exv10w5



 







Exhibit 10.5



  



STOCK PURCHASE AGREEMENT




by and among




HCA INC.




and




LIFEPOINT HOSPITALS, INC.




Dated as of July 14, 2005




 

 









 








EXECUTION
COPY




TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Article I DEFINITIONS	 	 	1	 
	1.1
	 	Defined Terms	 	 	1	 
	1.2
	 	Interpretation	 	 	11	 
	 
	 	 	 	 	 	 
	Article II PURCHASE AND SALE; CLOSING	 	 	11	 
	2.1
	 	Sale of the Acquired Company Ownership Interests	 	 	11	 
	2.2
	 	Reorganization	 	 	11	 
	2.3
	 	Purchase Price	 	 	11	 
	2.4
	 	Closing	 	 	12	 
	2.5
	 	Closing Deliveries	 	 	13	 
	2.6
	 	Multiple Closings	 	 	13	 
	 
	 	 	 	 	 	 
	Article III REPRESENTATIONS AND WARRANTIES OF HCA	 	 	14	 
	3.1
	 	Organization of HCA and Seller Group	 	 	14	 
	3.2
	 	Organization and Capitalization of the Acquired Companies	 	 	15	 
	3.3
	 	Organization and Capitalization of the Acquired Subsidiaries	 	 	16	 
	3.4
	 	Authorization	 	 	17	 
	3.5
	 	No Conflicting Agreements; Consents	 	 	18	 
	3.6
	 	Financial Statements	 	 	18	 
	3.7
	 	Absence of Undisclosed Liabilities; No Missing Assets	 	 	19	 
	3.8
	 	Absence of Changes	 	 	19	 
	3.9
	 	Contracts	 	 	20	 
	3.10
	 	Accounts Receivable	 	 	21	 
	3.11
	 	Real Property	 	 	21	 
	3.12
	 	Personal Property	 	 	22	 
	3.13
	 	Employees; Labor Matters; Company Plans; ERISA	 	 	23	 
	3.14
	 	Government Program Participation/Accreditation	 	 	24	 
	3.15
	 	Taxes	 	 	25	 
	3.16
	 	Inventory	 	 	26	 
	3.17
	 	Intellectual Property	 	 	26	 
	3.18
	 	Permits; Compliance With Laws	 	 	26	 
	3.19
	 	Environmental Conditions	 	 	26	 
	3.20
	 	Legal Proceedings, Court Orders	 	 	28	 
	3.21
	 	Insurance	 	 	28	 
	3.22
	 	Corporate Integrity Agreement	 	 	28	 
	3.23
	 	Medical Staff	 	 	28	 
	3.24
	 	Brokers	 	 	29	 
	3.25
	 	No Omissions or Misstatements	 	 	29	 
	 
	 	 	 	 	 	 
	Article IV REPRESENTATIONS AND WARRANTIES OF PURCHASER	 	 	29	 
	4.1
	 	Organization	 	 	29	 
	4.2
	 	Corporate Authorization	 	 	29	 
	4.3
	 	No Conflicting Agreements; Consents	 	 	30	 
	4.4
	 	Legal Proceedings, etc	 	 	30	 
	4.5
	 	Brokers	 	 	30	 
	4.6
	 	Sufficient Resources	 	 	30	 
	4.7
	 	Solvency	 	 	30	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	4.8
	 	Investment Representations	 	 	30	 
	4.9
	 	No Omissions or Misstatements	 	 	31	 
	 
	 	 	 	 	 	 
	Article V COVENANTS OF HCA	 	 	31	 
	5.1
	 	Regulatory Approvals	 	 	31	 
	5.2
	 	Conduct Prior to the Closing	 	 	31	 
	5.3
	 	Employee Matters	 	 	33	 
	5.4
	 	Investigation by Purchaser	 	 	33	 
	5.5
	 	Reports and Pre-Closing Deliverables	 	 	33	 
	5.6
	 	Closing Conditions	 	 	34	 
	5.7
	 	Transfer of Assets	 	 	35	 
	5.8
	 	Encumbrances	 	 	35	 
	5.9
	 	Condition of Assets	 	 	35	 
	5.10
	 	Consultative Process	 	 	35	 
	5.11
	 	Intercompany Accounts	 	 	35	 
	5.12
	 	Exclusivity	 	 	36	 
	5.13
	 	Resignations	 	 	36	 
	5.14
	 	Tax Filings	 	 	36	 
	5.15
	 	Purchaser Appointed Attorney for Reorganization Parties	 	 	36	 
	 
	 	 	 	 	 	 
	Article VI COVENANTS OF PURCHASER; CERTAIN ADDITIONAL
COVENANTS OF THE PARTIES	 	 	36	 
	6.1
	 	Confidentiality	 	 	36	 
	6.2
	 	Regulatory Approvals	 	 	37	 
	6.3
	 	Post-Closing Access	 	 	37	 
	6.4
	 	WARN Act	 	 	38	 
	6.5
	 	Employee Matters	 	 	39	 
	6.6
	 	Compliance Program	 	 	40	 
	6.7
	 	Tax Matters	 	 	40	 
	6.8
	 	Tax Elections and Allocations	 	 	42	 
	6.9
	 	Certain National and Regional Contracts	 	 	44	 
	6.10
	 	Cost Reports	 	 	44	 
	6.11
	 	Non-Competition	 	 	45	 
	6.12
	 	Closing Conditions	 	 	46	 
	6.13
	 	Insurance Agreements	 	 	46	 
	 
	 	 	 	 	 	 
	Article VII CONDITIONS TO OBLIGATIONS OF PURCHASER	 	 	46	 
	7.1
	 	Representations and Warranties	 	 	46	 
	7.2
	 	Compliance with Agreement	 	 	47	 
	7.3
	 	Closing Certificates	 	 	47	 
	7.4
	 	Secretary’s Certificates	 	 	47	 
	7.5
	 	Opinion of Counsel	 	 	47	 
	7.6
	 	Consents, Authorizations, Etc	 	 	47	 
	7.7
	 	No Action or Proceeding	 	 	48	 
	7.8
	 	Good Standing Certificates	 	 	48	 
	7.9
	 	Services Agreements	 	 	48	 
	7.10
	 	Reorganization Complete	 	 	48	 
	7.11
	 	Title Work and Surveys; Defects and Cure; Title Policy	 	 	48	 
	7.12
	 	Books	 	 	49	 
	7.13
	 	Miscellaneous	 	 	49	 
	7.14
	 	Resignations	 	 	49	 






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	 	 	 	 	Page	 
	7.15
	 	Post-Sigining Breaches of Representations and Warranties	 	 	49	 
	7.16
	 	Environmental Inspections	 	 	50	 
	7.17
	 	Waiver of Conditions	 	 	51	 
	 
	 	 	 	 	 	 
	Article VIII CONDITIONS TO OBLIGATIONS OF HCA	 	 	51	 
	8.1
	 	Representations and Warranties	 	 	51	 
	8.2
	 	Compliance with Agreement	 	 	51	 
	8.3
	 	Closing Certificates	 	 	51	 
	8.4
	 	Secretary’s Certificate	 	 	51	 
	8.5
	 	Opinion of Counsel	 	 	52	 
	8.6
	 	Consent, Authorizations, Etc	 	 	52	 
	8.7
	 	No Action or Proceeding	 	 	52	 
	8.8
	 	Good Standing Certificate	 	 	52	 
	8.9
	 	Constituent Documents	 	 	52	 
	8.10
	 	Service Agreements	 	 	52	 
	8.11
	 	Reorganization Complete	 	 	52	 
	8.12
	 	Waiver of Conditions	 	 	52	 
	 
	 	 	 	 	 	 
	Article IX INDEMNIFICATION	 	 	53	 
	9.1
	 	Survival	 	 	53	 
	9.2
	 	Indemnification by HCA	 	 	53	 
	9.3
	 	Indemnification by Purchaser	 	 	53	 
	9.4
	 	Limitations on Claims	 	 	54	 
	9.5
	 	Tax Indemnification	 	 	55	 
	9.6
	 	Claims Procedures	 	 	55	 
	9.7
	 	Exclusive Remedy	 	 	56	 
	 
	 	 	 	 	 	 
	Article X TERMINATION	 	 	56	 
	10.1
	 	Termination Events	 	 	56	 
	10.2
	 	Effect of Termination	 	 	57	 
	 
	 	 	 	 	 	 
	Article XI NOTICES	 	 	57	 
	11.1
	 	Notices	 	 	57	 
	 
	 	 	 	 	 	 
	Article XII MISCELLANEOUS	 	 	58	 
	12.1
	 	Fees and Expenses	 	 	58	 
	12.2
	 	Entire Agreement	 	 	59	 
	12.3
	 	Waiver	 	 	59	 
	12.4
	 	Amendment	 	 	59	 
	12.5
	 	Counterparts; Facsimile Signatures; Reproductions	 	 	59	 
	12.6
	 	No Third Party Beneficiary	 	 	59	 
	12.7
	 	GOVERNING LAW, CONSTRUCTION	 	 	59	 
	12.8
	 	Binding Effect	 	 	60	 
	12.9
	 	No Assignment	 	 	60	 
	12.10
	 	Headings, Gender, Etc	 	 	60	 
	12.11
	 	Public Announcement	 	 	60	 
	12.12
	 	Access to Information	 	 	60	 
	12.13
	 	Severability; Invalid Provisions	 	 	61	 
	12.14
	 	Cooperation	 	 	61	 
	12.15
	 	Venue; Waiver of Jury Trial	 	 	61	 
	12.16
	 	Damages	 	 	61	 






iii









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	12.17
	 	No Inferences	 	 	61	 
	12.18
	 	Tax and Medicare Advice and Reliance	 	 	62	 
	12.19
	 	Post-Closing Operations	 	 	62	 
	12.20
	 	Capital Expenditures	 	 	62	 
	12.21
	 	Reasonable Access	 	 	62	 
	12.22
	 	Schedules, Exhibits, Etc	 	 	62	 
	12.23
	 	Further Assurance Clause	 	 	63	 







iv









 








List of Exhibits and Schedules:




	 	 	 
	Exhibit A-1

	 	Seller Group and Acquired Companies
	Exhibit A-2

	 	Acquired Subsidiaries
	Exhibit B

	 	Facilities
	Exhibit C

	 	Assumed Contracts, Assumed Liabilities
	Exhibit D

	 	Reserved
	Exhibit E

	 	Reserved
	Exhibit F

	 	Insurance Agreements
	Exhibit G

	 	Contributed Assets
	Exhibit H

	 	Reserved
	Exhibit I

	 	Excluded Assets
	Exhibit J

	 	Excluded Contracts
	Exhibit K

	 	Excluded Liabilities
	Exhibit K-1

	 	Cost Reports
	Exhibit L

	 	Knowledge
	Exhibit M

	 	Service Agreement Terms
	Exhibit N

	 	Reorganization Agreements
	Exhibit O

	 	Title Work and Surveys
	Schedule 3.6

	 	Financial Statements
	Schedule 3.7(b)

	 	Other Assets
	Schedule 3.9(a)

	 	Material Contracts
	Schedule 3.11(a)

	 	Real Property
	Schedule 3.13(b)

	 	Company Plans
	Schedule 3.13(d)

	 	Continuation of Coverage
	Schedule 3.13(e)

	 	Employment Contracts
	Schedule 3.14

	 	Government Program Participation/Accreditation
	Schedule 3.14(a)

	 	Provider Numbers
	Schedule 3.14(b)

	 	Audited Cost Reports
	Schedule 3.14(e)

	 	JCAHO Accreditation
	Schedule 3.20

	 	Litigation
	Schedule 3.20(b)

	 	Court Orders
	Schedule 3.21

	 	Insurance Policies
	Schedule 3.21(i)

	 	Facility Repairs Recommendations
	Schedule 3.21(ii)

	 	 Claims Notices and Denials
	Schedule 5.14

	 	Tax Registrations
	Schedule 6.5

	 	Retention Bonuses
	Schedule 6.9

	 	National Contracts
	Schedule 9.2(d)

	 	Putnam Litigation
	Schedule 12.22

	 	Open Schedules







v









 








EXECUTION
COPY




STOCK PURCHASE AGREEMENT




     THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of July
14, 2005, by and among HCA Inc., a Delaware corporation (“HCA”), and LifePoint Hospitals,
Inc., a Delaware corporation (“Purchaser”).



R E C I T A L S:




     WHEREAS, the subsidiaries of HCA identified as Sellers on Exhibit A-1 to this
Agreement (each, a “Seller” and collectively the “Seller Group”) own (or, as of the
Closing Date, will own), directly or indirectly, 100% of the issued and outstanding equity
securities of the Persons identified as Acquired Companies on Exhibit A-1 (each, an
“Acquired Company”); and



     WHEREAS, the Acquired Companies own (or, as of the Closing Date, will own), directly or
indirectly, 100% of the issued and outstanding equity securities of the Persons identified as
Acquired Subsidiaries on Exhibit A-2 (each, an “Acquired Subsidiary”); and



     WHEREAS, the Acquired Companies and the Acquired Subsidiaries (collectively, the “Acquired
Entities”) own and operate (or, as of the Closing Date, will own and operate) each of the
hospitals and/or other health care facilities listed on Exhibit B (collectively, the
“Facilities”; and the business and operation of the Facilities, the “Business”);
and



     WHEREAS, HCA wishes to sell all issued and outstanding equity securities of the Acquired
Companies to Purchaser, and Purchaser wishes to purchase all issued and outstanding equity
securities of the Acquired Companies, on the terms, subject to the conditions and for the
consideration set forth in this Agreement; and



     WHEREAS, HCA shall cause each of its applicable subsidiaries (including the Seller Group and
the Acquired Entities) to take the necessary and appropriate actions to implement the transactions
contemplated in this Agreement; and



     WHEREAS, HCA will derive material benefits from the consummation of the transactions
contemplated hereby and wishes to enter into this Agreement as an inducement to the other parties
to enter into this Agreement.



     NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and other
agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto covenant and agree as follows:



ARTICLE I

DEFINITIONS




     1.1 Defined Terms.



     As used in this Agreement, the following defined terms shall have the meanings indicated
below:



     “Acquired Company” has the meaning set forth in the Recitals.



     “Acquired Company Ownership Interests” has the meaning set forth in Section
3.2(b).



 









 





     “Acquired Entities” means the Acquired Companies and the Acquired Subsidiaries, taken
as a whole.



     “Acquired Subsidiaries” has the meaning set forth in the Recitals.



     “Acquired Subsidiary Ownership Interests” has the meaning set forth in Section
3.3(c).



     “Affiliate” means any Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the Person specified;
provided, however, “Affiliate” shall not include officers, directors or shareholders of HCA.



     “Agreement” means this Stock Purchase Agreement, including the exhibits and schedules
attached hereto.



     “Allocations” has the meaning set forth in Section 6.8(a).



     “Associated Business” has the meaning set forth in Section 2.6(a).



     “Assumed Contract” means any agreement, Lease, license, sublicense, promissory note,
evidence of indebtedness or other contract described on Exhibit C that is assumed by an
Acquired Entity in connection with the Reorganization.



     “Assumed Liability” means any liability described on Exhibit C that is assumed
by an Acquired Entity in connection with the Reorganization.



     “Balance Sheet Date” means March 31, 2005.



     “Base Purchase Price” means $285,000,000.



     “Books and Records” means all existing patient, medical staff, employee, accounting,
business, marketing, corporate, partnership, limited liability company and other files, documents,
instruments, papers, books and records, including without limitation, financial statements,
budgets, ledgers, journals, deeds, titles, policies, manuals, minute books, stock certificates and
books, equity transfer ledgers, contracts, franchises, permits, supplier lists, reports, computer
files and data, retrieval programs and operating data or plans.



     “Business” has the meaning set forth in the Recitals.



     “Business Day” means a day other than Saturday, Sunday, or any day on which the
principal commercial banks located in the State of Tennessee or the State of New York are
authorized or obligated to close under the Laws of such states.



     “Business Material Adverse Effect” means a material adverse effect on the assets,
financial condition or operations of the Acquired Entities, taken as a whole, other than any
changes (a) generally affecting the healthcare industry directly or indirectly, including changes
due to actual or proposed changes in law or regulations, (b) that result from political or economic
turmoil, or (c) that are related to or result from the announcement or pendency of the transactions
contemplated by this Agreement.



     “Capital Expenditure Adjustment Amount” means the aggregate amount of all payments
made or accruals recorded for capitalized property, plant and equipment (including construction in
progress) in respect of the Facilities or the Business from and between January 1, 2005 and the
Effective Time (except



2









 




for amounts funded or to be funded by insurance), as determined in accordance with HCA’s
accounting policies and procedures (applied on a consistent basis); provided, however, that the
Capital Expenditure Adjustment Amount shall exclude any such payments or accruals made in respect
of Excluded Assets or Excluded Subsidiaries.




     “Claim” has the meaning set forth in Section 9.6(a).



     “Closing” has the meaning set forth in Section 2.4.



     “Closing Date” has the meaning set forth in Section 2.4.



     “Closing Date Balance Sheet” means the unaudited combined balance sheet of the
Business as of the Effective Time prepared in accordance with Section 2.3.



     “Closing Statement” has the meaning set forth in Section 2.3(c).



     “COBRA” has the meaning set forth in Section 3.13(d).



     “Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.



     “Company Plans” means each “employee benefit plan” (within the meaning of Section 3(3)
of ERISA) and each stock purchase, stock option, severance, change-in-control, fringe benefit,
bonus, incentive, deferred compensation and other employee benefit plan, program, policy or other
arrangement, including deferred compensation arrangements that are referenced in an employment
agreement in which any employee of the Business participates and, with respect to any employee
pension benefit plan (as defined in Section 3(2) of ERISA), which is sponsored or maintained by HCA
or its Affiliates or to which any Acquired Entity is a party or has any expense, liability or
obligation.



     “Competing Business” means the business of owning, leasing, managing or operating one
or more general acute care hospitals, ambulatory surgery centers, imaging or diagnostic centers or
services that compete with the services provided by each Hospital and other Facility as such
services are provided on the date of Closing.



     “Computer and Data Processing Agreement” means an amendment, in form and substance
reasonably satisfactory to the parties, to the existing Computer and Date Processing Services
Agreement, dated May 11, 1999, between HCA IT&S and Purchaser, as previously amended pursuant to
which the Business will become subject to the Computer and Date Processing Services Agreement.



     “Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of
March 28, 2005, between HCA and Purchaser.



     “Constituent Documents” means, for any corporation, partnership, limited partnership,
limited liability company or other organization, its Charter, Articles of Incorporation,
Certificate of Incorporation, bylaws, partnership agreement, operating agreement, certificate of
limited partnership, certificate of formation or other similar formation and governance documents,
each as amended to the relevant date.



     “Contract” means (a) any agreement, Lease, license, sublicense, promissory note,
evidence of indebtedness, or other contract or commitment, and all amendments, waivers, extensions,
schedules, exhibits and appendices thereof to which any of the Acquired Entities is a party, by
which assets of any of the Acquired Entities are bound or by which any of the Business is benefited
or otherwise primarily



3









 




related to the Facilities, and (b) any Assumed Contract; provided, however, that the term
“Contract” shall not include any Excluded Contract.




     “Contributed Asset” means any asset described on Exhibit G that is contributed
to an Acquired Entity in connection with the Reorganization.



     “Controlled Subsidiary” means any Person in which HCA owns or has power to vote,
directly or indirectly, 50% or more of the equity interests, or otherwise has power to appoint a
majority of the board of directors or other governing body of such Person, and “controlling” means
having “control” as defined in the definition of Affiliate.



     “Court Order” means any judgment, order, award or decree of any federal, state, local
or other court or judicial or quasi-judicial tribunal and any award in any binding arbitration
proceeding.



     “Damages” means any and all losses, damages, claims, costs, fines, fees, penalties,
interest, obligations and deficiencies (including, without limitation, reasonable attorneys fees
and other expenses of litigation).



“Defects” has the meaning set forth in Section 7.11(c)




     “Destruction Notice” has the meaning set forth in Section 6.3(b).



     “Effective Time” has the meaning set forth in Section 2.4.



     “Encumbrance” means any mortgage, pledge, assessment, security interest, lease,
sublease, lien, adverse claim, levy, right of way, easement, covenant, charge or other encumbrance
of any kind, or any conditional sale contract, title retention contract, or other contract to give
or to refrain from giving any of the foregoing.



     “Environmental Claim” means any claim, action, cause of action, investigation or
written notice by any person or entity alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries or penalties) arising out of, based on or
resulting from the violation of any Environmental Law.



     “Environmental Conditions” has the meaning set forth in Section 7.16.



     “Environmental Inspection Period” has the meaning set forth in Section 7.16.



     “Environmental Laws” means any federal, state, regional, county or local environmental
laws, regulations, ordinances, rules and policies and common law in effect on the date hereof and
as of the Effective Time relating to the use, refinement, handling, treatment, removal, storage,
production, manufacture, transportation or disposal, emission, discharge, release or threatened
release of Hazardous Substances, or otherwise relating to protection of human health or the
environment (including, without limitation, ambient air, surface water, ground water, land surface
or subsurface strata), as the same may be amended or modified to the date hereof and as of the
Effective Time.



     “Equity Security” and “equity interest” mean any “equity security” as such
term is defined in the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



4









 





     “Excluded Assets” means any asset described on Exhibit I that is excluded from
the transaction in connection with the Reorganization.



     “Excluded Contract” means any Contract described on Exhibit J that is excluded
from the transaction in connection with the Reorganization.



     “Excluded Liabilities” means IBNR, the “HCA Liabilities” and the
“Indemnified Matters”, as such terms are defined in Exhibit K.



     “Excluded Subsidiary” means any subsidiary of the Acquired Companies, whether direct
or indirect, whose equity securities are Excluded Assets.



     “Facility” has the meaning set forth in the Recitals.



     “FAS 87” has the meaning set forth in Section 3.13(b).



     “Federal Income Taxes” means all federal income or profits taxes, federal taxes
measured by income, profits or earned surplus, federal excise taxes and other federal governmental
charges arising from income, profits or other revenue similar in nature to any of the foregoing,
including any interest, penalties or other additions to such tax that may become payable in respect
thereof, imposed by any federal Governmental Authority.



     “Final Schedules” has the meaning set forth in Section 12.22.



     “Forms” has the meaning set forth in Section 6.8(a).



     “GAAP” has the meaning set forth in Section 3.6.



     “Governmental Authority” means, unless otherwise specified, any national, state or
local government, any political subdivision thereof or any other governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, body, agency, department, bureau,
commission or entity, or any arbitrator with authority to bind a party at law.



     “Government Programs” has the meaning set forth in Section 3.14(a).



     “Hazardous Substances” means any toxic or hazardous waste, pollutants, materials or
substances, including, without limitations, asbestos, polychlorinated biphenyls, petroleum
products, byproducts, or other hydrocarbon substances, and any other items, substances or materials
defined or listed as hazardous or toxic wastes, pollutants, materials or substances, hazardous,
toxic or infectious medical wastes, or similarly identified substances or mixtures, in or pursuant
to any Environmental Law.



     “HCA” has the meaning set forth in the Preamble.



     “HCA Affiliated Group” means the affiliated group of corporations (as defined in
Section 1504(a) of the Code) of which HCA is the parent.



     “HCA IT&S” means HCA-Information Technology & Services, Inc., a Tennessee corporation
and a subsidiary of HCA.



     “Historical Financial Statements” has the meaning set forth in Section 3.6.



     “Hospital” means any of the Facilities that are identified in Exhibit B as a
Hospital.



5









 





     “Hospital Acquired Entities” means any Acquired Entity that owns any of the Hospitals.



     “Hospital Group” means an individual Hospital together with the Facilities, assets and
operations of the Acquired Entities that are related primarily to such individual Hospital.



     “Hospital Group Material Adverse Effect” means, with respect to an individual Hospital
Group, a material adverse effect on the assets, financial condition or operations of that specific
Hospital Group taken as a whole, other than any changes (a) generally affecting the healthcare
industry directly or indirectly, including changes due to actual or proposed changes in law or
regulations, (b) that result from political or economic turmoil, or (c) that are related to or
result from the announcement or pendency of the transactions contemplated by this Agreement.



     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.



     “IBNR” means current liabilities of HCA and its Affiliates for incurred but not
reported (or incurred and reported to HCA but not paid by the Business) medical, dental,
self-insured workers compensation or other claims attributable to employees of the Business
pursuant to any Company Plan (including self-insured plans) that is a group health plan or provides
medical, dental, vision, worker’s compensation or similar benefits, except to the extent included
in the Net Working Capital and reflected in the Closing Date Balance Sheet.



     “Income Taxes” means a combination of all Federal Income Taxes plus all state and
local income or profits taxes, state and local taxes measured by income, profits or earned surplus,
state and local excise taxes and other state and local governmental charges arising from income,
profits or other revenue similar in nature to any of the foregoing, including any interest,
penalties or other additions to such tax that may become payable in respect thereof, imposed by any
state and local Governmental Authority.



     “Indebtedness Adjustment Amount” means the aggregate amount of indebtedness for
borrowed money and capital lease obligations and other long term liabilities of the Business
reflected as liabilities on the Closing Date Balance Sheet.



     “Indemnifying Party” has the meaning set forth in Section 9.6(a).



     “Indemnitee” has the meaning set forth in Section 9.6(a).



     “Intellectual Property” has the meaning set forth in Section 3.17(a).



     “JCAHO” means the Joint Commission on Accreditation of Healthcare Organizations.



     “Knowledge of HCA” (and any similar expression, including, the expression “HCA’s
Knowledge”) means, as to a particular matter, the actual knowledge of any Person specified with
respect to HCA on Exhibit L.



     “Knowledge of Purchaser” (and any similar expression) means, as to a particular
matter, the actual knowledge of any Person specified with respect to Purchaser on Exhibit
L.



     “Laws” means all statutes, laws, ordinances, rules, regulations and other
pronouncements of any Governmental Authority having the effect of law of the United States, any
state or commonwealth of the United States, or any city, county, municipality, department,
commission, board, bureau, agency or instrumentality thereof.



6









 





     “Leases” mean (a) all of those leases, subleases and occupancy agreements to which HCA
or any of its Affiliates is a party as the lessee/tenant or sublessee/subtenant of any portion of
the Real Property, and (b) all the following agreements to which HCA or any of its Affiliates is a
party as the landlord/lessor or sublandlord/sublessor of any portion of the Real Property, which do
not materially interfere with the operation of the Business as currently conducted: (i) leases of
land to third-party developers in connection with development/construction of health care related
projects at the Facilities; (ii) medical office leases, subleases and occupancy agreements; (iii)
leases, subleases and occupancy agreements for other medical uses, services or facilities; and (iv)
leases, subleases and occupancy agreements for food services and other ancillary services at the
Facilities, including as examples and not as limitations, wireless communication services, gift
shops, pharmacies or florist shops.



     “Medicaid” has the meaning set forth in Section 3.14(a).



     “Medicare” has the meaning set forth in Section 3.14(a).



     “Multiemployer Plan” means any “multiemployer plan” within the meaning of Section
3(37) of ERISA.



     “National Contract” has the meaning set forth in Section 6.9.



     “Net Working Capital” means, as of any particular date, an amount equal to the current
assets reflected on the balance sheet of the Business as of such date minus the current liabilities
reflected on the balance sheet of the Business as of such date. For purposes of calculating Net
Working Capital, the amounts, if any reflected on the Business’ balance sheet as of the applicable
date with respect to the following matters shall be eliminated from the calculation of the Net
Working Capital: (i) the Excluded Assets, (ii) the Excluded Liabilities (including liabilities and
reserves for Taxes and other indemnified matters), (iii) any item for which indemnification is
given pursuant to Section 9.2(d) (Special Indemnification) and 9.5 (Taxes), (iv)
all matters for which HCA is financially responsible in accordance with this Agreement, including
pursuant to Section 6.7 hereof, (v) all intercompany account balances that are to be paid,
cancelled or eliminated in accordance with Section 5.11 hereof, (vi) the Retention Bonuses.
In addition, for purposes of calculating Net Working Capital, the amounts, if any, that are not
reflected on the Business’ balance sheet as of the applicable date with respect to the following
matters shall be included in the calculation of the Net Working Capital to the extent that under
GAAP they should be classified as a current asset or current liability of the Acquired Entities:
(i) the Contributed Assets; (ii) the Assumed Liabilities; and (iii) the Assumed Contracts. For
purposes of calculating the Net Working Capital as of the Effective Time, the balance sheet will be
the Closing Date Balance Sheet as agreed upon by the parties or otherwise determined as final in
accordance with the provisions of Section 2.3.



     “Open Schedules” has the meaning set forth in Section 12.22.



     “Optional Termination Date” means December 31, 2005.



     “Ownership Interests” means capital stock, membership interests, partnership interests
and any other similar equity interest or security.



     “Partial Closing” has the meaning set forth in Section 2.6(a).



     “Pension Plan” has the meaning set forth in Section 3.13(b).



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     “Permits” means all licenses, permits, franchises, rights, registrations, approvals,
authorizations, consents, waivers, exemptions, releases, certificates of need, variances or orders
of, or filings with, or otherwise issued by, any Governmental Authority.



     “Permitted Encumbrance” mean (a) any Encumbrance approved in writing by Purchaser; (b)
any Encumbrance for Taxes or other governmental charges or assessments which are not delinquent or
which are being contested in good faith through appropriate proceedings; (c) any Encumbrance of any
landlord, carrier, warehouseman, mechanic or materialman and any like Encumbrance arising in the
ordinary course of business for sums that are not delinquent or which are being contested in good
faith through appropriate proceedings; (d) any Encumbrance of the lender, lessor or other
financing source (i) securing indebtedness for borrowed money, or (ii) on assets leased under a
capitalized lease obligation, to the extent (in either case) that such indebtedness for borrowed
money or capital lease is included in the calculation of the Indebtedness Adjustment Amount, (e)
easements and rights of way that do not materially interfere with or materially impair the current
use and operation of the Real Property; (f) Laws regulating the use or enjoyment of the applicable
property, (g) all Leases, (h) liens securing obligations which are Assumed Liabilities or included
in the Indebtedness Adjustment Amount, (i) matters set forth in the Title Work or shown on the
Surveys not objected to by Purchaser as provided in Section 7.11; (j) any matters included
in any Contract delivered to or otherwise made available to Purchaser prior to the execution and
delivery of this Agreement; (k) any consents from or notices to landlord/lessors or sublandlords/
sublessors under any of the Leases to which HCA or any of its Affiliates is a party as
lessee/tenant or sublessee/tenant, which consents are required to accomplish the transactions
contemplated by this Agreement; (l) any other Encumbrances which do not materially interfere with
the use or operation of the Business in a manner consistent with the current use thereof or
adversely and materially affect the value or title of the Real Property; and (m) with respect to
leased Real Property, Encumbrances which encumber the fee interest in such property.



     “Person” means any natural person, corporation, general partnership, limited
partnership, limited liability company, union, association, court, agency, government, tribunal,
instrumentality, commission, arbitrator, board, bureau or other entity or authority.



     “PIP” means periodic interim payment.



     “Pre-Closing Period” has the meaning set forth in Section 6.7(b)(i).



     “Preliminary Payment Amount” has the meaning set forth in Section 2.3(b).



     “Proceeding” has the meaning set forth in Section 6.7(e).



     “Purchase Price” has the meaning set forth in Section 2.3(a).



     “Purchase Price Adjustments” has the meaning set forth in Section 2.3(a).



     “Purchased Assets” has the meaning set forth in Section 6.8(c).



     “Purchaser” has the meaning set forth in the Preamble.



     “Purchaser Affiliated Group” means the affiliated group of corporations (as defined in
Section 1504(a) of the Code) of which Purchaser is a member.



     “Purchaser Indemnitee” has the meaning set forth in Section 9.2.



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     “Purchaser Tax Act” has the meaning set forth in Section 9.5(a).



     “Purchaser’s Environmental Inspections” has the meaning set forth in Section
7.16.



     “Purchaser’s Environmental Notice” has the meaning set forth in Section 7.16.



     “Real Property” means all real property together with all buildings and improvements
thereon and all appurtenances and rights pertaining thereto, held by HCA or its Affiliates that is
used or held for use in the operation of the Business other than the Excluded Assets.



     “Reference Balance Sheet” means the unaudited combined balance sheet of the Business
as of the Balance Sheet Date.



     “Reorganization” means the conversions, assignments, transfers and assumptions of
Excluded Assets, Excluded Liabilities, Excluded Contracts, Assumed Contracts, Assumed Liabilities
and Contributed Assets as contemplated by the Reorganization Agreements.



     “Reorganization Agreements” means the plan of reorganization attached hereto as
Exhibit N and the agreements executed and delivered to give effect to the reorganization
activities described therein.



     “Reorganization Parties” has the meaning set forth in Section 3.4(b).



     “Restricted Activity” has the meaning set forth in Section 6.11(a).



     “Retention Bonuses” has the meaning set forth in Section 6.5(a).



     “Returns” means all reports, estimates, declarations, schedules, disclosures,
information statements, claims for refunds and returns relating to, or required to be filed in
connection with, any Taxes, including any amendments thereto.



     “Section 338 Election” has the meaning set forth in Section 6.8(a).



     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.



     “Selected Accounting Firm” means an accounting firm of recognized national standing
acceptable to Purchaser and HCA.



     “Seller” has the meaning set forth in the Recitals.



     “Seller Group” has the meaning set forth in the Recitals.



     “Seller Indemnitee” has the meaning set forth in Section 9.3.



     “Seller’s Election Notice” has the meaning set forth in Section 7.16.



     “Seller’s Environmental Information” has the meaning set forth in Section
7.16.



     “Seller’s Review Period” has the meaning set forth in Section 6.8(c).



     “Services Agreements” means the service agreements pursuant to which certain HCA
Affiliates will provide services and support to the Acquired Entities after the Closing, including
billing and



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collection services and materials management services in compliance with the terms set forth
on Exhibit M.




     “Shares” means the outstanding shares of stock of any Acquired Entity that is a
corporation.



     “State Taxes” means all state and local income or profits taxes, state and local taxes
measured by income, profits or earned surplus, state and local excise taxes, state and local
payroll and employee withholding taxes, state and local unemployment taxes and social security
taxes, state and local sales and use taxes, state and local ad valorem taxes, state and local
franchise taxes, state and local gross receipt taxes, state and local business license taxes, state
and local occupation taxes and transfer taxes, escheat and other state and local governmental
charges, and other obligations of the same or a similar nature to any of the foregoing including
any interest, penalties or other additions to such tax that may become payable in respect thereof,
imposed by any state and local Governmental Authority.



     “Straddle Period” has the meaning set forth in Section 6.7(b)(ii).



     “Surveys” means those surveys (a) for the portions of the Real Property listed on
Exhibit O attached hereto that have been delivered to Purchaser or (b) for the remaining
portions of the Real Property that will be delivered to Purchaser in accordance with Section
7.11(b).



     “Survival Period” has the meaning set forth in Section 9.1.



     “Tax” or “Taxes” means a combination of all Income Taxes, all State Taxes,
plus federal payroll and employee withholding taxes, federal unemployment taxes and social security
taxes, federal franchise taxes, federal gross receipt taxes, federal business license taxes,
federal transfer taxes, and other federal governmental charges, and other obligations of the same
or a similar nature to any of the foregoing including any interest, penalties or other additions to
such tax that may become payable in respect thereof, imposed by any Governmental Authority.



     “Tax Allocation” has the meaning set forth in Section 6.8(c).



     “Tax Filing” has the meaning set forth in Section 5.14.



     “Tax Statement” has the meaning set forth in Section 6.7(b)(ii).



     “Territory” means the area within 15 miles of any of the Hospitals.



     “Title Company” has the meaning set forth in Section 7.11(d).



     “Title Evidence” has the meaning set forth in Section 7.11(c).



     “Title Policy” has the meaning set forth in Section 7.11(d)



     “Title Work” means those commitments to issue policies of owner’s or leasehold title
insurance (a) for the portions of the Real Property listed on Exhibit O attached hereto
that have been delivered to Purchaser or (b) for the remaining portions of the Real Property which
will be delivered to Purchaser in accordance with Section 7.11, together (in each case)
with copies of the exception documents listed thereon.



     “WARN Act” means the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
Section 2101 et. seq.



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     1.2 Interpretation. The words “hereof,” “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not
to any particular provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and schedules of this
Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words “without limitation” and
the phrase “in the ordinary course of business” and phrases of similar import shall be deemed to be
followed by the words “consistent with past practice.” All terms defined in this Agreement shall
have the defined meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms. Any reference to this
Agreement includes the Agreement as well as any exhibits or schedules hereto. Any agreement,
instrument or statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to time amended,
qualified or supplemented, including (in the case of agreements and instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor statutes and all
attachments thereto and instruments incorporated therein. References to a Person are also to its
permitted successors and assigns.



ARTICLE II

PURCHASE AND SALE; CLOSING




     2.1 Sale of the Acquired Company Ownership Interests. On and subject to the terms
and conditions set forth in this Agreement, at the Closing, HCA shall sell, assign, transfer and
deliver to Purchaser, free and clear of all Encumbrances, and Purchaser shall purchase from HCA,
the Acquired Company Ownership Interests. At the Closing, title to the Acquired Company Ownership
Interests shall pass to Purchaser, as record and beneficial owner. Purchaser shall then be
entitled to all rights, including, without limitation, voting rights, as the sole owner of the
Acquired Company Ownership Interests.



     2.2 Reorganization. Prior to the Closing, HCA shall, and shall cause the Acquired
Entities, to transfer and/or assign the Excluded Assets, Excluded Liabilities and Excluded
Contracts, in accordance with a plan of liquidation, and to accept and/or assume the Contributed
Assets, Assumed Liabilities and Assumed Contracts, all in accordance with and in the manner
described in the Reorganization Agreements.



     2.3 Purchase Price.



          (a) The consideration to be paid by Purchaser for the Acquired Company Ownership Interests
(the “Purchase Price”) shall be an amount equal to the Base Purchase Price plus the Net
Working Capital, plus the Capital Expenditure Adjustment Amount, minus the Indebtedness Adjustment
Amount (collectively, the “Purchase Price Adjustments”). The Purchase Price shall be
allocated in accordance with Code Section 1060 and Section 6.8 of this Agreement, as
applicable.




          (b) For purposes of determining the amount of cash to be delivered at the Closing in
accordance with Section 2.6(b), a preliminary determination of the Purchase Price (the
“Preliminary 
Payment Amount”) shall be made prior to the Closing Date using the then most recent
available month-end balance sheet of the Business. HCA shall prepare such preliminary
determination and shall deliver to Purchaser a copy of such balance sheet and a schedule showing
the calculation of the Preliminary Payment Amount not less than two Business Days prior to the
Closing Date.




          (c) Within 60 days after the Closing, HCA shall deliver to Purchaser the Closing Date Balance
Sheet together with a schedule setting forth HCA’s determination of the Purchase Price and





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each of
the Purchase Price Adjustments based upon the Closing Date Balance Sheet (collectively, the
“Closing Statement”). After the Closing, Purchaser shall (i) permit representatives of
HCA, during normal business hours, to have reasonable access to, and to examine and make copies of,
all books and records of the Acquired Entities which are in the possession of Purchaser or its
Affiliates (including the Acquired Entities) for purposes of preparing the Closing Statement, and
(ii) cause the employees of Purchaser and its Affiliates (including the Acquired Entities) to
cooperate with and assist HCA in the preparation of the Closing Statement. The Closing Statement
shall be prepared in accordance with GAAP as consistently applied in the Reference Balance Sheet.




          (d) Purchaser may object to any of the information or computations contained in the Closing
Statement which could affect the Purchase Price. Any such objection must be made by delivery of a
written statement of objections (stating the basis of the objections with reasonable specificity)
to HCA within 30 days following delivery of the Closing Statement to Purchaser. To the extent that
Purchaser does not so object within such 30-day period, the Closing Statement, as delivered to
Purchaser, shall be considered final and binding upon the parties. In the event that Purchaser and
HCA are unable to resolve a dispute or disagreement set forth in a written objection pursuant to
this Section 2.3(d) within 30 days of HCA’s receipt of such objection, either party may
elect, by written notice to the other party, to have all such unresolved disputes or disagreements
resolved by the Selected Accounting Firm. The Selected Accounting Firm shall determine the
Purchase Price Adjustments and calculate the Purchase Price in accordance with this Agreement,
which determination of the Selected Accounting Firm shall be final and binding upon the parties.
The Selected Accounting Firm shall be instructed to use every reasonable effort to perform its
services within 15 days after submission of the Closing Statement and the description of the
unresolved objections to it and, in any case, as soon as practicable after such submission. The
parties will cooperate fully with the Selected Accounting Firm, and shall cause the Acquired
Entities to cooperate fully with the Selected Accounting Firm, in connection with its resolution of
objections and, based upon (i) such resolution, (ii) the parties’ resolution of any other
objections, and (iii) the Closing Statement, its determination of the Purchase Price Adjustments
and calculation of the Purchase Price. The costs and expenses for the services of the Selected
Accounting Firm shall be borne equally by Purchaser and HCA.




          (e) Within ten days after the Purchase Price shall have been agreed upon or otherwise
determined pursuant to Section 2.3(d), HCA or Purchaser, as appropriate, shall pay the
other party cash (by wire transfer of immediately available funds) in the amount of the difference
between the Purchase Price and the Preliminary Payment Amount, together with interest thereon for a
period from (and including) the Closing Date to (but excluding) the date of payment, at the prime
rate as quoted in the Money Rates section of The Wall Street Journal from time to time.




     2.4 Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) will take place at the offices of Waller Lansden Dortch & Davis, PLLC, 511 Union
Street, Suite 2700, Nashville, Tennessee, or such other place as shall be mutually agreed upon by
the parties hereto, at 10:00 a.m., Central Time, on the earliest practicable day that is a
month-end (or, in the event that such month-end falls on a day that is not a Business Day, the
Business Day preceding such month-end) following the
satisfaction (or due waiver) of the conditions set forth in Articles VII and
VIII, or such other date as may be mutually agreed upon by the parties hereto but in no
event later than the last day of the calendar month in which such satisfaction or waiver occurs.
The date on which the Closing takes place is referred to herein as the “Closing Date.” The
Closing shall be deemed to occur at 11:59 p.m., Central Time, on the Closing Date (or if the
Closing takes place on a Business Day preceding the relevant month-end, at 11:59 p.m. on such
month-end) or at such other time as shall be mutually agreed upon in writing by the parties hereto.
The time at which the transactions contemplated hereby are deemed to become effective is referred
to herein as the “Effective Time”.



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     2.5 Closing Deliveries. At the Closing, the following events will occur:



          (a) Ownership Interests. HCA will deliver to Purchaser certificates representing the
Acquired Company Ownership Interests and the Acquired Subsidiary Ownership Interests, such
certificates representing the Acquired Company Ownership Interests to be duly endorsed or
accompanied by duly executed blank stock powers or other appropriate instruments of conveyance.




          (b) Payment for Acquired Company Ownership Interests. At the Closing, Purchaser shall
deliver the Preliminary Payment Amount in immediately available funds by electronic wire transfer
to an account designated by HCA.




          (c) Legal Opinions.




               (i) HCA shall cause an original opinion of Waller Lansden Dortch & Davis, PLLC, counsel for
HCA, to be delivered to Purchaser as contemplated by Section 7.5; and



               (ii) Purchaser shall cause an original opinion of Harwell Howard Hyne Gabbert & Manner, P.C.,
counsel for Purchaser, to be delivered to HCA as contemplated by Section 8.5.



          (d) Closing Certificates and Documents.




               (i) HCA shall deliver the other certificates and documents required to be delivered by HCA
pursuant to Article VII; and



               (ii) Purchaser shall deliver the other certificates and documents required to be delivered by
Purchaser pursuant to Article VIII.



     2.6 Multiple Closings.



          (a) If the conditions precedent in Article VII are met for all Facilities other than
for certain Acquired Entities which are not a Hospital (the “Associated Business”) whose
operations are immaterial to the operation of the associated Hospital, the Closing will proceed
with respect to all Acquired Entities other than the Associated Business in accordance with this
Agreement (any such Closing, a “Partial Closing”). From and after the Partial Closing, HCA
and Purchaser shall use commercially reasonable efforts to complete the acquisition of the
Associated Business. From and after the Partial Closing HCA shall cooperate in any reasonable
arrangement to provide Purchaser the benefit under any and all rights of the Associated Business
including but not limited to economic benefits and control of management decisions until the
earlier of the date described in clause (ii) below, and such time
as the Associated Business is acquired by Purchaser as described in the remainder of this
Section 2.6(a). If, after such Partial Closing and prior to the later of (i) termination
of this Agreement and (ii) the date that is 180 days after the Effective Time of such Partial
Closing, the conditions precedent in Article VII are subsequently satisfied with respect to
any such excluded Acquired Entities, Purchaser shall be obligated to consummate the purchase of and
HCA shall be obligated to consummate the sale of all such excluded Acquired Entities for which the
conditions in Article VII have been satisfied at a Closing in accordance with and subject
to Article II. Such Closing will be held within ten business days after satisfaction of
the conditions set forth in Articles VII and VIII with respect to such Acquired
Entities, or such other date as may be mutually agreed upon by the parties hereto. Such Closing
will take place without regard to whether the conditions in Article VII have been satisfied
for all such excluded Acquired Entities.




13









 








          (b) In the event that (i) the parties conclude in good faith that HCA was not able to deliver
the economic benefits of the Associated Business between the Partial Closing and acquisition of the
Associated Business by Purchaser or (ii) the Associated Business is not acquired by Purchaser, HCA
and Purchaser will negotiate in good faith to determine an appropriate adjustment to the Base
Purchase Price as a result of such failure to deliver economic benefit or exclusion of an Acquired
Entity.




               (i) If the parties are unable to agree upon such a price reduction, (1) the Base Purchase
Price will not be reduced as of the Closing Date, (2) the Partial Closing will not be delayed as a
result of the parties’ inability to agree upon such adjustment, (3) the Base Purchase Price will be
adjusted after the Closing in accordance with dispute resolution procedures agreed upon by the
parties, and (4) HCA will be required to pay Purchaser interest on such price adjustment from the
date of the Partial Closing to the date of payment of such price adjustment at the rate of interest
set forth in Section 2.3(e). Either HCA or Purchaser may initiate such proceedings to
determine the adjustment to the Base Purchase Price at any time following the Partial Closing.



               (ii) If the parties have not determined the amount of the price adjustment with respect to an
excluded Acquired Entity as of the date of a subsequent Closing at which Purchaser acquires such
Acquired Entity, the parties will negotiate in good faith to determine the amount of interest to
which Purchaser is entitled for having delivered the Base Purchase Price for such Acquired Entity
at an earlier Closing. Such amount will be equal to interest at the rate set forth in Section
2.3(e) on the portion of the Base Purchase Price attributable to such Acquired Entity from the
date of the Partial Closing until the date of the subsequent Closing. If the parties are unable
to agree upon such amount, (1) the Closing for the Acquired Entity will not be delayed as a result
of the parties’ inability to agree upon such amount, and (2) the amount of such interest payment
will be determined after the Closing in accordance with dispute resolution procedures agreed upon
by the parties. Either HCA or Purchaser may initiate such proceedings to determine the adjustment
to the Base Purchase Price at any time following the Partial Closing.



               (iii) If the parties have determined the adjustment to the Base Purchase Price applicable to
an excluded Acquired Entity (and, if such adjustment shall have been determined after the Partial
Closing, HCA shall have paid Purchaser the amount due under clause (A), above, in respect of such
excluded Acquired Entity), at any subsequent Closing of the sale of such Acquired Entity to
Purchaser, the Base Purchase Price for such Acquired Entity will be the previously determined
adjustment amount.



ARTICLE III

REPRESENTATIONS AND WARRANTIES OF HCA




     HCA represents and warrants to Purchaser (subject to the limitations and exemptions
disclosed in the correspondingly numbered Schedules to this Agreement) which shall be true and
correct as of the date hereof and as of the Closing as if then restated (except to the extent such
representations and warranties specifically speak only as of one of those dates or specifically
speak as of another date, in which case as of such date), as follows:



     3.1 Organization of HCA and Seller Group.



          (a) HCA is a corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware.





14









 







          (b) Each party that is a member of Seller Group is a corporation, limited partnership or
limited liability company duly organized, validly existing and in good standing under the Laws of
the state indicated as the state of organization in Exhibit A-1.




     3.2 Organization and Capitalization of the Acquired Companies.



          (a) Each Acquired Company (i) as of the Effective Time, will be a corporation, limited
partnership or limited liability company duly organized, validly existing and in good standing
under the Laws of the state of its organization, as identified on Exhibit A-1, (ii) as of
the Effective Time, will have the corporate, partnership or limited liability company power and
authority to own or lease and to operate its assets and to conduct its business as currently
conducted (or as conducted as of the Effective Time), and (iii) as of the Effective Time, will be
duly qualified to transact business as a foreign corporation, limited partnership or limited
liability company in the jurisdictions specified in Exhibit A-1 and is not (and, as of the
Effective Time, will not be) required to be so qualified by any Laws in any other jurisdiction in
which it has material operations or assets.




          (b) Exhibit A-1 sets forth the authorized capital stock, partnership interests or
membership interests as of the Effective Time of each Acquired Company and indicates the number or
amount (as appropriate) of, issued and/or outstanding shares (or other applicable ownership
interest) of such Acquired Company as of the Effective Time (such issued and/or outstanding shares
or other ownership interests for all of the Acquired Companies, the “Acquired Company Ownership
Interests”), together with the par value for each where applicable. The Acquired Company
Ownership Interests have been (or, as of the Effective Time, will have been) duly authorized and
validly issued and as of the Effective Time, will be fully paid and non-assessable. Except for the
Acquired Company Ownership Interests, as of the Effective Time, there will be no outstanding equity
securities of any of the Acquired Companies, including (i) securities which are convertible into or
exchangeable for any capital stock, partnership interests or membership interests of an Acquired
Company, (ii) contracts, arrangements, commitments or restrictions relating to the issuance, sale,
transfer, purchase or obtaining of capital stock or other equity securities of an Acquired Company,
or (iii) options, warrants, rights, calls or commitments of any character granted or issued by an
Acquired Company governing the issuance of shares of its capital stock, partnership interests or
membership interests.




          (c) As of the Effective Time, (i) Seller Group will have good and marketable title to, and
will own, all of the Acquired Company Ownership Interests, beneficially and of record; (ii) the
Acquired Company Ownership Interests will be free and clear of all Encumbrances; (iii) Seller Group
will have full voting power over the Acquired Company Ownership Interests, subject to no proxy,
shareholders’ agreement, voting trust or other agreement relating to the voting of any of the
Acquired Company Ownership Interests; and (iv) other than this Agreement, there will be no
agreement between HCA or any of its Affiliates (including Seller Group) and any other Person with
respect to the disposition of the Acquired Company Ownership Interests.




          (d) As of the Effective Time, (i) no Person will have any preemptive right to purchase any
equity security in any of the Acquired Companies, and (ii) other than the Acquired Company
Ownership Interests, there will be no outstanding equity securities in any of the Acquired
Companies giving the owner or holder thereof the right to vote on any matters on which
shareholders, partners or members of the applicable Acquired Company may vote.





15









 








     3.3 Organization and Capitalization of the Acquired Subsidiaries.



     (a) Except for the Acquired Subsidiaries and the Excluded Subsidiaries, as of the Effective
Time, the Acquired Entities will not directly or indirectly own, of record or beneficially, any
equity security of any Person.



     (b) Each Acquired Subsidiary (i) as of the Effective Time, will be a corporation, limited
partnership or limited liability company duly organized, validly existing and in good standing
under the Laws of the state of its organization, as identified on Exhibit A-2, (ii) as of
the Effective Time, will have the corporate, partnership or limited liability company power and
authority to own or lease and to operate its assets and to conduct its business as currently
conducted (or as conducted as of the Effective Time), and (iii) as of the Effective Time, will be
duly qualified to transact business as a foreign corporation, limited partnership or limited
liability company in each of the jurisdictions listed in Exhibit A-2 and is not (and, as
the Effective Time, will not be) required to be so qualified by any Laws in any other jurisdiction
in which it has material operations or assets.



     (c) Exhibit A-2 sets forth the authorized capital stock, partnership interests or
membership interests as of the Effective Time of each Acquired Subsidiary and indicates the number
or amount (as appropriate) of issued and outstanding shares (or other applicable ownership
interest) of such Acquired Subsidiary as of the Effective Time (such issued and/or outstanding
shares or other ownership interests for all of the Acquired Subsidiaries, the “Acquired
Subsidiary Ownership Interests”), together with the par value for each where applicable. The
Acquired Subsidiary Ownership Interests have been (or, as of the Effective Time, will have been)
duly authorized and validly issued and as of the Effective Time, will be fully paid and
non-assessable. Except for the Acquired Subsidiary Ownership Interests, as of the Effective Time,
there will be no outstanding equity securities of any of the Acquired Subsidiaries, including (i)
securities which are convertible into or exchangeable for any capital stock, partnership interests
or membership interests of an Acquired Subsidiary, (ii) contracts, arrangements, commitments or
restrictions relating to the issuance, sale, transfer, purchase or obtaining of capital stock or
other equity securities of an Acquired Subsidiary, or (iii) options, warrants, rights, calls or
commitments of any character granted or issued by an Acquired Subsidiary governing the issuance of
shares of its capital stock, partnership interests or membership interests.



     (d) As of the Effective Time, (i) the Acquired Entities will have good and marketable title
to, and will own, directly or indirectly, all of the Acquired Subsidiary Ownership Interests,
beneficially and of record; (ii) the Acquired Subsidiary Ownership Interests will be free and
clear of all Encumbrances, (iii) the Acquired Entities will have full voting power over the
Acquired Subsidiary Ownership Interests, subject to no proxy, shareholders’ agreement, voting trust
or other agreement relating to the voting of any of the Acquired Subsidiary Ownership Interests,
and (iv) other than this Agreement, there will be no agreement between HCA or any of its
subsidiaries and any other Person with respect to the disposition of the Acquired Subsidiary
Ownership Interests or otherwise relating to the Acquired Subsidiary Ownership Interests.



     (e) As of the Effective Time, (i) no Person will have any preemptive right to purchase any
equity security in any of the Acquired Subsidiaries, and (ii) other than the Acquired Subsidiary
Ownership Interests, there will be no outstanding equity securities in any of the Acquired
Subsidiaries giving the owner or holder thereof the right to vote on any matters on which
shareholders, partners or members of the applicable Acquired Subsidiary may vote.



16









 





     3.4 Authorization.



          (a) The execution, delivery and performance by HCA of this Agreement and by HCA of the other
agreements to be entered into by it pursuant to the terms of this Agreement, and the consummation
by HCA of the transactions contemplated hereby and thereby are within HCA’s corporate powers, are
not in contravention of the terms of HCA’s Constituent Documents, and have been duly authorized and
approved by the board of directors of HCA. No other corporate proceedings on the part of HCA are
necessary to authorize the execution, delivery and performance of this Agreement or the other
agreements to be entered into by HCA pursuant to the terms of this Agreement.




          (b) The execution, delivery and performance of the Reorganization Agreements and the other
agreements to be entered into pursuant to the terms of this Agreement or the Reorganization
Agreements by the Affiliates of HCA that are parties to such Reorganization Agreements and other
agreements (collectively, the “Reorganization Parties”), and the consummation by the
Reorganization Parties of the transactions contemplated thereby, are within the Reorganization
Parties’ respective corporate, partnership or limited liability company powers, are not in
contravention of the terms of the Reorganization Parties’ respective Constituent Documents, and
have been duly authorized and approved by the boards of directors, boards of governors, and other
similar governing bodies of the Reorganization Parties. In light of the fact that some of the
Reorganization Parties, and possibly other Affiliates of HCA, held a direct ownership interest in
assets of the Business prior to consummation of the Reorganization, representations to the effect
that “the Acquired Entities have not received ...” and “the Acquired Entity has ...” and “Acquired
Entities have ...” (and similar phrases) shall be deemed to include such Reorganization Parties and
other Affiliates of HCA who have owned an interest in the Business prior to Closing. No other
corporate, partnership or limited liability company proceedings on the part of any Reorganization
Party are necessary to authorize the execution, delivery and performance by the Reorganization
Parties of the Reorganization Agreements or any other agreements to be entered into by any
Reorganization Party pursuant to the terms of the Reorganization Agreements or this Agreement.




          (c) This Agreement has been duly and validly executed and delivered by HCA. As of the
Closing, the other agreements and Closing documents to be entered into by HCA pursuant to the terms
of this Agreement will have been duly and validly executed and delivered by HCA. This Agreement
constitutes (and upon their execution and delivery by HCA, the other agreements and Closing
documents to be entered into pursuant to the terms of this Agreement by HCA will constitute) the
legal, valid and binding obligations of HCA, enforceable against HCA in accordance with their
respective terms (assuming the valid authorization, execution and delivery hereof and thereof by
Purchaser), subject to
bankruptcy, insolvency, reorganization, moratorium and similar Laws of general application
relating to or affecting creditors’ rights and to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing.




          (d) As of the Closing, the Reorganization Agreements and the other agreements and Closing
documents to be entered into pursuant to the terms of this Agreement or the Reorganization
Agreements by the Reorganization Parties will have been duly and validly executed and delivered by
the Reorganization Parties. Upon their execution and delivery, the Reorganization Agreements and
such other agreements and Closing documents will constitute the legal, valid and binding
obligations of the Reorganization Parties that are parties thereto, enforceable against such
Reorganization Parties in accordance with their respective terms (assuming the valid authorization,
execution and delivery hereof and thereof by Purchaser and any other Person unaffiliated with HCA
that is a party thereto), subject, in each case, to bankruptcy, insolvency, reorganization,
moratorium and similar Laws of general application relating to or affecting creditors’ rights and
to general principles of equity, including principles of commercial reasonableness, good faith and
fair dealing. The Reorganization shall be completed in such a manner as to cause no obligation to
pay any tax, reimbursement, severance payment, liability or





17









 







obligation of any nature to the
Acquired Entities except for (i) the assumption of the Assumed Liabilities and Assumed Contracts
for which accruals or reserves will be appropriately included in the Closing Date Balance Sheet,
and (ii) those that (A) have been paid prior to Closing, (B) will be paid by HCA after the Closing,
or (C) are appropriately accrued or reserved against in the Closing Date Balance Sheet. All costs
and expenses associated with the Reorganization shall (X) have been paid prior to Closing, (Y) be
paid by HCA or (Z) be appropriately accrued in the Closing Date Balance Sheet. The Reorganization
does not cause a material default (whether with notice or lapse of time or both as a result of
events that occurred on or prior to Closing) under any material Contract or material Permit. After
giving effect to the Reorganization (as though the Reorganization had been completed as of the date
of execution of this Agreement), each Acquired Entity has, or within the two years preceding the
date of execution of this Agreement has had, ongoing active operations related to the Business.




     3.5 No Conflicting Agreements; Consents. Neither the Reorganization nor the execution
and delivery of this Agreement or any of the other agreements to be entered into by HCA, any Seller
or any Acquired Entity pursuant to the terms of this Agreement nor the consummation of any of the
transactions contemplated hereby or thereby will:



          (a) violate, conflict with, result in a breach or termination of the terms, conditions or
provisions of, constitute a default under, or entitle any party to terminate or accelerate (whether
with notice or lapse of time or both as a result of events that occurred on or prior to Closing),
(i) the respective Constituent Documents of HCA, Seller Group, or any of the Acquired Entities,
(ii) any Contract, except such violations, conflicts, breaches, defaults, terminations or
accelerations which would not reasonably be expected to have a Hospital Group Material Adverse
Effect; provided, however, that no representation or warranty is given with respect to any change
of control or assignment provision in any Contract (other than employment agreements and Company
Plans); (iii) any Court Order to which HCA, Seller Group or any of the Acquired Entities is a party
or by which HCA, any Seller or any of the Acquired Entities is bound, or (iv) any requirements of
Law affecting HCA, any Seller or any of the Acquired Entities, except such violations, conflicts,
breaches or defaults of such requirements of Laws which would not reasonably be expected to have a
Hospital Group Material Adverse Effect or materially impair the ability of HCA to perform its
obligations hereunder or under the other agreements contemplated hereby to be entered into by
Purchaser; provided, however, that no representation or warranty under this Section 3.5 is
given with respect to any state or federal antitrust law;




          (b) result in the creation or imposition of any Encumbrance upon any of the assets of any
Acquired Entity (except for Permitted Encumbrances); or




          (c) require a permit, approval, consent or authorization from, or the making by HCA, Seller
Group or any of the Acquired Entities of any declaration, filing or registration with, any
Governmental Authority, except as provided in Section 5.1 or Section 6.2 and except
for such approvals, consents, authorizations, declarations, filings or registrations, the failure
of which to be obtained or made would not reasonably be expected to have a Hospital Group Material
Adverse Effect or materially impair the ability of HCA to perform its obligations hereunder or
under the other agreements contemplated hereby to be entered into by HCA or prevent the
consummation of the transactions contemplated hereby or thereby; provided, however, that no
representation or warranty is given under this Section 3.5 with respect to any state or
federal antitrust law.




     3.6 Financial Statements. Schedule 3.6 contains copies of the following: (i)
the unaudited combined balance sheet of the Business as of December 31, 2003; (ii) the unaudited
combined balance sheet of the Business as of December 31, 2004; (iii) the unaudited combined
balance sheet of the Business as of the Balance Sheet Date; (iv) the unaudited combined income
statement of the Business for the 12 month period ended on December 31, 2003; (v) the unaudited
combined income statement of the Business



18









 




for the 12 month period ended on December 31, 2004; (vi)
the unaudited combined income statement of the Business for the three month period ended on the
Balance Sheet Date; and (vii) each of the foregoing presented as a consolidated statement for each
Hospital Group (collectively, the “Historical Financial Statements”). The Historical
Financial Statements have been prepared from and in accordance with the books and records of the
Business, fairly present in all material respects the financial position and results of operations
of the Business as of the dates and for the periods indicated, and, have been prepared in
accordance with generally accepted accounting principles, as consistently applied by HCA, subject
to the exceptions set forth in Schedule 3.6 (“GAAP”).




     3.7 Absence of Undisclosed Liabilities; No Missing Assets.



          (a) To HCA’s Knowledge, no Acquired Entity or Hospital Group has any material contingent
liabilities of any nature except for liabilities reflected or reserved against in the Historical
Financial Statements (including the notes thereto) and liabilities incurred in the ordinary course
of the Business since the Balance Sheet Date.




          (b) The Facilities include all Hospitals and all ancillary businesses that are located in the
Territory or the operation and assets of which are reflected in the Historical Financial
Information, including all ambulatory surgery centers, imaging and diagnostic centers, psychiatric
care hospitals, clinical laboratories, clinics, home health agencies, durable medical equipment
suppliers and all other related healthcare businesses. As a result of the Reorganization and the
consummation of the transactions contemplated hereby, except for the Excluded Assets, (i) the
Acquired Entities shall hold all right, title and interest then held by HCA or any of its
Affiliates, whether ownership, by virtue of contractual rights or otherwise, in all assets,
tangible and intangible, real and personal, used by HCA or its Affiliates in connection with
operating the Business (including the following (but nothing herein shall be deemed to include the
Excluded Assets): the Real Property, the personal property described in Section 3.12(a),
the Books and Records, the Contracts, the Acquired Company Ownership Interests, the Acquired
Subsidiary Ownership Interests, the Permits and the Intellectual Property). The assets and
contractual rights described in this Section 3.7(b) which will be held by the Acquired
Entities at the Effective Time are
sufficient for the continued conduct of the Business after Closing in substantially the same
manner as conducted prior to the Closing other than assets related to (i) the business functions
provided by HCA through the Services Agreements and the Computer and Data Processing Agreement,
(ii) other services normally provided by the HCA corporate, division and regional offices
(including group purchasing and other corporate or centrally provided services), (iii) the Excluded
Contracts, and (iv) the items that are identified in Schedule 3.7(b).




     3.8 Absence of Changes.



          (a) Between the Balance Sheet Date and the Effective Time, there has not been any occurrence
in which HCA or any of its Affiliates, in connection with the Business, has suffered any material
damage, destruction or loss with respect to the assets of any Hospital Group.




          (b) Between the Balance Sheet Date and the date of execution of this Agreement, there has not
been any transaction or occurrence in which HCA or any of its Affiliates, in connection with the
Business, has:




               (i) suffered a Hospital Group Material Adverse Effect;



               (ii) determined as collectible any material account receivable or any portion thereof which
was previously considered uncollectible, or written off as uncollectible any material



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account
receivable or any portion thereof, except for write-downs, write-ups, and write-offs in the
ordinary course of business;




               (iii) disposed of or permitted to lapse any material right to the use of any Intellectual
Property;



               (iv) sold, transferred or otherwise removed or disposed of any material assets of the
Facilities except in the ordinary course of business;



               (v) granted or incurred any obligation for any material increase in the compensation of any
employee who is employed at the Facilities (including any increase pursuant to any bonus, insurance
pension, profit-sharing, retirement, or other plan or commitment) except (A) in the ordinary course
of business, and (B) the Retention Bonuses;



               (vi) made any material change in any method of accounting or accounting principle, practice,
or policy;



               (vii) made or entered into a commitment to make any material capital expenditure at any of the
Facilities or otherwise on behalf of any Acquired Entity;



               (viii) terminated or amended any material Contract, Lease or other agreement to which any
Acquired Entity is a party, other than in the ordinary course of business or in connection with the
Reorganization;



               (ix) mortgaged, pledged or imposed any lien or encumbrance on the assets of an Acquired Entity
in excess of $50,000 in the aggregate, other than in the ordinary course of business or as will be
included in the calculation of the Indebtedness Adjustment Amount;



               (x) initiated or settled any litigation, action or proceeding before any court or Governmental
Authority, other than in the ordinary course of business;



               (xi) taken any other action neither in the ordinary course of business nor provided for in
this Agreement; or



               (xii) agreed, so as to legally bind Purchaser or the Acquired Entities, whether in writing or
otherwise, to take any of the actions set forth in this Section 3.8 and not otherwise
permitted by this Agreement.



     3.9 Contracts.



          (a) Copies of all material Contracts have been made available to Purchaser. Contracts which
are material shall include, but not be limited to any contract: to which a party thereto is a
referral source (including physicians) to any Facility; which involves an expenditure of greater
than $50,000 per contract per year; which is not cancelable upon less than 120 days notice during
the remaining term and upon cancellation without penalty, payment or obligation; which an Acquired
Entity is bound by a covenant not to compete; which is an employment agreement; and which is a
joint venture or partnership agreement. Schedule 3.9(a) hereto sets forth a complete and
accurate list of all material Contracts.




          (b) Each material Contract is valid, binding and enforceable in all material respects against
HCA or the applicable Acquired Entity and, to HCA’s Knowledge, against third parties, and the




20









 







applicable Acquired Entity has duly performed in all material respects its obligations under each
material Contract to which it is a party (to the extent that such obligations to perform have
accrued), subject, in each case, to bankruptcy, insolvency, reorganization, moratorium and similar
Laws of general application relating to or affecting creditors’ rights and to general principles of
equity, including principles of commercial reasonableness, good faith and fair dealing.




          (c) Neither HCA nor its Affiliates are in material default (nor would they be in material
default with notice or lapse of time or both as a result of events that have occurred) under any
material Contract.




          (d) No purchase commitment by any Acquired Entity is in excess of its respective ordinary
business requirements.




          (e) Except for Permitted Encumbrances, no Encumbrance exists on any interest created under any
of the Contracts.




     3.10 Accounts Receivable. The accounts receivable included in the Closing Date
Balance Sheet, to the extent uncollected as of the Effective Time, are valid and existing and
represent monies due for goods sold and delivered and services performed in the ordinary course of
business; provided that HCA makes no representation or warranty with respect to the collectibility
of the accounts receivable.



     3.11 Real Property.



          (a) As of the Closing Date, the Real Property shall be accurately described in Schedule
3.11(a) and include all real estate used or held for use in connection with the Business.




          (b) As of the Effective Time, all title, leasehold interests and other rights held by HCA or
its Affiliates with respect to Real Property will be held by the Acquired Entities.




          (c) Neither HCA nor any of its Affiliates has allowed the creation of, suffered, assumed, or
agreed to any Encumbrance (other than Permitted Encumbrances) on the Real Property.




          (d) None of the Real Property, or the buildings or improvements situated thereon, is in
material violation of any zoning or land use ordinances and regulations applicable thereto or to
the ownership or operation thereof. To the Knowledge of HCA, the consummation of the transactions
contemplated herein will not result in the termination of any applicable zoning variance,
conditional use permit, waiver or exemption relating to the Real Property with respect to any
non-conforming use or other zoning, land use or building codes matters except for terminations that
will not materially interfere with the use or operation of the Business in a manner consistent with
the current use. The buildings and improvements constituting the Facilities on the Real Property
are in material compliance with all applicable public health, fire safety or building codes and
regulations. Certificates of occupancy and/or use have been duly issued by the applicable
Governmental Authority having jurisdiction for all of the Facilities.




          (e) To the Knowledge of HCA the Real Property is subject to no conditions, restrictions,
ordinances, or other limitations not shown by the Title Work or the Surveys that would make such
property unusable for its current use or the title to such property unmarketable, or which
materially restrict or impair the current use of the Real Property.




          (f) To the Knowledge of HCA, no part of the Real Property is subject to any existing, proposed
or contemplated plans to modify or realign any street or highway or any existing,





21









 







proposed or
contemplated condemnation proceeding that would result in the taking of all or any part of the Real
Property or that would adversely and materially affect the current use of any of the Facilities or
any material part thereof, or materially and adversely interfere with any construction plans of HCA
or an Acquired Entity existing as of the Closing Date for which the applicable Facility has
received approval from HCA’s Capital Asset Management System. To the Knowledge of HCA, there are no
existing or contemplated public improvements which will result in special assessments against the
Real Property.




          (g) All utilities serving the Real Property are installed and operating, and shall at Closing
be adequate to operate the Real Property in the manner it is currently operated. Any tap fees,
hook-up fees or other associated charges accrued to date have been fully paid with respect to all
potable and industrial water and all gas, electrical, steam, compressed air, telecommunication,
sanitary and storm sewage lines and systems and other similar systems serving the Facilities except
as reflected in the Historical Financial Statements.




          (h) There are no outstanding options to purchase, rights of first offer, rights of first
refusal or any similar rights to purchase any parcel of the Real Property owned by the Acquired
Entities, or any portion thereof or interest therein not shown by the Title Work or the Leases; and




          (i) To the Knowledge of HCA, (i) the lessors named in the respective leases of the leased Real
Property (under which an Acquired Entity is the lessee) are the fee owners of the Real Property
leased thereunder except as otherwise provided in the Leases; (ii) except as set forth in each
Lease or the Title Work, none of the Leases under which an Acquired Entity is the lessor is subject
to any option to renew, options to purchase, rights of first refusal, rights of first offer or any
similar rights; and




          (iii) as to any of the Leases under which an Acquired Entity is the lessor, no tenant is
entitled to any rebate, concession or free rent, other than as set forth in the Lease or Contract
with such tenant; no commitments have been made to any tenant for material repairs or improvements
other than for normal repairs and maintenance in the future except as otherwise provided in the
Lease or Contract; the Acquired Entity’s obligations as lessor for any such commitments for
material repairs or improvements in the future that have accrued as of the Effective Time will have
been fully performed; and no rents due under any leases with tenants have been assigned or
hypothecated to, or encumbered by, the lessor.




     3.12 Personal Property.



          (a) As of the Effective Time, the Acquired Entities will be in possession of and will have
good title to, or have valid leasehold interests in or valid rights under contract to use, free and
clear of any Encumbrance other than a Permitted Encumbrance, all of the personal property used by
HCA or any of its Affiliates in the conduct of the Business, including all Books and Records and
all personal property reflected on the Historical Financial Statements and all of the personal
property purchased or otherwise acquired for use in the Business since the Balance Sheet Date,
other than (i) personal property disposed (and replaced if such replacement would have been done in
the ordinary course of business) since the Balance Sheet Date in the ordinary course of business,
and (ii) the Excluded Assets and Excluded Contracts.




          (b) As of the Effective Time, there will be no outstanding rights (including purchase options,
rights of first refusal, rights of first offers, agreements or other commitments made by HCA or any
of its Affiliates that give any Person a current or future right to require the Acquired Entities
to sell or transfer to a third party any material interests in the personal property owned by them.






22









 








     3.13 Employees; Labor Matters; Company Plans; ERISA.



          (a) (i) The Acquired Entities are not a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or labor organization;
(ii) there is no unfair labor practice or labor arbitration proceeding pending, or to HCA’s
Knowledge, threatened against HCA or any of its Affiliates relating to the Business; (iii) to HCA’s
Knowledge, there are no organization efforts with respect to the formation of a collective
bargaining unit presently being made or threatened involving employees of the Business; and (iv)
there is no labor strike, material slowdown or material work stoppage or lockout actually pending
or, to HCA’s Knowledge, threatened against or affecting the Business, and the Business has not
experienced any strike, material slowdown or material work stoppage or lockout since January 1,
2003.




          (b) Schedule 3.13(b) contains a list of each Company Plan. There is no Multiemployer
Plan under which any employee of the Business has any present or future right to benefits or under
which any Acquired Entity has any present or future liability. For each Company Plan that is a
“defined benefit plan,” as defined in section 414(j) of the Code (collectively, the “Pension
Plans”), the funded status of each Pension Plan is disclosed on Schedule 3.13(b) in a
manner consistent with the Statement of Financial Accounting Standards No. 87 (“FAS 87”)
prepared by the Financial Accounting Standards Board. With respect to the Pension Plans and the HCA
Retirement Plan, for purposes of section 412 of the Code, the annual minimum funding requirements
have been timely satisfied, there are no accumulated funding deficiencies and no funding waiver has
been applied for. There is no Pension Plan
under which any employee of the Business or any Acquired Entity has any present or future
right to benefits. No Acquired Entity has any present or future liability with respect to any
Pension Plan.




          (c) Any contributions, including salary deferrals, required to be made under the terms of the
Company Plans as of the date of this Agreement have been made in a timely fashion.




          (d) Except as provided in Schedule 3.13(d), no Company Plans provide for, and no
written or oral agreements have been entered into promising or guaranteeing, the continuation of
medical, dental, vision, life or disability insurance coverage for any employees of the Acquired
Entities or their beneficiaries for any period of time beyond the earlier of (i) the end of the
current plan year or (ii) the termination of employment (except to the extent of coverage required
under Title I, Part 6 of ERISA (“COBRA”)). The Company Plans are in material compliance
with the continuation coverage provisions of COBRA. As promptly as possible after the execution of
this Agreement, HCA shall make available for review and copy by Purchaser of each Company Plan
listed on Schedule 3.13(d).




          (e) No material changes in the basis for remuneration of employees of the Facilities have been
made, promised or authorized by HCA since the Balance Sheet Date, except in the ordinary course of
business. Schedule 3.13(e) lists all written employment contracts and agreements relating
to the Facilities that provide for employment for a term or restrictions upon HCA’s right to
terminate employment without any post-termination payment obligation. No employment agreement
(including, without limitation, any professional services agreement or recruiting agreement listed
on Schedule 3.9(a)) creates or modifies any Company Plan or promises to provide benefits
that cannot be terminated by HCA, the Acquired Entities, or the Purchaser without the prior consent
of the other party thereto and without prior notice.




          (f) Except as described in Schedule 3.13(b), no Company Plan has any unfunded
liabilities with respect to any employee of the Business for which the Acquired Entities have any
responsibility or liability, other than for salary contributions made pursuant to section 401(k) of
the Code that have been withheld from employees’ compensation but may not have been deposited to
such Plan as of the date of the Closing.






23









 








          (g) To HCA’s Knowledge, any Company Plan subject to the qualification requirements of section
401(a) or 501(a) of the Code are in compliance with such qualification requirements.




     3.14 Government Program Participation/Accreditation.



          (a) Each of the Facilities that has historically received Medicare or Medicaid reimbursement
is eligible to receive payment without restriction under Title XVIII of the Social Security Act
(“Medicare”) and Title XIX of the Social Security Act including under any experimental,
pilot or demonstration project(s) implemented pursuant to Section 1115 of the Social Security Act
(“Medicaid”) and is a “provider” with valid and current provider agreements and with one or
more provider numbers with the federal Medicare, all applicable state Medicaid and successor
programs (the “Government Programs”) through intermediaries, and a complete list of all
Part A and Part B provider numbers is included in Schedule 3.14(a). Each of the Facilities
that has historically received payments under Tricare or its predecessor programs is a “provider”
with valid and current provider agreements and with one or more provider numbers with Tricare and
successor programs through intermediaries. A true and correct copy of each of such agreement has
been made available to Purchaser by HCA. Each of the Facilities is in compliance with the
conditions of participation for the Government Programs in all material respects.
There is not pending or, to HCA’s Knowledge, threatened any proceeding or investigation under
the Government Programs involving the Business or any of the Acquired Entities. HCA has made
available to Purchaser true, correct and complete copies of the Facilities’ most recent Medicare
and Medicaid certification survey reports, including any statements of deficiencies and plans of
correction.




          (b) The Acquired Entities have filed and caused to be filed all cost reports and all other
material reports that are required by Law or contract to have been filed or made with respect to
the purchase of services of the Facilities by third party payors, including Government Programs and
other insurance carriers. The Acquired Entities are and have been in material compliance with
filing requirements with respect to cost reports of the Facilities, and such reports do not claim,
and none of the Facilities has received, payment or reimbursement in excess of the amount provided
by applicable law or any applicable agreement, except where excess reimbursement was noted on the
cost report. True and correct copies of all such reports for the three (3) most recent fiscal
years of the Facilities have been made available to Purchaser. Schedule 3.14(b) indicates
which of such cost reports for cost reporting periods ended within the three most recent fiscal
years have been audited by the fiscal intermediary and finally settled. To HCA’s Knowledge, there
are no facts or circumstances which may reasonably be expected to give rise to any material
disallowance under any such cost reports.




          (c) In connection with the Administrative Settlement Agreement, dated June 25, 2003, by and
between the United States Department of Health and Human Services (acting through the Centers for
Medicare and Medicaid Services) and HCA the Medicare cost reports for all Acquired Entities
relating to periods ending on or before July 31, 2001 have been finally settled, and there are no
unresolved claims or disputes for an Acquired Entity’s Medicare cost reports for such periods.




          (d) All of HCA’s billing practices with respect to the Facilities to all third party payors,
including the Government Programs and private insurance companies, have been and are in compliance
in all material respects with all applicable Laws, regulations and polices of such third party
payors and Government Programs. The Facilities have not billed or received any payment or
reimbursement in excess of amounts allowed by Law.




          (e) Each of the Hospitals and other Facilities listed on Exhibit B and any other
Facility for which such accreditation is available is duly accredited with no material
contingencies by the JCAHO. HCA has made available to Purchaser copies of the JCAHO accreditation
survey report and




24









 







deficiency list for each of the hospitals listed on Exhibit B, if any,
together with such hospital’s most recent statement of deficiencies and plan of correction. Except
as set forth on Schedule 3.14(e), no Acquired Entity has received written notice of any
threatened, pending or likely revocation, early termination, suspension or limitation of any such
accreditation.




          (f) To HCA’s knowledge, (i) no current employee of the Business has been excluded from
participating in any federal health care program (as defined in 42 U.S.C. §1320a-7b(f)) and (ii)
none of the Facilities, or the Acquired Entities’ current officers, directors, governing board
members, agents or managing employees (as such term is defined in 42 U.S.C. §1320a-5(b)), has been
excluded from Medicare or any federal health care program (as defined in 42 U.S.C. §1320a-7b(f))
or been subject to sanction pursuant to 42 U.S.C. §1320a-7a or 1320a-8 or been convicted of a
crime described at 42 U.S.C. §1320a-7b.




     3.15 Taxes.



          (a) HCA has duly filed or caused to be filed, or shall duly file or cause to be filed, in a
timely manner (taking into account all extensions of due dates) with the appropriate Governmental
Authorities all Returns which are required to be filed by or on behalf of the Acquired Entities on
or before the date of this Agreement and/or the Closing Date. All such Returns are correct and
complete in all material respects. All Taxes whether or not shown to be due on such Returns filed
prior to the date hereof have been paid in full, and all Taxes of the Acquired Entities whether or
not shown to be due on such Returns filed after the date hereof and on or before the Closing Date
will be paid in full within the time permitted under the Code or applicable Laws. There are no
material Encumbrances on any of the assets of the Acquired Entities with respect to Taxes, other
than Permitted Encumbrances. All Taxes (other than Income Taxes) have been properly and fully
accrued through the Effective Date.




          (b) With respect to State Tax liabilities of the Acquired Entities, (i) no material
deficiencies for State Taxes have been claimed, proposed or assessed in writing by any state and
local Governmental Authority for which the Acquired Entities may have any liability, (ii) there are
no pending or threatened audits, investigations or claims for or relating to any material liability
in respect of State Taxes of which HCA has Knowledge based upon personal contact with any agent of
such state and local Governmental Authority, and (iii) there are no matters under discussion by HCA
with any state and local Governmental Authorities with respect to State Taxes that may result in a
material additional amount of State Taxes for which the Acquired Entities may have any liability.




          (c) None of the Acquired Entities has made any payments, is obligated to make any payments, or
is a party to any agreement that under certain circumstances could obligate it to make any payments
that (i) would be considered “excess parachute payments” under Code Section 280G (or any
corresponding provision of state or local law), (ii) that will not be deductible under Code Section
280G (or any corresponding provision of state or local law), or (iii) that would not be fully
deductible as a result of Code Section 162(m) (or any corresponding provision of state or local
law). No consent under Code Section 341(f) concerning collapsible corporations has been filed by
or on behalf of the Acquired Entities. None of the Acquired Entities have been a United States
real property holding corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii).




          (d) None of the Acquired Entities has any liability for the Taxes of any Person other than the
Acquired Entities or other members of the HCA Affiliated Group under Treas. Reg. Section 1.1502-6
(or any similar provision of state, local or foreign law), as a transferee or successor for any tax
periods ending after December 31, 1999.





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          (e) No statute of limitations in respect of Taxes (other than Federal Income Taxes) has been
waived and no extension of time with respect to a Tax assessment or deficiency (other than Federal
Income Taxes) has been agreed to by or on behalf of the Acquired Entities.




     3.16 Inventory. The inventory, supplies, food, pharmaceuticals, janitorial and office
supplies and other similar disposables located at the Facilities and reflected on the Closing Date
Balance Sheet is of a quality and quantity useable in the Business in the ordinary course of
business, except to the extent of reserves reflected in the Net Working Capital as of the Closing
Date.



     3.17 Intellectual Property. Each Acquired Entity owns or has the right to use (or as
of the Closing will own or have the right to use) all patents, trademarks, trade names, service
marks, trade secrets, copyrights and other
intellectual property rights and licenses as are necessary to conduct the Business as
currently conducted (the “Intellectual Property”). To the Knowledge of HCA, (i) no
material infringement exists by any of the Acquired Entities on the intellectual property rights of
any other Person that results in any way from the operations of the businesses of the Acquired
Entities, and (ii) there is no material infringing use of any of the Intellectual Property owned by
any Acquired Entity by any other Person. No Court Orders or proceedings are pending, or to the
Knowledge of HCA, threatened, against any of the Acquired Entities that challenge the validity of,
or such Acquired Entity’s ownership of or right to use, any of the Intellectual Property.



     3.18 Permits; Compliance With Laws.



          (a) True and complete copies of all material Permits issued or granted by a Governmental
Authority and owned or held by or issued to any HCA Affiliate in connection with the current
operation of the Business have been provided or made available to Purchaser. Such Permits
constitute all material Permits necessary for the conduct of the Business and the operation of the
Facilities as currently conducted. As of the Effective Time, each Acquired Entity will be the duly
authorized holder of such Permits. Each Facility’s pharmacies, laboratories and all other material
ancillary departments located at such Facility or operated for the benefit of such Facility (and
which are owned or operated by any HCA Affiliate), which is required to be specially licensed, are
licensed by the appropriate Governmental Authority.




          (b) Each Facility is in material compliance with all Permits required by Law. There are no
provisions in, or agreements relating to, any such Permits which preclude or limit in any material
respect any Acquired Entity from operating any of the Facilities as they are currently operated.
There is not now pending or, to the Knowledge of HCA, threatened, any action by or before any
Governmental Authority to revoke, cancel, rescind, modify or refuse to renew any of the Permits,
and all of the material Permits are and shall be in good standing now and as of the Closing.




          (c) The Acquired Entities are, and since July 31, 2001 have been, in material compliance with
all Laws of any Governmental Authority having jurisdiction over the Business or the assets of the
Acquired Entities.




          (d) No representation or warranty is made with respect to the Facilities’ compliance with the
requirements of the Americans with Disabilities Act.




     3.19 Environmental Conditions.



          (a) Each of the Acquired Entities is in material compliance with all Environmental Laws; all
operations or activities upon, or any use, occupancy or operation of the Real Property, or any





26









 







portion thereof, by HCA or its Affiliates are and have been performed or carried on in material
compliance with all Environmental Laws;




          (b) No Acquired Entity has stored, manufactured, used, generated or dumped any Hazardous
Substances on, in, under or upon any of the Real Property, except for uses and temporary storage of
Hazardous Substances reasonably necessary to the customary operation of a general acute care
hospital in material compliance with applicable Environmental Laws (including the presence of
asbestos maintained in compliance with applicable Environmental Laws);




          (c) No Acquired Entity has disposed of, discharged or released any Hazardous Substances on,
in, under or upon, or from any of the Real Property, except for uses and temporary storage of
Hazardous Substances reasonably necessary to the customary operation of a general acute care
hospital in material compliance with applicable Environmental Laws (including the presence of
asbestos maintained in compliance with applicable Environmental Laws);




          (d) No Acquired Entity has received any written communication during the 24 months prior to
the date of execution of this Agreement from a Governmental Authority or any other Person that
alleges that such Acquired Entity is not in compliance with Environmental Laws or is otherwise
subject to liability relating to Environmental Laws. No Acquired Entity has received any written
communication from a Governmental Authority or any other Person that alleges that such Acquired
Entity is not in material compliance with Environmental Laws or is otherwise subject to material
liability relating to Environmental Laws;




          (e) There is no material Environmental Claim pending or, to the Knowledge of HCA, threatened
against any Acquired Entity or any of the Real Property, and no material work, repairs, remedy,
construction or capital expenditures are required by any Environmental Laws with respect to the
Real Property in order for the continued lawful use of the Real Property as it has been and is
currently used;




          (f) Each of the Acquired Entities is in material compliance with OSHA requirements respecting
friable asbestos, if any, located on the Real Property, or any portion thereof and in this regard,
each Acquired Entity has properly implemented an operations and maintenance training program where
required for certain of its employees in the proper handling and removal of asbestos;




          (g) (i) No portion of the Real Property has ever been used as a landfill, garbage or refuse
dump site, waste disposal facility, transfer station or other type of facility for the processing,
treatment or disposal of waste materials other than in material compliance with applicable
Environmental Laws; and (ii) to HCA’s Knowledge, no petroleum hydrocarbons have migrated on or
below the surface of any of the Real Property in amounts that would violate any applicable
Environmental Laws;




          (h) HCA shall promptly notify Buyer in writing of any order, notice of violation or
noncompliance with any applicable Environmental Laws, or order, threatened or pending action by any
regulatory agency or other Governmental Authority, or any claims made by any third party, in each
case, of which it is aware, relating to Hazardous Substances on, emanations on or from, releases on
or from, or threats of releases on or from any of the Real Property which relate to the period
prior to Closing; and shall promptly furnish Purchaser with copies of any correspondence, notices,
or legal pleadings in connection therewith; and




          (i) All above or underground storage tanks currently operated on any of the Real Property by
the Acquired Entities are in compliance in all material respects with applicable Environmental
Laws. For any underground storage tanks which were formally located on any Real




27









 







Property, and of
which HCA or any member of the Seller Group has knowledge, such tanks were removed or closed in
place in material compliance with applicable Environmental Laws and any remediation work required
as a result of any release, leakage or discharge of Hazardous Substances from such tanks or related
lines has been fully completed in accordance with Environmental Laws and accepted by the applicable
Governmental Authority.




     3.20 Legal Proceedings, Court Orders.



          (a) Schedule 3.20 contains an accurate list of and summary description of all material
litigation with respect to the Facilities, the Business and the Acquired Entities to which HCA and
its Affiliates are a party. Other than as set forth in Schedule 3.20, there are no
material actions, suits, proceedings, audits or investigations pending, or to the Knowledge of HCA,
threatened against HCA or any of its Affiliates with respect to the Facilities, the Business or the
Acquired Entities which could reasonably be expected to result in a Hospital Group Material Adverse
Effect or materially impair the ability of HCA to perform its obligations hereunder or under the
other agreements contemplated hereby to be entered into by HCA or could reasonably be expected to
delay or prevent the consummation of the transactions contemplated hereby or thereby.




          (b) Neither HCA nor any Acquired Entity is subject to any Court Order with respect to the
Facilities, the Business or the Acquired Entities.




     3.21 Insurance. Schedule 3.21 includes a list of all material insurance
policies maintained by or for the benefit of any Facility or Acquired Entity, including fire and
extended coverage and casualty, professional liability, general liability and other forms of
insurance. All of such policies are valid, outstanding, in full force and effect, and enforceable
with no premium arrearages. Except as set forth on Schedules 3.21(i) and (ii), (i)
there is no outstanding written requirement or recommendation by any insurance company that issued
any such policy or by any board of fire underwriters or other similar body (including any
Governmental Authority) exercising similar functions which requires or recommends any repairs or
other work to be done or with respect to any of Facilities, (ii) HCA has given to its insurer in a
timely manner all notices required to be given under its insurance policies with respect to all
claims and actions covered by insurance with respect to the Business and the assets thereof, and no
insurer has denied coverage of any such claims or actions or reserved its rights with respect to or
rejected any such claims, and (iii) HCA has not as of the date of this Agreement (A) received any
notice or other written communication from any such insurance company canceling or materially
amending any of said insurance policies with respect to the Business or its assets, and to the
knowledge of HCA no such cancellation or amendment is threatened, or (B) failed to give any
required notice or present any claim which is still outstanding under any of said policies with
respect to the Business or its assets.



     3.22 Corporate Integrity Agreement. After the Effective Time, the Acquired Entities
will no longer be subject to the terms and conditions of the Corporate Integrity Agreement, entered
into between the Office of Inspector General of the Department of Health and Human Services and
HCA, dated as of April 21, 1998 and the Facilities and the Acquired Entites are, and have been
operated, in material compliance therewith. HCA has made available to Purchaser all reports which
have been filed as part of such Corporate Integrity Agreement, but only to the extent that they
relate to the Facilities. HCA has fully complied with its obligation to disclose reportable events
pursuant to the Corporate Integrity Agreement.



     3.23 Medical Staff. HCA has made available to Purchaser a true and correct copy of
the by-laws of the medical staff applicable to each of the Hospitals. There are no pending or, to
the Knowledge of HCA, threatened appeals, challenges, disciplinary or corrective actions, disputes,
lawsuits or other



28









 




legal or administrative actions or claims involving applicants, current or former
medical staff members, or health professionals at any of the Facilities.




     3.24 Brokers. Except for Merrill Lynch & Co., neither HCA nor any of its subsidiaries (including any of
the Acquired Entities) has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by this Agreement. The
Acquired Entities do not have, and following the Closing the Acquired Entities will not have, any
financial obligation to Merrill Lynch & Co. in connection with the transactions contemplated by
this Agreement.



     3.25 No Omissions or Misstatements. This Agreement and the Schedules hereto delivered
by HCA do not include any untrue statement of a material fact or omit to state any material fact
necessary to make the statements made in this Agreement by HCA not misleading. True and correct
copies of all documents referred to in any Schedule hereto have been made available to Purchaser,
including amendments, exhibits, schedules, appendices, supplements or modifications thereto or
waivers thereunder.



ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER




     Purchaser represents and warrants to HCA (subject to the limitations and exemptions
disclosed in the corresponding numbered Schedules to this Agreement) which shall be true and
correct as of the date hereof and as of the Closing as if then restated (except to the extent such
representations and warranties specifically speak only as of one of those dates or specifically
speak as of another date, in which case as of such date), as follows:



     4.1 Organization. Purchaser is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Delaware.



     4.2 Corporate Authorization.



          (a) The execution, delivery and performance by Purchaser of this Agreement and the other
agreements to be entered into by Purchaser pursuant to this Agreement, and the consummation by
Purchaser of the transactions contemplated hereby and thereby are within Purchaser’s corporate
powers, are not in contravention of the terms of Purchaser’s Constituent Documents, and have been
duly authorized and approved by the board of directors of Purchaser. No other corporate
proceedings on the part of Purchaser are necessary to authorize Purchaser’s execution, delivery and
performance of this Agreement or the other agreements to be entered into by Purchaser pursuant to
this Agreement.




          (b) This Agreement has been duly and validly executed and delivered by Purchaser, and as of
the Closing, the other agreements to be entered into by Purchaser pursuant to the terms of this
Agreement will have been duly and validly executed and delivered by Purchaser. This Agreement
constitutes, and upon their execution and delivery, such other agreements will constitute, the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with
their respective terms (assuming the valid authorization, execution and delivery hereof and thereof
by HCA, Seller Group and any other unaffiliated entity that is a party thereto), subject, in each
case, to bankruptcy, insolvency, reorganization, moratorium and similar Laws of general application
relating to or affecting creditors’ rights and to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing.




29









 








     4.3 No Conflicting Agreements; Consents. Neither the execution and delivery of this
Agreement or any of the other agreements to be entered into by Purchaser pursuant to this Agreement
nor the consummation of any of the transactions contemplated hereby or thereby will:



          (a) violate, conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default under or entitle any party to terminate or accelerate (whether with notice or
lapse of time or both as a result of events that occurred on or prior to Closing), (i) the
Constituent Documents of Purchaser, (ii) any material agreement, lease, sublease, license,
sublicense, promissory note, evidence of indebtedness or other contract (whether written or oral)
to which assets of Purchaser are a party or by which Purchaser is bound, except such violations,
conflicts, breaches or defaults which would not materially impair the ability of Purchaser to
perform its obligations hereunder or under the other agreements contemplated hereby to be entered
into by Purchaser or would not prevent the consummation of the transactions contemplated hereby or
thereby, (iii) any Court Order to which Purchaser is a party or by which Purchaser is bound, or
(iv) any material requirements of Law affecting Purchaser, except such violations, conflicts,
breaches or defaults of such requirements of Laws which would not reasonably be expected to
materially and adversely affect the financial condition or operations of Purchaser or materially
impair the ability of Purchaser to perform its obligations hereunder or under the other agreements
contemplated hereby to be entered into by Purchaser; or




          (b) require a material permit, approval, consent or authorization from, or the making by
Purchaser of any material declaration, filing or registration with, any Governmental Authority,
except as provided in Section 5.1 or Section 6.2 and except for such approvals,
consents, authorizations, declarations, filings or registrations, the failure of which to be
obtained or made would not materially and adversely affect the financial condition or operations of
Purchaser or materially impair the ability of Purchaser to perform its obligations hereunder or
under the other agreements contemplated hereby to be entered into by Purchaser or prevent the
consummation of the transactions contemplated hereby or thereby.




     4.4 Legal Proceedings, etc. There are no material actions, suits or proceedings
pending or, to the Knowledge of Purchaser, threatened against Purchaser which would materially and
adversely affect the financial condition or operations of Purchaser or materially impair the
ability of Purchaser to perform its obligations hereunder or under the other agreements
contemplated hereby to be entered into by Purchaser or could reasonably be expected to delay or
prevent the consummation of the transactions contemplated hereby or thereby.



     4.5 Brokers. Purchaser has not paid or become obligated to pay any fee or commission
to any broker, finder or intermediary for or on account of the transactions contemplated by this
Agreement.



     4.6 Sufficient Resources. Purchaser has sufficient financial resources, and at the
Closing Purchaser will possess sufficient funds, to permit Purchaser to deliver the Purchase Price
in accordance with Section 2.3(b), subject to satisfaction of the conditions precedent to
Purchaser’s obligations to close the transactions contemplated by this Agreement.



     4.7 Solvency. At the Effective Time, Purchaser will be solvent and able to pay its debts as they become
due and will not become insolvent or otherwise unable to pay its debts as they become due as a
result of the consummation of the transactions contemplated by this Agreement.



     4.8 Investment Representations.



          (a) Purchaser is acquiring the Acquired Company Ownership Interests for its own account and
not with a view to the distribution thereof within the meaning of the Securities Act.








30









 








          (b) Except as set forth in this Agreement, Purchaser is not relying upon any representation or
warranty of HCA, any of its Affiliates or any of the officers, directors, employees, agents or
representatives thereof.




          (c) Purchaser has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of purchasing the Acquired Company Ownership Interests
and to understand the risks of, and other considerations relating to, its purchase of the Acquired
Company Ownership Interests.




          (d) Purchaser is aware that as of the Closing Date, (i) neither the Acquired Company Ownership
Interests nor the Acquired Subsidiary Ownership Interests will have been registered under the
Securities Act or any state’s securities laws, and (ii) no securities issued by any of the Acquired
Entities will be subject to the reporting requirements of the Exchange Act. Purchaser further
understands that the certificates representing the Acquired Company Ownership Interests and the
Acquired Subsidiary Ownership Interests will include an appropriate legend to the effect that such
securities have not been registered under the Securities Act or any state’s securities laws and
that such securities may not be sold or transferred except in compliance with the Securities Act
and applicable state securities laws.




     4.9 No Omissions or Misstatements This Agreement and the Schedules hereto delivered
by Purchaser do not include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements made in this Agreement by Purchaser not misleading.



ARTICLE V

COVENANTS OF HCA




     5.1 Regulatory Approvals. HCA will, and will cause the Acquired Entities to, (a)
use commercially reasonable efforts to obtain, as promptly as practicable, each of the Permits,
approvals, authorizations and clearances of Governmental Authorities allocated to HCA as described
in Section 5.5(d), and to make the filings and declarations with Governmental Authorities
as agreed between the parties pursuant to Section 5.5(d), (b) provide such information and
communications to applicable Governmental Authorities necessary in connection with the foregoing or
in connection with the Purchaser’s obtaining any Permits, approvals, authorizations and clearances
of Governmental Authorities or making any filings or declarations with Governmental Authorities in
accordance with Section 6.2 as such Governmental Authorities or Purchaser may reasonably
request, and (c) cooperate with Purchaser in obtaining or making, as soon as practicable, any
Permits, approvals, authorizations, clearances, filings and declarations of or with Governmental
Authorities that Purchaser is required to obtain pursuant to Section 6.2. Additionally,
HCA will use
commercially reasonable efforts to (i) make a filing and to assist Purchaser in making its
filing of a pre-merger notification report form pursuant to the HSR Act on or before August 31,
2005, and (ii) assist Purchaser in filing the initial letter of intent and subsequent certificate
of need applications required under applicable state Law on or before July 14, 2005 (with respect
to the initial filings) and July 26, 2005 (with respect to the remaining portions of such
applications).



     5.2 Conduct Prior to the Closing. On or after the date hereof and prior to the
Closing, as relates to the Reorganization, or otherwise consented to or approved in writing by an
authorized officer of Purchaser or as contemplated by this Agreement:



          (a) HCA shall not act or omit to act, and shall cause the Acquired Entities not to act or omit
to act, otherwise than in accordance with the following:






31









 








               (i) Except as contemplated by Section 2.2, none of the Acquired Entities shall amend
its respective Constituent Documents;



               (ii) Except as contemplated by Section 2.2, no change shall be made in the number or
amount of authorized or issued capital stock, partnership interests or membership interests of any
of the Acquired Entities; nor shall any other equity security of any kind be granted or issued by
any of the Acquired Entities; nor shall any Seller enter into or permit any of the Acquired
Entities to enter into any other agreement with respect to any equity security of the Acquired
Entities;



               (iii) the Acquired Entities shall not declare or pay dividends or make any other distributions
in respect of their Ownership Interests, except as contemplated by or provided in Section
2.2 or 5.7;



               (iv) HCA will not make or enter into any commitment to make any capital expenditure at the
Facilities or otherwise on behalf of any Acquired Entity in an aggregate amount greater than
$50,000;



               (v) HCA will not change or permit any change to be made in any accounting policy, practice or
method of the Acquired Entities except any such changes as are required to conform to modifications
in generally accepted accounting principles;



               (vi) The Acquired Entities will not (A) incur any indebtedness for borrowed money, other than
intercompany indebtedness which will be forgiven at Closing in accordance with Section 5.11
hereof or included in the Indebtedness Adjustment Amount; (B) except as contemplated by Section
2.2, assume, guaranty, endorse or otherwise become liable or responsible for the obligations of
any Person other than another Acquired Entity; (C) make any loans, advances or capital
contributions to, or investments in, any Person other than another acquired Entity, other than
intercompany loans which will be forgiven at Closing in accordance with Section 5.11
hereof; or (D) make any commitments to do any of the foregoing;



               (vii) The insurance maintained with respect to the Facilities and the Business, or comparable
insurance, shall be maintained in full force and effect until the Effective Time;



               (viii) No Acquired Entity shall terminate or amend any material Contract, Lease or other
agreement to which any Acquired Entity is a party, other than in the ordinary course of business;
and



               (ix) No Acquired Entity shall agree, whether in writing or otherwise, to take any of the
actions set forth above or described in Section 3.8(b)(i)-(xi) and not otherwise permitted
by this Agreement.



          (b) HCA shall use commercially reasonable efforts not to act or omit to act, and shall cause
the Acquired Entities to use commercially reasonable efforts not to act or omit to act, otherwise
than in accordance with the following:




               (i) The operations, activities and practices of the Business shall be conducted consistent
with the ordinary course of business and in conformity with past practice;



               (ii) Except as contemplated by or provided in Section 2.2, the respective business
organizations of the Acquired Entities will be preserved intact, and the services of the present



32









 




employees, agents and representatives of the Business will be kept available for Purchaser (except
with respect to those employees or relationships terminated for cause); and




               (iii) The relationships with, and the goodwill of, the customers of the Business and others
having business relations with the Business will be preserved.



     5.3 Employee Matters. Pending the Closing, except as otherwise consented to or
approved in writing by an authorized officer of Purchaser, HCA will cause the Acquired Entities not
to (a) make any general increase in the rate of compensation payable to any employees of the
Business, other than normal and customary increases consistent with past practice or increases that
otherwise may be required by obligations pursuant to Contracts or applicable Law, or (b) increase
severance or termination obligations to any employees of the Business (except (i) increases that
are the result of increases to an employee’s underlying compensation that are permitted under this
Section 5.3, and (ii) The Retention Bonuses). Neither HCA nor any of its subsidiaries
shall terminate any Pension Plan prior to the later of the day following (i) the Closing or (ii)
the Effective Time.



     5.4 Investigation by Purchaser. Between the date of this Agreement and the Closing
Date, to the extent permitted by Law, HCA will provide Purchaser and its counsel, accountants and
other representatives with reasonable access during normal business hours, to all of the assets,
properties, facilities, employees, agents, accountants and Books and Records of the Business and
will furnish or make available to Purchaser and such representatives during such period all such
information and data (including, without limitation, copies of Contracts) concerning the Business
in the possession of HCA or its Affiliates or such representatives reasonably may request;
provided, however, such investigation shall be coordinated through persons as may be designated in
writing by HCA for such purpose. Purchaser’s right of access and inspection shall be made in such
a manner as not to interfere unreasonably with the operation of the Business or the Acquired
Entities. In this regard, Purchaser agrees that such inspection shall not take place, and no
employees or other personnel of the Business shall be contacted by Purchaser’s representatives,
without first coordinating such contact or inspection with either Gregg Gerken or the chief
executive officer of the appropriate Hospital (and giving notice of such request to Gregg Gerken or
his designee). Notwithstanding the foregoing, Purchaser understands that (x) with respect to
documents and information deemed by HCA in good faith to be market sensitive or competitive in
nature, (1) HCA will identify such documents and information to Purchaser, (2) if requested by
Purchaser, HCA will provide such documents and information to Purchaser’s outside attorneys and
accountants (who will be bound by confidentiality agreements) for their review, and (3) any report
by such attorneys and accountants to
Purchaser with respect to such documents and information will be in writing and subject to
prior review and reasonable approval by HCA to confirm that any market sensitive or competitive
information is not made available to Purchaser, (y) litigation and other materials (including
internal/external legal audit letters or reviews, patient records and similar patient information,
PRO information, National Data Bank reports, peer and quality review information and other
physician-specific confidential information) that are deemed privileged or confidential by HCA and
materials which HCA or its Affiliates may not disclose without violating confidentiality agreements
with third parties will not be made available to Purchaser, and (z) HCA shall not be obligated to
generate or produce information in any prescribed format not customarily produced by HCA and its
Affiliates.



     5.5 Reports and Pre-Closing Deliverables.



          (a) As soon as practicable following the end of each month, but no later than the
15th day of the immediately succeeding month (and each fiscal year) from and after the
date hereof and prior to the Closing Date, HCA will deliver to Purchaser true and complete copies
of the Business’ unaudited balance sheets and the related unaudited statements of income (prepared
consistently with the Historical Financial Statements) for each month (and each fiscal year) then
ended. Such financial statements will be




33









 







prepared from and in accordance with the Books and
Records of the Business, will be prepared in accordance with GAAP, and will fairly present the
Business’ financial position and results of operations, as of the date and for the period
indicated.




          (b) At least three days prior to the Closing HCA shall deliver to Purchaser a list of all
banking institutions in which the Acquired Entities have accounts, plus the related account
numbers.




          (c) As promptly as possible after the occurrence of any of the following, HCA shall give
Purchaser notice of (i) any material damage, destruction or loss with respect to the assets of any
Hospital Group or (ii) a Hospital Group Material Adverse Effect.




          (d) Within 15 days after the execution date of this Agreement HCA shall deliver to Purchaser a
list of all material Permits issued or granted by a Governmental Authority and owned or held by or
issued to any HCA Affiliate in connection with the current operation of the Business, and promptly
following delivery thereof the parties shall negotiate in good faith to (i) determine what actions
shall be required in connection with such Permits in order to consummate the transactions
contemplated hereby and to permit operation of the Business following the Closing in the manner in
which it was operated prior to the Closing, and (ii) allocate responsibility for such actions.




          (e) HCA shall continue to file reports with respect to the Business in compliance with the
Corporate Integrity Agreement in the ordinary course of business and shall make such reports
available to Purchaser. HCA shall provide Purchaser with a written description of facts that HCA
is investigating and reasonably believes would constitute a reportable event with respect to the
Business, but for which the term for reporting such event has not expired at the Closing.




          (e) Within 15 days after the execution date of this Agreement HCA shall deliver to Purchaser a
list of all of the names, trade names or fictitious names under which the Business has been
operated for the last five years.




          (f) As promptly as possible after the execution of this Agreement HCA shall deliver to
Purchaser a copy of all of the due diligence materials that were previously made available to
Purchaser in the HCA data room for the transactions contemplated hereby.




          (g) At least ten days prior to the Closing, HCA shall deliver to Purchaser a list of contracts
or other agreements (other than those material Contracts specifically noted as such on Schedule
3.9(a)) under which a chief executive officer, chief financial officer, chief operating officer
or chief nursing officer of any of the Hospitals: (i) is a supplier of goods or services to the
Acquired Entities or the Facilities, (ii) directly or indirectly controls or is a director,
trustee, member, officer, controlling shareholder, employee or agent of any corporation, firm,
association, partnership or other business entity which is a supplier of goods or services to the
Acquired Entities or the Facilities, or (iii) is otherwise a party to any contract or other
agreement with the Acquired Entities or the Facilities.




          (h) To the extent requested by Purchaser, HCA shall provide a summary of notices of all
program reimbursement, proposed or pending audit adjustments, disallowances, appeals of
disallowances, and all other unresolved claims or disputes, in connection with audits, reviews or
inquiries with respect to cost reports of the Facilities for cost reporting periods ending within
the three fiscal years preceding the date of execution of this Agreement.




     5.6 Closing Conditions. HCA will use its best efforts to cause each of the conditions
set forth in Article VII to be satisfied as soon as reasonably practicable, but in all
events on or prior to the Closing Date.



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     5.7 Transfer of Assets. From and after the date hereof and until the Closing, HCA
shall cause the Acquired Companies not to sell or dispose of any of their assets or properties
without the prior written consent of Purchaser, except for (a) dispositions of the Excluded Assets
as contemplated by Section 2.2, or (b) dispositions or sales of inventory or obsolete or
immaterial property in the ordinary course of business. Notwithstanding the foregoing or the
provisions of Section 5.2(a)(iii), the Acquired Entities may pay dividends or make
distributions of current assets in respect of their capital stock to the extent reflected in the
Closing Date Balance Sheet.



     5.8 Encumbrances. From and after the date hereof and until the Closing, HCA shall not
permit the Acquired Entities to enter into or assume any mortgage, pledge, conditional sale or
other title retention agreement or permit any Encumbrance to attach upon any of its assets, whether
now owned or hereafter acquired, except for (i) Permitted Encumbrances, or (ii) Encumbrances
incurred in the ordinary course of business and in conformity with past practice on assets and
properties of the Acquired Entities having an original cost or fair value (whichever is less) not
exceeding $250,000 in the aggregate. HCA shall timely and fully perform the Excluded Liabilities.



     5.9 Condition of Assets. From and after the date hereof and until the Closing, HCA
shall use commercially reasonable efforts, and shall cause its applicable Affiliates to use
commercially reasonable efforts, to maintain, subject to ordinary wear and tear, all real property
improvements, inventory, machinery, equipment and other tangible personal property owned or leased
by HCA or its Affiliates and used in connection with the operation of the Business other than
Excluded Assets. Subject to the compliance by HCA with the obligations set forth in the preceding
sentence, and except as specifically provided in Article III, Purchaser acknowledges that
it will take possession and ownership of such assets and properties by operation of its purchase of
the Acquired Company Ownership Interests pursuant to this Agreement AS IS, WHERE IS AND WITH ALL
FAULTS. ALL OTHER WARRANTIES, EXPRESSED OR
IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE AND ANY WARRANTIES REGARDING HABITABILITY OR FITNESS FOR HABITATION, ARE
EXPRESSLY DISCLAIMED.



     5.10 Consultative Process. From and after the date hereof and until the Closing,
Purchaser shall designate an individual or individuals whom HCA’s representatives may contact
during normal business hours for the purpose of approving actions or transactions for which the
consent of Purchaser is required under this Agreement. The written approval of a designated
individual as contemplated in this Section 5.10 shall constitute the consent of Purchaser
to the transaction or action so approved. Failure of a designated individual to respond within
five Business Days of receipt of a written request for such approval shall constitute the consent
of Purchaser to the transaction or action in question. Unless and until Purchaser gives written
notice to HCA to the contrary, such designated individuals shall be Paul Hannah and Mary Kim Shipp
(or Bill Carpenter if neither of the foregoing are available).



     5.11 Intercompany Accounts. Except as otherwise provided in this Agreement, at or
prior to the Effective Time, (a) all indebtedness and other amounts (i) owed by HCA, Seller Group,
or any of their Affiliates (other than an Acquired Entity) to an Acquired Entity or (ii) owed by an
Acquired Entity to HCA, Seller Group, or any of their Affiliates (other than an Acquired Entity)
shall be paid, canceled or eliminated (whether or not then due), and (b) all Encumbrances relating
to any of the aforesaid indebtedness or amounts shall be canceled and shall be discharged of record
and (c) all arrangements calling for the transfer of funds by any Acquired Entity in connection
with HCA’s cash management program shall be terminated as of the Effective Time. Indebtedness and
other amounts owed solely among Acquired Entities shall not be paid, cancelled or eliminated.



35









 





     5.12 Exclusivity. From the date hereof until the earlier of the Closing or the
termination of this Agreement, HCA agrees that neither it nor any Affiliate nor any of their
respective officers, directors or representatives will (a) negotiate with any other Persons with
respect to a sale, merger, consolidation, reorganization or other business combination pursuant to
which the stock, assets or business of any Acquired Entity would be combined with that of, or sold
to, any acquirer or any other business or entity (except as contemplated by Section
2.2(b)); (b) solicit or respond to any offers, bids, negotiations or inquiries with respect to
the same; (c) furnish any information with respect to the business, activities, operations, assets
or liabilities of the Acquired Entities, or other similar matters, to any Persons whatsoever (other
than as described in this Agreement) with respect to the foregoing; nor (d) proceed or continue
with negotiations in respect of the foregoing which may be in progress as of the date of this
Agreement.



     5.13 Resignations. HCA shall obtain the written resignations of all directors,
governing board members and officers of the Acquired Entities as are requested by Purchaser not
less than ten days in advance of the Closing, such resignations to be effective as of the Effective
Time. To the extent that any such officer or director is also an employee of an Acquired Entity,
such resignation shall be applicable only to the Person’s position as an officer or director and
not to such Person’s employment. Nothing in this Section 5.13 shall be interpreted to
expand or extend any existing rights of indemnification that may exist with respect to any
directors, governing board members and officers of the Acquired Entities.



     5.14 Tax Filings. Prior to the Effective Date, HCA will cause the Acquired Entities,
in accordance with applicable law, to file with the necessary federal, state and local Governmental
Authorities those specific itemized registrations related to only Taxes as set forth on
Schedule 5.14 (“Tax Filings”). HCA will provide Purchaser with the status of each
such Tax Filing within five days of a written request from Purchaser.



     5.15 Purchaser Appointed Attorney for Reorganization Parties. In the event that
accounts receivable generated in respect of the Business are held by a Person other than an
Acquired Entity, HCA, effective at the Effective Time, hereby constitutes and appoints Purchaser,
its successors and assigns, the true and lawful attorney of Reorganization Parties, in the name of
either the Purchaser or Reorganization Parties (as Purchaser shall determine in its sole
discretion) but for the benefit of Purchaser: (i) to institute and prosecute all proceedings which
Purchaser may deem proper in order to collect, assert or enforce any claim, right or title of any
kind in or to such accounts receivable; (ii) to defend or compromise any and all actions, suits or
proceedings in respect of any of such accounts receivable, and to do all such acts and things in
relation thereto as Purchaser shall deem advisable; and (iii) to take all action which Purchaser,
its successors or assigns may reasonably deem proper in order to provide for Purchaser, its
successors or assigns, the benefits under any of such accounts receivable where any required
consent of another party to the sale or assignment thereof to Purchaser pursuant to this Agreement
shall not have been obtained. HCA acknowledges that the foregoing powers are coupled with an
interest and shall be irrevocable. Purchaser shall be entitled to retain for its own accounts any
amounts collected pursuant to the foregoing powers, including any amounts payable as interest in
respect thereof. Purchaser agrees to act in good faith in seeking to collect, assert or enforce
any claim against any third party in accordance with this Section 5.14 and shall fully
indemnify HCA with respect to the consequences of any of the actions of Purchaser taken pursuant to
this Section.



ARTICLE VI

COVENANTS OF PURCHASER; CERTAIN ADDITIONAL

COVENANTS OF THE PARTIES




     6.1 Confidentiality. Purchaser acknowledges and agrees that the Confidentiality
Agreement shall survive the execution and delivery of this Agreement by the parties hereto and that
all information



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provided to Purchaser or its “Representatives” or “Other Recipients” (as such terms
are defined in the Confidentiality Agreement) in accordance with this Agreement shall be considered
“Evaluation Material” (as such term is defined in the Confidentiality Agreement) except as
otherwise provided in the Confidentiality Agreement.




     6.2 Regulatory Approvals. Purchaser will (a) use commercially reasonable efforts to
obtain, as promptly as practicable, all Permits, approvals, authorizations and clearances of
Governmental Authorities allocated to Purchaser as described in Section 5.5(d), and to make
the filings and declarations with Governmental Authorities as agreed between the parties pursuant
to Section 5.5(d), (b) provide such information and communications to applicable
Governmental Authorities as is necessary in connection with the foregoing or in connection with HCA
or its Affiliates’ obtaining any of the Permits, approvals, authorizations and clearances of
Governmental Authorities or making any filings or declarations with Governmental Authorities in
accordance with Section 5.1, and (c) cooperate with HCA and its Affiliates in obtaining or
making, as soon as practicable, any Permits, approvals, authorizations, clearances, filings and
declarations of or with
Governmental Authorities that HCA or its Affiliates is required to obtain or make pursuant to
Section 5.1. Additionally, Purchaser will use commercially reasonable efforts to (i) make
a filing, and to assist HCA in making its filing, of a pre-merger notification report form pursuant
to the HSR Act on or before August 31, 2005 and (ii) file all certificate of need applications
required under applicable state Law on or before July 14, 2005 (with respect to the initial
filings) and July 26, 2005 (with respect to the remaining portions of such applications).



     6.3 Post-Closing Access.



          (a) Purchaser and HCA acknowledge that, subsequent to the Closing, Purchaser and HCA may each
need access to information, documents or computer data in the control or possession of the other
(or their respective Affiliates), and HCA may need access to the Facilities or other assets of the
Acquired Entities for purposes of concluding the transactions contemplated herein and for audits,
investigations, compliance with governmental requirements, regulations and requests, and the
prosecution or defense of third party claims. Purchaser agrees that, at the sole cost and expense
of HCA, except as provided in Section 6.3(e), below, it will make available to HCA, its
Affiliates and their respective representatives, agents and independent auditors such documents and
information as may be in the possession of Purchaser and its Affiliates relating to periods prior
to the Effective Time and will permit HCA, its Affiliates and their respective representatives,
agents and independent auditors to make copies of such documents and information. HCA agrees that,
at the sole cost and expense of Purchaser, except as provided in Section 6.3(e) below, HCA
will make available to Purchaser, its Affiliates and their respective representatives, agents and
independent auditors such documents and information as may be in the possession of HCA and its
Affiliates relating to periods prior to the Effective Time and will permit Purchaser, its
Affiliates and their respective representatives, agents and independent auditors to make copies of
such documents and information.




          (b) Until six months after the later to occur of (i) the final adjudication of any dispute or
investigation involving Taxes arising out of the business, operations or affairs of the Acquired
Entities before the Effective Time, (ii) the final adjudication of any matter for which HCA may be
required to indemnify or hold harmless Purchaser, the Acquired Entities or any Purchaser Indemnitee
pursuant to the terms of this Agreement, or (iii) the running of applicable statutes of
limitations, Purchaser will maintain in their original form all medical and other records
(including all documents, electronic data and other compilations of information in any form) of the
Acquired Entities existing as of the Effective Time that relate to the pre-Closing business,
operations, assets and properties of the Business, and will give HCA, its Affiliates and their
representatives full and complete access to all such Books and Records to the fullest extent
reasonably required to enable HCA and its Affiliates to satisfy their respective obligations
hereunder or under applicable Law. In addition to the foregoing, following the expiration of the
periods





37









 







described above, Purchaser shall not, without 90 days prior written notification (a
“Destruction Notice”) to HCA, destroy any pre-Closing Books and Records of the Acquired
Entities. Following HCA’s receipt of a Destruction Notice, if HCA advises Purchaser in writing
within such 90 day period, Purchaser will promptly deliver the applicable Books and Records to HCA.




          (c) Purchaser acknowledges that as a result of entering into this Agreement and managing the
Facilities Purchaser and its Affiliates will gain access to patient and other information which is
subject to Laws regarding confidentiality. Purchaser shall abide by (and cause its Affiliates to
abide by) any such Laws relating to the confidential information that it acquires. Purchaser shall
maintain (and cause its Affiliates to maintain) the patient records held at each Facility or
delivered to Purchaser or the Acquired Entities at Closing at the Facilities after Effective Time
in accordance with applicable Law (including, if applicable, Section 1861(v)(i)(I) of the Social
Security Act (42 U.S.C. § 1395(V)(1)(i)), and
requirements of relevant insurance carriers), all in a manner consistent with the maintenance
of patient records generated at the Facilities after Closing. HCA and its Affiliates shall be
entitled to remove from the Facilities any Books and Records, but only for purposes of pending
litigation involving a patient to whom such records refer, as certified in writing prior to removal
by counsel retained by HCA or its applicable Affiliate in connection with such litigation. Any
Books and Records removed from the Facilities shall be promptly returned to Purchaser following its
use by HCA or its Affiliates.




          (d) After the Closing, Purchaser agrees to make available to HCA such of Purchaser’s employees
as HCA shall reasonably request for the purpose of assisting HCA in the preparation of the Closing
Date Balance Sheet and the other components of the Closing Statement pursuant to Section
2.3 hereof (and otherwise complying with Article II hereof) and in connection with the
resolution of any objections or disputes with respect to the post-closing adjustments to the
Purchase Price in accordance with Section 2.3. Additionally, until the post-closing
adjustments to the Purchase Price have been agreed upon by the parties or otherwise determined in
accordance with Section 2.3, Purchaser will make reasonable office or administrative space
available to employees and representatives of HCA at each Hospital (together with office furniture,
equipment and telephone service customarily used by administrative employees of such Hospital) for
use in connection with the preparation of the Closing Date Balance Sheet and the other component as
of the Closing Statement pursuant to Section 2.3, otherwise complying with Section
2.3, and the resolution of any disputes with respect to the post-closing adjustments to the
Purchase Price in accordance with Section 2.3.




          (e) Following the Closing, Purchaser and HCA shall make available to one another (and to the
other’s Affiliates), at no charge to the requesting party, the personnel of such Person and its
Affiliates to the extent reasonably required by such Person or its Affiliates in connection with
any litigation, investigation or other judicial or administrative proceedings attributable to the
ownership or operation of the Business and the Facilities prior to the Effective Time. In the
event that HCA or Purchaser provides witnesses pursuant to this section, it shall be entitled to
reimbursement from the requesting party for all reasonably incurred out-of-pocket costs and
expenses, but not including internal time charges.




          (f) HCA’s right of access and inspection pursuant to this Section 6.3 shall be
exercised in such a manner as not to cause unreasonable expense or interfere unreasonably with the
operation of the Business or the Acquired Entities.




     6.4 WARN Act. Purchaser will not take any action that results in the imposition of
liability on HCA, Seller Group or their Affiliates under the WARN Act due to a “plant closing” or
“mass layoff” or otherwise under the provisions of the WARN Act, or any similar state or local laws
relating to plant closings, with respect to the Acquired Entities. All quoted terms used in this
Section 6.4 and not defined herein shall have the meanings ascribed to such terms under the
WARN Act.



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     6.5 Employee Matters.



          (a) As of the Effective Time, Purchaser shall continue the employment of all of the
then-current employees of the Acquired Entities (including employees of the Business who currently
are employed by an HCA Affiliate other than an Acquired Subsidiary but who will be employed by an
Acquired Entity as of the Effective Time in connection with the Reorganization) and, with respect
thereto: (i) maintain the salaries and wages at the levels in effect immediately prior to the
Effective Time, (ii)
provide benefits which are substantially similar to the benefits provided to similarly
situated employees of Purchaser and its subsidiaries, (iii) recognize the existing levels of
service and seniority for benefit plan purposes (including but not limited to paid time off,
vacation, sick, extended illness and holiday time), and (iv) provide credit for purposes of
eligibility, vesting and rate of accrual under its benefit plans, programs or policies for service
with the Acquired Entities. With respect to any self-insured welfare benefit plans maintained by
Purchaser that cover employees of Acquired Entities, Purchaser shall cause such plans to provide
credit for any co-payments or deductibles paid by such employees and waive all pre-existing
condition exclusions and waiting periods that might otherwise apply to such employees, other than
limitations or waiting periods that have not been satisfied under any welfare plans maintained by
the Acquired Entities for their employees prior to the Effective Date. HCA shall be liable for the
retention bonus and severance packages with senior management of the Facilities described in
Schedule 6.5 (the “Retention Bonuses”). The Retention Bonuses represent all of the
retention bonuses and severance pay packages provided for senior management of the Facilities.
Nothing in this Agreement shall require the Acquired Entities or Purchaser to provide any severance
pay to recipients of the Retention Bonuses.




          (b) With respect to employees of the Acquired entities whose employment is terminated by
Purchaser within one year of the Effective Time, Purchaser shall provide severance benefits thereto
that are equivalent to or better than the severance benefits typically provided by Purchaser.
Purchaser shall provide, and retain full responsibility for, COBRA continuation coverage (other
than with respect to flexible spending accounts) to any employee or former employee of the Acquired
Entities who is an M&A Qualified Beneficiary (as defined in Treas. Reg. § 54.4980B-9) and eligible
to receive such coverage as of the Effective Time or who becomes eligible to receive such coverage
due to events that arise with respect to employees of the Acquired Entities after the Effective
Time.




          (c) Notwithstanding any provision herein, no term of this Agreement shall be deemed to create
any contract with any employee, or to give any employee the right to be retained in the employment
of Purchaser, an Acquired Entity, or any related employer, or to interfere with Purchaser’s or an
Acquired Entity’s right to terminate employment of any employee at any time. Nothing in this
Agreement shall diminish Purchaser’s rights to change or terminate its policies regarding salaries,
benefits and other employment matters at any time or from time to time. The representations,
warranties, covenants and agreements contained herein are for the sole benefit of the parties
hereto, and employees are not intended to be and shall not be construed as beneficiaries hereof.




          (d) HCA shall provide reasonable access and information to the Purchaser regarding the Company
Plans that are sponsored and maintained by the Acquired Entities. With respect to the Company
Plans that are sponsored by HCA or its Affiliates, and in which the Acquired Entities are merely
participating employers, HCA and/or its Affiliates will take all necessary and appropriate action
to terminate the participation of the Acquired Entities therein effective immediately prior to the
Closing; provided, however, that HCA will take appropriate actions so that the employees of the
Acquired Entities who are employed at the Closing will accrue benefits under the HCA Retirement
Plan and the HCA 401(k) Plan for the 2005 fiscal year of such plans, provided that such employees
are otherwise eligible for an accrual, and will fund any contributions required with respect to
such accruals. With respect to Company Plans that are sponsored by an Acquired Entity, HCA will
reasonably cooperate with Purchaser





39









 







in evaluating such Company Plans and assisting Purchaser in
determining the termination or continuation of all such Company Plans in connection with the
transactions contemplated by this Agreement, prior to the Closing. HCA shall cause all Company
Plans that are sponsored by an Acquired Entity to be terminated effective immediately prior to the
Closing, unless Purchaser notifies HCA to the contrary. HCA will take all reasonable steps
necessary in connection with the above, including providing required notices to participants and
appropriate governmental agencies and adopting all necessary resolutions and
Company Plan amendments. Notwithstanding the above, no provision of this Agreement shall
require Purchaser to assume any Company Plan or any portion thereof, or continue same after the
Closing.




     6.6 Compliance Program. Purchaser represents and agrees that, as of Closing, it has
or will implement and maintain an effective program to prevent and detect violations of legal
requirements applicable to the delivery of goods and services in connection with any health care
benefits and that such a program will comply with the provisions of the U.S. Sentencing Guidelines
relating to corporate compliance programs and will be mindful of any applicable guidance issued by
the U.S. Department of Health and Human Services. Purchaser agrees that it will maintain such
program for no less than five years following the Effective Time.



     6.7 Tax Matters.



          (a) Termination of Existing Tax Sharing Agreements. HCA shall cause all tax sharing
agreements or similar arrangements with respect to or involving the Acquired Entities to be
terminated effective as of the Effective Time and, after the Effective Time, the Acquired Entities
shall not be bound thereby or have any liability thereunder.




          (b) Payment of Taxes.




               (i) HCA shall prepare and file, or cause to be prepared and filed, all Returns of or which
include any of the Acquired Entities (including any amendments thereto) with respect to any taxable
period ending at or prior to the Effective Time (a “Pre-Closing Period”). Such Returns
shall be prepared in a manner consistent with past practices. HCA shall provide Purchaser with
copies of all Returns of only the Acquired Entities upon the request of Purchaser. Notwithstanding
anything to the contrary in this Agreement, HCA shall pay any and all Taxes imposed on or with
respect to any Acquired Entity for a Pre-Closing Period (including, without limitation, any Taxes
imposed on any Acquired Entity as a result of having been a member of the HCA Affiliated Group, and
any Taxes that are determined by income or earned surplus attributable to a Pre-Closing Period).
Purchaser shall prepare and file, or cause to be prepared and filed, all Returns of or which
include any of the Acquired Entities and shall pay all Taxes of any of the Acquired Entities for
all taxable periods other than a Pre-Closing Period, except to the extent provided in the preceding
sentence and in paragraph (ii) below.



               (ii) For purposes of the immediately preceding paragraph (i) and this paragraph (ii), if, for
Tax purposes, the taxable period of an Acquired Entity that includes the Effective Time does not
terminate at the Effective Time (a “Straddle Period”), the parties hereto will, to the
extent permitted by applicable law, elect with the relevant Governmental Authority to treat a
portion of any such Straddle Period as a short taxable period ending as of the Effective Time and
such short taxable period shall be treated as a Pre-Closing Period for purposes of this Agreement.
In any case where applicable law does not permit such an election to be made then, for purposes of
this Agreement, Taxes with respect to the Acquired Entities for the Straddle Period shall be
allocated to the Pre-Closing Period using an interim closing-of-the-books method that complies with
Treas. Reg. Section 1.1502-76(b)(2)(i) (assuming that such taxable period ended at the Effective
Time) and treating such period as a Pre-Closing Period for purposes of this Agreement, except that
exemptions, allowances or deductions that are calculated on an annual basis (such as the deduction
for depreciation) shall be apportioned on a per diem basis. In the case



40









 




of any Straddle Period
described in the preceding sentence, Purchaser shall provide HCA and its authorized representatives
with copies of the completed Return for such period and a statement certifying
the amount of Taxes shown on such Return that are chargeable to HCA (the “Tax
Statement”) at least 30 days prior to the due date for the filing of such Return (including any
extension thereof), and HCA and its authorized representatives shall have the right to review and
comment on at HCA’s expense each such Return and Tax Statement prior to the filing of such Return.
HCA and Purchaser agree to consult and resolve in good faith any issues arising as a result of the
review of such Return and Tax Statement by HCA or their authorized representatives and to mutually
consent to the filing of such Return. If the parties hereto are unable to resolve any dispute
within ten Business Days prior to the due date for filing of the Return in question (including any
extension thereof), the parties shall jointly request the Selected Accounting Firm to resolve any
issue in dispute as promptly as possible. If the Selected Accounting Firm is unable to make a
determination with respect to any disputed issue prior to the due date (including extensions) for
the filing of the Return in question, the Purchaser and the Acquired Entities, as the case may be,
may file such Return without the consent of HCA, subject, however, to the obligation thereafter to
file an amended Return reflecting the final decision of the Selected Accounting Firm (which
decision shall be rendered prior to the expiration of the period during which an amended Return may
validly be filed with respect to the applicable taxable period). Not later than five days before
the due date (including any extensions thereof) for payment of Taxes with respect to such Return,
HCA shall pay to Purchaser an amount equal to the Taxes shown on the Tax Statement as being
chargeable to HCA pursuant to this paragraph (ii). If HCA has disputed such amount, appropriate
adjustments shall be made to the amount paid by HCA in order to reflect the decision of the
Selected Accounting Firm in immediately available funds not later than five days after such
decision has been rendered. Any decision rendered by the Selected Accounting Firm in accordance
with this Section 6.7(b)(ii) shall be binding and conclusive, and the any expenses relating to the
engagement of the Selected Accounting Firm shall be shared equally by HCA and Purchaser.




          (c) Refunds and Tax Benefits. Purchaser shall pay to HCA, within 30 days of receipt,
any refund or credit (including any interest paid or credited with respect thereto) received by
Purchaser or any member of the Purchaser Affiliated Group of Taxes relating to any Pre-Closing
Period or portions of Straddle Periods at or before the Effective Time. Purchaser shall, if HCA so
requests, at HCA’s expense cause the relevant Acquired Entity (or other relevant member of the
Purchaser Affiliated Group) to file for any refund or credit to which HCA believes it is entitled
pursuant to this Section 6.7(c). Any Proceeding with respect to such a claim shall be
governed by the provisions of this Section 6.7, including the provisions of Section
6.7(e).




          (d) Cooperation.




               (i) HCA, on the one hand, and Purchaser and the Acquired Entities, on the other hand, agree to
furnish or cause to be furnished to each other or their respective representatives, upon request,
as promptly as practicable, such information and assistance (including access to books and records)
relating to the Acquired Entities as is reasonably necessary for the preparation of any Return,
claim for refund, audit or similar matter, or the prosecution or defense of any claim, suit or
proceeding relating to any proposed adjustment of Taxes.



               (ii) Except as otherwise provided in Section 6.7(b)(ii), if HCA and Purchaser disagree
as to the matters governed by this Section 6.7, HCA and Purchaser shall promptly consult
with each other in an effort to resolve such dispute. If any such disagreement cannot be resolved
within 15 days after either party asserts in writing that such dispute cannot be resolved, the
Selected Accounting Firm shall act as an arbitrator to resolve such disagreement. The Selected
Accounting Firm’s determination shall be binding and conclusive, and any expenses relating to the
engagement of such Selected Accounting firm shall be shared equally by HCA and Purchaser.



41









 





          (e) Post-Closing Audits and Other Proceedings. In the case of any audit, examination
or other proceeding (“Proceeding”) with respect to Taxes for which HCA is or may be liable
pursuant to this Agreement (other than a Proceeding relating to Taxes for a Straddle Period),
Purchaser shall promptly notify HCA in writing of any such Proceeding, and Purchaser shall timely
execute or cause to be executed powers of attorney or other documents necessary to enable HCA to
take all actions desired by HCA with respect to such Proceeding to the extent such Proceeding may
affect the amount of Taxes for which HCA is liable pursuant to this Agreement; provided that, in
acting on behalf of the Acquired Entities, HCA shall take no position that Purchaser determines
will result in any negative Tax consequence to Purchaser or the Acquired Entities after the
Effective Time. HCA shall have the sole right to control any such Proceedings, (including any
Proceedings to initiate claims for refunds of or credits with respect to any Taxes for which HCA is
liable pursuant to this Agreement and that HCA believes are available) including the right to
initiate any claim for refund or credit, file any amended Return or take any other action that it
deems appropriate with respect to such Taxes (or refunds or credits). All costs and expenses
incurred in connection with any such Proceeding shall be borne by HCA, and Purchaser and the
Acquired Entities shall be reimbursed by HCA for any and all reasonable direct costs and expenses
incurred by them in connection with such Proceeding. Any settlement of a Proceeding shall be made
subject to Purchaser’s prior written consent. In the event that Purchaser’s consent is withheld,
Purchaser will assume the control, costs and expenses of the Proceeding. If such Proceeding is
ultimately resolved by payment of an amount in excess of the amount in the original settlement
proposal (or receipt of a refund in an amount less than the amount in the original settlement
proposal), Purchaser will pay the amount of such excess (or shall pay HCA the amount of such refund
shortfall). If such Proceeding is ultimately resolved by payment of an amount less than the amount
of the original settlement proposal (or a refund or credit in an amount greater than the original
settlement proposal), HCA will reimburse Purchaser for its costs and expenses to the extent of such
difference. Notwithstanding the foregoing, (i) HCA shall control all Proceedings in connection
with any Tax claim relating to Taxes of any Acquired Entity for a Straddle Period and (ii)
Purchaser shall control any Tax claim that would reasonably be expected to have a material adverse
effect on the business, financial condition or results of operation of Purchaser or the Acquired
Entities for any taxable periods including or ending after the Closing Date, excluding a Straddle
Period addressed in 6.7(e)(i).




          (f) Timing Adjustments. In the event that a final determination (which shall include
the execution of a Form 870-AD or successor form) results in a timing difference (e.g., an
acceleration of income or delay of deductions) that would increase HCA’s liability for Taxes
pursuant to Article VI or results in a timing difference (e.g., an acceleration of
deductions or delay of income) that would increase Purchaser’s liability for Taxes pursuant to
Article VI, HCA or Purchaser, as the case may be, shall promptly make payments to Purchaser
or HCA as and when Purchaser or HCA, as the case may be, actually realizes any Tax benefits as a
result of such timing difference (or under such other method for determining the present value of
any such anticipated Tax benefits as agreed to by the parties). Such Tax benefit for federal,
state and local income tax purposes shall be computed for any year using Purchaser’s or HCA’s, as
the case may be, actual tax liability.




          (g) Parties Agree to Act in Good Faith. HCA and Purchaser agree to act in good faith
in accordance with Section 47-1-203 of the Tennessee Code Annotated in taking any actions pursuant
to this Section 6.7.




     6.8 Tax Elections and Allocations.



          (a) HCA will join with Purchaser in making an election under Section 338(h)(10) of the Code,
and any corresponding elections under state, local or foreign tax law (collectively, a
“Section 338 Election”), with respect to the purchase and sale of Shares pursuant
hereto. The parties understand and agree that the purchase of the Shares will be treated for
federal income tax purposes as if





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the Acquired Entities had each sold all of its assets, with the
result that the tax consequences of such a “deemed sale” of assets shall be required to be included
in the consolidated federal income tax return of HCA. HCA will pay any Tax attributable to the
making of the Section 338 Election excluding any state transfer or sales taxes arising therefrom,
the payment of which is addressed in Section 12.1 of this Agreement. To facilitate the
Section 338 Elections, Purchaser shall deliver to Seller, at least 15 days prior to the Closing
Date, drafts of Internal Revenue Service Form 8023 and any similar forms under applicable state,
local and foreign income Tax law (collectively, the “Forms”). HCA shall review such Forms and
provide any proposed revisions to Purchaser at least five days prior to the Closing. Purchaser and
HCA agree to negotiate in good faith such proposed revisions and to attempt to resolve any
differences between the Parties (it being understood, however, that such determination and/or
agreement by HCA and Purchaser is not a condition to the obligation of a Party to consummate the
sale and purchase under this Agreement). Purchaser shall duly and timely file the forms as
prescribed by Treasury Regulation Section 1.338(h)(10)-1 or the corresponding provisions of
applicable state, local or foreign income Tax law. As soon as practicable after the Closing Date
and at least 60 days prior to the due date and filing of Internal Revenue Service Form 8883 by
either party, Purchaser shall provide HCA with a draft of Form 8883. HCA shall review such Form
8883 and provide any proposed revisions to Purchaser at least 30 days prior to the due date of such
Form 8883 for either party. HCA and Purchaser agree to cooperate in good faith to (i) determine
and agree upon the amount of the “adjusted grossed-up basis” of the Shares within the meaning of
Treas. Reg. § 1.338-5 and (ii) determine and agree upon the proper allocations (the
“Allocations”) of the “adjusted grossed-up basis” of the Shares among the assets of the
Acquired Entities in accordance with Treas. Reg. § 1.338-6. In the event the Parties reach
agreement as to the information to be reflected on such Form 8883, the Form 8883 shall be revised
and timely filed as required by law. In the event the parties do not reach agreement on the
information to be reflected on such Form 8883, Purchaser and HCA shall submit such disagreement to
the Selected Accounting Firm whose decision as to the proper allocation shall be binding on both
Purchaser and HCA. The costs of such Selected Accounting Firm shall be shared equally by Purchaser
and HCA.




          (b) Purchaser and HCA each agree to take any and all actions at or prior to Closing as the
other shall reasonably request a reasonable time prior to Closing to help the other effectuate a
like-kind exchange of the Real Property pursuant to Section 1031 of the Code, and/or Revenue
Procedure 2000-37 (governing reverse like-kind exchanges), including, without limitation (i)
entering into a like-kind exchange trust agreement authorized by a “qualified intermediary” or a
qualified exchange accommodation arrangement authorized with a “qualified exchange titleholder”, if
necessary, (ii) paying the Purchase Price to the qualified intermediary to acquire the replacement
property in accordance with the instructions of the qualified intermediary or to the qualified
exchange titleholder in accordance with the instructions of the qualified exchange titleholder, as
applicable, and (iii) assigning this Agreement or a portion thereof to one or more Affiliates of
the Acquired Entities or entering into a separate agreement for the purchase of Real Property with
one or more Affiliates of the Acquired Entities in order to effectuate a like-kind exchange;
provided, however, that in no event shall Purchaser be required to take title to any real property
other than the Real Property; provided, further, neither HCA nor Purchaser shall be required to
incur any additional expenses or liability in order to effectuate the like-kind exchange, and the
like-kind exchange shall not delay the Closing. HCA and Purchaser each agree to pay the other an
amount equal to all additional third party costs and expenses incurred by the other as a result of
effectuating the transactions contemplated hereby in the manner contemplated by this Section
6.8(b) (including such costs incurred in connection with the negotiation of the like-kind
exchange trust agreement or the qualified exchange accommodation agreement contemplated hereby,
including, without limitation, the reasonable fees and expenses of the other’s agents,
representatives, accountants and counsel). Any such amounts shall be paid promptly upon receipt of
evidence of such costs and expenses. HCA and Purchaser each also agree to indemnify, defend and
hold Purchaser harmless from and against any and all claims and
other liabilities of any kind arising with regard to Section 6.8(b). Notwithstanding
anything to the contrary provided herein, neither Purchaser nor HCA makes any representations or
warranties as to the





43









 







tax treatment for the transaction contemplated in this Section 6.8(b)
or the ability of the transaction contemplated to qualify for like-kind exchange treatment pursuant
to Section 1031 of the Code. In no event shall either party be released from any liability under
this Agreement by reason of structuring the transaction as a like-kind exchange as contemplated by
this Section 6.8(b).




          (c) Code Section 1060 Allocation. To the extent the sale of any of the Acquired
Entities is treated as a sale of assets (“Purchased Assets”) to Purchaser for federal tax
purposes, the parties agree that Purchaser shall prepare a preliminary allocation of the applicable
portion of the Purchase Price (and all other capitalized costs) among the Purchased Assets in
accordance with Code Section 1060 and the Treasury Regulations thereunder (and any similar
provisions of state, local or foreign law, as appropriate) (“Tax Allocation”). Purchaser
shall deliver its preliminary Tax Allocation to the Seller within one hundred twenty (120) Business
Days after the Closing Date, and the Seller shall have thirty (30) Business Days after receiving
the preliminary Tax Allocation (“Seller’s Review Period”) to object to the preliminary Tax
Allocation. If the Seller timely raises any such objections, Purchaser and the Seller will attempt
to resolve such objections in good faith; provided, however, that if Purchaser and the Seller are
unable to resolve such issues within thirty (30) Business Days after the end of Seller’s Review
Period, then either Purchaser or the Seller may elect, by written notice to the other, to have the
objections resolved by the Selected Accounting Firm, whose decision shall be binding on the parties
in the absence of manifest error. If the Seller fails to object to the preliminary Tax Allocation
within the Seller’s Review Period, then such preliminary Tax Allocation shall be deemed acceptable
to the Seller, and such preliminary Tax Allocation shall be binding upon the parties, unless
Purchaser in good faith determines that adjustments are necessary and so notifies the Seller in
writing of such adjustment(s). If Purchaser notifies the Seller of any adjustment(s), then the
Seller shall have the right to object to the adjustment(s) by giving written notice of objection to
Purchaser within ten (10) Business Days after receipt of Purchaser’s notice of adjustment(s).
Purchaser and the Seller will attempt to resolve such objections in good faith within ten (10)
Business Days after Purchaser receives the Seller’s notice of objection; provided, however, that if
Purchaser and the Seller are unable to resolve such issues within ten (10) Business Days, then
either Purchaser or the Seller may elect, by written notice to the other, to have the objections
resolved by the Selected Accounting Firm, whose decision shall be binding on the parties in the
absence of manifest error. Thereafter, Purchaser, the Seller, and their respective Affiliates
shall report, act and file Returns (including, but not limited to Internal Revenue Service Form
8594) in all respects and for all purposes consistent with such finally determined Tax Allocation.
Neither Purchaser nor the Seller shall take any position (whether in audits, Returns, or otherwise)
that is inconsistent with such Tax Allocation, unless required to do so by applicable law. Prior
to filing IRS Form 8594 (asset acquisition statement under Section 1060) with respect to the
transactions described herein, the parties shall provide to each other a true and correct copy of
IRS Form 8594 which each intends to file with respect to the transactions described herein.




     6.9 Certain National and Regional Contracts. Certain Affiliates of HCA have entered
into contracts and/or leases with third parties to provide equipment, supplies and services on a
national or regional basis to HCA and its Affiliates, including certain of the Acquired Entities.
Certain of such contracts and/or leases are listed on Schedule 6.9 (such contracts and/or
leases, the “National Contracts”). At the Closing, at the option of HCA, such Affiliates
of HCA shall assign to Purchaser or the Acquired Entities, and Purchaser or the Acquired Entities
(as applicable) shall assume, the rights, benefits and obligations of such Affiliates in, to and
under all or a portion of the National Contracts to the extent they relate to the Facilities.



     6.10 Cost Reports. From and after the Effective Time, the parties shall comply with the terms and agreements
set forth in Exhibit K-1.



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     6.11 Non-Competition.



          (a) Except as permitted in this Section 6.11 during the period commencing at the
Effective Time and ending on the second anniversary of the Effective Time, HCA agrees that it shall
not, and shall cause each of its Controlled Subsidiaries not to, directly or indirectly, (i) engage
in the operation of any Competing Business located within the Territory, or (ii) acquire, lease,
construct, develop or own any Competing Business located within the Territory, or (iii) be a
controlling shareholder, controlling partner, controlling member or controlling equity holder of,
exercise management control over, or acquire or maintain a controlling interest in, any Competing
Business that is located within the Territory (items (i) through (iii) collectively,
“Restricted Activities”).




          (b) This Section 6.11 shall continue to apply if HCA is acquired by or merged with or
into any other Person that engages in Restricted Activities, but shall not apply to (i) any
Restricted Activities of such other Person existing as of the effective time of such merger or sale
(including the completion of (A) the acquisition, development or construction of a Competing
Business, or (B) the acquisition of an interest in a Person that is engaged in Restricted
Activities, that, in either case, is under way at the effective time of the merger or acquisition),
(ii) expansions and extensions of such existing exempt Restricted Activities, or (iii) insofar as
the Restricted Activities described in clauses (i) and (ii), above, are concerned, to such other
Person or its Affiliates that engage in such Restricted Activities.




          (c) Nothing herein contained shall be deemed to prevent or limit the right of HCA or any of
its Controlled Subsidiaries to purchase, acquire, merge or consolidate with, by any means
whatsoever (and, thereafter, to own or operate), any Person (or the assets of any Person) that
engages in Restricted Activities so long as the Person or assets that are purchased or acquired
have or include five or more general acute care hospitals, with at least 4 of such hospitals
located outside the Territory. Additionally, the covenants in Section 6.11(a) will not
apply to (i) any Persons or assets, operations or facilities that cease to be owned, directly or
indirectly, by HCA, including assets, operations or facilities that may be divested or spun-off by
HCA or its Affiliates, (ii) any transitional services (including IT and billing/collections
services) provided by or on behalf of HCA or its Affiliates to (A) any such Person or assets,
operations or facilities referred to in clause (i) above or (B) any Persons in which HCA has,
directly or indirectly, any non-controlling ownership interest.




          (d) HCA recognizes that the covenants in this Section 6.11, and the territorial, time
and other limitations with respect thereto, are reasonable and properly required for the adequate
protection of the acquisition of the Acquired Company Ownership Interests by Purchaser, and agrees
that such limitations are reasonable with respect to its activities, business and public purpose.
HCA agrees and acknowledges that the violation of the covenants or agreements in this Section
6.11 would cause irreparable injury to Purchaser and that the remedy at law for any violation
or threatened violation thereof would be inadequate and that, in addition to whatever other
remedies may be available at law or in equity, Purchaser shall be entitled to temporary and
permanent injunctive or other equitable relief without the necessity of proving actual damages or
posting bond. The parties hereto also waive any requirement of proving actual damages in
connection with the obtaining of any such injunctive or other equitable relief.




          (e) It is the intention of each party hereto that the provisions of this Section 6.11
shall be enforced to the fullest extent permissible under the laws and the public policies of the
state in which the applicable portion of the Territory is located, but that the unenforceability
(or the modification
to conform with such laws or public policies) of any provisions hereof shall not render
unenforceable or impair the remainder of this Agreement. Accordingly, if any term or provision of
this Section 6.11 shall be determined to be illegal, invalid or unenforceable, either in
whole or in part, this Agreement shall be deemed amended to delete or modify, as necessary, the
offending provisions and to alter the balance of




45









 







this Agreement in order to render the same valid
and enforceable to the fullest extent permissible as aforesaid.




     6.12 Closing Conditions. Purchaser will use its best efforts to cause the conditions
set forth in Article VIII hereof to be satisfied as soon as reasonably practicable, but in
all circumstances prior to Closing Date.



     6.13 Insurance Agreements. HCA shall, or shall cause an HCA Affiliate to, offer to
the Acquired Entities physician malpractice insurance coverage on the terms and conditions set
forth in Exhibit F.



ARTICLE VII

CONDITIONS TO OBLIGATIONS OF PURCHASER




     Except as may be waived in writing by Purchaser, the obligations of Purchaser to purchase
the Acquired Company Ownership Interests and to consummate the transactions contemplated hereby on
the Closing Date shall be subject to the satisfaction on or prior to the Closing Date of the
following conditions:



     7.1 Representations and Warranties.



          (a) All representations and warranties of HCA set forth in this Agreement (other than those
set forth in Sections 3.2(c), 3.2(d), 3.3(d) and 3.3(e)) shall be
true and correct as of the Closing Date in each case as if made on and as of the Closing Date
(except to the extent such representations and warranties specifically speak as of an earlier date,
in which case as of such date); provided, however, that this condition will be deemed to be
satisfied so long as the failure of such representations and warranties to be true and correct
(without regard to any qualifiers with respect to materiality contained in such representations and
warranties) as of the Closing Date would not reasonably be expected to have a Business Material
Adverse Effect.




          (b) All representations and warranties of HCA set forth in Sections 3.2(c),
3.2(d), 3.3(d) and 3.3(e) shall be true and correct in all respects as if
made on and as of the Closing Date.




          (c) If the effect of any failure or alleged failure of a representation or warranty of HCA to
be true and correct can be remedied by HCA through the payment of money or the giving of an
absolute first dollar indemnity to Purchaser and/or an Affiliate of Purchaser, and HCA pays such
money or gives such an indemnity, the related failure or alleged failure shall be deemed waived by
Purchaser.




          (d) For the avoidance of doubt, Purchaser agrees that (i) Purchaser shall not be excused from
consummating the transactions contemplated by this Agreement based on the failure or alleged
failure of any representation or warranty made by HCA to be true except to the extent provided in
clauses (a) and (b), above, (ii) Purchaser will not assert the failure or alleged failure of any
representation or warranty made by HCA to be true as a basis for not consummating the transactions
contemplated by
this Agreement unless (A) the failure of such representations and warranties (other than those
set forth in Sections 3.2(c), 3.2(d), 3.3(d) and 3.3(e)) to be true
and correct (without regard to any qualifiers with respect to materiality contained in such
representations and warranties) as of the Closing Date would reasonably be expected to have a
Business Material Adverse Effect, or (B) the representations set forth in Sections 3.2(c),
3.2(d), 3.3(d) and 3.3(e) are not true and correct in all respects, and
(iii) except for the conditionality provided by this Article VII, the sole remedy of
Purchaser for any failure of a representation and warranty made by HCA to be true and correct is to
be indemnified as and to the extent set forth in Article IX.





46









 








     7.2 Compliance with Agreement. On and as of the Closing Date, HCA shall have
performed and complied with each covenant and agreement required by this Agreement to be performed
and complied with by it on or before the Closing Date; provided that this condition will be deemed
to be satisfied unless both (a) Purchaser shall have given HCA written notice of such failure to
perform or comply and HCA shall not have cured such failure to perform or comply within 30 days
after receipt of such notice and (b) the respects in which such covenants and obligations have not
been performed would reasonably be expected to have had a Business Material Adverse Effect. For the
avoidance of doubt, Purchaser agrees that (i) Purchaser shall not be excused from consummating the
transactions contemplated by this Agreement based on HCA’s failure or alleged failure to have
performed and complied with each covenant and agreement required by this Agreement to be performed
by HCA on or before the Closing Date except as provided in clauses (a) and (b), above, (ii)
Purchaser will not assert the failure or alleged failure of HCA to have performed and complied with
each such covenant and requirement except as provided in clauses (a) and (b), above, and (iii)
except for the conditionality provided by this Article VII, the sole remedy of Purchaser
for any failure of HCA to perform or comply with any such covenant or requirement is to be
indemnified as and to the extent set forth in Article IX. In no event shall any dispute
over a reduction in the Purchase Price based on the failure or alleged failure of HCA to comply
with any such covenant or agreement delay or postpone the Closing.



     7.3 Closing Certificates. HCA shall have delivered to Purchaser a certificate, dated
as of the Closing Date and signed on behalf of HCA by a Vice President thereof, certifying the
fulfillment of the conditions specified in Sections 7.1 and 7.2.



     7.4 Secretary’s Certificates. At the Closing, Purchaser shall have received copies of
the following, in each case certified as of the Closing Date by a Secretary or an Assistant
Secretary of HCA:



          (a) resolutions of the respective boards of directors or governing boards of HCA and Seller
Group (and to the extent required by law or their Constituent Documents, shareholder or other
equity holders) authorizing the execution, delivery and performance of this Agreement and the other
agreements that HCA or Seller Group are required to execute and deliver pursuant to the terms of
this Agreement; and




          (b) the signature and incumbency of the respective officers of HCA and Seller Group authorized
to execute and deliver this Agreement and the other agreements and certificates that HCA or Seller
Group is required to deliver on or before the Closing Date pursuant to this Agreement.




     7.5 Opinion of Counsel. At the Closing, Purchaser shall have received the opinion, dated the Closing Date, of
Waller Lansden Dortch & Davis, PLLC, counsel for HCA, in a form substantially acceptable to the
parties. Such opinion may include qualifications and assumptions that are customary and
appropriate with respect to the substance of such opinion.



     7.6 Consents, Authorizations, Etc. Purchaser shall have obtained documentation or
other evidence reasonably satisfactory to Purchaser that:



          (a) Purchaser has (i) received all required Permits of Governmental Authorities that Purchaser
must as a matter of Law receive prior to Closing in order to consummate the transactions
contemplated herein; and (ii) received reasonable assurance from the applicable Governmental
Authorities that such Permits as are required to operate the Facilities as currently operated by
HCA and its Affiliates (other than Permits the failure of which to obtain would not reasonably be
expected to have a Hospital Group Material Adverse Effect) shall be issued promptly following the
Effective Time and be effective as of the Effective Time; and





47









 








          (b) All waiting periods under the HSR Act and any similar state Law shall have expired or been
terminated.




     7.7 No Action or Proceeding. On the Closing Date, (a) no valid judgment, order or
decree of any court or other Governmental Authority restraining, enjoining or otherwise preventing
the consummation of this Agreement or the transactions contemplated hereby shall be outstanding,
and (b) no action, suit, investigation or proceeding brought by any Governmental Authority shall be
pending before any court or other Governmental Authority or threatened in writing by any
Governmental Authority to restrain, enjoin or otherwise prevent the consummation of this Agreement
or any of the transactions contemplated hereby, which action, suit, investigation or proceeding, in
the reasonable opinion of Purchaser, may result in a decision, ruling or finding that has or would
reasonably be expected to have a material adverse effect on the validity or enforceability of this
Agreement, or on the ability of HCA to perform its obligations under this Agreement.



     7.8 Good Standing Certificates. At the Closing, HCA shall have delivered to Purchaser
good standing certificates issued with respect to each of the Acquired Entities issued by the
Secretary of State of the relevant entity’s state of organization and qualification. Each such
good standing certificate shall be dated as of a date that is not more than 60 days prior to the
Closing Date.



     7.9 Services Agreements. HCA shall have delivered to Purchaser executed originals of
the Services Agreements with terms and conditions consistent with Exhibit M, and an
executed original of the Computer and Data Processing Agreement, each in form and substance
satisfactory to Purchaser.



     7.10 Reorganization Complete. HCA and the Acquired Entities shall have completed the
Reorganization in all material respects.



     7.11 Title Work and Surveys; Defects and Cure; Title Policy.



          (a) Title Work. Within 30 days of the date of this Agreement, HCA shall cause to be
furnished to Purchaser the Title Work for those portions of the Real Property listed on Exhibit
O together with legible copies of all exceptions to title referenced therein. The Title Work
shall set forth the state of title as of each commitment’s effective date to the portions of the
Real Property listed on Exhibit O, together with all exceptions or conditions to such
title, including, without limitation, all easements, restrictions, rights-of-way, covenants,
reservations, and all other encumbrances of record affecting such Real Property which would appear
in an owner’s title policy or leasehold policy of title insurance, if issued.




          (b) Survey. Within 30 days of the date of this Agreement, HCA shall cause to be
furnished to Purchaser the Surveys for those portions of the Real Property listed on Exhibit
O, which Surveys shall be current as-built surveys of these portions of the Real Property
listed on Exhibit O (the “Surveys”). The Surveys shall meet the requirements of an
ALTA/ACSM survey as adopted in 1999 by the American Land Title Association and the American
Congress on Surveying and Mapping, including Table A optional items 1, 2, 3, 4, 6, 7(a), 8, 9, 10,
11, 13, 14, 15 and 16. Each Survey shall contain the surveyor’s certification to Purchaser, HCA,
the Acquired Entities and the Title Company that (i) the Survey conforms to all applicable minimum
guidelines for ALTA/ACSM land title surveys of comparable property as adopted in 1999 by the
American Land Title Association and the American Congress on Surveying and Mapping, including Table
A optional items 1, 2, 3, 4, 6, 7(a), 8, 9, 10, 11, 13, 14, 15 and 16. The Survey shall contain a
certification that except as shown thereon, the applicable portion of the Real Property is not
located within the 100 year flood plain or other flood hazard area.





48









 








          (c) Defects and Cure. The Title Work and the Surveys are collectively referred to as
“Title Evidence”. Purchaser shall notify HCA in writing within twenty (20) days after its
receipt of the last of each component of the Title Evidence for each Facility of any liens, claims,
encroachments, exceptions or defects (other than Permitted Encumbrances) disclosed in the Title
Evidence to which Purchaser objects (collectively, “Defects”). HCA, at its sole cost and
expense, shall cure any such Defects on or before Closing (“cure” shall include an
endorsement to an owner’s or a leasehold policy of title insurance, as applicable, reasonably
acceptable to Purchaser, either eliminating the Defect, insuring over the Defect or insuring
against the effect of the Defect or an agreement by HCA that is reasonably acceptable to Purchaser
to indemnify Purchaser with respect to the Defect) or HCA may elect to not cure the objections and
shall give written notice to Purchaser within thirty (30) days of its receipt of Purchaser’s notice
of Defects of its decision. Within 30 days of Purchaser’s receipt of notice from HCA of uncured
Defects, Purchaser may waive such uncured Defects and close or, subject to the provisions of
Section 2.6, may terminate this Agreement as if it were a termination pursuant to
Section 10.1(c). If HCA fails to timely give such notice, HCA shall be deemed to have
elected not to cure the Defects, whereupon Purchaser may waive such Defects and close, or may
terminate this Agreement with respect to the Facility affected by the Defect. Upon termination of
this Agreement under the terms of this Section 7.11, no party to this Agreement shall have
any further obligations with respect to the Facility affected by the Defect.




          (d) At the Closing, HCA will cause to be furnished to Purchaser a pro forma of a current ALTA
Form Owner’s Title Policy or Leasehold Policy, as applicable, (the “Title Policy”) for
those portions of the Real Property listed on Exhibit O by the title insurance company
providing the Title Work (the “Title Company”). The Title Policies shall be issued as of
the Closing Date in an amount equal to the portion of the Purchase Price being allocated to such
portion of the Real Property and shall insure to the applicable Acquired Entity good and marketable
fee simple or leasehold title, as the case may be, to
such Real Property, subject only to the (i) Permitted Encumbrances and (ii) taxes for the
current and subsequent years “not yet due and payable.” The Title Policy shall have all standard
and general exceptions deleted so as to afford full “extended form coverage” as permitted by
applicable State title insurance regulations and shall contain such endorsements as Purchaser shall
reasonably require in connection with its review of the Title Work and the Surveys, specifically
including without limitation, a so-called non-imputation endorsement. HCA and its Affiliates shall
execute such certificates and affidavits as may be reasonably necessary in connection with the
issuance of the Title Policies as described in this Section 7.11(d). HCA shall pay all
premiums, costs and expenses of the Title Policies.




     7.12 Books. HCA shall have delivered to Purchaser the original corporate minute books
of each Acquired Entity including true and complete copies of the Constituent Documents of each
Acquired Entity and other records included in the Business.



     7.13 Miscellaneous. HCA shall have executed and delivered all necessary documentation
and taken all action necessary to cause each relevant domain name registrar to transfer or register
in the name of Purchaser all internet domain names owned, used or registered by or for Seller
Group, Acquired Entities or their Affiliates and used primarily in connection with the Business.



     7.14 Resignations. HCA will cause to deliver to Purchaser the original resignations
set forth in Section 5.13 above.



     7.15 Post-Sigining Breaches of Representations and Warranties.



          (a) As of the Closing, there shall not be one or more material breaches of representations or
warranties of HCA set forth in this Agreement that are not qualified as to “materiality”, “Hospital
Group Material Adverse Effect” or similar qualifiers for which (i) Purchaser has given HCA




49









 







written
notice, (ii) for which the aggregate amount of Damages resulting from such breaches exceeds
$1,750,000, and (iii) for which HCA has not agreed to indemnify Purchaser for Damages resulting
from such breach from the first dollar of Damages without regard to the limitations set forth in
Section 9.4(a)(i)); provided, however, that in determining the aggregate amount of the
Damages resulting from such breaches, no Damages that arise out of or relate to any such breach
will be included in such calculation to the extent HCA otherwise has full economic responsibility
pursuant to this Agreement.




          (b) As of the Closing, there shall not be any breaches of representations or warranties of HCA
set forth in this Agreement that are qualified as to “materiality”, “Hospital Group Material
Adverse Effect” or similar qualifiers for which (i) Purchaser has given HCA written notice, and
(ii) for which HCA either (A) has not agreed to indemnify Purchaser for Damages resulting from such
breach from the first dollar of Damages without regard to the limitations set forth in Section
9.4(a)(i)), or (B) does not otherwise have full economic responsibility pursuant to this
Agreement. The parties agree that with respect to non-material damage, destruction or loss with
respect to the assets of any Hospital Group known to have occurred prior to the Closing,
Purchaser’s sole remedy with respect to matters governed by Section 3.8(a) will be
insurance proceeds available to it under HCA’s pre-Effective Time insurance policies; provided,
however, that to the extent that such insurance proceeds are limited by a deductible under such
policies, Purchaser shall bear the initial $100,000, and HCA shall bear all remaining portions
of such deductibles. HCA shall cause any such proceeds pursuant to such insurance policies in
respect of such damage, destruction or loss to be paid to Purchaser.




     7.16 Environmental Inspections. For a period of 90 days following the execution of
this Agreement (the “Environmental Inspection Period”), Purchaser and Purchaser’s agents,
representatives and contractors, shall have the right to enter upon the Real Property for the
purpose of conducting, or causing to be conducted, such tests, assessments, studies, reports,
evaluations and investigations as Purchaser may determine in its sole discretion, including without
limitation Phase I or Phase II environmental reports in order to evaluate and determine the
environmental condition of the Real Property (“Purchaser’s Environmental Inspections”).
During the Environmental Inspection Period, HCA and its Affiliates will make available to Purchaser
and its agents, representatives and contractors conducting Purchaser’s Environmental Inspections
copies of any prior environmental investigations, reports, studies, tests, assessments and other
documentation prepared by or for HCA and its Affiliates and in their possession, custody or control
(“Seller’s Environmental Information”). On or before the expiration of the Environmental
Inspection Period, Purchaser shall give written notice to HCA if Purchaser has identified any
breach of Section 3.19 (“Environmental Conditions”). Purchaser shall provide HCA
with a copy of Purchaser’s Environmental Inspections. If Purchaser gives notice of any
Environmental Conditions (“Purchaser’s Environmental Notice”) to HCA, and if such
Environmental Conditions constitute a breach of Section 3.19, then HCA (i) shall at its
sole cost and expense, cure or remedy such Environmental Conditions to Purchaser’s reasonable
satisfaction on or before Closing (which cure or remedy may include an agreement by HCA that is
reasonably acceptable to Purchaser to indemnify Purchaser from any Damages resulting from such
Environmental Conditions from the first dollar of Damages without regard to the limitations set
forth in Section 9.4(a)(i)) or (ii) may elect not to cure or remedy such Environmental
Conditions, and shall give written notice to Purchaser within twenty (20) days after Purchaser’s
Environmental Notice of its election (“Seller’s Election Notice”). Within twenty (20) days
of Purchaser’s receipt of Seller’s Election Notice that HCA has elected not to cure or remedy any
Environmental Conditions, Purchaser may elect to waive such Environmental Conditions and close or,
subject to Section 2.6, may elect to terminate this Agreement as if it were a termination
pursuant to Section 10.1(c). If HCA fails to timely give Seller’s Election Notice, HCA
shall be deemed to have elected not to cure or remedy the Environmental Conditions, whereupon
Purchaser may elect as provided in the immediately preceding sentence.



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     7.17 Waiver of Conditions. Purchaser may waive any conditions in writing of this
Article VII to the extent permitted by applicable law. Except as otherwise provided herein
or agreed to by the parties prior to the Closing, the consequences of any knowing written waiver
shall be (a) the elimination of the waived condition as a valid basis for Purchaser to refuse to
close the transactions contemplated by this Agreement, and (b) the release of HCA from any claim by
Purchaser for resulting injuries and Damages with respect to that waived condition.



ARTICLE VIII

CONDITIONS TO OBLIGATIONS OF HCA




     Except as may be waived in writing by HCA, the obligations of HCA to consummate the
transactions contemplated hereby on the Closing Date shall be subject to the satisfaction on or
prior to the Closing Date of the following conditions:



     8.1 Representations and Warranties. All representations and warranties of Purchaser set forth in this Agreement shall be true
and correct as of the Closing Date in each case as if made on and as of the Closing Date (except to
the extent such representations and warranties specifically speak as of an earlier date, in which
case as of such date); provided, however, that this condition will be deemed to be satisfied so
long as the failure of such representations and warranties to be true and correct (without regard
to any qualifiers with respect to materiality contained in such representations and warranties) as
of the Closing Date would not reasonably be expected to have a material adverse effect on
Purchaser’s ability to perform its obligations under and consummate the transactions contemplated
by this Agreement.



     8.2 Compliance with Agreement. On and as of the Closing Date, Purchaser shall have
performed and complied with each covenant and agreement required by this Agreement to be performed
and complied with by it on or before the Closing Date; provided that this condition will be deemed
to be satisfied unless both (a) HCA shall have given Purchaser written notice of such failure to
perform or comply and Purchaser shall not have cured such failure to perform or comply within 30
days after receipt of such notice and (b) the respects in which such covenants and obligations have
not been performed would reasonably be expected to have a material adverse effect on Purchaser’s
ability to perform its obligations under and consummate the transactions contemplated by this
Agreement. For the avoidance of doubt, HCA agrees that (i) HCA shall not be excused from
consummating the transactions contemplated by this Agreement based on Purchaser’s failure or
alleged failure to have performed and complied with each covenant and agreement required by this
Agreement to be performed by Purchaser on or before the Closing Date except as provided in clauses
(a) and (b), above, (ii) HCA will not assert the failure or alleged failure of Purchaser to have
performed and complied with each such covenant and requirement except as provided in clauses (a)
and (b), above, and (iii) except for the conditionality provided by this Article VIII, the
sole remedy of HCA for any failure of Purchaser to perform or comply with any such covenant or
requirement is to be indemnified as and to the extent set forth in Article IX.



     8.3 Closing Certificates. Purchaser shall have delivered to HCA a certificate, dated
as of the Closing Date and signed on behalf of Purchaser by the President or a Vice President
thereof, certifying the fulfillment of the conditions specified in Sections 8.1 and
8.2.



     8.4 Secretary’s Certificate. At the Closing, HCA shall have received copies of the
following, in each case certified as of the Closing Date by a Secretary or an Assistant Secretary
of Purchaser:



          (a) resolutions of the board of directors of Purchaser (and to the extent required by law or
their Constituent Documents, shareholder or other equity holders) authorizing the execution,
delivery and performance of this Agreement and the other agreements that Purchaser is required to
execute and deliver pursuant to the terms of this Agreement; and





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          (b) the signature and incumbency of the officers of Purchaser authorized to execute and
deliver this Agreement and the other agreements and certificates that Purchaser is required to
deliver on or before the Closing Date pursuant to this Agreement.




     8.5 Opinion of Counsel. At the Closing, HCA shall have received the opinion, dated the Closing Date, of Harwell
Howard Hyne Gabbert & Manner, P.C., counsel for Purchaser, in a form substantially acceptable to
the parties. Such opinion may include qualifications and assumptions that are customary and
appropriate with respect to the substance of such opinion.



     8.6 Consent, Authorizations, Etc.. HCA shall have obtained documentation or other
evidence reasonably satisfactory to HCA that:



          (a) HCA has received all required Permits of Governmental Authorities that HCA must, as a
matter of Law, receive prior to the Closing in order to consummate the transactions herein
contemplated; and




          (b) all waiting periods under the HSR Act and any similar state Law shall have expired or been
terminated.




     8.7 No Action or Proceeding. On the Closing Date, (a) no valid judgment, order or
decree of any court or other Governmental Authority restraining, enjoining or otherwise preventing
the consummation of this Agreement or the transactions contemplated hereby shall be outstanding,
and (b) no action, suit, investigation or proceeding brought by any Governmental Authority shall be
pending before any court or other Governmental Authority or threatened in writing by any
Governmental Authority to restrain, enjoin or otherwise prevent the consummation of this Agreement
or any of the transactions contemplated hereby, which action, suit, investigation or proceeding, in
the reasonable opinion of HCA, may result in a decision, ruling or finding that has or would
reasonably be expected to have a material adverse effect on the validity or enforceability of this
Agreement or on the ability of Purchaser to perform its obligations under this Agreement.



     8.8 Good Standing Certificate. At the Closing, Purchaser shall have delivered to HCA
a good standing certificate issued with respect to Purchaser by the Secretary of State of
Purchaser’s state of incorporation. Such good standing certificate shall be dated as of a date
that is not more than 60 days prior to the Closing Date.



     8.9 Constituent Documents. Purchaser shall have delivered to HCA true and complete
copies of Purchaser’s Constituent Documents.



     8.10 Service Agreements. Purchaser shall have delivered to HCA executed originals of
the Services Agreements with terms and conditions consistent with Exhibit M, and an executed
original of the Computer and Data Processing Agreement, each in form and substance satisfactory to
HCA.



     8.11 Reorganization Complete. HCA and the Acquired Entities shall have completed the
Reorganization in all material respects.



     8.12 Waiver of Conditions. HCA may waive any conditions in writing of this
Article VIII to the extent permitted by applicable law. Except as otherwise provided
herein or agreed to by the parties prior to the Closing, the consequences of any knowing written
waiver shall be (a) the elimination of the waived condition as a valid basis for HCA to refuse to
close the transactions contemplated by this Agreement, and (b) the release of Purchaser from any
claim by HCA for resulting injuries and Damages with respect to that waived condition.



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ARTICLE IX

INDEMNIFICATION




     9.1 Survival. Except as otherwise provided in this Article IX, (a) each
representation and warranty contained in Articles III and IV shall survive the
Closing for sixteen months after the Closing Date, provided that the representations and warranties
contained in (i) Section 3.13 (ERISA), 3.14 (Government Program Participation),
3.15 (Taxes) and 3.19 (Environmental Conditions) shall survive the Closing for a
period of six years and (ii) Sections 3.2(c), 3.2(d), 3.3(d) and
3.3(e) shall survive until the expiration of the applicable statute of limitations, and (b)
covenants in this Agreement shall survive the Closing. The period from the date hereof until the
last date on which a representation, warranty, covenant or other obligation survives pursuant to
this Section 9.1 shall be known as the “Survival Period.” No party, affiliate of
any party, nor any shareholder, director, officer, employee, or affiliate of any of the foregoing
shall incur any liability whatsoever as a result of any inaccuracy in or breach of any applicable
representation or warranty, except for indemnification obligations pursuant to this Article
IX with respect to those inaccuracies, breaches, or failures as to which written notice of
which has been received prior to the expiration of the applicable Survival Period.



     9.2 Indemnification by HCA. Subject to the provisions of this Article IX, HCA
shall indemnify and hold harmless Purchaser, any Affiliate of Purchaser, and the respective
officers, directors, shareholders, employees, agents and representatives of Purchaser and its
Affiliates (each, a “Purchaser Indemnitee”) from and after the Effective Time, from and
against any Damages actually incurred by such Purchaser Indemnitee as a result of:



          (a) the Excluded Assets, Excluded Liabilities and Excluded Contracts;




          (b) any inaccuracy in any of the representations and warranties made herein by HCA;




          (c) any breach of any of the covenants or agreements made herein by HCA;




          (d) any matter related to the acts or omissions of the Persons listed in Schedule
9.2(d) regardless of the nature or current status of such mater or claim, including any matter
arising from or related to any claim now or hereafter filed by such Persons;




          (e) any Encumbrance of any landlord, carrier, warehouseman, mechanic or materialman and any
like Encumbrance existing at the Closing and arising in the ordinary course of business for sums
that are not delinquent or which are being contested in good faith through appropriate proceedings.



Notwithstanding the foregoing, the sole recourse of a Purchaser Indemnitee for any and all Damages
relating to or arising from a breach of any of the covenants or agreements contained in
Sections 3.15 or 6.7, to the extent that they relate to Taxes, shall be controlled
by the provisions of Section 9.5.




     9.3 Indemnification by Purchaser. Subject to the provisions of this Article IX,
Purchaser shall indemnify and hold harmless HCA, Seller Group, any Affiliate of HCA or Seller
Group, and the respective officers, directors, shareholders, employees, agents and representatives
of HCA, Seller Group and their respective Affiliates (each a “Seller Indemnitee”) from and
after the Effective Time from and against any Damages actually incurred by such Seller Indemnitee
as a result of:



          (a) the Contributed Assets; Assumed Contracts or Assumed Liabilities;





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          (b) any inaccuracy in any of the representations and warranties made herein by Purchaser;




          (c) any breach of any of the covenants or agreements made herein by Purchaser;




          (d) any breach of any of the covenants or agreements made by Purchaser in the Confidentiality
Agreement, including any use of the Evaluation Material by Purchaser or its Representatives or
Other Recipients contrary to the terms of the Confidentiality Agreement;




          (e) any Claims, actions, suits, or other proceedings relating to the operations of the
Acquired Entities before or after the Effective Time; provided that nothing herein shall relieve
HCA of its indemnification obligations pursuant to Section 9.2; and




          (f) any Claims, actions, suits or proceedings arising out of any pre- or post-Closing
obligation or action on the part of the Acquired Entities under any Contract which is not an
Excluded Contract or Excluded Liability; provided that nothing herein shall relieve HCA of its
indemnification obligations pursuant to Section 9.2.



Notwithstanding the foregoing, the sole recourse of a Seller Indemnitee for any and all Damages
relating to or arising from a breach of any of the covenants or agreements contained in
Sections 3.15 or 6.7, to the extent that they relate to Taxes, shall be controlled
by the provisions of Section 9.5.




     9.4 Limitations on Claims.



          (a) Notwithstanding anything in this Article IX to the contrary, the rights of the
parties to be indemnified and held harmless under this Agreement shall be limited as follows:




               (i) No claims for indemnity by a Purchaser Indemnitee for any inaccuracy in a representation
or warranty (other than for breach of Section 3.2, 3.3, 3.4(a),
3.4(c), 3.13(b) or 3.24, which shall each be indemnified from the first
dollar of Damages) made in this Agreement by HCA shall be made unless and until the aggregate
dollar amount of all such Claims exceeds $3,500,000, in which case HCA shall be obligated to
indemnify, defend and hold harmless the Purchaser Indemnitee for all Damages above and beyond such
amount (excluding the initial $3,500,000 of the Base Purchase Price) provided that materiality
qualifications (and the like) will not be taken into account in determining the
magnitude of the damages occasioned by a breach for purposes of calculating the amount of
Damages subject to the deductible set forth in this Section 9.4(a)(i);



               (ii) The maximum aggregate liability of HCA for Claims pursuant to Sections 9.2(b) and
(c) shall be limited to the Purchase Price; and



               (iii) The maximum aggregate liability of Purchaser for Claims pursuant to Section
9.3(b) and (c) shall be limited to the Purchase Price.



          (b) The liability of a party with respect to any claim for indemnity by an Indemnitee pursuant
to this Article IX shall be offset dollar for dollar by (i) any insurance proceeds received
by such Indemnitee after the Effective Time in respect of the Damages involved, (ii) any positive
Tax effect actually recognized by the Indemnitee in respect of the Damages involved, and (iii) any
other recovery made by such Indemnitee from any third party on account of the Damages involved.






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     9.5 Tax Indemnification.



          (a) HCA shall indemnify, defend and hold Purchaser and the Acquired Entities harmless from and
against any and all Damages for Taxes imposed on or with respect to any Acquired Entity for a
Pre-Closing Period (including, without limitation, any Taxes imposed on any Acquired Entity as a
result of having been a member of the HCA Affiliated Group under Treas. Reg. Section 1.1502-6 or
any similar provision of state, local or foreign law, and also including any Tax liability for a
Pre-Closing Period with respect to any Acquired Entity as a transferee or successor, by contract,
law or equity). Notwithstanding the foregoing, HCA shall not indemnify, defend or hold harmless
Purchaser and the Acquired Entities from and against any and all Damages for Taxes attributable to
any action taken (which would otherwise give rise to an Tax indemnity payment by HCA or its
Affiliates) after the Effective Time by Purchaser or the Acquired Entities (other than any such
action expressly required or otherwise expressly contemplated by this Agreement or with the written
consent of HCA) (a “Purchaser Tax Act”).




          (b) Purchaser shall indemnify, defend and hold HCA and the HCA Affiliated Group harmless from
and against any and all Damages for (i) Taxes of any of the Acquired Entities, except to the extent
HCA is otherwise required to indemnify Purchaser for such Taxes pursuant to Section 9.5(a),
and (ii) Taxes attributable to a Purchaser Tax Act.




          (c) The amount of any Taxes for which indemnification is provided under this Section
9.5 shall not be (A) increased to take account of any net Tax cost incurred by the Indemnitee
arising from the receipt of indemnity payments hereunder or (B) reduced to take account of any net
Tax benefit realized by the Indemnitee arising from the incurrence or payment of any such Taxes.
Any indemnity payment under this Agreement shall be treated as an adjustment to the Purchase Price
for United States federal Tax purposes, unless otherwise required by Law.




          (d) Any indemnity payment required to be made pursuant to this Section 9.5 shall be
paid within 30 days after the Indemnitee makes written demand upon the indemnifying party, but in
no case earlier than five Business Days prior to the date on which the relevant Taxes are required
to be paid to the relevant Governmental Authority (including estimated Tax payments).




          (e) In no event shall the indemnities provided for in this Section 9.5 be subject to
the provisions of Section 9.4 of this Agreement.




     9.6 Claims Procedures.



          (a) If a party seeks indemnification for Damages hereunder, the party seeking indemnification
(the “Indemnitee”) shall promptly notify the party from whom indemnification is sought (the
“Indemnifying Party”) in writing of the existence and nature of such Damages (a
“Claim”), and shall include in the Claim a reasonably detailed description of all related
claims, demands, actions or proceedings, if any, out of which the Damages arise; provided, however,
that so long as a Claim is delivered within the applicable Survival Period, failure or delay by the
Indemnitee to deliver a Claim in compliance with this provision shall only reduce the obligation of
the Indemnifying Party to the extent that such failure impairs the Indemnifying Party’s ability to
defend the claim or mitigate Damages, in which case the Indemnifying Party shall have no obligation
to indemnify the Indemnitee to the extent of Damages, caused by such failure.




          (b) In the event of a Claim related to a claim by a third party, the Indemnifying Party may
elect to retain counsel of its choice to represent the Indemnitee in connection with such Claim and
shall pay the fees, charges and disbursements of such counsel. The Indemnitee may participate, at
its own expense and through legal counsel of its choice, provided that (i) the Indemnifying Party
may elect to





55









 







control the defense of the Indemnitee in connection with such Claim and (ii) the
Indemnitee and their counsel shall cooperate with the Indemnifying Party and its counsel in
connection with such Claim. The Indemnifying Party shall not settle any such Proceeding without
the relevant Indemnitees’ prior written consent (which shall not be unreasonably withheld), unless
the terms of such settlement provide for no relief other than the payment of monetary damages.
Notwithstanding the foregoing, if the Indemnifying Party elects not to retain counsel and assume
control of such defense or if both the Indemnifying Party and any Indemnitee are parties to or
subjects of such proceeding and conflicts of interests exist between the Indemnifying Party and
such Indemnitee, then the Indemnitee shall retain counsel reasonably acceptable to the Indemnifying
Party in connection with such proceeding and assume control of the defense in connection therewith,
and the fees, charges and disbursements of no more than one such counsel per jurisdiction selected
by the Indemnitee shall be reimbursed by the Indemnifying Party.




          (c) If the Indemnifying Party shall, within a reasonable time after said notice, fail to
defend, the Indemnitee shall have the right, but not the obligation, and without waiving any rights
against the Indemnifying Party, to undertake the defense of, and with the consent of the
Indemnifying Party (such consent not to be withheld unreasonably), to compromise or settle the
Claim on behalf, for the account, and at the risk and expense, of the Indemnifying Party and shall
be entitled to collect the amount of any settlement or judgment or decree and all costs and
expenses (including, without limitation, reasonable attorney’s fees) in connection therewith from
the Indemnifying Party. Under no circumstances will the Indemnifying Party have any liability in
connection with any settlement of any Proceeding that is entered into without its prior written
consent (which shall not be unreasonably withheld). Except as provided in this Section
9.6(c), the Indemnitee shall not compromise or settle any Claim.




          (d) From and after the delivery of a Claim, at the reasonable request of the Indemnifying
Party, each Indemnitee shall grant the Indemnifying Party and its counsel, experts and
representatives full access, during normal business hours, to the books, records, personnel and
properties of the Indemnitee to the extent reasonably related to the Claim at no cost to the
Indemnifying Party.




          (e) If the Indemnitee or its Affiliates subsequently recover all or part of a third-party
claim from any other Person legally obligated to pay the claim, the Indemnitee shall repay to the
Indemnifying Party the amounts recovered up to an amount not exceeding the payment made by the
Indemnifying Party to the Indemnitee by way of indemnity.




     9.7 Exclusive Remedy. From and after the Closing, the exclusive remedy of each party
in connection with this Agreement and the transactions contemplated hereby shall be as provided in
this Article IX other than as provided in Section 6.11.



ARTICLE X




TERMINATION




     10.1 Termination Events. This Agreement may be terminated at any time prior to
Closing upon prior written notice by the party electing to terminate this Agreement to the other
party:



          (a) by mutual agreement of HCA and Purchaser (expressed in writing);




          (b) by either HCA or Purchaser if any permanent injunction, Court Order or other order, decree
or ruling of any court or other Governmental Authority of competent jurisdiction permanently
restraining, enjoining or otherwise preventing the consummation of the transactions contemplated
hereby shall have been issued and become final and non-appealable; provided,
however, that any such injunction, Court Order or other order, decree or ruling that
affects only a portion of the Acquired Entities (or the transactions contemplated hereby with
respect to only a portion of the Acquired





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Entities) will not enable HCA or Purchaser to terminate
this Agreement with respect to the other Acquired Entities if and to the extent a Closing on a
portion of the Acquired Entities would still be possible under Section 2.6;




          (c) by either HCA or Purchaser if the Closing shall not have occurred by the Optional
Termination Date; provided, however, that the right to terminate this Agreement under this
Section 10.1(c) shall not be available to any party whose breach of its representations and
warranties in this Agreement or whose failure to perform any of its covenants and agreements under
this Agreement shall have been a contributing cause of, or resulted in, the failure of the Closing
to occur on or before the Optional Termination Date; and provided further that the Optional
Termination Date shall be extended through March 31, 2006 for any party who has complied with or
performed, or who is in a position to comply with or perform, all conditions to the other party’s
obligations other than receipt of the certificates of need required for the consummation of the
transaction and if the required certificates of need have not been received by March 31, 2006 the
parties will work together in good faith to determine whether to further extend the Optional
Termination Date to a later time.




          (d) by HCA upon a breach in any material respect of any covenant or agreement on the part of
the Purchaser set forth in this Agreement, or if any representation or warranty of the Purchaser
shall have been breached or shall have become untrue, in any such case that the conditions set
forth in Sections 8.1 and 8.2 would be incapable of being satisfied by the Optional
Termination Date (or any later termination date specified in this Agreement or as may be otherwise
extended by mutual agreement of the parties).




          (e) by Purchaser upon a breach in any material respect of any covenant or agreement on the
part of any Seller set forth in this Agreement, or if any representation or warranty of any Seller
shall have been breached or shall have become untrue in any such case such that the conditions set
forth in Sections 7.1 and 7.2 would be incapable of being satisfied by the Optional
Termination Date (or any later termination date specified in this Agreement or as may be otherwise
extended by mutual agreement of the parties).




     10.2 Effect of Termination. In the event of termination of this Agreement pursuant to
Section 10.1 or Section 12.22 all obligations of the parties hereto shall
terminate, except the obligations of the parties pursuant to Sections 6.1, 10.2,
11.1, 12.1, 12.2, 12.3, 12.4, 12.6, 12.7,
12.8, 12.9, 12.13, 12.15 and 12.16.



ARTICLE XI

NOTICES




     11.1 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered in person or received by telegraphic or
other electronic means (including facsimile, telecopy and telex), when delivered by reputable
overnight courier, or if mailed, five days after being deposited in the United States mail,
certified or registered mail, first-class postage prepaid, return receipt requested, to the parties
at the following addresses or facsimile numbers:



     If to HCA, to:


HCA Inc.

One Park Plaza

Nashville, Tennessee 37203

Attention: General Counsel

Fax: (615) 344-1531






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     and


HCA Inc.

One Park Plaza

Nashville, Tennessee 37203

Attention: Senior Vice President, Development

Fax: (615) 344-2824




     With a copy to:


Waller Lansden Dortch & Davis, PLLC

511 Union Street, Suite 2700

Nashville, Tennessee 37219-1760

Attention: G. Scott Rayson

Fax: (615) 244-6804




     If to Purchaser, to:


LifePoint Hospitals, Inc.

103 Powell Court, Suite 200

Brentwood, TN 37027

Attention: Executive Vice President

Fax: (615) 372-8572




     With a copy to:


Harwell Howard Hyne Gabbert & Manner, P.C.

315 Deaderick Street, Suite 1800

Nashville, Tennessee 37238

Attention: Ernest E. Hyne II

Fax: (615) 251-1057



Any party from time to time may change its address or facsimile number for the purpose of receipt
of notices to that party by giving a similar notice specifying a new address or facsimile number to
the other notice parties listed above in accordance with the provisions of this Section
11.1.




ARTICLE XII

MISCELLANEOUS




     12.1 Fees and Expenses. Except as otherwise provided in this Agreement, HCA
shall pay its own expenses (including the fees and expenses of Merrill Lynch & Co. in connection
with this Agreement and also including those expenses of the Acquired Entities in connection with
this Agreement and the transactions contemplated hereby incurred prior to the Effective Time) and
Purchaser shall pay its own expenses (including those of the Acquired Entities in connection with
this Agreement and the transactions contemplated hereby incurred after the Effective Time) in
connection with this Agreement and the transactions contemplated hereby. HCA and Purchaser each
shall pay one half all recording fees, transfer fees, transfer taxes, sales taxes, if any, and
documentary or stamp taxes, if any, relating to the sale and the transactions provided for herein.
Except as set forth in the following sentence, each party shall pay its own fees and expenses,
including for purposes of this Section, attorney fees, with respect to the preparation of
pre-merger report forms under the HSR Act. Purchaser shall pay the HSR filing fees of all parties
with respect to the filing of notifications under the HSR Act. Further, and notwithstanding the



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foregoing, Purchaser will bear all fees and expenses of all parties, resulting from or relating to
any investigation or challenge of the transactions contemplated hereby initiated by the United
States Federal Trade Commission, the United States Department of Justice or the Attorney General of
any state on, prior to or after the Closing under antitrust or similar Laws, including costs and
expenses resulting from or relating to any “second request” issued in connection with the parties’
HSR Act filings made in connection with the transactions contemplated hereby. Purchaser shall also
pay all fees and expenses in connection with the filing of any applicable certificates of need and
the related proceedings.




     12.2 Entire Agreement. Except for documents and agreements executed pursuant hereto,
and except for the provisions of the Confidentiality Agreement (which Confidentiality Agreement
shall survive the parties’ execution and delivery of this Agreement and the other documents and
agreements contemplated hereby until the Closing shall have occurred, except to the extent
otherwise provided in Section 6.1), this Agreement supersedes all prior oral discussions and
written agreements between the parties with respect to the subject matter of this Agreement
(including any term sheet or similar agreement or document relating to the transactions
contemplated hereby). Except for the Confidentiality Agreement, this Agreement, including the
exhibits and schedules hereto and other documents delivered in connection herewith, contains the
sole and entire agreement between the parties hereto with respect to the subject matter hereof.



     12.3 Waiver. Any term or condition of this Agreement may be waived at any time by the party which is
entitled to the benefit thereof. Any such waiver must be in writing and must be duly executed by
such party. A waiver on one occasion shall not be deemed to be a waiver of the same or any other
breach, provision or requirement on any other occasion.



     12.4 Amendment. This Agreement may be modified or amended only by a written
instrument duly executed by each of the parties hereto.



     12.5 Counterparts; Facsimile Signatures; Reproductions. This Agreement may be
executed simultaneously in any number of counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument. Facsimile signatures on this
Agreement shall be deemed to be original signatures for all purposes. This Agreement and all
documents relating hereto, including (i) consents, waivers and modifications which may hereafter be
executed, (ii) the documents delivered at the Closing, and (iii) financial statements, certificates
and other information previously or hereafter furnished to HCA or to Purchaser, may be reproduced
by HCA and by Purchaser by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process and, unless otherwise required by Law, HCA and Purchaser may
destroy any original documents so reproduced. HCA and Purchaser agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any judicial, arbitral or
administrative proceeding (whether or not the original is in existence and whether or not such
reproduction was made by HCA or Purchaser in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in
evidence.



     12.6 No Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of HCA, Purchaser and their respective successors or assigns, and
it is not the intention of the parties to confer third party beneficiary rights upon any other
Person.



     12.7 GOVERNING LAW, CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE APPLICABLE TO A CONTRACT EXECUTED AND
PERFORMED IN SUCH STATE. The parties hereto agree that no provisions of this Agreement or any
related document shall be construed for or against or interpreted to the advantage or disadvantage
of any party hereto by any court or other



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Governmental Authority by reason of any party’s having or
being deemed to have structured or drafted such provision, each party having participated equally
in the structuring and drafting hereof.




     12.8 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns, including successors by merger
or otherwise.



     12.9 No Assignment. Neither this Agreement nor any right hereunder or part hereof may
be assigned by any party hereto without the prior written consent of the other parties hereto;
provided, however, that HCA, on the
one hand, and Purchaser, on the other hand, may assign some or all of their respective rights
and obligations under this Agreement to other Persons who (a) are wholly-owned (directly or
indirectly) by HCA or Purchaser, respectively, and (b) agree to be bound by the terms and
conditions of this Agreement. Notwithstanding the assignment of this Agreement or any rights or
obligations hereunder, the assignor shall be jointly and severally liable with its assignee for its
obligations hereunder.



     12.10 Headings, Gender, Etc. The headings used in this Agreement have been inserted
for convenience and do not constitute provisions to be construed or interpreted in connection with
this Agreement. Unless the context of this Agreement otherwise requires, (a) words of any gender
will be deemed to include each other gender, (b) words using the singular or plural number also
will include the plural or singular number, respectively, (c) the terms “hereof”, “herein”,
“hereby” and derivative or similar words will refer to this entire Agreement, (d) the terms
“Article,” “Section,” “Schedule” and “Exhibit” will refer to the specified Article or Section of
this Agreement or the specified Schedule or Exhibit to this Agreement, and (e) the terms “material
contract,” “material permit,” “material assets,” “material increase,” “material taxes,” “material
default,” “substantially all” and phrases of similar import will be deemed to be measured with
respect to the Hospital Group to which it relates against their effect on the financial condition
and operations of such Hospital Group.



     12.11 Public Announcement. On or before the Closing, the parties hereto will each
consult with one another prior to making or issuing public statements or announcements with respect
to this Agreement or the transactions contemplated hereby and will use good faith efforts to agree
on the text of a joint public statement or announcement and/or will use good faith efforts to
obtain the other parties’ approval of the text of any public statement or announcement to be made
solely on behalf of a party; provided that the foregoing shall not preclude any party from making
such disclosure as may be required by applicable Law or the rules of any securities exchange or
market on which securities of such party are listed or quoted.



     12.12 Access to Information. HCA and Purchaser agree that, from time to time after
the Closing, upon the reasonable request of another party hereto, they will cooperate and will
cause their respective Affiliates to cooperate with each other to effect the orderly transition of
the business, operations and affairs of the Acquired Entities. Without limiting the generality of
the foregoing, (a) HCA will give and will cause its Affiliates to give representatives of the
Acquired Entities reasonable access to all Books and Records of HCA reasonably requested by
Purchaser in the preparation of any post-Closing financial statements, reports or Returns of the
Acquired Entities with the reasonable cost thereof to be borne by Purchaser; and (b) Purchaser will
give and will cause the Acquired Entities to give representatives of HCA reasonable access to all
pre-Closing Books and Records of the Acquired Entities reasonably requested by HCA in the
preparation of any post-Closing financial statements, reports or Returns of HCA with the reasonable
cost thereof to be borne by HCA. The rights of access granted in this Agreement shall be exercised
in such a manner as not to cause unreasonable expense or interfere unreasonably with the operation
of the business of the Person granting access.



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     12.13 Severability; Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, (a) such provisions will be
fully severable; (b) this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof; (c)
the remaining provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its severance herefrom; and
(d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar in terms and effect
to such illegal, invalid or unenforceable provision as may be possible.



     12.14 Cooperation. Upon request, each of the parties hereto shall cooperate with the
other in good faith, at the requesting party’s expense, in furnishing information, testimony and
other assistance in connection with any actions, proceedings, arrangements, or disputes involving
any of the parties hereto (other than in a dispute among such parties or entities) and based upon
contracts, arrangements or acts of the Acquired Entities which were in effect or occurred prior to
the Effective Time and which relate to the business of the Acquired Entities. Purchaser shall
cause the Acquired Entities to provide any information or documents reasonably requested by HCA in
connection with Tax or other disputes, settlements, investigations, proceeding or other matters in
respect of any period ending at or prior to the Effective Time. The party requesting documents or
information pursuant to this Section shall pay all fees and expenses paid to unaffiliated third
parties by the party providing such documents or information in connection with providing such
information or document. In addition, following the Closing, the parties hereto shall cooperate
fully with each other and make available to the other, as reasonably requested, and to any taxing
authority, all information, records, documents relating to Tax liabilities or potential Tax
liabilities and tax bases of the Acquired Entities, and shall preserve all such information,
records and documents at least until the expiration of any applicable statute of limitations or
extension thereof. At or prior to Closing, Purchaser shall provide HCA any reasonable certificate
or other document from any governmental authority or any other person that may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed with respect to the transactions
contemplated hereby.



     12.15 Venue; Waiver of Jury Trial. To the fullest extent permitted by applicable law,
each party hereto (a) agrees that any claim, action or proceeding by such party seeking any relief
whatsoever arising out of, or in connection with, this Agreement or the transactions contemplated
hereby shall be brought only in any Tennessee State court located in Davidson County and not in any
other State or Federal court in the United States of America or any court in any other country,
(ii) agrees to submit to the exclusive jurisdiction of such courts located in Davidson County for
purposes of all legal proceedings arising out of, or in connection with, this Agreement or the
transactions contemplated hereby, (iii) waives and agrees not to assert any objection that it may
now or hereafter have to the laying of the venue of any such proceeding brought in such a court or
any claim that any such proceeding brought in such a court has been brought in an inconvenient
forum, and (iv) agrees that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by applicable Law. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY
LITIGATION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.



     12.16 Damages. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER
PARTY NOR ANY AFFILIATE THEREOF SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR
PUNITIVE DAMAGES.



     12.17 No Inferences. Inasmuch as this Agreement is the result of negotiations between
sophisticated parties of equal bargaining power represented by counsel, no inference in favor of,
or



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against, either party shall be drawn from the fact that any portion of this Agreement has been
drafted by or on behalf of such party.




     12.18 Tax and Medicare Advice and Reliance. Except as expressly provided in this
Agreement, none of the parties (nor any of the parties’ respective counsel, accountants or other
representatives) has made or is making any representations to any other party (or to any other
party’s counsel, accountants or other representatives) concerning the consequences of the
transactions contemplated hereby under applicable tax laws or under the laws governing the Medicare
program. Each party has relied solely upon the tax and Medicare advice of its own employees or of
representatives engaged by such party and not on any such advice provided by any other party
hereto.



     12.19 Post-Closing Operations. Purchaser acknowledges that it is an experienced and
knowledgeable owner and operator of facilities and assets similar to the Acquired Entities and the
Facilities and will rely on its own expertise in operating the Facilities from and after the
Closing. Purchaser covenants for the benefit of HCA to operate the Facilities in material
compliance with all applicable Laws, including Laws relating to the regulation of the Facilities
and operation of the Business and all Environmental Laws, from and after the Closing.



     12.20 Capital Expenditures. This Agreement shall not be deemed to be an acquisition
or obligation of a capital expenditure or of funds within the meaning of the certificate of need
statute of any state, until the appropriate Governmental Authority shall have granted a certificate
of need or the appropriate approval or ruled that no certificate of need or other approval is
required.



     12.21 Reasonable Access. In each instance where a party is granted access pursuant to
this Agreement, such access shall be reasonable and shall be granted during normal business hours
and shall be coordinated through persons as may be designated in writing by the granting party for
such purpose. The right of access and inspection shall be made in such a manner as not to
interfere unreasonably with the operation of the granting party. Notwithstanding the foregoing,
each party understands that (a) with respect to documents and information deemed by the granting
party in good faith to be market sensitive or competitive in nature (other than with respect to an
obligation to indemnify), (i) the party granting access will identify such documents and
information, (ii) if requested by the party seeking access, the granting party will provide such
documents and information to the other party’s outside attorneys and accountants (who will be bound
by confidentiality agreements) for their review, and (ii) any report by such attorneys and
accountants to the accessing party with respect to such documents and information will be in
writing and subject to prior review and reasonable approval by the granting party to confirm that
any market sensitive or competitive information is not made available to the requesting party, (b)
litigation and other materials (including internal/external legal audit letters or reviews, patient
records and similar patient information, PRO information, National Data Bank reports, peer and
quality review information and other physician-specific confidential information) that are deemed
privileged or confidential and materials which may not be disclosed without violating
confidentiality agreements with third parties will not be made available
except to the extent permitted by law, and (c) no party shall be obligated to generate or
produce information in any prescribed format not customarily produced by such party.



     12.22 Schedules, Exhibits, Etc.



          (a) The parties agree that the Schedules and Exhibits listed in Schedule 12.22 will be
the only Schedules and Exhibits to this Agreement. Schedules and Exhibits designated as “final and
approved” in Schedule 12.22 (the “Final Schedules”) have been approved by both
parties. Notwithstanding anything to the contrary contained in this Agreement, the Exhibits and
Schedules designated in Schedule 12.22 as “open schedules” (the “Open Schedules”)
either (i) have been delivered on or before the date of execution of this Agreement and remain
subject to review by Purchaser in





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accordance with clause (b) below, or (ii) to the extent specified
below (but only to the extent specified below), must be delivered by HCA or Purchaser and will be
subject to review by Purchaser or HCA, as applicable, in accordance with clauses (b) and (c)
below.




          (b) HCA shall deliver Schedules 3.21(i) and 3.21(ii) within five business
days. With respect to the Open Schedules (other than Schedule 5.14) Purchaser shall have
the right to make reasonable inquiries with respect to information contained in the Open Schedules,
and deliver to HCA any reasonable objection to such Open Schedules, within 20 days after delivery.
If Purchaser does not raise a reasonable objection to any such Open Schedules within such period,
such Open Schedules shall become additional Final Schedules. The parties shall use their best
efforts to resolve such objections raised in respect of the Open Schedules. If, within the time
periods specified above the parties have not resolved all such objections, the chief executive
officers of HCA and Purchaser shall meet in order to resolve any outstanding issues. If, within
three days of the meeting of the chief executive officers the parties have not resolved the
remaining issues, either Purchaser or HCA shall have the right to terminate this Agreement until
the parties have agreed upon such Open Schedules.




          (c) Purchaser shall deliver Schedule 5.14 within five business days. With respect to
the Open Schedules (other than Schedules 3.21(i) and 3.21(ii)) HCA shall have the
right to make reasonable inquiries with respect to information contained such Open Schedules, and
deliver to Purchaser any reasonable objection to such Open Schedules, within 20 days after
delivery. If HCA does not raise a reasonable objection to any such Open Schedules within such
period, such Open Schedules shall become additional Final Schedules. The parties shall use their
best efforts to resolve such objections raised in respect of such Open Schedules. If, within the
time periods specified above the parties have not resolved all such objections, the chief executive
officers of HCA and Purchaser shall meet in order to resolve any outstanding issues. If, within
three days of the meeting of the chief executive officers the parties have not resolved the
remaining issues, either Purchaser or HCA shall have the right to terminate this Agreement until
the parties have agreed upon such Open Schedules.




          (d) The parties agree that there shall be no changes to the Schedules (other than
Schedules 3.21(i), 3.21(ii) and 5.14) other than in response to objections
raised pursuant to this Section 12.22 and the resolution thereof in accordance with this
Section 12.22. The schedules and exhibits as finally agreed pursuant to this Section
12.22 shall become the final schedules and exhibits applicable to this Agreement.




     12.23 Further Assurance Clause.



          (a) On and after the Closing Date, HCA, the Acquired Entities and Purchaser will take all
appropriate action and execute all documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the provisions hereof, including, without
limitation, putting Purchaser in possession and operation control of the Business and the
Facilities.




          (b) The parties acknowledge and agree that it is their intent that HCA and its Affiliates
transfer to the Acquired Entities all Real Property held by HCA and its Affiliates that is used or
held for use in the operation of the Business other than the Excluded Assets. To the extent any
Real Property (or building, improvements and fixtures on or forming a part of the Real Property or
any appurtenances or rights pertaining thereto) identified on any Exhibit or Schedule (or which
should have been identified on such Exhibit or Schedule) is (1) misidentified, incorrectly
described, or incorrectly identified as being owned or leased by a particular entity, or (2) any
such Real Property which should have been included on any Exhibit or Schedule is inadvertently not
included on such Exhibit or Schedule and such errors are discovered subsequent to execution of this
Agreement, the parties agree that the applicable Exhibit or Schedule shall be amended by mutual
written agreement prior to Closing to correct





63









 







such errors. In the event that any such errors are
discovered subsequent to the Closing, to the extent necessary to effect the intent of this
Agreement, the parties agree that such Exhibit or Schedule shall be amended by a written
post-Closing addendum to this Agreement to correct such errors and HCA and its Affiliates shall
execute and deliver or cause to be executed and delivered, deeds, assignments, instruments of
correction, or such other instruments or documents of transfer or conveyance, and to take or cause
to be taken, such other steps as may be necessary, to correctly vest or convey such real property
in or to the applicable Acquired Entity in accordance with the intent of this Agreement. The
obligations pursuant to this paragraph shall survive the Closing.




[The following page is the signature page.]




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     IN WITNESS WHEREOF, the parties have caused this Stock Purchase Agreement to be executed as of
the date first above written.



	 	 	 	 	 	 	 
	 	 	HCA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Gregg Gerken	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Gregg Gerken	 	 
	 

	 	Title:	 	Vice President	 	 






	 	 	 	 	 	 	 
	 	 	LIFEPOINT HOSPITALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William F. Carpenter III	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	William F. Carpenter III	 	 
	 

	 	Title:	 	Executive Vice President	 	 







65