agreement. None of Intensiva or any of its Representatives shall
have any liability to the Company or any of its Representatives resulting from
the use of or reliance on the Information by the Company or its Representatives,
except and only to the extent, if any, set forth in definitive agreements
executed by the parties.
9. NONHIRE COVENANT. The Company agrees that, during the discussions with
Intensiva and for a period of one year after the date hereof. Company shall
not, directly or indirectly, solicit for employment or employ an employee or
officer of Intensive or any of its Affiliates whose annual base pay at the time
of solicitation exceeds $50,000 or who holds any Hospital Leadership Position
(as defined hereinafter), or attempt to induce any such person to leave the
employment of or otherwise terminate his or her relationship with Intensiva or
any of its Affiliates, except that the Company shall not be precluded from (a)
soliciting such employees pursuant to a General Solicitation (as defined
hereinafter) and from hiring any such employee who responds to such General
Solicitation, or (b) from hiring any employee of the Company who has been
involuntarily terminated prior to commencement of solicitation of such employee.
For purposes of this Agreement, "Hospital Leadership Position" shall mean the
President, Vice President of Provider Relations, Vice President of Patient Care,
and Organizational Improvement Coordinator of each of Intensiva's Affiliates.
For purposes of this Agreement, "General Solicitation" shall mean an
advertisement for employment in (i) a publication of national circulation, (ii)
a publication in the general metropolitan area in which the Company has
operations, or (iii) a publication in a metropolitan area contiguous to a
metropolitan area in which the Company has operations.
10. SHARE OWNERSHIP REPRESENTATION. The Company represents and warrants that,
as of the time of execution of this Agreement, it is not the record and/or
beneficial owner of, and is not a member of a group, as such term is used in
Section 13 of the Securities Exchange Act of 1934, as amended, and the
Regulations promulgated thereunder, that is the record and/or beneficial owner
of, any outstanding voting securities of Intensiva.
11. NO OBLIGATION TO PROCEED. Communication of Information pursuant to this
Agreement shall not obligate either party to enter into any further agreements
relating to an acquisition or other transaction between the parties. It is
understood that unless and until a definitive agreement between Intensiva and
the Company with respect to any transaction between them has been executed and
delivered, neither Intensiva nor the Company shall be under any legal obligation
of any kind whatsoever with respect to such a transaction by virtue of this
Agreement or any written or oral expression with respect to such a transaction
by Intensiva, the Company, or any of their respective Representatives except, in
the case of this Agreement, for the matters
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specifically agreed to herein. The term "definitive agreement" as used in this
Agreement shall not include a letter of intent or any other preliminary written
agreement, or any actual or purported written or verbal acceptance of any offer
or bid.
12. REMEDIES. It is acknowledged that the Information is unique and that the
disclosure and use of the information other than in furtherance of the business
of Intensiva and its Affiliates could reasonably be expected to result in
irreparable harm to Intensiva for which monetary damages would not be an
adequate remedy. Accordingly, in addition to whatever other remedies Intensiva
may have in law, in equity, or pursuant to this Agreement, it is understood and
agreed that, subject to any other applicable provisions of this Agreement,
Intensiva shall be entitled to apply to any court of competent jurisdiction
(without posting bond or other security) to enjoin any actual or threatened
breach or default under the covenants and promises contained herein and shall be
entitled to seek specific performance of this Agreement, and if any such relief
is so ordered (or agreed to by the Company), the Company agrees to pay all costs
of enforcement, including reasonable attorneys' fees and expenses, relating
thereto.
13. NOTICES. Except as otherwise provided herein, all notices required or
permitted hereunder shall be in writing and shall be deemed to be duly received:
(i) on the date given if delivered personally or by facsimile transmission; or
(ii) two business days after delivery to the United States Postal Service,
postage prepaid, mailed by registered or certified mail (return receipt
requested). Notices to a party shall be addressed to the principal office of
that party, or to such other address as a party may, by written notice, request
that notice be delivered.
14. GOVERNING LAW. This Agreement shall be governed and construed by and in
accordance with the internal laws of the State of Delaware, excluding principles
of conflict of laws. Each of Intensiva and the Company hereby consents and
submits to the exclusive jurisdiction and venue of the courts of the States of
Delaware or Missouri and of the United States of America in either Delaware or
the Eastern District of Missouri for any actions, suits, or proceedings arising
out of or related to this Agreement.
15. ENTIRE AGREEMENT, AMENDMENTS. This Agreement represents the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersedes any and all prior agreements between the parties,
whether written or oral; provided, however, that all Information furnished to
Company prior to the date of this Agreement shall be subject to the provisions
of this Agreement. This Agreement may be amended or waived only by a separate
written instrument executed by Intensiva and the Company expressly so amending
or waiving any provision of this Agreement.
16. BINDING EFFECT, ASSIGNMENT, SURVIVAL. This Agreement shall inure to the
benefit of and may be enforced by the parties hereto and their respective
successors and permitted assigns, and shall be binding upon the parties hereto
and their respective successors in interest. Neither party may assign or
otherwise transfer any rights, duties, or obligations hereunder without the
prior written consent of the other party, which consent may be withheld for any
reason whatsoever. All agreements, covenants, undertakings, representations,
and warranties made in this Agreement shall survive the termination of
discussions by the parties.
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17. SEVERABILITY. Should any one or more of the provisions of this Agreement
be found to be invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. In addition, if any provisions
of this Agreement shall be found to be invalid, illegal, or unenforceable under
applicable law, such provision shall be deemed to be modified to the minimum
extent necessary to make such provision legal, valid, and enforceable.
18. NO WAIVER. No failure or delay 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 right, power, or privilege hereunder.
19. HEADINGS. The headings hereof are for convenient reference purposes only
and shall not constitute a part of this Agreement nor affect the meaning or
interpretation of this Agreement.
20. COUNTERPARTS. This Agreement shall be executed in counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one agreement.
IN WITNESS WHEREOF, this Agreement has been executed by authorized
representatives of Intensiva and the Company as of the 7th day of
October, 1998.
INTENSIVA: INTENSIVA HEALTHCARE CORPORATION
By /s/ XXXXX X. XXXXX
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Title: President and Chief Executive Officer
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COMPANY SELECT MEDICAL CORPORATION
By /s/ XXXXXX X. XXXXXXXX
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Title: President
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