EXHIBIT 2.2
Distribution Agreement
Dated as of ________ __, 1999
By and Among
Columbia/HCA Healthcare Corporation,
LifePoint Hospitals, Inc.
and
Triad Hospitals, Inc.
Table of Contents
Page
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Article I Definitions........................................................................................ 1
Section 1.1.............. Definitions........................................................................................ 1
Article II Pre-Distribution Transactions; Certain Covenants................................................... 9
Section 2.1.............. Restructuring Transactions......................................................................... 9
Section 2.2.............. Consents........................................................................................... 9
Section 2.3.............. Transfer and Assignment of Certain Licenses and Permits............................................ 9
Section 2.4.............. Transfer and Assignment of Certain Business Agreements............................................. 9
Section 2.5.............. Transfers Not Effected Prior to the Distribution Date;
Transfers Deemed Effective as of the Distribution Date............................................ 10
Section 2.6.............. Securities Matters................................................................................. 11
Section 2.7.............. Conduct Prior to the Distribution Date............................................................. 12
Section 2.8.............. Resignations....................................................................................... 12
Section 2.9.............. Election of Officers............................................................................... 12
Section 2.10............. Other Agreements................................................................................... 12
Article III The Distribution................................................................................... 13
Section 3.1.............. Conditions Precedent to the Distribution........................................................... 13
Section 3.2.............. No Constraint...................................................................................... 14
Section 3.3.............. The Distribution................................................................................... 14
Section 3.4.............. Fractional Shares.................................................................................. 14
Article IV Covenants.......................................................................................... 15
Section 4.1.............. Further Assurances................................................................................. 15
Section 4.2.............. Certain Intellectual Property Matters.............................................................. 16
Section 4.3.............. Assumption and Satisfaction of Liabilities......................................................... 16
Section 4.4.............. Removal of Certain Guarantees...................................................................... 17
Section 4.5.............. No Representations or Warranties; Consents......................................................... 18
Section 4.6.............. Limitation on Solicitation of Employees............................................................ 19
Article V Indemnification.................................................................................... 20
Section 5.1.............. Indemnification by Columbia/HCA.................................................................... 20
Section 5.2.............. Indemnification by LifePoint....................................................................... 21
Section 5.3.............. Indemnification by Triad........................................................................... 21
Section 5.4.............. Limitations on Indemnification Obligations......................................................... 21
Section 5.5.............. Procedures Regarding Indemnification............................................................... 23
Section 5.6.............. Indemnification Payments........................................................................... 25
Section 5.7.............. Cooperation of the Parties with Respect to Actions and Third
Party Claims....................................................................................... 25
Section 5.8.............. Contribution....................................................................................... 26
Section 5.9.............. Survival of Indemnities; Exclusive Remedy.......................................................... 26
Article VI Ancillary Agreements............................................................................... 27
Section 6.1.............. Generally.......................................................................................... 27
i
Distribution Agreement
Distribution Agreement (this "Agreement") dated as of ________ __,
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:
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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
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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.
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"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 files,
workpapers, manuals and similar documents.
"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.
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"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 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.
"Consents" is defined in Section 2.2 below.
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"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.
"Disputes" is defined in Section 11.3(a) below.
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"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.
"Facilities" is defined in Section 8.1 below.
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"Government Investigations" is defined in Section 5.1 below.
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"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.
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"Indemnifying Party" is defined in Section 5.4(a) below.
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"Indemnitee" is defined in Section 5.4(a) below.
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"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 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.
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"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.
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"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. 1-14693), which was declared effective by
the Commission on _________ __, 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 by LifePoint
and its Subsidiaries, as described in the LifePoint Form 10.
"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
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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,
(iii) Liabilities arising under or in connection with the LifePoint Form 10
(other than in respect of disclosure in the LifePoint Form 10 set forth under
the captions "Summary--Columbia/HCA Healthcare Corporation" and "Governmental
Investigation of Columbia/HCA and Related Litigation"), and (iv) 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 H 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.
"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 excluding time spent by employees of such person and excluding any
consequential damages) actually incurred by such person arising from such
matter.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"Privilege" is defined in Section 9.6(a) below.
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"Privileged Information" is defined in Section 9.6(c) below.
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"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 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
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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.
"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.
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"Tradenames" is defined in Section 4.2(a) below.
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"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 D hereto.
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"Triad Certificate" means the certificate of incorporation of Triad in
the form attached as Exhibit E 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.
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"Triad Form 10" means the registration statement filed on Form 10
pursuant to the Exchange Act (File No. 1-14695), which was declared effective by
the Commission on __________ __, 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 by Triad and its
Subsidiaries, as described in the Triad Form 10.
"Triad Group Records" is defined in Section 9.1(c) below.
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"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, (iii) Liabilities arising
under or in connection with the Triad Form 10 (other than in respect of
disclosure in the Triad Form 10 set forth under the captions "Summary--
Columbia/HCA Healthcare Corporation" and "Governmental Investigation of
Columbia/HCA and Related Litigation"), and (iv) 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 H 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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ARTICLE II
PRE-DISTRIBUTION TRANSACTIONS; CERTAIN COVENANTS
Section 2.1. Restructuring Transactions. Each of Columbia/HCA,
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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
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use their reasonable efforts to obtain any third-party consents or approvals
that are required to 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.
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(a) Licenses and Permits Relating to the LifePoint Group
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Business. On or prior to the Distribution Date, or as soon as reasonably
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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
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Business. On or prior to the Distribution Date, or as soon as reasonably
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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.
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(a) Transfer and Assignment of LifePoint Group Business
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Agreements. On or prior to the Distribution Date, or as soon as
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reasonably
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practicable thereafter, and subject to the limitations set forth in this
Section 2.4, each of Columbia/HCA and Triad shall take all necessary
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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
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Agreements. On or prior to the Distribution Date, or as soon as
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reasonably practicable thereafter, and subject to the limitations set forth
in this Section 2.4, each of Columbia/HCA and LifePoint shall take all
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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 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
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Section 2.4, any agreement to which any party hereto (or, after giving
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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
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assigned, in whole or in part, pursuant to this Section 2.4 shall assume
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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
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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;
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Transfers Deemed Effective as of the Distribution Date. To the extent that any
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transfers contemplated by this Article II shall not have been consummated on or
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prior to the
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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 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.
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(a) 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.
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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 12:01 a.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 12:01 a.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 12:01 a.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 12:01 a.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 12:01 a.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 12:01 a.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
-12-
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;
(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) to the
effect
-13-
that neither the Restructuring Transactions nor the Distribution will be
taxable to Columbia/HCA or the stockholders of Columbia/HCA, 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;
(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
fifteen 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
-14-
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.
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.
-15-
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 or tradename (collectively, the "Tradenames") of any
other party hereto (or, after giving effect to the Restructuring
Transactions and the Distribution, any Subsidiary of any other party
hereto) or any tradename or trademark likely to cause confusion with any
such Tradenames.
(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 Tradenames 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
Tradenames.
(c) Each party hereto agrees to use its reasonable efforts to
(and to cause each of its Subsidiaries to) cease using the Tradenames of
any other party (or, after giving effect to the Restructuring Transactions
and the Distribution, any 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
-16-
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 F 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.
-----------
(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 F 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 F 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
-17-
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 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:
(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
-18-
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
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.
-19-
ARTICLE V
INDEMNIFICATION
Section 5.1. Indemnification by Columbia/HCA. 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 either
(a) the Columbia/HCA Liabilities or (b) 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.
In addition, 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 the Indemnified Matters; provided, however, that the indemnification
-----------------
provided for in this Section 5.1 shall exclude, and Columbia/HCA shall have no
responsibility for, (A) Losses which constitute consequential damages and (B)
Losses arising out of or relating to acts, practices or omissions engaged in
after the Distribution Date by LifePoint or Triad or, after giving effect to the
Restructuring and the Distribution, any of their respective Subsidiaries or
Affiliates. For purposes hereof, "Indemnified Matters" means (x) proceedings
commenced by the United States Department of Justice and other federal and state
governmental authorities conducting the pending investigations (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 and CHAMPUS patients
regarding (a) allegedly improper diagnosis related group ("DRG") coding
(commonly referred to as "upcoding") relating to bills submitted for medical
services, (b) allegedly improper outpatient laboratory billing (e.g., unbundling
of services, medically unnecessary tests), (c) inclusion of allegedly improper
items in cost reports submitted as a basis for reimbursement under Medicare,
Medicaid 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 (c) includes any stub period from the date of filing of
any such cost report to the Distribution Date), (d) arrangements with physicians
and other parties that allegedly violate certain federal and state laws
governing referral relationships, including fraud and abuse, anti-kickback and
"▇▇▇▇▇" laws, (e) allegedly improper acquisitions of home health care agencies
and allegedly excessive billing for home health care services, and (f) other
allegedly improper billing 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 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
-20-
insurance policy maintained by Columbia/HCA and listed on Exhibit H hereto), and
(z) proceedings commenced and claims asserted 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 above. 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
shall be for the sole benefit of Columbia/HCA.
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, 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
-21-
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 of any payment with respect to any such Loss or the
incurrence or payment of any such Loss. If an Indemnitee shall have
received 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.
-22-
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
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
-23-
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 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
-24-
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. Indemnification required by
------------------------
this Article V shall be made by periodic payment of the amount thereof during
---------
the course of the investigation or defense, as and when bills are received or
loss, liability, claim, damage or expense is incurred.
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.
(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
-25-
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 (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
-26-
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, 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
-27-
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. Accounting Treatment of Assets Transferred and
----------------------------------------------
Liabilities Assumed. Solely for 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.
ARTICLE VIII
GOVERNMENT PROGRAMS
Section 8.1. Medicare Provider, Medicaid Provider and Cost-Based Blue
--------------------------------------------------------
Cross Provider Receivables and Payables. Following the Distribution, each of
---------------------------------------
LifePoint and Triad shall prepare and file Medicare, Medicaid and Blue Cross
home office cost reports for its respective costs, and Columbia/HCA shall
prepare and file Medicare, Medicaid and Blue Cross home office cost reports for
its costs. Columbia/HCA, LifePoint and Triad agree that for cost reports filed
prior to or after the Distribution, each shall be entitled to, or be responsible
for, any Medicare, Medicaid or cost-based Blue Cross receivables or payables in
respect of their respective hospitals and other health care facilities (the
"Facilities"), and each acknowledges that among the Assets and Liabilities being
transferred to and assumed by the LifePoint Group and the
-28-
Triad Group, are the accounts receivable and accounts payable recorded on the
books of Columbia/HCA relating to such cost reports, as well as all other
administrative responsibilities and financial or other obligations relating to
such reports in respect of their respective Facilities; provided, however, that
Columbia/HCA shall retain any and all rights to Medicare and Medicaid
reimbursement for group appeal issues relating to any period ending on or prior
to the Distribution Date, including, without limitation, those group appeal
issues identified on Exhibit G hereto. Columbia/HCA shall have sole discretion
---------
to initiate and pursue any group appeal issue for cost reporting periods ending
on or prior to the Distribution Date. The term "group appeals" as used in this
Section 8.1 shall have the meaning set forth in Part I, Section 2920, of the
-----------
Provider Reimbursement Manual published by HCFA. If either of LifePoint or Triad
shall determine not to pursue any individual Facility appeal issues related to
cost reports filed on or prior to the Distribution Date, it shall give
Columbia/HCA written notice of such determination. Upon receipt of such notice,
Columbia/HCA shall have the right, in its sole discretion and upon written
notice to the party providing notice of such determination, to pursue such
appeal issues and shall be entitled to any additional reimbursement resulting
from such appeal; provided, however, that Columbia/HCA shall reimburse the
notifying party for all costs and expenses arising from or relating to the
pursuit of such appeals that are incurred by such party after the date that
Columbia/HCA elects to pursue such appeal issues. After such date, such party
shall take action and incur costs with respect to such appeal issues only at
Columbia/HCA's direction or with Columbia/HCA's prior written consent.
Section 8.2. Medicare and Medicaid Appeals. Each of Columbia/HCA,
-----------------------------
LifePoint and Triad shall be responsible for its own separate and distinct
Medicare and Medicaid appeal functions (including, without limitation, the
protection of appeal rights and the filing of appeal requests) relating to any
period ending on or after the Distribution Date; provided, however, that if
Medicare and/or Medicaid group appeal cases can be or are required to be
consolidated for cost reporting periods ending after the Distribution Date, 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 Medicare and/or Medicaid
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. Medicare Provider, Medicaid Provider and Cost-Based Blue
--------------------------------------------------------
Cross Provider Cost Reports.
---------------------------
(a) Each of LifePoint and Triad shall be responsible for filing
the Medicare provider, Medicaid provider and cost-based Blue Cross provider
cost reports for its respective Facilities for cost reporting periods
ending prior to, on or after the Distribution Date, including any
terminating cost reports due as a result of the transactions contemplated
hereby, and each shall accept full
-29-
responsibility for such reports, including, without limitation, financial
responsibility for the receivables and payables relating to such reports.
(b) Prior to the preparation of the cost reports, each of
LifePoint and Triad shall obtain information and data from Columbia/HCA on
appeal issues that are to be included in such reports. Any portion of such
cost reports relating to such appeal issues shall be prepared on a basis
consistent with the cost reports of Columbia/HCA and its providers. In
order to assure that the appeal issues have been properly included in such
cost reports, each of LifePoint and Triad shall submit draft cost reports
to Columbia/HCA for review and approval before such reports are filed with
the Medicare and Medicaid fiscal intermediaries. Columbia/HCA shall be
entitled to the receivables, and shall bear the responsibility for
payables, with respect to such appeal issues to the extent provided in
Section 8.1 above.
-----------
(c) Each of LifePoint and Triad agrees that, without the prior
written consent of Columbia/HCA, it shall not file or cause to be filed any
amended cost reports for periods ending on or prior to the Distribution
Date which relates to an appeal issue relevant to Columbia/HCA unless such
reports reflect appeal issues related to Columbia/HCA on a basis consistent
with the cost reports of Columbia/HCA and its providers.
Section 8.4. Cooperation on Medicare Matters.
-------------------------------
(a) Each of Columbia/HCA, LifePoint and Triad shall notify each
other affected party of all significant issues (determined in good faith by
the notifying party) arising out of an audit with respect to any
terminating cost reports due as a result of the transactions contemplated
hereby and any other material or significant issues relating to the
Medicare and Medicaid programs or any other governmental health care
programs. The parties shall transfer all information, records and documents
relating to the Medicare, Medicaid and cost-based Blue Cross receivables
and payables of their respective Groups in accordance with Section 9.1
-----------
below, shall maintain the confidentiality of such information, records and
documents in accordance with Section 9.6 below, and shall preserve such
-----------------
information, records and documents in accordance with Section 9.5 below.
-----------
(b) Each of LifePoint and Triad shall have the right to take all
reasonable and appropriate action in connection with the conduct of any
audit or other proceeding with respect to reimbursement through the
Medicare and Medicaid programs or any other governmental health care
programs; provided, however, that in the event that any such action could
reasonably be expected to have an adverse impact on any other party hereto
with respect to such reimbursement, the party proposing to take such action
shall consult with the potentially adversely affected party and shall
refrain from taking such action until the parties have reached agreement
with regard thereto.
-30-
(c) Each of Columbia/HCA, LifePoint and Triad shall cooperate
with, and provide information upon the reasonable request of, any other
party hereto in connection with the preparation or filing of a cost report
or in conducting any audit or other proceeding relating to the Medicare and
Medicaid programs or any other governmental health care programs.
(d) Any funds received by any Group, which are due to any other
Group pursuant to this Article VIII, shall be paid to such other Group
------------
within thirty days after receipt thereof.
ARTICLE IX
CORPORATE RECORDS AND INFORMATION
Section 9.1. Provision, Transfer and Delivery of Applicable Corporate
--------------------------------------------------------
Records. Except as otherwise provided 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 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"),
-31-
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 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
-32-
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, (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, 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
-33-
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. Notwithstanding the
foregoing, no such 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; 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 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
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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, (ii) LifePoint, if such Privileged
Information relates to the LifePoint Liabilities, or (iii) Triad, if
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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 of
---------------
this Article IX, 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 Triad Group Records (in
-36-
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.
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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & 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 Agreement or
any of the Ancillary Agreements. Except as otherwise set forth in this
-37-
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
-38-
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
-39-
FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS 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
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Senior Vice President and General Counsel
If to LifePoint, to
LifePoint Hospitals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (615) ___-____
Attention: ▇▇. ▇▇▇▇▇ ▇. Mercy
Chairman and Chief Executive Officer
If to Triad, to
Triad Hospitals, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (___) ___-____
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
In each case, with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
-40-
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.
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 shall not be assignable, and no party
shall request that Columbia/HCA consent to 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
-41-
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 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.
-42-
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_____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., M.D.
Chairman and Chief Executive Officer
LifePoint Hospitals, Inc.
By_____________________________
▇▇▇▇▇ ▇. Mercy
Chairman and Chief Executive Officer
Triad Hospitals, Inc.
By_____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
-43-
List of Exhibits
Exhibit Description
------- -----------
Exhibit A Ancillary Agreements
Exhibit B LifePoint By-laws
Exhibit C LifePoint Certificate of Incorporation
Exhibit D Triad By-laws
Exhibit E Triad Certificate of Incorporation
Exhibit F Certain Guarantees
Exhibit G Medicare and Medicaid Reimbursement
for Appeal Issues
Exhibit H Standard Forms of Insurance Policies
Exhibit I
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