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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report May 11, 1999
(Date of Earliest Event Reported)
COLUMBIA/HCA HEALTHCARE CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE
(State of Incorporation)
001-11239 75-2497104
(Commission (I.R.S. Employer
File Number) Identification No.)
One Park Plaza, Nashville, Tennessee 37203
(Address of principal executive offices) (Zip Code)
(615) 344-9551
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On May 11, 1999, Columbia/HCA Healthcare Corporation, LifePoint
Hospitals, Inc. and Triad Hospitals, Inc. jointly announced the completion of
the spin-off of LifePoint and Triad Hospital Groups.
The spin-off was effected through a distribution of one share of
LifePoint and one share of Triad for every 19 shares of Columbia/HCA common
stock outstanding on the record date of April 30, 1999. The Internal Revenue
Service has ruled that the spin-off generally will be tax-free to Columbia/HCA
stockholders (except for any cash received instead of fractional shares of
LifePoint common stock and Triad common stock).
ITEM 7. EXHIBITS
Exhibit 20 Copy of press release dated May 11, 1999.
Exhibit 99 Copy of Distribution Agreement.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
COLUMBIA/HCA HEALTHCARE CORPORATION
/s/ JOHN M. FRANCK II
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John M. Franck II
Corporate Secretary
DATED: May 18, 1999
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Exhibit 20
COLUMBIA/HCA COMPLETES SPIN-OFF OF
LIFEPOINT HOSPITALS, INC. AND TRIAD HOSPITALS, INC.
NASHVILLE, TENNESSEE, May 11, 1999-Columbia/HCA Healthcare Corporation (NYSE:
COL), LifePoint Hospitals, Inc. and Triad Hospitals, Inc. today jointly
announced the completion of the spin-off of LifePoint and Triad Hospital Groups.
The spin-off was effected through a distribution of one share of
LifePoint and one share of Triad for every 19 shares of Columbia/HCA common
stock outstanding on the record date of April 30, 1999. The Internal Revenue
Service has ruled that the spin-off generally will be tax-free to Columbia/HCA
stockholders (except for any cash received instead of fractional shares of
LifePoint common stock and Triad common stock).
This press release contains forward-looking statements based on current
management expectations. Numerous factors, including those related to market
conditions and those detailed from time-to-time in the Company's filings with
the Securities and Exchange Commission, may cause results to differ materially
from those anticipated in the forward-looking statements. Many of the factors
that will determine the Company's future results are beyond the ability of the
Company to control or predict. These statements are subject to risks and
uncertainties and, therefore, actual results may differ materially.
Readers should not place undue reliance on forward-looking statements, which
reflect management's views only as of the date hereof. The Company undertakes no
obligation to revise or update any forward-looking statements, or to make any
other forward-looking statements, whether as a result of new information, future
events or otherwise.
All references to "Company" and "Columbia/HCA" as used throughout this document
refer to Columbia/HCA Healthcare Corporation and its affiliates.
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EXHIBIT 99
DISTRIBUTION AGREEMENT
DATED AS OF MAY 11, 1999
BY AND AMONG
COLUMBIA/HCA HEALTHCARE CORPORATION,
LIFEPOINT HOSPITALS, INC.
AND
TRIAD HOSPITALS, INC.
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TABLE OF CONTENTS
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Article I Definitions...........................................................................1
Section 1.1. Definitions....................................................................1
Article II Pre-Distribution Transactions; Certain Covenants.....................................10
Section 2.1. Restructuring Transactions....................................................10
Section 2.2. Consents......................................................................10
Section 2.3. Transfer and Assignment of Certain Licenses and Permits.......................11
Section 2.4. Transfer and Assignment of Certain Business Agreements........................11
Section 2.5. Transfers Not Effected Prior to the Distribution Date; Transfers
Deemed Effective as of the Distribution Date..................................12
Section 2.6. Securities Matters............................................................13
Section 2.7. Conduct Prior to the Distribution Date........................................13
Section 2.8. Resignations..................................................................13
Section 2.9. Election of Officers..........................................................14
Section 2.10. Other Agreements..............................................................14
Article III The Distribution.....................................................................14
Section 3.1. Conditions Precedent to the Distribution......................................14
Section 3.2. No Constraint.................................................................15
Section 3.3. The Distribution..............................................................16
Section 3.4. Fractional Shares.............................................................16
Article IV Covenants............................................................................17
Section 4.1. Further Assurances............................................................17
Section 4.2. Certain Intellectual Property Matters.........................................17
Section 4.3. Assumption and Satisfaction of Liabilities....................................18
Section 4.4. Removal of Certain Guarantees.................................................18
Section 4.5. No Representations or Warranties; Consents....................................19
Section 4.6. Limitation on Solicitation of Employees.......................................21
Section 4.7. LifePoint Registration Statement..............................................21
Section 4.8. Triad Registration Statement..................................................23
Section 4.9. Certain Real Estate Matters...................................................24
Section 4.10. Personal Property.............................................................25
Article V Indemnification......................................................................26
Section 5.1. Indemnification by Columbia/HCA...............................................26
Section 5.2. Indemnification by LifePoint..................................................27
Section 5.3. Indemnification by Triad......................................................27
Section 5.4. Limitations on Indemnification Obligations....................................28
Section 5.5. Procedures Regarding Indemnification..........................................29
Section 5.6. Indemnification Payments......................................................31
Section 5.7. Cooperation of the Parties with Respect to Actions and Third Party Claims.....31
Section 5.8. Contribution..................................................................32
Section 5.9. Survival of Indemnities; Exclusive Remedy.....................................33
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Article VI Ancillary Agreements.................................................................33
Section 6.1. Generally.....................................................................33
Article VII Accounting Matters...................................................................33
Section 7.1. Settlement of Intercompany Accounts...........................................33
Section 7.2. Allocation of Prepaid Items and Reserves......................................34
Section 7.3. Financial Accounting Treatment of Assets Transferred and Liabilities Assumed..34
Section 7.4. Other Accounting Matters......................................................35
Article VIII Indemnification and Other Matters Relating To Government Programs....................35
Section 8.1. Indemnification and Other Matters Relating to Pre-Distribution
Period Cost Reports...........................................................35
Section 8.2. Matters Relating to Post-Distribution Period Cost Reports.....................38
Section 8.3. Cooperation on Reimbursement Matters..........................................38
Section 8.4. Limitation....................................................................39
Article IX Corporate Records and Information....................................................39
Section 9.1. Provision, Transfer and Delivery of Applicable Corporate Records..............39
Section 9.2. Access to Information.........................................................40
Section 9.3. Confidentiality...............................................................40
Section 9.4. Litigation Cooperation........................................................41
Section 9.5. Retention of Records..........................................................42
Section 9.6. Privileged Matters............................................................42
Section 9.7. Certain Matters...............................................................44
Article X Interest On Payments.................................................................45
Section 10.1. Interest on Payments..........................................................45
Article XI Miscellaneous........................................................................45
Section 11.1. Allocation of Costs and Expenses..............................................45
Section 11.2. Termination; Amendment........................................................46
Section 11.3. Disputes......................................................................46
Section 11.4. Consent to Jurisdiction.......................................................47
Section 11.5. Waiver of Jury Trial..........................................................47
Section 11.6. Notices.......................................................................48
Section 11.7. Entire Agreement..............................................................49
Section 11.8. Assignment....................................................................50
Section 11.9. Survival of Agreements and Covenants..........................................50
Section 11.10. No Third Party Beneficiaries..................................................50
Section 11.11. Waiver........................................................................50
Section 11.12. Severability..................................................................50
Section 11.13. Governing Law.................................................................50
Section 11.14. Counterparts..................................................................51
Section 11.15. Headings......................................................................51
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DISTRIBUTION AGREEMENT
Distribution Agreement (this "Agreement") dated as of May 11,
1999 by and among Columbia/HCA Healthcare Corporation, a Delaware corporation
(together with its successors and permitted assigns, "Columbia/HCA"), LifePoint
Hospitals, Inc., a Delaware corporation (together with its successors and
permitted assigns, "LifePoint"), and Triad Hospitals, Inc., a Delaware
corporation (together with its successors and permitted assigns, "Triad").
W I T N E S S E T H:
WHEREAS, the Board of Directors of Columbia/HCA has determined
that it is in the best interests of Columbia/HCA and its stockholders (i) to
separate certain of the businesses of Columbia/HCA and its Subsidiaries from the
other businesses conducted by Columbia/HCA and its Subsidiaries by transferring
certain businesses to each of LifePoint and Triad, (ii) to distribute on a pro
rata basis to the holders of Columbia/HCA Common Stock (as hereinafter defined)
all of the outstanding shares of LifePoint Common Stock (as hereinafter defined)
and Triad Common Stock (as hereinafter defined) owned by Columbia/HCA (which, as
of the Distribution Date (as hereinafter defined), will constitute 100% of the
issued and outstanding shares of LifePoint Common Stock and Triad Common Stock),
and (iii) to effect the other transactions contemplated by this Agreement; and
WHEREAS, the parties have determined that it is necessary and
desirable to set forth in this Agreement the principal corporate transactions
required to effect the Distribution (as hereinafter defined) and to set forth
other agreements that will govern certain other matters following such
Distribution;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the parties hereto hereby
agree as follows:
Article I
Definitions
Section 1.1. Definitions. As used herein, the following terms
have the following meanings:
"Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority or
arbitration tribunal, whether at law or in equity.
"Affiliate" means, with respect to a specified person, any
person that directly or indirectly controls, is controlled by or is under common
control with the
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specified person. A person shall be deemed to control another person if such
first person has the power to direct or cause the direction of the management
and policies of such other person, whether through ownership of voting
securities, by contract or otherwise.
"Ancillary Agreements" means all of the agreements identified
on Exhibit A hereto.
"Assets" means all properties, rights, contracts, leases and
claims, of every kind and description, wherever located, whether tangible or
intangible, and whether real, personal or mixed.
"Benefits Agreement" means the Benefits and Employment Matters
Agreement by and among Columbia/HCA, LifePoint and Triad, entered into on or
before the Distribution Date, as amended from time to time.
"Books and Records" means all books, records, manuals,
agreements and other materials (in any form or medium), including, without
limitation, all mortgages, licenses, indentures, contracts, financial data,
customer lists, marketing materials and studies, advertising materials, price
lists, correspondence, distribution lists, supplier lists, production data,
sales and promotional materials and records, purchasing materials and records,
personnel records, manufacturing and quality control records and procedures,
blue prints, research and development files, records, data and laboratory books,
account records, sales order files, litigation files, computer files,
microfiche, tape recordings, photographs, patient and medical records, and
Medicare cost report files and workpapers.
"Code" means the Internal Revenue Code of 1986, as amended.
"Columbia/HCA Assets" means the Assets of Columbia/HCA and its
Subsidiaries, after giving effect to the Restructuring Transactions and the
Distribution. Any positive recovery which results from resolution of a
proceeding or claim which is an Indemnified Matter shall be deemed to be a
Columbia/HCA Asset.
"Columbia/HCA Common Stock" means the outstanding shares of
common stock, $0.01 par value per share, and nonvoting common stock, $0.01 par
value per share, of Columbia/HCA.
"Columbia/HCA Group" means Columbia/HCA and its Subsidiaries,
after giving effect to the Restructuring Transactions and the Distribution.
"Columbia/HCA Group Business" means the business now or
formerly conducted by Columbia/HCA and its present and former Subsidiaries, but
excluding (i) the LifePoint Group Business and (ii) the Triad Group Business.
"Columbia/HCA Group Records" is defined in Section 9.1(a)
below.
"Columbia/HCA Indemnitees" means (i) Columbia/HCA and, after
giving effect to the Restructuring Transactions and the Distribution, each of
its Affiliates, and (ii) each of the directors, officers, employees and agents
of the entities described in the
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immediately preceding clause (i) and each of the heirs, executors, successors
and assigns of any of such directors, officers, employees and agents.
"Columbia/HCA Liabilities" means (i) Liabilities, whether
arising before, on or after the Distribution Date, incurred in connection with
the conduct or operation of the Columbia/HCA Group Business, or ownership or use
of the Columbia/HCA Assets; (ii) Liabilities arising from any claim against
LifePoint, Triad, or any of their Affiliates, which claim is based upon facts
and circumstances occurring prior to the Distribution Date and is covered by an
insurance policy maintained by Columbia/HCA and listed on Exhibit H hereto,
without regard to deductible amounts, coinsurance amounts or policy limits, and
(iii) Liabilities arising from any worker's compensation claim against
LifePoint, Triad, or any of their Affiliates if the injury or condition giving
rise to the claim was incurred on or before the Distribution Date.
"Commission" means the Securities and Exchange Commission.
"Compliance Agreement" means an agreement setting forth the
agreement of the party executing such agreement to comply with applicable Laws
and to take specified actions intended to permit such compliance to be
monitored.
"Consents" is defined in Section 2.2 below.
"Conveyancing and Assumption Instruments" shall mean,
collectively, the various agreements, instruments and other documents heretofore
entered into and to be entered into to effect the transfer of Assets and the
assumption of Liabilities in the manner contemplated by this Agreement, or
otherwise arising out of or relating to the transactions contemplated by this
Agreement, which shall be in such form as the parties agree.
"Cost Reports" is defined in Section 8.1(a) below.
"Disputes" is defined in Section 11.3(a) below.
"Distribution" means the LifePoint Distribution and the Triad
Distribution, collectively.
"Distribution Agent" means National City Bank, in its capacity
as distribution agent.
"Distribution Date" means the date on which the Distribution
shall be effective, as determined by the Board of Directors of Columbia/HCA.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Hospital" is defined in Section 5.1(d) below.
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"Exclusion Order" is defined in Section 5.1(d) below.
"Facilities" is defined in Section 8.1 below.
"Funded Debt" means indebtedness for money borrowed.
"Government Investigations" is defined in Section 5.1 below.
"Governmental Authority" means any federal, state, local,
foreign or international government, agency, bureau, board, commission, court,
department, official, or other regulatory, administrative or governmental
authority.
"Group" means any of the Columbia/HCA Group, the LifePoint
Group or the Triad Group, as the context requires.
"HCFA" means the United States Health Care Financing
Administration.
"Indemnified Matters" is defined in Section 5.1 below.
"Indemnifying Party" is defined in Section 5.4(a) below.
"Indemnitee" is defined in Section 5.4(a) below.
"Information Statement" means the information statement to be
sent in connection with the Distribution to holders of record of Columbia/HCA
Common Stock at the close of business on the Record Date.
"Insurance Allocation and Administration Agreement" means the
Insurance Allocation and Administration Agreement by and among Columbia/HCA,
LifePoint and Triad, entered into on or before the Distribution Date, as amended
from time to time.
"Insurance Proceeds" means, with respect to any insured party,
those monies, net of any applicable premium adjustment, retrospectively-rated
premium, deductible, retention or cost of reserve paid or held by or for the
benefit of such insured party, which are either: (i) received by an insured
party from an insurance carrier or (ii) paid by an insurance carrier on behalf
of an insured party.
"IRS" means the Internal Revenue Service.
"Law" means all laws, statutes and ordinances and all
regulations, rules and other pronouncements of Governmental Authorities having
the effect of law of the United States, any foreign country or any foreign or
domestic state, province, commonwealth, city, country, municipality, territory,
protectorate, possession or similar instrumentality or any Governmental
Authority thereof.
"Liabilities" means any and all claims, debts, liabilities and
obligations, absolute or contingent, matured or not matured, liquidated or
unliquidated, accrued or
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unaccrued, known or unknown, whenever arising, including all costs and expenses
relating thereto, and including, without limitation, those debts, liabilities
and obligations arising under this Agreement, under any law, rule, regulation,
action, order, injunction or decree of any governmental entity or under any
award of any arbitrator of any kind, and those arising under any contract,
commitment or undertaking.
"Liens" means any mortgages, pledges, liens, security
interests, easements, rights of way, restrictions, covenants, encumbrances,
encroachments, or charges of any kind.
"LifePoint Assets" means all Assets reflected as Assets of
LifePoint on the LifePoint Balance Sheet and all other Assets that are
determined by Columbia/HCA in its sole discretion to be associated primarily or
exclusively with the LifePoint Group Business.
"LifePoint Balance Sheet" means the most recent consolidated
balance sheet of LifePoint included in the LifePoint Form 10.
"LifePoint By-laws" means the By-laws of LifePoint in the form
attached as Exhibit B hereto.
"LifePoint Certificate" means the certificate of incorporation
of LifePoint in the form attached as Exhibit C hereto.
"LifePoint Common Stock" means the outstanding shares of
common stock, $0.01 par value per share, of LifePoint.
"LifePoint Distribution" means the distribution on the
Distribution Date of all outstanding shares of LifePoint Common Stock owned by
Columbia/HCA to the holders of Columbia/HCA Common Stock at the close of
business on the Record Date.
"LifePoint Form 10" means the registration statement filed on
Form 10 pursuant to the Exchange Act (File No. 0-29818), which was declared
effective by the Commission on April 27, 1999, as such registration statement
was amended through the effective date.
"LifePoint Group" means LifePoint and its Subsidiaries, as
constituted upon completion of the Restructuring Transactions.
"LifePoint Group Business" means the business conducted at the
hospitals and other healthcare facilities which constitute the operations of
LifePoint and its Subsidiaries as of the Distribution Date, as described in the
LifePoint Form 10, including the business conducted at such hospitals and other
healthcare facilities prior to the Distribution Date.
"LifePoint Group Records" is defined in Section 9.1(b) below.
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"LifePoint Indemnitees" means (i) LifePoint and, after giving
effect to the Restructuring Transactions and the Distribution, each of its
Affiliates, and (ii) each of the directors, officers, employees and agents of
the entities described in the immediately preceding clause (i) and each of the
heirs, executors, successors and assigns of any of such directors, officers,
employees and agents.
"LifePoint Liabilities" means (i) Liabilities of LifePoint or,
after giving effect to the Restructuring Transactions and the Distribution, any
of its Subsidiaries, whether arising before, on or after the Distribution Date,
including all Liabilities incurred in connection with the conduct or operation
of any LifePoint Group Business, the ownership or use of any of the LifePoint
Assets, or the establishment or maintenance of, or contributions to, any
employee benefit plan (as defined in Section 3(3) of ERISA) for the benefit of
persons employed by any LifePoint Group Business, (ii) Liabilities arising in
connection with any transfer or attempted transfer of any Asset to the LifePoint
Group, including, without limitation, Liabilities arising in connection with the
failure to obtain any Consent or to comply with any requirement of Law, and
(iii) all Liabilities reflected as liabilities or obligations on the LifePoint
Balance Sheet; provided, however, that the following Liabilities are not
LifePoint Liabilities: (1) Liabilities arising from any claim based upon facts
and circumstances occurring prior to the Distribution Date and covered by an
insurance policy maintained by Columbia/HCA and listed on Exhibit D hereto,
without regard to deductible amounts, coinsurance amounts or policy limits, (2)
Liabilities arising from any worker's compensation claim if the injury or
condition giving rise to the claim was incurred on or before the Distribution
Date, and (3) Liabilities that are Columbia/HCA Liabilities or Triad
Liabilities.
"LifePoint Option" means options to purchase shares of
LifePoint Common Stock granted to certain officers of Columbia/HCA on or prior
to the Distribution Date.
"LifePoint Option Shares" means the shares of LifePoint Common
Stock issuable upon exercise of the LifePoint Option.
"LifePoint Permitted Exceptions" means (1) Liens for taxes,
water, sewer and other service or use charges and fees, and other State, local
or municipal charges and assessments, not yet due and payable as of the
Distribution Date, (2) Liens for any indebtedness shown on the LifePoint Balance
Sheet and Liens for any contractual or other obligation to be retained by any of
the LifePoint Group following the Distribution Date, (3) standard printed
exceptions customarily set forth in ALTA title reports or title policies as in
use in the jurisdiction in which the real property is located, (4) equity, joint
venture or other similar interests of others identified in Exhibit E in any of
the hospitals and related medical facilities and professional office buildings
set forth on Exhibit E, (5) easements, encroachments, covenants, restrictions,
rights of way, defects, irregularities or encumbrances on title which do not
materially impair the use of such real property for the purpose for which it is
used as of the Distribution Date, (6) zoning and other municipal ordinances
which are not violated in any material respect by existing improvements and the
present use made of the premises, (7) any other Liens or title defects or
irregularities
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which do not, in the aggregate, materially and adversely affect the LifePoint
Group Business (taken as a whole), and (8) Liens identified on Exhibit E.
"LifePoint Real Property" means the real property set forth on
Exhibit E, relating to the hospitals and related medical facilities and
professional office buildings of the LifePoint Group.
"LifePoint Registration Statement" means a registration
statement under the Securities Act, on such form as may be appropriate
thereunder, to effect the registration of the LifePoint Option Shares and the
resale thereof.
"Listing" means the listing of the LifePoint Common Stock and
the Triad Common Stock on NASDAQ.
"Losses" means, with respect to any matter for which a person
is entitled to indemnification pursuant to Article V hereof (including any
Indemnified Matter), any and all losses, liabilities, damages, settlements,
claims, fines, penalties, costs and expenses (including reasonable attorneys'
fees, but not including time spent by employees of such person) actually
incurred by such person arising from such matter, but excluding consequential
damages.
"Marks" is defined in Section 4.2(a) below.
"Monthly Statement" is defined in Section 8.1(f) below.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"OIG" means the Office of Inspector General.
"Post-Distribution Periods" is defined in Section 8.2(a)
below.
"Pre-Distribution Periods" is defined in Section 8.1(a) below.
"Privilege" is defined in Section 9.6(a) below.
"Privileged Information" is defined in Section 9.6(c) below.
"Reconciling Payment" is defined in Section 8.1(f) below.
"Record Date" means such date as is designated by
Columbia/HCA's Board of Directors as the record date for determining the
stockholders of Columbia/HCA entitled to receive the Distribution.
"Restructuring Transactions" means (i) the series of
transactions, the form and sequence of which shall be directed by Columbia/HCA
in its sole discretion, undertaken for the purpose of (a) assigning,
transferring and conveying to LifePoint (or to the appropriate member of the
LifePoint Group) the LifePoint Assets, (b) effecting the
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assumption by LifePoint (or by the appropriate member of the LifePoint Group)
of the LifePoint Liabilities, (c) assigning, transferring and conveying to Triad
(or to the appropriate member of the Triad Group) the Triad Assets, and (d)
effecting the assumption by Triad (or by the appropriate member of the Triad
Group) of the Triad Liabilities, and shall also mean (ii) any transaction
undertaken at the direction or with the consent of Columbia/HCA for the purpose
of confirming the right, title and interest of Columbia/HCA to the Columbia/HCA
Assets and the responsibility of Columbia/HCA for the Columbia/HCA Liabilities.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Social Security Act" means the Social Security Act, as
amended.
"Subsidiary" means, with respect to any entity, (i) any
corporation in which such entity, directly or indirectly, owns or controls, at
the time of determination, at least a majority in interest of the outstanding
voting stock (having by the terms thereof voting power under ordinary
circumstances to elect a majority of the directors of such corporation,
irrespective of whether or not stock of any other class or classes of such
corporation shall have or might have voting power by reason of the occurrence of
a contingency); or (ii) any non-corporate entity in which such entity either (a)
directly or indirectly, at the time of determination, has at least a majority
ownership interest, or (b) at the date of determination, is a general partner or
an entity performing similar functions (for example, manager of a limited
liability company or a trustee of a trust).
"Tax" has the meaning set forth in the Tax Agreement.
"Tax Agreement" means the Tax Sharing and Indemnification
Agreement by and among Columbia/HCA, LifePoint and Triad, entered into on or
before the Distribution Date, as amended from time to time.
"Third Party Claim" is defined in Section 5.5(a) below.
"Triad Assets" means all Assets reflected as Assets of Triad
on the Triad Balance Sheet and all other Assets that are determined by
Columbia/HCA in its sole discretion to be associated primarily or exclusively
with the Triad Group Business.
"Triad Balance Sheet" means the most recent consolidated
balance sheet of Triad included in the Triad Form 10.
"Triad By-laws" means the By-laws of Triad in the form
attached as Exhibit F hereto.
"Triad Certificate" means the certificate of incorporation of
Triad in the form attached as Exhibit G hereto.
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"Triad Common Stock" means the outstanding shares of common
stock, $0.01 par value per share, of Triad.
"Triad Distribution" means the distribution on the
Distribution Date of all outstanding shares of Triad Common Stock owned by
Columbia/HCA to the holders of Columbia/HCA Common Stock at the close of
business on the Record Date.
"Triad Form 10" means the registration statement filed on Form
10 pursuant to the Exchange Act (File No. 0-29816), which was declared effective
by the Commission on April 27, 1999, as such registration statement was amended
through the effective date.
"Triad Group" means Triad and its Subsidiaries, as constituted
upon completion of the Restructuring Transactions.
"Triad Group Business" means the business conducted at the
hospitals and other healthcare facilities which constitute the operations of
Triad and its Subsidiaries as of the Distribution Date, as described in the
Triad Form 10, including the business conducted at such hospitals and other
healthcare facilities prior to the Distribution Date.
"Triad Group Records" is defined in Section 9.1(c) below.
"Triad Indemnitees" means (i) Triad and, after giving effect
to the Restructuring Transactions and the Distribution, each of its Affiliates,
and (ii) each of the directors, officers, employees and agents of the entities
described in the immediately preceding clause (i) and each of the heirs,
executors, successors and assigns of any of such directors, officers, employees
and agents.
"Triad Liabilities" means (i) Liabilities of Triad or, after
giving effect to the Restructuring Transactions and the Distribution, any of its
Subsidiaries, whether arising before, on or after the Distribution Date,
including all Liabilities incurred in connection with the conduct or operation
of any Triad Group Business, the ownership or use of any of the Triad Assets, or
the establishment or maintenance of, or contributions to, any employee benefit
plan (as defined in Section 3(3) of ERISA) for the benefit of persons employed
by any Triad Group Business, (ii) Liabilities arising in connection with any
transfer or attempted transfer of any Asset to the Triad Group, including,
without limitation, Liabilities arising in connection with the failure to obtain
any Consent or to comply with any requirement of Law, and (iii) all Liabilities
reflected as liabilities or obligations on the Triad Balance Sheet; provided,
however, that the following Liabilities are not Triad Liabilities: (1)
Liabilities arising from any claim based upon facts and circumstances occurring
prior to the Distribution Date and covered by an insurance policy maintained by
Columbia/HCA and listed on Exhibit D hereto, without regard to deductible
amounts, coinsurance amounts or policy limits, (2) Liabilities arising from any
worker's compensation claim if the injury or condition giving rise to the claim
was incurred on or before the Distribution Date, and (3) Liabilities that are
Columbia/HCA Liabilities or LifePoint Liabilities.
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"Triad Option" means options to purchase shares of Triad
Common Stock granted to certain officers of Columbia/HCA on or prior to the
Distribution Date.
"Triad Option Shares" means the shares of Triad Common Stock
issuable upon exercise of the Triad Option.
"Triad Permitted Exceptions" means (1) Liens for taxes, water,
sewer and other service or use charges and fees, and other State, local or
municipal charges and assessments, not yet due and payable as of the
Distribution Date, (2) Liens for any indebtedness shown on the Triad Balance
Sheet and Liens for any contractual or other obligation to be retained by any of
the Triad Group following the Distribution Date, (3) standard printed exceptions
customarily set forth in ALTA title reports or title policies as in use in the
jurisdiction in which the real property is located, (4) equity, joint venture or
other similar interests of others identified in Exhibit H in any of the
hospitals and related medical facilities and professional office buildings set
forth on Exhibit H, (5) easements, encroachments, covenants, restrictions,
rights of way, defects, irregularities or encumbrances on title which do not
materially impair the use of such real property for the purpose for which it is
used as of the Distribution Date, (6) zoning and other municipal ordinances
which are not violated in any material respect by existing improvements and the
present use made of the premises, (7) any other Liens or title defects or
irregularities which do not, in the aggregate, materially and adversely affect
the Triad Group Business (taken as a whole), and (8) Liens identified on
Exhibit H.
"Triad Real Property" means the real property set forth on
Exhibit H, relating to the hospitals and related medical facilities and
professional office buildings of the Triad Group.
"Triad Registration Statement" means a registration statement
under the Securities Act, on such form as may be appropriate thereunder, to
effect the registration of the Triad Option Shares and the resale thereof.
Article II
Pre-Distribution Transactions; Certain Covenants
Section 2.1. Restructuring Transactions. Each of Columbia/HCA,
LifePoint and Triad shall take all necessary action to cause, effect and
consummate the Restructuring Transactions. In connection with the Restructuring
Transactions, the parties shall execute or cause to be executed by the
appropriate entities the Conveyancing and Assumption Instruments. Any transfers
of capital stock shall be effected by means of delivery of stock certificates
and executed stock powers and notation on the stock record books of the
corporation or other legal entities involved and, to the extent required by
applicable law, by notation on public registries.
Section 2.2. Consents. The parties hereto shall cooperate and
shall use their reasonable efforts to obtain any third-party consents or
approvals that are required to
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consummate the Restructuring Transactions, the Distribution and the other
transactions contemplated hereby (the "Consents").
Section 2.3. Transfer and Assignment of Certain Licenses and
Permits.
(a) Licenses and Permits Relating to the LifePoint
Group Business. On or prior to the Distribution Date, or as soon as
reasonably practicable thereafter, each of Columbia/HCA and Triad shall
take all necessary action to duly and validly transfer, or cause to be
duly and validly transferred, to the appropriate member of the
LifePoint Group all transferable licenses, permits and authorizations
issued by any Governmental Authority, if any, that relate primarily or
exclusively (as determined by Columbia/HCA in its sole discretion) to
the LifePoint Group Business but which are held in the name of
Columbia/HCA or Triad, or any of their respective Subsidiaries,
employees, officers, directors, stockholders or agents.
(b) Licenses and Permits Relating to the Triad Group
Business. On or prior to the Distribution Date, or as soon as
reasonably practicable thereafter, each of Columbia/HCA and LifePoint
shall take all necessary action to duly and validly transfer, or cause
to be duly and validly transferred, to the appropriate member of the
Triad Group all transferable licenses, permits and authorizations
issued by any Governmental Authority, if any, that relate primarily or
exclusively (as determined by Columbia/HCA in its sole discretion) to
the Triad Group Business but which are held in the name of Columbia/HCA
or LifePoint, or any of their respective Subsidiaries, employees,
officers, directors, stockholders or agents.
Section 2.4. Transfer and Assignment of Certain Business
Agreements.
(a) Transfer and Assignment of LifePoint Group
Business Agreements. On or prior to the Distribution Date, or as soon
as reasonably practicable thereafter, and subject to the limitations
set forth in this Section 2.4, each of Columbia/HCA and Triad shall
take all necessary action to assign, transfer and convey, or cause to
be assigned, transferred and conveyed, to the appropriate member of the
LifePoint Group all of its (or any of its Subsidiaries') right, title
and interest in and to any and all agreements, if any, that relate
primarily or exclusively (as determined by Columbia/HCA in its sole
discretion) to the LifePoint Group Business or any member of the
LifePoint Group.
(b) Transfer and Assignment of Triad Group Business
Agreements. On or prior to the Distribution Date, or as soon as
reasonably practicable thereafter, and subject to the limitations set
forth in this Section 2.4, each of Columbia/HCA and LifePoint shall
take all necessary action to assign, transfer and convey, or cause to
be assigned, transferred and conveyed, to the appropriate member of the
Triad Group all of its (or any of its Subsidiaries') right, title and
interest in and to any and all agreements, if any, that relate
primarily or
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exclusively (as determined by Columbia/HCA in its sole discretion) to
the Triad Group Business or any member of the Triad Group.
(c) Joint Agreements. Subject to the provisions of
this Section 2.4, any agreement to which any party hereto (or, after
giving effect to the Restructuring Transactions and the Distribution,
any of such party's Subsidiaries) is a party that inures to the benefit
of more than one of the Columbia/HCA Group Business, the LifePoint
Group Business and the Triad Group Business shall be assigned in part,
on or prior to the Distribution Date or as soon as reasonably
practicable thereafter, as directed by Columbia/HCA in its sole
discretion with the intention that each Group shall continue to possess
the rights and benefits, and be subject to the obligations, inuring to
its business under such agreement.
(d) Obligations of Assignees. The assignee of any
agreement assigned, in whole or in part, pursuant to this Section 2.4
shall assume and agree to pay, perform and fully discharge all
obligations of the assignor under such agreement (whether such
obligations arose or were incurred prior to, on or subsequent to the
Distribution Date and irrespective of whether such obligations have
been asserted as of the Distribution Date); provided, however, that
each assignor shall promptly upon request from an assignee reimburse
such assignee for any payments made by such assignee pursuant to an
assigned agreement which were due prior to the Distribution Date, but
not timely paid by the assignor. In the case of a partial assignment
under Section 2.4(c) above, such assignee shall assume and agree to
pay, perform and discharge the related portion of such obligations as
determined in accordance with the terms of the relevant agreement,
where determinable on the face thereof, and otherwise as directed by
Columbia/HCA in its sole discretion in connection with such partial
assignment.
Section 2.5. Transfers Not Effected Prior to the Distribution
Date; Transfers Deemed Effective as of the Distribution Date. To the extent that
any transfers contemplated by this Article II shall not have been consummated on
or prior to the Distribution Date, each party hereto shall cooperate (and shall
cause each of its Subsidiaries to cooperate) to effect such transfers as
promptly following the Distribution Date as shall be practicable. Nothing herein
shall be deemed to require any party to, or constitute an agreement to, transfer
any Assets or assume any Liabilities which would require the Consent of a third
party which Consent had not been obtained or which otherwise by its terms or by
operation of Law cannot be transferred or assumed. If any such transfer of
Assets or Liabilities has not been consummated, or if an attempted transfer of
any Asset would be ineffective or would adversely affect the rights of any party
hereto so that such party would not receive all rights to such Asset, from and
after the Distribution Date the party required to transfer such Asset shall hold
such Asset in trust for the use and benefit of the party entitled thereto (at
the expense of the party entitled thereto) or retain such Liability for the
account of the party by whom such Liability is to be assumed pursuant hereto, as
the case may be, and take such other action as may be reasonably requested by
the party to whom such Asset is to be transferred, or by whom such Liability is
to be assumed, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such
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<PAGE> 16
Asset or Liability been transferred or assumed as contemplated hereby. As and
when any such Asset or Liability becomes transferable or assumable, such
transfer shall be effected forthwith. As of the Distribution Date, each party
hereto (or, as applicable, such Subsidiary of such party) shall be deemed to
have acquired (or, as applicable, retained) complete and sole beneficial
ownership over all the Assets, together with all rights, powers and privileges
incident thereto, and shall be deemed to have assumed in accordance with the
terms of this Agreement all the Liabilities, and all duties, obligations and
responsibilities incident thereto, which such party (or, after giving effect to
the Restructuring Transactions and the Distribution, any Subsidiary of such
party) is entitled to acquire or required to assume pursuant to the terms of
this Agreement.
Section 2.6. Securities Matters. LifePoint shall cooperate
with Columbia/HCA and Triad to prepare, and Columbia/HCA shall cause to be
mailed to the holders of Columbia/HCA Common Stock at the close of business on
the Record Date, for receipt by such holders prior to the Distribution Date, the
Information Statement. Columbia/HCA and LifePoint shall cooperate in preparing
and filing with the Commission any registration statements which it is necessary
or advisable to file prior to the Distribution Date in respect of any employee
benefit or other plan involving securities of LifePoint contemplated by the
Benefits Agreement.
(b) Triad shall cooperate with Columbia/HCA and
LifePoint to prepare, and Columbia/HCA shall cause to be mailed to the
holders of Columbia/HCA Common Stock at the close of business on the
Record Date, for receipt by such holders prior to the Distribution
Date, the Information Statement. Columbia/HCA and Triad shall cooperate
in preparing and filing with the Commission any registration statements
which it is necessary or advisable to file prior to the Distribution
Date in respect of any employee benefit or other plan involving
securities of Triad contemplated by the Benefits Agreement.
Section 2.7. Conduct Prior to the Distribution Date. Prior to
the Distribution Date, the businesses of the LifePoint Group and the Triad Group
shall be operated for the sole benefit of Columbia/HCA.
Section 2.8. Resignations.
(a) Subject to Section 2.8(d) below, Columbia/HCA
shall cause all of its employees and all of the employees of its
Subsidiaries to resign, effective as of 11:59 p.m. on the Distribution
Date, from all positions as officers or directors of any Subsidiary of
LifePoint in which they serve, and LifePoint shall cause all of its
employees and all of the employees of its Subsidiaries to resign,
effective as of 11:59 p.m. on the Distribution Date, from all positions
as officers or directors of any Subsidiary of Columbia/HCA in which
they serve.
(b) Subject to Section 2.8(d) below, Columbia/HCA
shall cause all of its employees and all of the employees of its
Subsidiaries to resign, effective as of 11:59 p.m. on the Distribution
Date, from all positions as officers
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<PAGE> 17
or directors of any Subsidiary of Triad in which they serve, and Triad
shall cause all of its employees and all of the employees of its
Subsidiaries to resign, effective as of 11:59 p.m. on the Distribution
Date, from all positions as officers or directors of any Subsidiary of
Columbia/HCA in which they serve.
(c) Subject to Section 2.8(d) below, LifePoint shall
cause all of its employees and all of the employees of its Subsidiaries
to resign, effective as of 11:59 p.m. on the Distribution Date, from
all positions as officers or directors of any Subsidiary of Triad in
which they serve, and Triad shall cause all of its employees and all of
the employees of its Subsidiaries to resign, effective as of 11:59 p.m.
on the Distribution Date, from all positions as officers or directors
of any Subsidiary of LifePoint in which they serve.
(d) No person shall be required by any party hereto
to resign from any position or office with another party hereto if such
person has been appointed by the Board of Directors of the relevant
entity to hold such position or office following the Distribution.
Section 2.9. Election of Officers. On or prior to the
Distribution Date, each of Columbia/HCA, LifePoint and Triad shall, as
applicable, take all actions necessary and desirable so that, as of the
Distribution Date, the executive officers of LifePoint and Triad will be as set
forth in the LifePoint Form 10 or the Triad Form 10, as the case may be.
Section 2.10. Other Agreements. On or prior to the
Distribution Date, or (in the case of agreements other than the Ancillary
Agreements) as soon as reasonably practicable thereafter, each of Columbia/HCA,
LifePoint and Triad shall take all necessary action to execute and deliver, or
cause to be executed and delivered, (a) the Ancillary Agreements, and (b) any
other agreements in respect of the Restructuring Transactions and the
Distribution as are necessary or appropriate in connection with the transactions
contemplated hereby and thereby.
Article III
The Distribution
Section 3.1. Conditions Precedent to the Distribution. The
Distribution shall be subject to, in the sole discretion of Columbia/HCA, the
fulfillment or waiver of each of the following conditions:
(a) the Board of Directors of Columbia/HCA shall have
declared the Distribution, established the Record Date and the
Distribution Date and any appropriate procedures in connection with the
Distribution to the extent not provided for herein;
(b) any necessary regulatory approvals shall have
been received;
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(c) the LifePoint Form 10 and the Triad Form 10 each
shall have become effective under the Exchange Act and no stop order
shall have been entered, and no proceeding for that purpose shall have
been initiated or threatened by the Commission with respect thereto;
(d) all necessary permits, registrations and consents
required under the securities or blue sky laws of states or other
political subdivisions of the United States of America in connection
with the transactions contemplated by this Agreement shall have been
received or become effective;
(e) Columbia/HCA shall have elected or caused the
election of the Board of Directors of LifePoint, as named in the
LifePoint Form 10, and the LifePoint Certificate and the LifePoint
By-laws shall be in effect;
(f) Columbia/HCA shall have elected or caused the
election of the Board of Directors of Triad, as named in the Triad Form
10, and the Triad Certificate and the Triad By-laws shall be in effect;
(g) each of the LifePoint Common Stock and the Triad
Common Stock shall have been approved for listing on NASDAQ, subject to
official notice of issuance;
(h) each of the Ancillary Agreements shall have been
executed and delivered by the parties thereto and shall be in full
force and effect;
(i) Columbia/HCA shall have received a private letter
ruling from the IRS (in form and substance satisfactory to
Columbia/HCA) regarding the federal income tax treatment of the
Restructuring Transactions and the Distribution, and in respect of such
other matters as Columbia/HCA shall have deemed appropriate or
desirable;
(j) the Restructuring Transactions shall have been
effected; and
(k) consummation of the Distribution and the other
transactions contemplated hereby shall not be prohibited by Law and no
Governmental Authority of competent jurisdiction shall have enacted,
issued, promulgated or entered, or shall have threatened to enact,
issue, promulgate or enter, any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary,
preliminary or permanent) which materially restricts, prevents or
prohibits consummation of such transactions.
Section 3.2. No Constraint. Notwithstanding the provisions of
Section 3.1 above, the fulfillment or waiver of any or all of the conditions
precedent to the Distribution set forth therein shall not:
(a) create any obligation on the part of Columbia/HCA
to effect the Distribution;
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(b) in any way limit Columbia/HCA's right and power
under Section 11.2 below to terminate this Agreement and to abandon the
Distribution; or
(c) alter the consequences of any such termination
under Section 11.2 below from those specified therein.
Section 3.3. The Distribution. On or before the Distribution
Date, subject to satisfaction or waiver of the conditions set forth in this
Agreement, Columbia/HCA shall deliver to the Distribution Agent certificates
representing all of the then outstanding shares of LifePoint Common Stock and
Triad Common Stock owned by Columbia/HCA (which, as of the Distribution Date,
will constitute 100% of the issued and outstanding shares of LifePoint Common
Stock and Triad Common Stock), endorsed in blank, and shall instruct the
Distribution Agent to distribute to each holder of record of Columbia/HCA Common
Stock at the close of business on the Record Date certificates representing one
share of LifePoint Common Stock and one share of Triad Common Stock for every
nineteen shares of Columbia/HCA Common Stock so held. LifePoint agrees to
provide all certificates for shares of LifePoint Common Stock that the
Distribution Agent shall require to effect the LifePoint Distribution, and Triad
agrees to provide all certificates for shares of Triad Common Stock that the
Distribution Agent shall require in order to effect the Triad Distribution.
Section 3.4. Fractional Shares. Notwithstanding anything
herein to the contrary, no fractional shares of LifePoint Common Stock or Triad
Common Stock shall be issued in connection with the Distribution, and any such
fractional share interests to which a stockholder would otherwise be entitled
will not entitle such stockholder to vote or to any rights of a stockholder of
LifePoint or Triad, as the case may be. In lieu of any such fractional shares,
each stockholder who, but for the provisions of this Section 3.4, would be
entitled to receive a fractional share of LifePoint Common Stock or Triad Common
Stock pursuant to the LifePoint Distribution or the Triad Distribution, or both,
shall be paid cash, without any interest thereon, as hereinafter provided.
Columbia/HCA shall instruct the Distribution Agent to determine the number of
whole shares and fractional shares of LifePoint Common Stock and Triad Common
Stock allocable to each stockholder, to aggregate all such fractional shares
into whole shares, to sell the whole shares obtained thereby in the open market
at the then prevailing prices on behalf of stockholders who otherwise would be
entitled to receive fractional share interests and to distribute to each such
stockholder his, her or its ratable share of the total proceeds of such sale,
after making appropriate deductions of the amount required for federal income
tax withholding purposes and after deducting any applicable transfer taxes. All
brokers' fees and commissions incurred in connection with such sales shall be
paid by Columbia/HCA. Solely for purposes of computing fractional shares
pursuant to this Section 3.4, the beneficial owner of shares of LifePoint Common
Stock or Triad Common Stock held of record in the name of a nominee will be
treated as the holder of record of such shares.
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Article IV
Covenants
Section 4.1. Further Assurances. From and after the
Distribution Date, each of the parties hereto will execute and deliver, and
cause its Subsidiaries to execute and deliver, such further instruments and
documents and take such other actions as any other party hereto may reasonably
request in order to carry out the transactions contemplated by this Agreement or
by any of the Ancillary Agreements. Without limitation of the foregoing, each of
the parties hereto will take, or cause to be taken, all actions, and do, or
cause to be done, all things, reasonably necessary, proper or advisable under
applicable laws, regulations and agreements or otherwise to consummate and make
effective the transactions contemplated by this Agreement or by any of the
Ancillary Agreements, including, without limitation, executing, and causing its
Subsidiaries to execute, such other instruments and documents as may be
reasonably required to assign, transfer, convey and vest in the proper party
ownership of its respective Assets or to effect the assumption by the proper
party of its respective Liabilities, using its reasonable efforts to obtain any
Consents, and making any filings and applications and taking all such further
reasonable actions as shall be necessary or desirable in order to consummate the
transactions contemplated by this Agreement or by the Ancillary Agreements.
Section 4.2. Certain Intellectual Property Matters.
(a) Except as otherwise specifically set forth
elsewhere herein, from and after the Distribution Date, no party
hereto, directly or indirectly, shall use (or permit any of its
Subsidiaries to use) any name or any other trademark, service mark or
trade name (collectively, the "Marks") owned and used by any other
party hereto (or, after giving effect to the Restructuring Transactions
and the Distribution, any Subsidiary of any other party hereto) or any
trade name, service mark or trademark likely to cause confusion with
any such Mark, except (i) pursuant to a license agreement entered into
in connection with the transactions contemplated hereby or (ii) for
such Marks or portions thereof which, as used, are descriptive, generic
or are not likely to cause confusion.
(b) From and after the Distribution Date, each party
hereto (and each of their respective Subsidiaries) shall have the right
to use existing brochures, packaging, labeling, containers, linens,
supplies, advertising materials and any similar materials bearing any
Mark, which such party (and any such Subsidiary) does not have to right
to use pursuant to Section 4.2 (a) above, until the earlier of (i) one
year after the Distribution Date and (ii) the date existing stocks of
such material are exhausted. Each party hereto shall (and shall cause
each of its Subsidiaries to) comply with all applicable laws or
regulations in any use of packaging or labeling containing the Marks.
(c) Each party hereto agrees to use its reasonable
efforts to (and to cause each of its Subsidiaries to) cease using the
Marks of any other party (or, after giving effect to the Restructuring
Transactions and the Distribution, any
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Subsidiary of any other party hereto) on buildings, cars, trucks and
other fixed assets as soon as possible but in any event within a period
not to exceed one year after the Distribution Date.
(d) From and after the Distribution Date, no party
hereto shall represent or permit to be represented to any third person
that it (or any of its Subsidiaries) has a business affiliation with
any other party hereto (or, after giving effect to the Restructuring
Transactions and the Distribution, any Subsidiary of any other party
hereto), except as expressly permitted by this Section 4.2 or by any of
the Ancillary Agreements.
Section 4.3. Assumption and Satisfaction of Liabilities.
Except as otherwise specifically set forth in any Ancillary Agreement, from and
after the Distribution Date:
(a) Columbia/HCA shall take all necessary action to
assume, pay, perform and discharge, or cause to be assumed, paid,
performed and discharged, all Columbia/HCA Liabilities in accordance
with their terms, when determinable, and otherwise as determined in
accordance with the practice of the parties prior to the Distribution;
(b) LifePoint shall take all necessary action to
assume, pay, perform and discharge, or cause to be assumed, paid,
performed and discharged, all LifePoint Liabilities in accordance with
their terms, when determinable, and otherwise as determined in
accordance with the practice of the parties prior to the Distribution;
and
(c) Triad shall take all necessary action to assume,
pay, perform and discharge, or cause to be assumed, paid, performed and
discharged, all Triad Liabilities in accordance with their terms, when
determinable, and otherwise as determined in accordance with the
practice of the parties prior to the Distribution.
Section 4.4. Removal of Certain Guarantees.
(a) Removal of Columbia/HCA as Guarantor of LifePoint
Liabilities and Triad Liabilities. Except as otherwise contemplated by
the Restructuring Transactions or as specified in any Ancillary
Agreement or on Exhibit I hereto, each of Columbia/HCA, LifePoint and
Triad shall use its reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, Columbia/HCA
(and, after giving effect to the Restructuring Transactions and the
Distribution, any Subsidiary of Columbia/HCA) removed as a guarantor
of, or obligor under or for, any LifePoint Group Liability or Triad
Group Liability, as the case may be, including, without limitation, in
respect of any agreement (or part thereof) assigned to LifePoint or
Triad (or, after giving effect to the Restructuring Transactions and
the Distribution, any of their respective Subsidiaries) pursuant to
Section 2.4 above.
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(b) Removal of LifePoint as Guarantor of Columbia/HCA
Liabilities and Triad Liabilities. Except as otherwise contemplated by
the Restructuring Transactions or as specified in any Ancillary
Agreement or on Exhibit I hereto, each of Columbia/HCA, LifePoint and
Triad shall use its reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, LifePoint
(and, after giving effect to the Restructuring Transactions and the
Distribution, any Subsidiary of LifePoint) removed as a guarantor of,
or obligor under or for, any Columbia/HCA Group Liability or Triad
Group Liability, as the case may be, including, without limitation, in
respect of any agreement (or part thereof) assigned to Columbia/HCA or
Triad (or, after giving effect to the Restructuring Transactions and
the Distribution, any of their respective Subsidiaries) pursuant to
Section 2.4 above.
(c) Removal of Triad as Guarantor of Columbia/HCA
Liabilities and LifePoint Liabilities. Except as otherwise contemplated
by the Restructuring Transactions or as specified in any Ancillary
Agreement or on Exhibit I hereto, each of Columbia/HCA, LifePoint and
Triad shall use its reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, Triad (and,
after giving effect to the Restructuring Transactions and the
Distribution, any Subsidiary of Triad) removed as a guarantor of, or
obligor under or for, any Columbia/HCA Group Liability or LifePoint
Group Liability, as the case may be, including, without limitation, in
respect of any agreement (or part thereof) assigned to Columbia/HCA or
LifePoint (or, after giving effect to the Restructuring Transactions
and the Distribution, any of their respective Subsidiaries) pursuant to
Section 2.4 above.
(d) Indemnification Relating to Guarantees. If (x)
Columbia/HCA, LifePoint or Triad, or any of their respective
Subsidiaries, as the case may be, cannot be removed as a guarantor or
obligor as set forth in Section 4.4(a), (b) or (c) above or (y)
Liabilities arise from and after the Distribution Date but before a
guarantor or obligor with reference to any such Liability is removed
pursuant to Section 4.4(a), (b) or (c) above, then such guarantor or
obligor shall be indemnified and held harmless for all Liabilities
incurred by it in its capacity as guarantor or obligor by (i)
Columbia/HCA with respect to any Columbia/HCA Liabilities, (ii)
LifePoint with respect to any LifePoint Liabilities, and (iii) Triad
with respect to any Triad Liabilities.
Section 4.5. No Representations or Warranties; Consents.
(a) General. Each of the parties hereto understands
and agrees that no party hereto, or to any other agreement or document
contemplated by this Agreement (including the Ancillary Agreements and
Conveyancing and Assumption Instruments, and any agreements or
documents contemplated thereby), is making any representation or
warranty whatsoever, including, without limitation, any representation
or warranty:
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(i) as to the value or freedom from encumbrance
of, or any other matter concerning, any Assets of such party;
or
(ii) as to the legal sufficiency to convey title
to any Asset.
Each of the parties hereto confirms that it is not relying on any
representation or warranty made by any other party hereto or any other
person in connection with its execution and delivery of this Agreement.
(b) Disclaimer of Merchantability or Fitness of
Assets. Each party hereto understands and agrees that there are no
warranties, express or implied, as to the merchantability or fitness of
any of the Assets either transferred to or retained by the Columbia/HCA
Group, the LifePoint Group or the Triad Group, as the case may be,
pursuant to the Restructuring Transactions and the other terms and
provisions of this Agreement, any Ancillary Agreement, any Conveyancing
and Assumption Instrument or any other agreement or document, and all
such Assets which are so transferred will be transferred on an "as is,
where is" basis, and the party to which any such Assets are transferred
hereunder, or which retains Assets hereunder, shall bear the economic
and legal risk that any conveyances of such Assets shall prove to be
insufficient or that the title of such party or any other member of its
respective Group to any such Assets shall be other than good and
marketable and free from encumbrances.
(c) Acknowledgment of Disclosure and Waiver. Each of
LifePoint and Triad acknowledges, for itself and on behalf of each of
its Subsidiaries, that:
(i) Columbia/HCA has disclosed, and LifePoint and
Triad have knowledge of, all matters pertaining to the Assets
to be conveyed to the LifePoint Group or the Triad Group
pursuant to the Restructuring Transactions or otherwise
pursuant to this Agreement to the same extent that
Columbia/HCA or any of its Affiliates has knowledge of such
matters; and
(ii) such knowledge constitutes notice and
disclosure of such matters.
Each of LifePoint and Triad waives, to the fullest extent permitted by
Law, for itself and for each of its Subsidiaries, any and all claims or
causes of action which any of them may have arising out of such matters
or the failure of any Conveyancing and Assumption Instrument to
describe or refer to, or provide notice of, any such matters.
(d) No Representations or Warranties Regarding
Consents. Each of the parties hereto understands and agrees that no
party hereto, or to any other agreement or document contemplated by
this Agreement (including the Ancillary Agreements and Conveyancing and
Assumption Instruments, and any
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agreement or document contemplated thereby) is making any
representation or warranty whatsoever that the obtaining of any
Consents, the execution and delivery of any amendatory agreements and
the making of any filings or applications contemplated by this
Agreement will satisfy the provisions of any or all applicable
agreements or the requirements of any or all applicable Laws. Each of
the parties hereto further agrees and understands that the party to
which any Assets are transferred as contemplated by the Restructuring
Transactions or this Agreement shall bear the economic and legal risk
that any Consents are not obtained or that any requirements of Laws are
not complied with.
Section 4.6. Limitation on Solicitation of Employees. Each of
Columbia/HCA, LifePoint and Triad agrees, for itself and, after giving effect to
the Restructuring Transactions and the Distribution, its Subsidiaries and
Affiliates, that it shall not directly or indirectly, or in connection with any
other person, firm or entity approach, counsel, or induce any employee of any
other party hereto or, after giving effect to the Restructuring Transactions and
the Distribution, any of such other party's Subsidiaries or Affiliates, to leave
his or her employment at any time prior to the second anniversary of the
Distribution Date without the prior written consent of such other party.
Section 4.7. LifePoint Registration Statement.
(a) Registration. Subject to this Section 4.7,
LifePoint will cause to be filed within 120 days after the Distribution
Date the LifePoint Registration Statement, and LifePoint agrees to
effect no later than 210 days after the Distribution Date (i) the
registration and/or qualification with, or the approval of, any
governmental authority under the Securities Act and any applicable
state securities laws of the LifePoint Option and the LifePoint Option
Shares and the resale thereof and (ii) the listing of the LifePoint
Option Shares on NASDAQ, in each case as may be required to permit the
exercise of the LifePoint Option and the sale or other disposition of
the LifePoint Option Shares. LifePoint may, upon written notice to
Columbia/HCA, defer filing the LifePoint Registration Statement, and
may withhold efforts to cause the LifePoint Registration Statement to
become effective, for a reasonable period of time, but not in excess of
60 days, if LifePoint has made a good faith determination that such
registration would require the disclosure of material information which
LifePoint has a bona fide business purpose for preserving as
confidential or that LifePoint is unable to comply with SEC
requirements.
(b) Effectiveness. LifePoint shall keep effective and
maintain the LifePoint Registration Statement and any other
registration, qualification or listing of the LifePoint Option Shares
required pursuant to this Section 4.7, and shall from time to time
amend or supplement the LifePoint Registration Statement and the
prospectus used in connection therewith to the extent necessary in
order to comply with the Securities Act and applicable state securities
laws, until the date that (i) the LifePoint Option has been exercised
in its entirety and (ii) the LifePoint Option Shares either (x) have
been sold or (y) may be sold without being registered under Section 5
of the Securities Act or in reliance upon an
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exemption therefrom. If, after the LifePoint Registration Statement
becomes effective, LifePoint advises the holders of the LifePoint
Option and the LifePoint Option Shares that LifePoint considers it
appropriate for the LifePoint Registration Statement to be amended,
such holders shall suspend any further exercises of the LifePoint
Option and any sales of the LifePoint Option Shares until LifePoint
advises them that the LifePoint Registration Statement has been
amended, provided, that LifePoint shall use file such amendment and
cause it to become effective as expeditiously as possible under the
circumstances and in any event within 60 days of the date that such
notice is given to the holders.
(c) Expenses. All expenses incident to the
obligations of LifePoint under Sections 4.7(a) and 4.7(b) hereof
(including, without limitation, registration fees, printing or document
reproduction expenses, and fees and expenses of its counsel and
accountants) shall be borne by LifePoint, and all other expenses
incident to the disposition by each holder of the LifePoint Option
Shares held by him or her (including, without limitation, fees and
expenses of his or her counsel and all underwriting discounts, if any,
brokerage commissions and similar fees) shall be borne by such holder.
(d) Information. Columbia/HCA agrees to cause each
holder of the LifePoint Option to furnish to LifePoint such information
as LifePoint may from time to time reasonably request in connection
with the LifePoint Registration Statement and related prospectus, any
amendment or supplement thereto or any other filings required by this
Section 4.7, and, for so long as the registration, qualification,
approval or listing remains effective, promptly after the sale or any
other disposition by him or her of LifePoint Option Shares, to give
LifePoint written notice of same.
(e) Indemnification under this Section 4.7. LifePoint
agrees to indemnify and hold harmless, to the extent permitted by law,
the holders of the LifePoint Option and hold them harmless at all times
after the date hereof from and against and in respect of any and all
liabilities, losses, damages, settlements, claims, costs or expenses,
including, without limitation, attorneys' fees, under the Securities
Act, state securities laws, common law or otherwise, arising out of or
due to (A) any untrue statement or alleged untrue statement of a
material fact contained in the LifePoint Registration Statement or
related prospectus relating to the registration or qualification of the
LifePoint Option Shares, or (B) any omission or alleged omission to
state in the LifePoint Registration Statement or related prospectus a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such liabilities, losses,
damages, settlements, claims, costs or expenses arise out of or are due
to any untrue statement of a material fact contained in, or omission of
a material fact from, information furnished in writing to LifePoint by
the holders expressly for use in the LifePoint Registration Statement
or related prospectus. If the offering pursuant to this Section 4.7 is
made through underwriters, LifePoint agrees to enter into an
underwriting agreement in customary form with such underwriters
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and to indemnify such underwriters to the same extent as provided above
with respect to the indemnification of the holders. The procedures to
be followed in connection with the rights of indemnification provided
in this Section 4.7(e) are set forth in Article V hereof.
Section 4.8. Triad Registration Statement.
(a) Registration. Subject to this Section 4.8, Triad
will cause to be filed within 120 days after the Distribution Date the
Triad Registration Statement, and Triad agrees to effect no later than
210 days after the Distribution Date (i) the registration and/or
qualification with, or the approval of, any governmental authority
under the Securities Act and any applicable state securities laws of
the Triad Option and the Triad Option Shares and the resale thereof and
(ii) the listing of the Triad Option Shares on NASDAQ, in each case as
may be required to permit the exercise of the Triad Option and the sale
or other disposition of the Triad Option Shares. Triad may, upon
written notice to Columbia/HCA, defer filing the Triad Registration
Statement, and may withhold efforts to cause the Triad Registration
Statement to become effective, for a reasonable period of time, but not
in excess of 60 days, if Triad has made a good faith determination that
such registration would require the disclosure of material information
which Triad has a bona fide business purpose for preserving as
confidential or that Triad is unable to comply with SEC requirements.
(b) Effectiveness. Triad shall keep effective and
maintain the Triad Registration Statement and any other registration,
qualification or listing of the Triad Option Shares required pursuant
to this Section 4.8, and shall from time to time amend or supplement
the Triad Registration Statement and the prospectus used in connection
therewith to the extent necessary in order to comply with the
Securities Act and applicable state securities laws, until the date
that (i) the Triad Option has been exercised in its entirety and (ii)
the Triad Option Shares either (x) have been sold or (y) may be sold
without being registered under Section 5 of the Securities Act or in
reliance upon an exemption therefrom. If, after the Triad Registration
Statement becomes effective, Triad advises the holders of the Triad
Option and the Triad Option Shares that Triad considers it appropriate
for the Triad Registration Statement to be amended, such holders shall
suspend any further exercises of the Triad Option and any sales of the
Triad Option Shares until Triad advises them that the Triad
Registration Statement has been amended, provided, that Triad shall use
file such amendment and cause it to become effective as expeditiously
as possible under the circumstances and in any event within 60 days of
the date that such notice is given to the holders.
(c) Expenses. All expenses incident to the
obligations of Triad under Sections 4.8(a) and 4.8(b) hereof
(including, without limitation, registration fees, printing or document
reproduction expenses, and fees and expenses of its counsel and
accountants) shall be borne by Triad, and all other expenses incident
to the disposition by each holder of the Triad Option Shares held by
him or her (including, without limitation, fees and expenses of his or
her counsel and all
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underwriting discounts, if any, brokerage commissions and similar fees)
shall be borne by such holder.
(d) Information. Columbia/HCA agrees to cause each
holder of the Triad Option to furnish to Triad such information as
Triad may from time to time reasonably request in connection with the
Triad Registration Statement and related prospectus, any amendment or
supplement thereto or any other filings required by this Section 4.8,
and, for so long as the registration, qualification, approval or
listing remains effective, promptly after the sale or any other
disposition by him or her of Triad Option Shares, to give Triad written
notice of same.
(e) Indemnification under this Section 4.8. Triad
agrees to indemnify and hold harmless, to the extent permitted by law,
the holders of the Triad Option and hold them harmless at all times
after the date hereof from and against and in respect of any and all
liabilities, losses, damages, settlements, claims, costs or expenses,
including, without limitation, attorneys' fees, under the Securities
Act, state securities laws, common law or otherwise, arising out of or
due to (A) any untrue statement or alleged untrue statement of a
material fact contained in the Triad Registration Statement or related
prospectus relating to the registration or qualification of the Triad
Option Shares, or (B) any omission or alleged omission to state in the
Triad Registration Statement or related prospectus a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such liabilities, losses, damages,
settlements, claims, costs or expenses arise out of or are due to any
untrue statement of a material fact contained in, or omission of a
material fact from, information furnished in writing to Triad by the
holders expressly for use in the Triad Registration Statement or
related prospectus. If the offering pursuant to this Section 4.8 is
made through underwriters, Triad agrees to enter into an underwriting
agreement in customary form with such underwriters and to indemnify
such underwriters to the same extent as provided above with respect to
the indemnification of the holders. The procedures to be followed in
connection with the rights of indemnification provided in this Section
4.8(e) are set forth in Article V hereof.
Section 4.9. Certain Real Estate Matters
Columbia/HCA shall, to the fullest extent permitted
by law, indemnify and hold harmless each of the LifePoint Indemnitees
from and against any and all Losses which are actually incurred by the
LifePoint Indemnitees within one year after the Distribution Date and
which Losses arise from (i) the failure of the LifePoint Group to have,
on the Distribution Date, good indefeasible fee title to, or a valid
leasehold interest in, as applicable, the LifePoint Real Property free
and clear of any and all Liens on and as of the Distribution Date
except LifePoint Permitted Exceptions, (ii) any matter (not
constituting a LifePoint Permitted Exception) that would be reflected
on a current survey of the LifePoint Real Property as of the
Distribution Date, which materially and
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adversely affects the LifePoint Group Business (taken as a whole), and
(iii) an incorrect legal description of the LifePoint Real Property as
of the Distribution Date that materially and adversely affects the
LifePoint Group Business (taken as a whole). Columbia/HCA shall, to the
fullest extent permitted by law, indemnify and hold harmless each of
the Triad Indemnitees from and against any and all Losses which are
actually incurred by the Triad Indemnitees within one year after the
Distribution Date and which Losses arise from (i) the failure of the
Triad Group to have, on the Distribution Date, good indefeasible fee
title to, or a valid leasehold interest in, as applicable, the Triad
Real Property free and clear of any and all Liens on and as of the
Distribution Date except Triad Permitted Exceptions, (ii) any matter
(not constituting a Triad Permitted Exception) that would be reflected
on a current survey of the Triad Real Property as of the Distribution
Date, which materially and adversely affects the Triad Group Business
(taken as a whole), and (iii) an incorrect legal description of the
Triad Real Property as of the Distribution Date that materially and
adversely affects the Triad Group Business (taken as a whole).
Section 4.10. Personal Property.
Columbia/HCA shall, to the fullest extent permitted
by law, indemnify and hold harmless each of the LifePoint Indemnitees
from and against any and all Losses which are actually incurred by the
LifePoint Indemnitees within one year after the Distribution Date and
which Losses arise from the failure of Columbia/HCA to transfer, or
cause to be transferred, its right, title and interest to the personal
property reflected on the LifePoint Balance Sheet to LifePoint free and
clear of any and all Liens which secure Funded Debt existing on and as
of the Distribution Date except (i) changes in inventory and accounts
receivable, or other personal property disposed of, in the ordinary
course of business, (ii) as disclosed on the LifePoint Balance Sheet
(or in the notes thereto) and (iii) Liens securing Funded Debt which do
not, in the aggregate, constitute a material adverse change from the
financial condition of LifePoint reflected on the LifePoint Balance
Sheet. Columbia/HCA shall, to the fullest extent permitted by law,
indemnify and hold harmless each of the Triad Indemnitees from and
against any and all Losses which are actually incurred by the Triad
Indemnitees within one year after the Distribution Date and which
Losses arise from the failure of Columbia/HCA to transfer, or cause to
be transferred, its right, title and interest to the personal property
reflected on the Triad Balance Sheet to Triad free and clear of any and
all Liens which secure Funded Debt existing on and as of the
Distribution Date except (i) changes in inventory and accounts
receivable, or other personal property disposed of, in the ordinary
course of business, (ii) as disclosed on the Triad Balance Sheet (or in
the notes thereto) and (iii) Liens securing Funded Debt which do not,
in the aggregate, constitute a material adverse change from the
financial condition of Triad reflected on the Triad Balance Sheet.
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Article V
Indemnification
Section 5.1. Indemnification by Columbia/HCA.
(a) Except as otherwise specifically set forth in any
provision of this Agreement or of any Ancillary Agreement, Columbia/HCA
shall, to the fullest extent permitted by law, indemnify and hold
harmless each of the LifePoint Indemnitees and the Triad Indemnitees
from and against any and all Losses which are actually incurred by the
LifePoint Indemnitees and the Triad Indemnitees, respectively, and
which arise from (i) the Columbia/HCA Liabilities, (ii) the breach by
Columbia/HCA or, after giving effect to the Restructuring Transactions
and the Distribution, any of its Subsidiaries, of any contractual
obligation arising under this Agreement, any of the Ancillary
Agreements, or any of the Conveyancing and Assumption Instruments, or
(iii) the Indemnified Matters; provided, however, that the
indemnification provided for in this Section 5.1(a) shall exclude, and
Columbia/HCA shall have no responsibility for, Losses arising out of or
relating to acts, practices or omissions engaged in after the
Distribution Date by LifePoint or Triad or any of their respective
Subsidiaries or Affiliates.
(b) For purposes of the indemnification specified in
Section 5.1(a) hereof, "Indemnified Matters" means (x) proceedings
commenced by the United States Department of Justice and other federal
and state governmental authorities (the "Government Investigations") of
certain acts, practices or omissions alleged to have been engaged in by
Columbia/HCA and its Subsidiaries and Affiliates prior to the
Distribution Date with respect to Medicare, Medicaid, Medi-Cal and
Champus patients regarding (i) allegedly improper coding, including,
but not limited to, diagnosis related group ("DRG") coding (commonly
referred to as "upcoding") relating to bills submitted for medical
services, (ii) allegedly improper outpatient laboratory billing (e.g.,
unbundling of services, medically unnecessary tests), (iii) inclusion
of allegedly improper items in cost reports submitted as a basis for
reimbursement under Medicare, Medicaid, Medi-Cal and similar government
programs for all cost reports relating to periods ending on or prior to
the Distribution Date (it being understood that the scope of this
clause (iii) includes any stub period from the date of filing of any
such cost report to the Distribution Date), (iv) arrangements with
physicians and other parties that allegedly violate certain federal and
state laws governing referral relationships, including fraud and abuse,
anti-kickback and "Stark" laws, (v) allegedly improper acquisitions of
home health care agencies and allegedly excessive billing for home
health care services, and (vi) other allegedly improper billing and
coding practices with respect to government programs; (y) proceedings
commenced and claims asserted by private parties and described in
Columbia/HCA's Annual Report on Form 10-K for the Fiscal Year ended
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December 31, 1998 (other than proceedings and claims generically
described in such Form 10-K as matters arising in the ordinary course
of business, except to the extent that any such proceeding or claim is
covered by an insurance policy maintained by Columbia/HCA and listed on
Exhibit D hereto), and (z) proceedings commenced and claims asserted,
whether before or after the Distribution Date, by Governmental
Authorities and private parties arising from acts, practices or
omissions engaged in prior to the Distribution Date and relating to the
subjects of the proceedings referred to in clauses (x) and (y) above or
otherwise relating to any violation or alleged violation of a federal
or state law which gives rise to a claim of fraud in the billing for
and/or delivery of healthcare services.
(c) It is agreed by the parties hereto that any
positive recovery which results from resolution of a proceeding or
claim which is an Indemnified Matter for the purposes of the
indemnification specified in Section 5.1(a) hereof shall be for the
sole benefit of Columbia/HCA.
(d) Notwithstanding the definition of "Losses"
herein, to the extent that, solely as a result of an Indemnified
Matter, any hospital owned and operated by, or leased and operated by,
LifePoint or Triad as of the date of issuance of an Exclusion Order (as
defined herein) is permanently excluded from participation in the
Medicare and Medicaid programs by a final and nonappealable order
issued by HCFA or by the OIG (an "Exclusion Order"), then Columbia/HCA
shall make a cash payment to LifePoint or Triad, as the case may be, in
respect of each hospital so excluded (each, an "Excluded Hospital") in
an amount , if positive, equal to (x) five multiplied by the Excluded
Hospital's 1998 EBITDA as set forth on Annex A hereto less (y) the net
proceeds of the sale or other disposition of such Excluded Hospital.
Such payment shall be made by Columbia/HCA within 30 days following the
date of the sale or other disposition of the Excluded Hospital.
Section 5.2. Indemnification by LifePoint. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, LifePoint shall, to the fullest extent permitted by law, indemnify
and hold harmless the Columbia/HCA Indemnitees and the Triad Indemnitees from
and against any and all Losses of the Columbia/HCA Indemnitees and the Triad
Indemnitees, respectively, arising out of, by reason of or otherwise in
connection with either (a) the LifePoint Liabilities or (b) the breach by
LifePoint or, after giving effect to the Restructuring Transactions and the
Distribution, any of its Subsidiaries, of any contractual obligation arising
under this Agreement, any of the Ancillary Agreements, or any of the
Conveyancing and Assumption Instruments.
Section 5.3. Indemnification by Triad. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, Triad shall, to the fullest extent permitted by law, indemnify and
hold harmless the Columbia/HCA Indemnitees and the LifePoint Indemnitees from
and against any and all Losses of the Columbia/HCA Indemnitees and the LifePoint
Indemnitees, respectively, arising out of,
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by reason of or otherwise in connection with either (a) the Triad Liabilities or
(b) the breach by Triad or, after giving effect to the Restructuring
Transactions and the Distribution, any of its Subsidiaries, of any contractual
obligation arising under this Agreement, any of the Ancillary Agreements, or any
of the Conveyancing and Assumption Instruments.
Section 5.4. Limitations on Indemnification Obligations.
(a) Reductions for Insurance Proceeds and Other
Recoveries. The amount that any party (an "Indemnifying Party") is or
may be required to pay to any person (an "Indemnitee") pursuant to
Section 5.1, Section 5.2 or Section 5.3 above, as applicable, shall be
reduced (retroactively or prospectively) by any Insurance Proceeds,
other amounts actually recovered from third parties, or amounts
recovered pursuant to any Ancillary Agreement, by or on behalf of such
Indemnitee in respect of the related Losses. Each of the parties agrees
that it shall use its best efforts to collect any such Insurance
Proceeds or other amounts to which it or any of its Subsidiaries may be
entitled. The existence of a claim by an Indemnitee for insurance or
against a third party in respect of any Loss shall not delay any
payment pursuant to the indemnification provisions contained herein and
otherwise determined to be due and owing by an Indemnifying Party;
rather, the Indemnifying Party shall make payment in full of such
amount so determined to be due and owing by it against an assignment by
the Indemnitee to the Indemnifying Party of the entire claim of the
Indemnitee for such insurance or against such third party. No insurer
or any other third party shall be (i) entitled to a benefit it would
not be entitled to receive in the absence of the foregoing
indemnification provisions, (ii) relieved of the responsibility to pay
any claims for which it is obligated, or (iii) entitled to any
subrogation rights with respect to any obligation arising under the
foregoing indemnification provisions. If an Indemnitee shall have
received the payment required by this Agreement from an Indemnifying
Party in respect of any Loss and shall subsequently actually receive
Insurance Proceeds or other amounts in respect of such Loss, then such
Indemnitee shall hold such Insurance Proceeds or other amounts in trust
for the benefit of such Indemnifying Party and promptly shall pay to
such Indemnifying Party a sum equal to the amount of such Insurance
Proceeds or other amounts actually received, up to the aggregate amount
of any payments received from such Indemnifying Party pursuant to this
Agreement in respect of such Loss.
(b) Adjustments for Taxes. The amount of any Loss
shall be: (i) increased (retroactively or prospectively) to take into
account any net Tax cost actually incurred by an Indemnitee arising
from any payments received from the Indemnifying Party (grossed up for
such increase); and (ii) reduced (retroactively or prospectively) to
take into account any net Tax benefit actually realized by an
Indemnitee arising from the incurrence or payment of any such Loss. In
computing the amount of such Tax cost or Tax benefit, an Indemnitee
shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the
receipt or accrual of any payment with respect to any such Loss or the
incurrence or payment of any such Loss. If
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an Indemnitee shall have received or accrued the payment required by
this Agreement from an Indemnifying Party and shall subsequently
actually realize any net Tax benefit arising from the incurrence or
payment of such Loss, then such Indemnitee promptly shall pay to such
Indemnifying Party a sum equal to the amount of such net Tax benefit,
up to the aggregate amount of any payments received from such
Indemnifying Party pursuant to this Agreement in respect of such Loss.
(c) Reductions for Subsequent Recoveries or Other
Events. In addition to any adjustments required pursuant to Section
5.4(a) or Section 5.4(b) above, if the amount of any Loss shall, at any
time subsequent to any indemnification payment made by an Indemnifying
Party pursuant to this Article V, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by Indemnitee to the
Indemnifying Party, up to the aggregate amount of any payments received
from such Indemnifying Party pursuant to this Article V in respect of
such Loss.
(d) Assignment of Claims for Contribution and/or
Indemnification. Upon the request of an Indemnifying Party, an
Indemnitee shall assign to the Indemnifying Party any and all claims of
such Indemnitee for contribution and/or indemnification against any
party (other than another Indemnitee) arising out of the claim for
which indemnity is sought.
Section 5.5. Procedures Regarding Indemnification.
(a) Notice of Third Party Claims. If a claim or
demand is made against an Indemnitee by any person who is not a party
hereto or a Subsidiary of a party hereto (a "Third Party Claim") as to
which such Indemnitee is entitled to indemnification pursuant to this
Agreement, such Indemnitee shall notify the Indemnifying Party in
writing, and in reasonable detail, of the Third Party Claim promptly
(and in any event within fifteen business days) after receipt by such
Indemnitee of written notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
Indemnitee's right to indemnification hereunder except to the extent
the Indemnifying Party shall have been actually prejudiced as a result
of such failure (except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the Indemnitee
failed to give such notice). Thereafter, the Indemnitee shall deliver
to the Indemnifying Party, promptly (and in any event within five
business days) after the Indemnitee's receipt thereof, copies of all
notices and documents (including court papers) received by the
Indemnitee relating to the Third Party Claim.
(b) Legal Defense of Third Party Claims. If a Third
Party Claim is made against an Indemnitee, the Indemnifying Party shall
be entitled to participate in the defense thereof and, if it so
chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. Should the
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Indemnifying Party so elect to assume the defense of a Third Party
Claim, the Indemnifying Party shall, within 30 days of its receipt of
notice of such Third Party Claim from Indemnitee (or sooner if the
nature of the Third Party Claim so requires), notify the Indemnitee of
its intent to do so, and the Indemnifying Party shall thereafter not be
liable to the Indemnitee for legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof;
provided, that such Indemnitee shall have the right to employ counsel
to represent such Indemnitee if, in the judgment of the Indemnifying
Party, a conflict of interest between such Indemnitee and such
Indemnifying Party exists in respect of such claims which would make
representation of both such parties by one counsel inappropriate, and
in such event the fees and expenses of such separate counsel shall be
paid by such Indemnifying Party. If the Indemnifying Party assumes such
defense, the Indemnitee shall have the right to participate in the
defense thereof and to employ counsel, subject to the proviso of the
preceding sentence, at its own expense, separate from the counsel
employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party
shall be liable for the fees and expenses of counsel employed by the
Indemnitee for any period during which the Indemnifying Party has
failed to assume the defense thereof (other than during any period
during which the Indemnitee shall have failed to have given notice of
the Third Party Claim as required above). If the Indemnifying Party so
elects to assume the defense of any Third Party Claim, the Indemnifying
Party shall have the right to settle such action or claim on such terms
as it deems appropriate, and all of the Indemnitees shall fully and
completely cooperate with the Indemnifying Party in the defense of such
action or claim and shall provide the Indemnifying Party with access
(including access to employees of the Indemnitees) and copying rights
during normal business hours to all records, books, contracts,
instruments, computer data and other information in the possession of
the Indemnitees which is reasonably required in connection with the
defense of such action or claim. It is understood and agreed that
wherever in this Section 5. 5 reference is made to the payment of fees
and expenses of counsel for the Indemnitee by the Indemnifying Party,
the Indemnifying Party shall not, in connection with any Third Party
Claim or any group of separate but substantially similar Third Party
Claims arising out of the same general allegations, be liable for the
fees and expenses of more than one separate firm of attorneys at any
time for all Indemnitees.
(c) Settlement of Third Party Claims. Except as
otherwise provided in this Section 5.5 or as otherwise specifically
provided in any Ancillary Agreement, unless and until the Indemnifying
Party has failed to assume the defense of any Third Party Claim within
thirty days of its receipt of notice of such Third Party Claim from
Indemnitee (or sooner if the nature of the Third Party Claim so
requires), then in no event will the Indemnitee admit any liability
with respect to, or settle, compromise or discharge, any Third Party
Claim without the Indemnifying Party's prior written consent; provided,
however, that the Indemnitee shall have the right to settle, compromise
or discharge such Third Party Claim without the consent of the
Indemnifying Party if the Indemnitee releases the Indemnifying Party
from its indemnification obligation hereunder
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with respect to such Third Party Claim and such settlement, compromise
or discharge would not otherwise adversely affect the Indemnifying
Party. If, upon expiration of 30 days from the date that the
Indemnifying Party receives notice of a Third Party Claim from
Indemnitee, the Indemnifying Party has not notified the Indemnitee of
its election to assume the defense of such Third Party Claim, then in
no event shall the Indemnitee settle, compromise or discharge such
Third Party Claim without providing prior written notice to the
Indemnifying Party, and the Indemnifying Party shall then have the
option within fifteen days following receipt of such notice to:
(A) approve and agree to pay the settlement;
(B) approve the amount of the settlement,
reserving the right to contest the Indemnitee's right to
indemnity pursuant to this Agreement; or
(C) disapprove the settlement and assume in
writing all past and future responsibility for such Third
Party Claim (including all of Indemnitee's prior expenditures
in connection therewith, and the Indemnifying Party shall
furnish reasonable assurance that it will discharge such
responsibility).
(d) Other Claims. Any claim on account of a Loss
which does not result from a Third Party Claim shall be asserted by
written notice given by the Indemnitee to the applicable Indemnifying
Party. Such Indemnifying Party shall have a period of fifteen days
after the receipt of such notice within which to respond thereto. If
such Indemnifying Party does not respond within such fifteen-day
period, or if such Indemnifying Party rejects such claim in whole or in
part, then such Indemnitee shall be free to pursue such remedies as may
be available to it under this Agreement.
Section 5.6. Indemnification Payments. Amounts for which
payment is required to be made by any party pursuant to this Article V shall be
reflected on the Monthly Statements to be prepared by each of LifePoint and
Triad pursuant to Section 8.1(f) hereof, as and when bills are received or loss,
liability, claim, damage or expense is incurred or recovery is made. Such
amounts shall be adjusted to reflect addition or deduction of any Reconciling
Payment required to be made pursuant to Section 8.1(f) and such payments shall
be made at the times and in the manner provided in Section 8.1(f).
Section 5.7. Cooperation of the Parties with Respect to
Actions and Third Party Claims.
(a) Identification of Party in Interest. Any party to
this Agreement that has responsibility for an Action or Third Party
Claim shall identify itself as the true party in interest with respect
to such Action or Third Party Claim and shall use its reasonable
efforts to obtain the dismissal of any other party to this Agreement
from such Action or Third Party Claim.
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(b) Disputes Regarding Responsibility for Actions and
Third Party Claims. If there is uncertainty or disagreement concerning
which party to this Agreement has responsibility for any Action or
Third Party Claim, the following procedure shall be followed in an
effort to reach agreement concerning responsibility for such Action or
Third Party Claim:
(i) The parties in disagreement over the
responsibility for an Action or Third Party Claim shall
exchange brief written statements setting forth their position
concerning which party has responsibility for the Action or
Third Party Claim in accordance with the provisions of this
Article V. These statements shall be exchanged within ten days
of a party putting another party on written notice that such
other party is or may be responsible for the Action or Third
Party Claim.
(ii) If, within ten days of the exchange of the
written statement of each party's position, agreement is not
reached on responsibility for the Action or Third Party Claim,
the General Counsel for each of the parties in disagreement
over responsibility for the Action or Third Party Claim shall
meet (which meeting may be by telephone or in person) to
attempt to reach agreement on responsibility for the Action or
Third Party Claim.
(c) Effect of Failure to Follow Procedure. Failure to
follow the procedure set forth in Section 5.7(b) above shall not affect
the rights and responsibilities of the parties as established by the
other provisions of this Article V.
(d) Exchange of Information. In connection with the
handling of current or future Actions or Third Party Claims, the
parties may determine that it is in their mutual interest to exchange
privileged or confidential information. If so, the parties agree to
discuss whether it is in their mutual interest to enter into a joint
defense agreement or information exchange agreement to maintain the
confidentiality of their communications and to permit them to maintain
the confidentiality of proprietary information or information that is
otherwise confidential or subject to an applicable privilege,
including, but not limited to, the attorney-client, work product,
executive, deliberative process, or self-evaluation privileges.
Section 5.8. Contribution. To the extent that any
indemnification provided for under Section 5.1, Section 5.2 or Section 5.3 above
is unavailable to an Indemnitee or is insufficient in respect of any Loss of
such Indemnitee, then the Indemnifying Party under such Section, in lieu of
indemnifying such Indemnitee in respect of such Loss, shall contribute to the
amount paid or payable by such Indemnitee as a result of such Loss (a) in such
proportion as is appropriate to reflect the relative value of the business owned
or held by the Indemnifying Party immediately after giving effect to the
Distribution, on the one hand, and the value of the business owned or held by
the Indemnitee immediately after giving effect to the Distribution, on the other
hand, or
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(b) if the allocation provided by clause (a) above is not permitted by
applicable Law, in such proportion as is appropriate to reflect not only the
relative sizes of the parties referred to in clause (a) above but also the
relative fault of the Indemnifying Party, on the one hand, and of the
Indemnitee, on the other hand, in connection with the action, inaction,
statements or omissions that resulted in such Loss as well as any other relevant
equitable considerations.
Section 5.9. Survival of Indemnities; Exclusive Remedy. The
indemnification obligations of Columbia/HCA, LifePoint and Triad under this
Article V shall survive the sale or other transfer by any of them of any Assets
or businesses or the assignment by any of them of any Liabilities, with respect
to any Loss by any Indemnitee related to such Assets, businesses or Liabilities;
provided, however, that the indemnification obligations set forth herein shall
be terminated to the extent that any Indemnitee seeks indemnification in respect
of a matter in which the procedures regarding indemnification set forth in this
Article V (including the provision of Section 5.5 above requiring that an
Indemnifying Party be given the opportunity to assume and control the defense of
any Third Party Claim) shall not have been followed. The indemnification
provided for in this Article V shall be the exclusive remedy in any action
seeking damages or any other form of monetary relief brought by any party to
this Agreement against another party.
Article VI
Ancillary Agreements
Section 6.1. Generally. Except as provided in Section 5.4
above relating to adjustment of indemnification amounts for insurance proceeds
and net Tax benefits or detriments, all matters relating to the subject matter
of each Ancillary Agreement shall be governed exclusively by such Ancillary
Agreement, and the provisions of such Ancillary Agreement shall govern in the
event of any inconsistency with this Agreement.
Article VII
Accounting Matters
Section 7.1. Settlement of Intercompany Accounts.
(a) Settlement of Intercompany Accounts Between
LifePoint Group and Columbia/HCA Group. All intercompany receivables,
payables and loans (other than receivables, payables and loans
otherwise specifically provided for in any of the Ancillary Agreements
or hereunder), including, without limitation, in respect of any cash
balances, any cash balances representing deposited checks or drafts for
which only a provisional credit has been allowed or any cash held in
any centralized cash management system, between the LifePoint Group, on
the one hand, and the Columbia/HCA Group, on the other hand, shall,
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as of the close of business on the Distribution Date, be settled,
capitalized or converted into ordinary trade accounts, in each case as
may be agreed in writing prior to the Distribution Date by duly
authorized representatives of the Columbia/HCA Group and the LifePoint
Group.
(b) Settlement of Intercompany Accounts Between Triad
Group and Columbia/HCA Group. All intercompany receivables, payables
and loans (other than receivables, payables and loans otherwise
specifically provided for in any of the Ancillary Agreements or
hereunder), including, without limitation, in respect of any cash
balances, any cash balances representing deposited checks or drafts for
which only a provisional credit has been allowed or any cash held in
any centralized cash management system, between the Triad Group, on the
one hand, and the Columbia/HCA Group, on the other hand, shall, as of
the close of business on the Distribution Date, be settled, capitalized
or converted into ordinary trade accounts, in each case as may be
agreed in writing prior to the Distribution Date by duly authorized
representatives of the Columbia/HCA Group and the Triad Group.
(c) Settlement of Intercompany Accounts Between
LifePoint Group and Triad Group. All intercompany receivables, payables
and loans (other than receivables, payables and loans otherwise
specifically provided for in any of the Ancillary Agreements or
hereunder), including, without limitation, in respect of any cash
balances, any cash balances representing deposited checks or drafts for
which only a provisional credit has been allowed or any cash held in
any centralized cash management system, between the LifePoint Group, on
the one hand, and the Triad Group, on the other hand, shall, as of the
close of business on the Distribution Date, be settled, capitalized or
converted into ordinary trade accounts, in each case as may be agreed
in writing prior to the Distribution Date by duly authorized
representatives of the LifePoint Group and the Triad Group.
Section 7.2. Allocation of Prepaid Items and Reserves. All
prepaid items and reserves that have been maintained by Columbia/HCA on a
consolidated basis but that relate in part to Assets or Liabilities of the
LifePoint Group or the Triad Group shall be allocated among the Columbia/HCA
Group, the LifePoint Group and the Triad Group in such manner as shall be
determined by Columbia/HCA in its sole discretion.
Section 7.3. Financial Accounting Treatment of Assets
Transferred and Liabilities Assumed. Solely for financial accounting purposes,
any transfers of Assets of the Columbia/HCA Group to the LifePoint Group or the
Triad Group pursuant to this Agreement shall constitute contributions by
Columbia/HCA to the capital of LifePoint or Triad, as the case may be, and any
assumption by the LifePoint Group or the Triad Group of Liabilities of the
Columbia/HCA Group pursuant to this Agreement, net of Assets received, shall be
treated as a distribution by LifePoint or Triad, as the case may be, to
Columbia/HCA.
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Section 7.4. Other Accounting Matters. Exhibit J hereto sets
forth the agreement of Columbia/HCA, LifePoint and Triad as to the payment of
and financial responsibility for certain matters.
Article VIII
Indemnification and Other Matters
Relating To Government Programs
Section 8.1. Indemnification and Other Matters Relating to
Pre-Distribution Period Cost Reports.
(a) Each of LifePoint and Triad shall be responsible
for filing Medicare provider, Medicaid provider, Medi-Cal provider,
Champus/Tricare provider, and cost-based Blue Cross provider cost
reports ("Cost Reports") in respect of its respective hospitals and
other health care facilities ("Facilities") relating to periods ending
on or prior to the Distribution Date ("Pre-Distribution Periods").
Columbia/HCA shall indemnify and hold harmless each of LifePoint and
Triad for all payments which it or any member of its Group is required
to make in respect of Cost Report payables relating to Pre-Distribution
Periods, and each of LifePoint and Triad shall indemnify and hold
harmless Columbia/HCA for and pay over to Columbia/HCA any amount
received by it or any member of its Group in respect of Cost Report
receivables relating to Pre-Distribution Periods. The first payment due
to be made hereunder to and from Columbia/HCA, on the one hand, and to
and from each of LifePoint and Triad, on the other hand, shall be
determined in respect of the period between the Distribution Date and
May 31, 1999, and payments due to be made hereunder shall thereafter be
determined and paid on a monthly basis, all as provided in Section
8.1(f) below. Each of LifePoint, Triad and Columbia/HCA will account
for the arrangement provided for in this Section 8.1(a) in a manner
intended to reflect the retention of all operating income statement
impacts arising from Pre-Distribution Cost Reports by Columbia/HCA.
(b) Columbia/HCA shall retain all rights to Medicare,
Medicaid, Medi-Cal, Champus/Tricare, and cost-based Blue Cross
reimbursement for all appeal issues relating to Pre-Distribution
Periods. Columbia/HCA shall have sole discretion to initiate and pursue
any individual and group appeal issue for Cost Reports relating to
Pre-Distribution Periods; however, Columbia/HCA, LifePoint and Triad
will cooperate in discussing new appeal issues. Each of LifePoint and
Triad agrees to indemnify and hold harmless Columbia/HCA for and pay
over to Columbia/HCA any payment received by it or any member of its
Group in respect of appeal issues relating to Pre-Distribution Periods.
Such payment over to Columbia/HCA shall be made within 30 days of the
receipt of such payment by LifePoint or Triad, as the case may be.
(c) Each of LifePoint and Triad shall appoint
Columbia/HCA as the third party representative for all hearings on
group and individual appeal
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issues relating to Pre-Distribution Periods. Each of LifePoint and
Triad acknowledges that all correspondence (such as audit adjustments,
Notices of Program Reimbursement, etc.) relating to such appeal issues
will be forwarded within seven business days of receipt to the
Columbia/HCA Director of Appeals or to such other representative of
Columbia/HCA as may be specified in writing by Columbia/HCA. Each of
LifePoint and Triad further agrees that if failure to forward such
documentation on a timely basis results in loss of an appeal issue,
then LifePoint and/or Triad, as the case may be, shall indemnify and
hold harmless Columbia/HCA for and pay over to Columbia/HCA an amount
reasonably determined by Columbia/HCA to represent the amount of lost
reimbursement resulting from such loss of an appeal issue.
(d) Prior to the preparation of the Cost Reports
relating to Pre-Distribution Periods, each of LifePoint and Triad shall
obtain information and data from Columbia/HCA on appeal issues that are
to be included in such Cost Reports. Any portion of such Cost Reports
relating to such appeal issues shall be prepared on a basis consistent
with directions from Columbia/HCA. Drafts of all Cost Reports relating
to Pre-Distribution Periods shall be submitted by LifePoint and Triad
to Columbia/HCA for review and approval before such Cost Reports are
filed with the Medicare, Medicaid, Medi-Cal, Champus/Tricare and
cost-based Blue Cross fiscal intermediaries, and no Cost Report
relating to a Pre-Distribution Period shall be filed by LifePoint or
Triad prior to approval of such Cost Report by Columbia/HCA. The
parties agree that, with respect to any Cost Report related to a
Pre-Distribution Period which is due to be filed after June 30, 1999, a
draft shall be furnished to Columbia/HCA for its review not less than
30 days prior to the date that such Cost Report is due to be filed, and
Columbia/HCA shall provide its comments on such draft within 14 days of
its receipt of the draft. Each of LifePoint and Triad shall be
responsible for the completion of the Columbia/HCA Home Office
Workpaper set applicable to Home Office Cost Statements relating to
Pre-Distribution Periods and shall submit such workpaper set to the
Columbia/HCA Assistant Vice President of Home Office or to such other
representative of Columbia/HCA as may be specified by Columbia/HCA.
Each of LifePoint and Triad agrees that it will not file or cause to be
filed any amended Cost Report relating to a Pre-Distribution Period
without the prior written consent of Columbia/HCA, and further agrees
that it will file any amendment to a Cost Report relating to a
Pre-Distribution Period which it is requested to file by Columbia/HCA.
Each of LifePoint and Triad agrees to provide Columbia/HCA with monthly
status reports in a form reasonably requested by Columbia/HCA setting
forth a description of all activity in respect of Cost Reports relating
to Pre-Distribution Periods together with copies of all related
documentation received by it or any of its Facilities (except to the
extent that such documentation has previously been provided to
Columbia/HCA).
(e) Notwithstanding the provisions of Section 9.1
below, all information, documents and records relating to Medicare,
Medicaid, Medi-Cal, Champus/Tricare and cost-based Blue Cross
receivables and payables which relate to Pre-Distribution Periods shall
be the property of Columbia/HCA. Each
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of LifePoint and Triad agrees to take all necessary action, at its
expense, to transfer or cause to be transferred to Columbia/HCA, as
soon as practicable following the Distribution Date, all of such
materials in its possession. Prior to the transfer of such information,
documents and records to Columbia/HCA, each of LifePoint and Triad may
make copies of such materials for its own use, but shall not deliver
copies of such materials to any other party, including, without
limitation, any consultant or any potential buyer of a Facility,
without the prior written consent of Columbia/HCA.
(f) For any period (initially, the period between the
Distribution Date and May 31, 1999, and thereafter, each calendar
month) in which the amount of payments in respect of Cost Reports
relating to Pre-Distribution Periods received by LifePoint or Triad
exceeds the aggregate amount of payments made by it, then LifePoint or
Triad shall be obligated pursuant to Section 8.1(a) above to make a
cash payment to Columbia/HCA equal to the difference between the
aggregate amount of payments received by it and the aggregate amount of
payments made by it, and for any calendar month in which the amount of
payments in respect of Cost Reports relating to Pre-Distribution
Periods made by LifePoint or Triad exceeds the aggregate amount of
payments received by it, then Columbia/HCA shall be obligated pursuant
to Section 8.1(a) above to make a cash payment to LifePoint or Triad
equal to the difference between the aggregate amount of payments made
by LifePoint or Triad and the aggregate amount of payments received by
LifePoint or Triad (in either case, a "Reconciling Payment"). Within 20
days of the end of each calendar month, each of LifePoint and Triad
shall provide to Columbia/HCA a statement (the "Monthly Statement")
summarizing all payments made by it, and all payments received by it,
during such month in respect of Cost Reports relating to
Pre-Distribution Periods, and setting forth the amount of the
Reconciling Payment to be made by it to Columbia/HCA or by Columbia/HCA
to it, as the case may be. The Monthly Statements prepared by LifePoint
and Triad shall also reflect any payments to be made by LifePoint or
Triad to Columbia/HCA, or by Columbia/HCA to LifePoint or Triad,
pursuant to the provisions of Article V hereof. If Columbia/HCA does
not provide notice of disagreement within 15 days following its receipt
of a Monthly Statement, the Monthly Statement shall become final and
binding, and the party obligated to make the Reconciling Payment
provided for therein, and any other payment provided for therein, shall
make such payment within 10 days of the date that the Monthly Statement
becomes final and binding. A notice of disagreement with the Monthly
Statement shall provide reasonable detail of the nature of the
disagreement. During the 15 day period following receipt of a notice of
disagreement, Columbia/HCA and LifePoint or Triad, as the case may be,
shall attempt to resolve any differences they may have with respect to
any matters specified in the notice of disagreement. If at the end of
such 15 day period the parties have reached agreement with respect to
the matters identified in the notice of disagreement, the Monthly
Statement (as adjusted to reflect such agreement) shall be final and
binding, and the party obligated to make the Reconciling Payment
provided for therein, and any other payment provided for therein, shall
make such payment within 10 days of the date that the Monthly
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Statement becomes final and binding. If at the end of such 15 day
period the parties have not reached agreement with respect to the
matters identified in the notice of disagreement, then (i) any
Reconciling Payment or other payment (or portion thereof) which would
be required to be made by any party under the Monthly Statement if the
disputed matter or matters were resolved in its favor shall be made and
(ii) resolution of the disputed matter or matters shall be governed by
the applicable provisions of Article XI hereof.
Section 8.2. Matters Relating to Post-Distribution Period Cost
Reports.
(a) Each of Columbia/HCA, LifePoint and Triad shall
be responsible for filing Medicare provider, Medicaid provider,
Medi-Cal provider, Champus/Tricare provider, and cost-based Blue Cross
provider Cost Reports in respect of its Facilities relating to periods
ending after the Distribution Date ("Post-Distribution Periods"), and
each shall be entitled to, or be responsible for, any receivables or
payables in respect of Cost Reports relating to Post-Distribution
Periods.
(b) Each of Columbia/HCA, LifePoint and Triad shall
be responsible for its own separate and distinct Medicare, Medicaid,
Medi-Cal, Champus/Tricare and cost-based Blue Cross appeal functions
(including, without limitation, the protection of appeal rights and the
filing of appeal requests) relating to any Post-Distribution Period;
provided, however, that if Medicare, Medicaid, Medi-Cal,
Champus/Tricare and/or cost-based Blue Cross group appeal cases can be
or are required to be consolidated for Cost Reports relating to
Post-Distribution Periods, each of Columbia/HCA, LifePoint and Triad
agree to share the legal fees and expert witness fees on a pro rata
basis based upon the amount of the reimbursement in dispute for the
appeal cases for each party. Each party shall bear its own internal
costs as related to such appeal. The decision to consolidate the cases
shall be made through the mutual agreement of the parties affected by
the appeal, and where cases are consolidated, such parties shall
mutually agree as to the management of the appeal cases (including,
without limitation, approval of position papers, attorneys to be used,
expert witnesses and venue).
Section 8.3. Cooperation on Reimbursement Matters.
(a) Each of LifePoint and Triad shall be responsible
for furnishing, in a form reasonably requested by Columbia/HCA, all
documentation required as part of the Medicare, Medicaid, Medi-Cal,
Champus/Tricare and cost-based Blue Cross audits of Cost Reports
relating to Pre-Distribution Periods and each agrees to assist in
whatever way reasonably requested by Columbia/HCA in connection with
resolutions of issues and disputes in connection with Medicare,
Medicaid, Medi-Cal, Champus/Tricare and cost-based Blue Cross programs,
including, without limitation, by providing witnesses and by causing
the appropriate hospital financial officer to attend all exit
conferences.
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(b) Each of LifePoint and Triad shall notify
Columbia/HCA of all audits or other proceedings with respect to
reimbursement through the Medicare, Medicaid, Medi-Cal, Champus/Tricare
and cost-based Blue Cross programs for Cost Reports relating to
Pre-Distribution Periods. Such notice shall be given within 48 hours
after LifePoint's or Triad's corporate office is notified of the
scheduling of such audit or proceeding. Columbia/HCA shall also be
provided with all correspondence relating to such proceedings (such as
proposed audit adjustments) within seven business days of receipt. No
action shall be taken by LifePoint or Triad with regard to such audits
or other proceedings (except for the provision of requested
documentation at the Facility level) without the prior written consent
of Columbia/HCA.
Section 8.4. Limitation. The obligations of Columbia/HCA
pursuant to Section 8.1(a) above to indemnify LifePoint and Triad for payments
which they are required to make in respect of one or more Cost Reports relating
to Pre-Distribution Periods shall be terminated in the event that LifePoint or
Triad, as the case may be, fails to comply in all material respects with the
procedures regarding such Cost Reports, appeal issues, cooperation and related
matters set forth in this Article VIII.
Article IX
Corporate Records and Information
Section 9.1. Provision, Transfer and Delivery of Applicable
Corporate Records. Except as otherwise provided herein or in any Ancillary
Agreement:
(a) Provision, Transfer and Delivery of Columbia/HCA
Group Records. Each of LifePoint and Triad shall take all necessary
action to transfer, or cause to be transferred, as soon as practicable
following the Distribution Date (at Columbia/HCA's expense) to
Columbia/HCA, the Books and Records in its or its Subsidiaries'
possession that relate primarily to the Columbia/HCA Group Business or
are necessary to operate the Columbia/HCA Group Business (collectively,
the "Columbia/HCA Group Records"), except to the extent such items are
already in the possession of the Columbia/HCA Group. The Columbia/HCA
Group Records shall be the property of Columbia/HCA, but shall be
available pursuant to Section 9.2 below to each of LifePoint and Triad
for review and copying.
(b) Provision, Transfer and Delivery of LifePoint
Group Records. Each of Columbia/HCA and Triad shall take all necessary
action to transfer, or cause to be transferred, as soon as practicable
following the Distribution Date (at LifePoint's expense) to LifePoint,
the Books and Records in its or its Subsidiaries' possession that
relate primarily to the LifePoint Group Business or are necessary to
operate the LifePoint Group Business (collectively, the "LifePoint
Group Records"), except to the extent such items are already in the
possession of the LifePoint Group. The LifePoint Group Records shall be
the
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property of LifePoint, but shall be available pursuant to Section 9.2
below to each of Columbia/HCA and Triad for review and copying.
(c) Provision, Transfer and Delivery of Triad Group
Records. Each of Columbia/HCA and LifePoint shall take all necessary
action to transfer, or cause to be transferred, as soon as practicable
following the Distribution Date (at Triad's expense) to Triad, the
Books and Records in its or its Subsidiaries' possession that relate
primarily to the Triad Group Business or are necessary to operate the
Triad Group Business (collectively, the "Triad Group Records"), except
to the extent such items are already in the possession of the Triad
Group. The Triad Group Records shall be the property of Triad, but
shall be available pursuant to Section 9.2 below to each of
Columbia/HCA and LifePoint for review and copying.
Section 9.2. Access to Information. From and after the
Distribution Date, each of Columbia/HCA, LifePoint and Triad shall afford one
another (including each party's accountants, counsel and other designated
representatives) reasonable access (including using reasonable efforts to give
access to persons or firms possessing information) and copying rights during
normal business hours to all records, books, contracts, instruments, computer
data and other data and information in its possession relating to its business
and affairs, insofar as such access is reasonably required, including, without
limitation, for audit, accounting and litigation purposes. Any copying expense
shall be borne by the party requesting such copying. Notwithstanding the
foregoing, no party shall have the right to access any patient information or
medical records to the extent that such access, in the reasonable judgment of
the party requested to provide such access, would not be permitted by applicable
Law or otherwise would violate obligations related to patient confidentiality.
Section 9.3. Confidentiality.
(a) General Restriction on Disclosure. Each of
Columbia/HCA, LifePoint and Triad shall take all necessary action to
hold, and shall cause its (and its respective Subsidiaries')
consultants, advisors and other representatives to hold, in strict
confidence all information concerning each other party hereto and such
other party's Subsidiaries in its possession, custody or control to the
extent such information either:
(i) relates to the period up to the Distribution
Date;
(ii) is obtained pursuant to Section 9.2 above;
(iii) relates to any Ancillary Agreement; or
(iv) is obtained in the course of performing
services for the other party pursuant to any Ancillary
Agreement,
and each party hereto shall (and shall cause each of its respective
Subsidiaries to) refrain from otherwise releasing or disclosing such
information to any other
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person, except for such person's auditors, attorneys, financial
advisors, bankers and other consultants and advisors, without the prior
written consent of the other affected party or parties.
(b) Exceptions to Confidential Treatment.
Notwithstanding Section 9.3(a) above, no party hereto shall be
prohibited from using or permitting the use of and no party shall be
required to hold in confidence any information to the extent that (i)
such information has been or is in the public domain through no fault
of such party, (ii) such information was used or held for use in such
party's business (and in no other party's business) prior to the
Distribution Date, (iii) such information is, after the Distribution
Date, lawfully acquired by such party from sources other than a party
hereto or a Subsidiary of a party hereto, (iv) this Agreement, any
Ancillary Agreement or any other agreement entered into pursuant hereto
permits the use or disclosure of such information by such party, or (v)
such information is necessary for such party to investigate, evaluate,
defend or prosecute any claim or Action involving any other party
hereto. To the extent that a party hereto (or any of its Subsidiaries
or, to the knowledge of such party or Subsidiary, any current or former
employee of such party or Subsidiary) is requested (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any information
required to be kept confidential pursuant to this Section 9.3, such
party agrees to take all necessary action to maintain, or cause to be
maintained (or in respect of a current or former employee, to take all
reasonable action as is necessary to cause such employee to maintain),
the confidentiality of such information and to provide prompt notice to
any of (i) Columbia/HCA, if such information relates to the
Columbia/HCA Group Business or to the Columbia/HCA Liabilities or the
Indemnified Matters, (ii) LifePoint, if such information relates to the
LifePoint Group Business or to the LifePoint Liabilities, or (iii)
Triad, if such information relates to the Triad Group Business or to
the Triad Liabilities, so that the party or parties to which the
information pertains may seek an appropriate protective order or waive
the notifying party's compliance with this Section 9.3(b). If, in the
absence of a protective order or the receipt of a waiver hereunder, the
person which has received such a request is, nonetheless, in the
reasonable written opinion of counsel, legally required to disclose
such information, such person may disclose such information, and no
party shall be liable pursuant to this Section 9.3(b); provided, that
such person furnishes only that portion of the information which such
person is advised by counsel to disclose and exercises its reasonable
efforts to obtain assurance that confidential treatment will be
accorded to the disclosed portion of the information. Notwithstanding
the foregoing, each party will be permitted to disclose confidential
information in any proceeding in which such party is in an adversarial
position to any other party to this Agreement.
Section 9.4. Litigation Cooperation. Each of Columbia/HCA,
LifePoint and Triad shall use its best efforts to make available to one another,
upon written request of a party hereto, its Group's officers, directors,
employees and agents as witnesses to the extent that such persons may reasonably
be required in connection with any legal,
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legislative, administrative or other proceedings arising out of the business of
such requesting party prior to the Distribution Date in which the requesting
party may from time to time be involved. In the event that any party provides
witnesses pursuant to this Section 9.4, it shall be entitled to reimbursement
from the requesting party for all reasonably incurred out-of-pocket costs and
expenses, but not including internal time charges.
Section 9.5. Retention of Records. Except when a longer period
is required by Law or is specifically provided for herein or in any Ancillary
Agreement, each party hereto shall take all necessary action to keep, or cause
to be kept, in its original form, for a period of at least fifteen years
following the Distribution Date, all material information (including, without
limitation, all material Books and Records) relating to such party's Group and
its operations prior to the Distribution Date; provided, however, that any party
hereto may offer in writing to deliver to the other parties all or a portion of
such information as it relates to the offering party's Group and, if such offer
is accepted in writing within 90 days after receipt thereof, the offering party
shall promptly arrange for the delivery of such information (or copies thereof)
to each accepting party (at the expense of such accepting party). If such offer
is not so accepted, the offered information may be destroyed or otherwise
disposed of by the offering party at any time thereafter; provided, however,
that no information shall be destroyed or disposed of prior to the date that
Columbia/HCA shall notify LifePoint and Triad that the Government Investigations
have been concluded. With regard to patient records, each party hereto shall
maintain the patient records held at each of its Facilities (or delivered to it
pursuant hereto) relating to periods prior to the Distribution Date in
accordance with applicable Law (including, if applicable, 42 U.S.C. Section 1395
(V)(I)(i)), and requirements of relevant insurance carriers, and in a manner
consistent with its maintenance of patient records generated at its Facilities
after the Distribution Date. Each party acknowledges that as a result of
operating the Facilities it will gain access to patient and other information
which is subject to rules and regulations regarding confidentiality, and agrees
to abide by such rules and regulations with regard to such confidential
information.
Section 9.6. Privileged Matters.
(a) Privileged Information. Each of the parties
hereto shall take all reasonable action as is necessary to maintain,
preserve, protect and assert, or cause to be maintained, preserved,
protected and asserted, all privileges, including, without limitation,
all privileges arising under or relating to the attorney-client
relationship (including, but not limited to, the attorney-client and
attorney work product privileges), that relate directly or indirectly
to the business of any other Group for any period prior to the
Distribution Date ("Privilege" or "Privileges"). Columbia/HCA shall be
entitled in perpetuity to require the assertion or to decide whether to
consent to the waiver of any and all Privileges which relate primarily
to the Columbia/HCA Liabilities or the Indemnified Matters; LifePoint
shall be entitled in perpetuity to require the assertion or to decide
whether to consent to the waiver of all Privileges which relate
primarily to the LifePoint Liabilities; and Triad shall be entitled in
perpetuity to require the assertion or to decide whether to consent to
the waiver of all Privileges which
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relate primarily to the Triad Liabilities. Each of the parties hereto
shall use the same degree of care as it would use with respect to its
own Privileges, so as not to waive, or permit to be waived, any such
Privilege that could be asserted under applicable Law without the prior
written consent of the other party or parties having the right to
assert or waive such Privilege pursuant to this Section 9.6(a).
(b) Shared Privileges.
(i) The parties hereto agree that they shall have
a shared Privilege, with equal right to assert or waive,
subject to the restrictions in this Section 9.6(b)(i), with
respect to all Privileges not allocated pursuant to the terms
of Section 9.6(a) above. All Privileges relating to any
claims, proceedings, litigation, disputes, or other matters
which involve two or more of Columbia/HCA, LifePoint or Triad
and in respect of which two or more of such parties retain any
responsibility or liability under this Agreement, shall be
subject to a shared Privilege among them.
(ii) No party hereto may waive any Privilege
which could be asserted under any applicable law, and in which
any other party hereto has a shared Privilege, without the
consent of the other party, except to the extent reasonably
required in connection with any litigation with third-parties
or as provided in Section 9.6(c) below. Consent shall be in
writing, or shall be deemed to be granted unless written
objection is made within twenty days after notice upon the
other party requesting such consent.
(iii) If a dispute arises between or among the
parties hereto or their respective Subsidiaries regarding
whether a Privilege should be waived to protect or advance the
interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any
prejudice to the rights of the other parties, and shall not
unreasonably withhold consent to any request for waiver by
another party. Each party hereto specifically agrees that it
will not withhold consent to waiver for any purpose except to
protect its own legitimate interests.
(c) Compelled Disclosure. To the extent that a party
hereto (or any of its Subsidiaries or, to the knowledge of such party
or Subsidiary, any current or former employee of such party or
Subsidiary) is requested (by oral questions, interrogatories, requests
for information or documents, subpoena, civil investigative demand or
similar process) to disclose any information under circumstances in
which any Privilege would be available ("Privileged Information"), such
party agrees to take all necessary action to assert, or cause to be
asserted (or in respect of a current or former employee, to take all
reasonable action as is necessary to cause such employee to assert),
such Privilege in good faith and to provide prompt notice to any of (i)
Columbia/HCA, if such Privileged Information relates to the
Columbia/HCA Liabilities or the
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Indemnified Matters, (ii) LifePoint, if such Privileged Information
relates to the LifePoint Liabilities, or (iii) Triad, if such
Privileged Information relates to the Triad Liabilities, so that the
party or parties to which the Privileged Information pertains may seek
an appropriate protective order or waive the notifying party's
compliance with this Section 9.6(c). If, in the absence of a protective
order or the receipt of a waiver hereunder, the person which has
received such a request is, nonetheless, in the reasonable written
opinion of counsel, legally required to disclose such Privileged
Information or else stand liable for contempt or suffer other censure
or penalty, such person may disclose such Privileged Information, and
no party shall be liable pursuant to this Section 9.6(c); provided,
that such person furnishes only that portion of the Privileged
Information which such person is advised by counsel to disclose and
(ii) exercises its reasonable efforts to obtain assurance that
confidential treatment will be accorded to the disclosed portion of the
Privileged Information. Notwithstanding the foregoing, each party will
be permitted to disclose Privileged Information in any proceeding in
which such party is in an adversarial position to any other party to
this Agreement.
(d) No Waiver. The parties hereto agree that the
transfer of any Books and Records or other information between the
Columbia/HCA Group, the LifePoint Group, or the Triad Group shall be
made in reliance on the agreements of Columbia/HCA, LifePoint and
Triad, as set forth in Section 9.3 above and this Section 9.6, to
maintain the confidentiality of confidential information and to assert
and maintain all applicable Privileges. The Books and Records being
transferred pursuant to Section 9.1 above, the access to information
being granted pursuant to Section 9.2 above, the agreement to provide
witnesses and individuals pursuant to Section 9.4 above and the
transfer of Privileged Information to any party hereto (or any of its
Subsidiaries) pursuant to this Agreement shall not be deemed a waiver
of any Privilege that has been or may be asserted under this Section
9.6 or otherwise. Nothing in this Agreement shall operate to reduce,
minimize or condition the rights granted to each party in, or the
obligations imposed upon each party by, this Section 9.6.
Section 9.7. Certain Matters. Notwithstanding any other
provision set forth in this Article IX or elsewhere herein, each of LifePoint
and Triad acknowledges the existence of the Government Investigations and of the
proceedings and claims which constitute the Indemnified Matters, and each
acknowledges that Columbia/HCA may need access to information regarding the
LifePoint Group Business and the Triad Group Business for purposes of responding
to the Government Investigations and the Indemnified Matters. Each of LifePoint
and Triad agrees to provide all information which is requested by Columbia/HCA
in connection with the Government Investigations and the Indemnified Matters,
and that such information may be disclosed by Columbia/HCA to the
representatives of the Governmental Authorities who are conducting the
Government Investigations and otherwise may be disclosed as deemed to be
appropriate by Columbia/HCA in connection with the Indemnified Matters. Each of
LifePoint and Triad further agrees to provide representatives of the
Governmental Authorities who are conducting the Government Investigations with
direct, full and complete access to all of the LifePoint Group Records (in the
case of LifePoint) and the
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Triad Group Records (in the case of Triad) as well as the right to make copies
of such records, and to permit representatives of such Governmental Authorities
to remove original records upon reasonable notice and the substitution of copies
for any records to be removed. Each of LifePoint and Triad also agrees to permit
employees to speak with the representatives of such Governmental Authorities.
Each of LifePoint and Triad agrees that, in connection with the Government
Investigations, it will participate with Columbia/HCA in negotiating one or more
Compliance Agreements.
Article X
Interest On Payments
Section 10.1. Interest on Payments. Except as otherwise
expressly provided in this Agreement, all payments by one party to the other
under this Agreement shall be paid, by wire transfer of immediately available
funds to an account in the United States designated by the recipient, within 30
days after receipt of an invoice or other written request for payment setting
forth the specific amount due and a description of the basis therefor in
reasonable detail. Any amount remaining unpaid beyond its due date, including
disputed amounts that are ultimately determined to be payable, shall bear
interest during the period that such amount remains unpaid (computed on the
basis of a 360-day year of twelve 30-day months) at a fluctuating rate per annum
equal to the prime commercial lending rate publicly announced by The Chase
Manhattan Bank or any successor thereto at its principal office (or any
alternative rate substituted therefor by such bank).
Article XI
Miscellaneous
Section 11.1. Allocation of Costs and Expenses. Except as
otherwise set forth in this Agreement or any Ancillary Agreement, all costs and
expenses incurred on or prior to the Distribution Date (whether or not paid on
or prior to the Distribution Date) in connection with the Restructuring
Transactions, the Distribution and the other transactions contemplated hereby,
including, but not limited to, (i) the preparation, printing and filing of the
LifePoint Form 10 and the Triad Form 10, (ii) the Listing of the LifePoint
Common Stock and the Triad Common Stock, (iii) the preparation and negotiation
of all of the documentation related to the Restructuring Transactions, the
Distribution and the other transactions contemplated hereby, (iv) the
preparation, printing and mailing of the Information Statement, (v) the
preparation and filing of the private letter ruling request submission by
Columbia/HCA to the IRS, and (vi) the engagement of Goldman, Sachs & Co. as
financial advisor to Columbia/HCA in connection with Restructuring Transactions,
the Distribution and the other transactions contemplated hereby, shall be
charged to and paid by Columbia/HCA; provided, however, that each of LifePoint
and Triad shall be solely responsible and liable for any fees, costs or other
expenses that it separately and directly incurs in connection with any of the
Restructuring Transactions, the Distribution or any of the other transactions
contemplated by this
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Agreement or any of the Ancillary Agreements. Except as otherwise set forth in
this Agreement or any Ancillary Agreement, each party shall bear its own costs
and expenses incurred after the Distribution Date. Any amount or expense to be
paid or reimbursed by any party hereto to any other party hereto shall be so
paid or reimbursed promptly after the existence and amount of such obligation is
determined and demand therefor is made.
Section 11.2. Termination; Amendment. This Agreement may be
terminated and the Distribution may be amended, modified or abandoned at any
time prior to the consummation of the Distribution by and in the sole discretion
of Columbia/HCA without the approval of LifePoint or Triad. In the event of such
termination, amendment, modification or abandonment, no party hereto shall have
any Liability of any kind to any other party or any other person. After the
Distribution Date, this Agreement may not be terminated, amended or modified
except by an agreement in writing signed by all of the parties hereto; provided,
however, that only the signatures of Columbia/HCA and LifePoint shall be
required to amend or modify this Agreement in a manner which affects only the
rights and obligations hereunder as between Columbia/HCA and LifePoint, and only
the signatures of Columbia/HCA and Triad shall be required to amend or modify
this Agreement in a manner which affects only the rights and obligations
hereunder as between Columbia/HCA and Triad.
Section 11.3. Disputes.
(a) Resolution of any and all disputes arising from
or in connection with this Agreement, any Ancillary Agreement, any
Conveyancing and Assumption Instrument or any transaction contemplated
hereby or thereby, whether based on contract, tort, statute or
otherwise, including, but not limited to, disputes in connection with
claims by third parties (collectively, "Disputes"), shall be resolved
in accordance with this Section 11.3; provided, however, that a party
may, without prejudice to the provisions of this Section 11.3, file a
complaint for statute of limitations reasons, or to seek a preliminary
injunction or other provisional relief, if in its sole judgment such
action is necessary to avoid irreparable damage or to preserve the
status quo. Despite such action the parties shall continue to
participate in good faith in the procedures specified in this Section
11.3. All applicable statutes of limitations and defenses based upon
the passage of time shall be tolled while the procedures set forth in
this Section 11.3 are pending. The parties shall take such action, if
any, as is required to effectuate such tolling.
(b) The parties shall use all reasonable efforts to
amicably resolve any Dispute through direct discussions, and each party
agrees that its senior management will respond promptly to notice of
any such Dispute. Any party hereto may give another party written
notice of any Dispute, which notice shall include a statement of the
position of the party giving such notice and a summary of arguments
supporting that position. Within 30 days after such written notice is
received, one or more members of the senior management of each of the
parties involved in the Dispute shall meet in Nashville, Tennessee to
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attempt in good faith to resolve the Dispute. All reasonable requests
for information made by one party to the other will be honored.
(c) If the Dispute has not been resolved by
negotiation pursuant to Section 11.3(b) above within 90 days of
delivery of the first written notice, or if the senior management of
the parties to the Dispute have failed to meet within 45 days after the
date of delivery of such notice, then within 15 days thereafter, the
chief executive officer of each of the parties involved in the Dispute
shall meet in Nashville, Tennessee to attempt in good faith to resolve
the Dispute.
(d) If the Dispute has not been resolved by
negotiation pursuant to Section 11.3(b) or (c) above within 120 days of
delivery of the first written notice, or if the chief executive
officers of such parties have failed to meet when required pursuant to
Section 11.3(c) above, then each party to the Dispute shall retain and
thereafter may pursue all rights and remedies it may have at law or in
equity in respect of such Dispute, including, without limitation,
commencing any Action permitted by Law or, if the parties mutually
shall agree, submitting such matter to be settled by arbitration.
Section 11.4. Consent to Jurisdiction. Columbia/HCA, LifePoint
and Triad each hereby expressly (a) submits and consents in advance to the
jurisdiction of any Tennessee State Court sitting in Nashville, Tennessee or the
United States District Court for the Middle District of Tennessee with respect
to any Actions arising out of or relating to this Agreement, (b) waives any
objection which it may have based upon lack of personal jurisdiction, improper
venue or forum non conveniens, (c) agrees that all claims with respect to such
Actions may be heard and determined in any Tennessee State Court sitting in
Nashville, Tennessee or the United States District Court for the Middle District
of Tennessee, (d) agrees not to commence any Action relating to this Agreement
other than in a Tennessee State Court sitting in Nashville, Tennessee or the
United States District Court for the Middle District of Tennessee, and (e)
agrees that a final judgment in any such Action shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
Section 11.5. Waiver of Jury Trial. Each of Columbia/HCA,
LifePoint and Triad ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND
HAS
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CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.5.
Section 11.6. Notices. All notices or other communications
required or permitted under this Agreement shall be in writing and sufficient if
sent by registered or certified mail, postage prepaid, addressed as provided
below; or delivered personally, by private courier or fax, and followed by such
mailing:
If to Columbia/HCA, to
Columbia/HCA Healthcare Corporation
One Park Plaza
Nashville, Tennessee 37203
Telecopy: (615) 344-2015
Attention: Mr. Milton Johnson
Vice President and Controller
with a copy to:
Columbia/HCA Healthcare Corporation
One Park Plaza
Nashville, Tennessee 37203
Telecopy: (615) 344-2075
Attention: Robert A. Waterman, Esq.
Senior Vice President and
General Counsel
If to LifePoint, to
LifePoint Hospitals, Inc.
4525 Harding Road
Suite 103
Nashville, Tennessee 37205
Telecopy: (615) 344-6276
Attention: Mr. Scott L. Mercy
Chairman and Chief Executive Officer
with a copy to:
LifePoint Hospitals, Inc.
4525 Harding Road
Suite 103
Nashville, Tennessee 37205
Telecopy: (615) 344-6272
Attention: William F. Carpenter III, Esq.
Senior Vice President and
General Counsel
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If to Triad, to
Triad Hospitals, Inc.
13455 Noel Road
20th Floor
Dallas, Texas 75240
Telecopy: (972) 663-3945
Attention: Mr. James D. Shelton
Chairman and Chief Executive Officer
with a copy to:
Triad Hospitals, Inc.
13455 Noel Road
20th Floor
Dallas, Texas 75240
Telecopy: (972) 701-9604
Attention: Donald P. Fay, Esq.
Executive Vice President and
General Counsel
In each case, with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Telecopy: (212) 259-6333
Attention: Morton A. Pierce, Esq.
Any party may change the person and address to which notices or other
communications are to be sent to it by giving written notice of any such change
in the manner provided herein.
Section 11.7. Entire Agreement. This Agreement, together with
the Ancillary Agreements and the exhibits and other documents delivered pursuant
hereto, sets forth the entire agreement and understanding of the parties hereto
in respect of the transactions contemplated hereby, and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof. No party hereto has relied upon any oral or written statement,
representation, warranty, covenant, condition, understanding or agreement made
by any other party or any representative, agent or employee thereof, except for
those expressly set forth in this Agreement or in the exhibits or other
documents delivered pursuant hereto. Nothing herein is intended to diminish any
of the rights or obligations of any of the parties pursuant to the Tax
Agreement, the Insurance Allocation and Administration Agreement, the Employee
Benefits Agreement, any of the other Ancillary Agreements or any Conveyancing
and Assumption Instrument.
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Section 11.8. Assignment. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective
successors, heirs, executors, administrators, legal representatives and
permitted assigns; provided, however, that no assignment of any rights or
delegation of any obligations provided for herein shall be made by any party
hereto without the express prior written consent of each other party hereto;
provided, further, that only the signatures of Columbia/HCA and LifePoint shall
be required to effect an assignment in a manner which affects only the rights
and obligations hereunder as between Columbia/HCA and LifePoint, and only the
signatures of Columbia/HCA and Triad shall be required to effect an assignment
in a manner which affects only the rights and obligations hereunder as between
Columbia/HCA and Triad. Notwithstanding the foregoing, the indemnification by
Columbia/HCA of the LifePoint Indemnitees and the Triad Indemnitees in respect
of the Indemnified Matters provided for herein and the indemnification of
LifePoint and Triad in respect of Pre-Distribution Cost Reports shall not be
assignable, and no party shall request that Columbia/HCA consent to any such
assignment.
Section 11.9. Survival of Agreements and Covenants. Except as
otherwise expressly provided herein, all agreements and covenants of the parties
hereto which are contained in this Agreement, together with the exhibits and
other documents delivered pursuant hereto, shall survive the Distribution and
remain operative and in full force and effect, regardless of any investigation
heretofore or hereafter made by or on behalf of any of the parties hereto.
Section 11.10. No Third Party Beneficiaries. Except as
provided in Article V above (relating to Indemnitees), this Agreement is solely
for the benefit of the parties hereto, and should not be construed to confer
upon any other person any remedy, claim, liability, right of reimbursement,
claim of action or other right.
Section 11.11. Waiver. No delay or omission by any party
hereto to exercise any right or power under this Agreement or pursuant to
applicable law shall impair such right or power or be construed as a waiver
thereof. A waiver by any party hereto of any of the covenants to be performed by
any other party or any breach shall not be construed to be a waiver of any
succeeding breach or of any other covenant. All rights and remedies conferred
under this Agreement or by any other instrument or law shall be cumulative and
may be exercised singularly or concurrently. The failure by either party to
enforce any term shall not be deemed to be a waiver of future enforcement of
that or any other term of this Agreement.
Section 11.12. Severability. In the event that any provision
hereof is prohibited or unenforceable in any jurisdiction, such provision shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.13. Governing Law. This Agreement shall be deemed
to be made in and in all respects shall be interpreted, construed and governed
by and in
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accordance with the law of the State of Delaware without regard to the conflict
of law principles thereof.
Section 11.14. Counterparts. This Agreement may be executed in
any number of separate counterparts, each of which shall be deemed to be an
original, but which together shall constitute one and the same instrument.
Section 11.15. Headings. The section headings contained in
this Agreement are inserted for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, each party hereto has duly executed this
Agreement, or has caused this Agreement to be duly executed, as of the date
first above written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By: /s/ Thomas F. Frist, Jr.
-------------------------------------
Thomas F. Frist, Jr., M.D.
Chairman and Chief Executive Officer
LIFEPOINT HOSPITALS, INC.
By: /s/ Scott L. Mercy
-------------------------------------
Scott L. Mercy
Chairman and Chief Executive Officer
TRIAD HOSPITALS, INC.
By: /s/ James D. Shelton
-------------------------------------
James D. Shelton
Chairman and Chief Executive Officer
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