Exhibit 99.1
BANC OF AMERICA SECURITIES
LLC
BANK OF AMERICA,
N.A.
9 West 57th Street
New York, New York
10019
January 16, 2007
Health Management Associates,
Inc.
5811 Pelican Boulevard
Suite 500
Naples, FL 34108
Project Trojan
Commitment Letter
$3,250.0 million Senior Secured
Credit Facilities
Ladies and Gentlemen:
You have advised Bank of America,
N.A. (“ Bank of America ”) and Banc of
America Securities LLC (“ BAS ”) that you
(the “ Borrower ”) intend to enter into a
recapitalization transaction (the “
Recapitalization ”) consisting of the
declaration and payment of a special one time dividend to be paid
to holders of the Borrower’s common stock in an aggregate
amount not to exceed $2.5 billion.
You have also advised us that you
intend to finance the Recapitalization, the costs and expenses
related to the Transaction (as hereinafter defined) and the ongoing
working capital and other general corporate purposes of the
Borrower after consummation of the Recapitalization from the
following sources (and that no financing other than the financing
described herein will be required in connection with the
Transaction): up to $3,250.0 million in senior secured credit
facilities of the Borrower (collectively, the “ Credit
Facilities ”), comprised of (i) term loan
facilities aggregating up to $2,750.0 million and (ii) a
revolving credit facility of up to $500.0 million. The
Recapitalization, the entering into and funding of the Credit
Facilities and all related transactions are hereinafter
collectively referred to as the “ Transaction
.”
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1.
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Commitments.
In connection with the foregoing,
(a) Bank of America is pleased to advise you of its commitment
to provide the full principal amount of the Credit Facilities and
to act as the sole administrative agent (in such capacity, the
“ Administrative Agent ”) for the Credit
Facilities, all upon and subject to the terms and conditions set
forth in this letter and in the summary of terms attached as Annex
I and Annex II hereto (collectively, the “ Summary of
Terms ”), and together with this letter agreement,
the “ Commitment Letter ”) and
(b) BAS is pleased to advise you of its willingness, as the
sole lead arranger and joint bookrunning manager (in such
capacities, the “ Lead Arranger ”) for
the Credit Facilities, to form a syndicate of financial
institutions and institutional lenders (including Bank of America)
(collectively, the “ Lenders ”) in
consultation with you for the Credit Facilities, including Bank of
America. All capitalized terms used and not otherwise defined
herein shall have the same meanings as specified therefor in
the
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Summary of Terms. If you accept
this Commitment Letter as provided below, the date of the initial
funding under the Credit Facilities is referred to herein as the
“ Closing Date .”
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2.
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Syndication. The Lead Arranger intends to commence
syndication of the Credit Facilities promptly after your acceptance
of the terms of this Commitment Letter and the Fee Letter, and the
commitment of Bank of America hereunder shall be reduced
dollar-for-dollar as and when corresponding commitments are
received. You agree to actively assist the Lead Arranger in
achieving a syndication of the Credit Facilities that is
satisfactory to the Lead Arranger and the Lead Arranger agrees to
consult with you in connection therewith. Such assistance shall
include (a) your providing the Lead Arranger and the Lenders
upon request with all information reasonably deemed necessary by
the Lead Arranger to complete such syndication, including, but not
limited to, information and evaluations prepared by you, or your
advisors on your behalf, relating to the Transaction, (b) your
assistance in the preparation of an Information Memorandum to be
used in connection with the syndication of the Credit Facilities,
(c) your using your commercially reasonable efforts to ensure
that the syndication efforts of the Lead Arranger benefit
materially from the existing lending relationships of the Companies
and (d) your otherwise assisting the Lead Arranger in its
syndication efforts, including by making the officers and advisors
of the Companies available from time to time to attend and make
presentations regarding the business and prospects of the
Companies, as appropriate, at one or more meetings of prospective
Lenders.
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You hereby agree to use commercially
reasonable efforts to (i) cause the Information Memorandum to
be used in connection with the syndication of the Credit Facilities
to be completed no less than 28 consecutive days prior to the
initial funding of the Credit Facilities (exclusive of the period
from and including December 25, 2006 through and including
January 4, 2007), (ii) cause a meeting of prospective
Lenders to be held no less than 21 consecutive days prior to the
initial funding of the Credit Facilities (exclusive of the period
from and including December 25, 2006 through and including
January 4, 2007) and (iii) obtain a debt rating of the
Credit Facilities from each of Moody’s Investors Service Inc.
(“ Moody’s ”) and
Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc. (“ S&P ”) no less
than 21 consecutive days prior to the initial funding of the Credit
Facilities (exclusive of the period from and including
December 25, 2006 through and including January 4,
2007).
It is understood and agreed that the
Lead Arranger will manage and control all aspects of the
syndication of each Credit Facility in consultation with you,
including decisions as to the selection of prospective Lenders and
any titles offered to proposed Lenders, when commitments will be
accepted and the final allocations of the commitments among the
Lenders. It is understood that we will not syndicate the Facilities
to any financial institutions or institutional lenders that you
have identified to us in writing prior to the date hereof. You
shall be entitled to designate additional banks and lending
institutions to whom Bank of America shall assign not more than 50%
of its aggregate commitment hereunder as either syndication agent
or documentation agent for the Credit Facilities. In addition, you
shall be entitled to designate one additional bank or lending
institution as joint bookrunning manager. In connection with any
assignment of Bank of America’s commitment hereunder in
accordance with the immediately preceding sentence, (i) Bank
of America’s commitment shall be reduced on a
dollar-for-dollar basis and (ii) any bank to whom Bank of
America’s commitment is assigned shall receive a pro rata
allocation of the Underwriting Fee (as defined in the Fee Letter).
You agree that Bank of America and/or BAS, as applicable, will have
“ left ” placement in any and all marketing
materials or other documentation used in connection with the Credit
Facilities and will hold the leading role and responsibilities
conventionally understood to be associated with such name
placement. It is understood that no Lender participating in the
Credit Facilities will receive compensation from you in order to
obtain its commitment,
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except on the terms contained herein
and in the Summary of Terms. It is also understood and agreed that
the distribution of the fees among the Lenders will be determined
by the Lead Arranger after consultation with you.
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3.
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Information
Requirements. You hereby
represent, warrant and covenant that (a) all information,
other than Projections (as defined below), that has been or is
hereafter made available to the Lead Arranger or any of the Lenders
by you or any of your representatives (or on your or their behalf)
in connection with any aspect of the Transaction (the “
Information ”) is and will be complete and
correct in all material respects and does not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein not
misleading and (b) all financial projections concerning the
Borrower that have been or are hereafter made available to the Lead
Arranger or any of the Lenders the Borrower or its representatives
(or on their behalf) (the “ Projections
”) have been or will be prepared in good faith based upon
reasonable assumptions. You agree to furnish us with such
Information and Projections as we may reasonably request and to
supplement the Information and the Projections from time to time
until the Closing Date so that the representation, warranty and
covenant in the immediately preceding sentence is correct on the
Closing Date. In issuing this commitment and in arranging and
syndicating the Credit Facilities, Bank of America and BAS are and
will be using and relying on the Information and the Projections
without independent verification thereof. The Information and
Projections provided to the Lead Arranger prior to the date hereof
are hereinafter referred to as the “ Pre-Commitment
Information .”
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You hereby acknowledge that
(a) BAS and/or Bank of America will make available Information
and Projections (collectively, “ Borrower
Materials ”) to the proposed syndicate of Lenders by
posting the Borrower Materials on IntraLinks or another similar
electronic system (the “ Platform ”) and
(b) certain of the proposed Lenders may be
“public-side” Lenders ( i.e., Lenders that do
not wish to receive material non-public information with respect to
the Borrower or its securities) (each, a “ Public
Lender ”). You hereby agree that, so long as you are
the issuer of any outstanding debt or equity securities that are
registered or issued pursuant to a private offering or are actively
contemplating issuing any such securities, (w) you will use
commercially reasonable efforts to identify that portion of the
Borrower Materials that may be distributed to the Public Lenders,
which shall include a reasonably detailed term sheet among such
Borrower Materials, and acknowledge that all Borrower Materials
that are to be made available to Public Lenders shall be clearly
and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower
Materials as “PUBLIC,” you shall be deemed to have
authorized BAS, Bank of America and the proposed Lenders to treat
such Borrower Materials as not containing any material non-public
information with respect to the Borrower or its securities for
purposes of United States federal and state securities laws, it
being understood that certain of such Borrower Materials may be
subject to the confidentiality requirements of the definitive
credit documentation; (y) all Borrower Materials marked
“PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Investor;”
and (z) BAS and Bank of America shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not
designated “Public Investor.” Notwithstanding the
foregoing, you shall be under no obligation to mark any Borrower
Materials “PUBLIC.”
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4.
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Fees and
Indemnities. You agree to
pay the fees set forth in the Fee Letter dated as of the date
hereof (the “ Fee Letter ”) among the
parties hereto, if, as and when required thereby. You also agree to
reimburse Bank of America and BAS from time to time on demand for
all reasonable out-of-pocket fees and expenses (including, but not
limited to, the reasonable fees, disbursements and other charges of
Cahill Gordon & Reindel LLP, as counsel to the Lead
Arranger and the
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Administrative Agent, and of any
special and local counsel to the Lenders retained by the Lead
Arranger, and due diligence expenses) incurred in connection with
the Credit Facilities, the syndication thereof, the preparation of
the definitive documentation therefor and the other transactions
contemplated hereby.
You also agree to indemnify and hold
harmless Bank of America, BAS, each other Lender and each of their
affiliates and their officers, directors, employees, agents,
advisors and other representatives (each an “
Indemnified Party ”) from and against (and will
reimburse each Indemnified Party as the same are incurred for) any
and all claims, damages, losses, liabilities and expenses
(including, without limitation, the reasonable fees, disbursements
and other charges of counsel) that may be incurred by or asserted
or awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith)
(a) any aspect of the Transaction or any similar transaction
and any of the other transactions contemplated thereby or
(b) the Credit Facilities and any other financings, or any use
made or proposed to be made with the proceeds thereof, except to
the extent such claim, damage, loss, liability or expense
(i) is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence or willful misconduct or
(ii) arising from a material breach of the obligations of such
indemnified person under this Commitment Letter. In the case of an
investigation, litigation or proceeding to which the indemnity in
this paragraph applies, such indemnity shall be effective whether
or not such investigation, litigation or proceeding is brought by
you, your equity holders or creditors or an Indemnified Party,
whether or not an Indemnified Party is otherwise a party thereto
and whether or not any aspect of the Transaction is consummated.
You also agree that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to
you or your subsidiaries or affiliates or to your or their
respective equity holders or creditors arising out of, related to
or in connection with any aspect of the Transaction, except to the
extent of direct (as opposed to special, indirect, consequential or
punitive) damages determined in a final non-appealable judgment by
a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence or willful misconduct.
It is further agreed that Bank of America shall only have liability
to you (as opposed to any other person), and that Bank of America
shall be liable solely in respect of its own commitment to the
Credit Facilities on a several, and not joint, basis with any other
Lender and that such liability shall only arise to the extent
damages have been caused by breach of Bank of America’s
obligations hereunder to negotiate in good faith definitive
documentation for the applicable Facility on the terms set forth
herein, as determined in a final, nonappealable judgment by a court
of competent jurisdiction. Notwithstanding any other provision of
this Commitment Letter, no Indemnified Party shall be liable for
any damages arising from the use by others of information or other
materials obtained through electronic telecommunications or other
information transmission systems.
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5.
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Conditions
to Financing. The
commitment of Bank of America in respect of the Credit Facilities
and the undertaking of BAS to provide the services described herein
are subject to the satisfaction of each of the conditions set forth
in Annex II hereto and each of the following conditions precedent
in a manner acceptable to the Lead Arranger: (a) you shall
have accepted the separate fee letter addressed to you dated the
date hereof from Bank of America and BAS (the “ Fee
Letter ”) as provided therein for the Credit
Facilities and you shall have paid, all applicable fees and
expenses (including the reasonable fees and disbursements of
counsel) that are due thereunder and (b) prior to and during
the syndication of the Credit Facilities, there shall be no
offering, placement or arrangement of any debt securities or bank
financing by or on behalf of the Borrower or any of its
affiliates.
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6.
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Confidentiality and Other
Obligations. This
Commitment Letter and the Fee Letter and the contents hereof and
thereof are confidential and, except for the disclosure hereof or
thereof on a confidential basis to your accountants, attorneys and
other professional advisors retained in connection with the
Transaction, may not be disclosed in whole or in part to any person
or entity without our prior written consent; provided ,
however , it is understood and agreed that you may disclose
this Commitment Letter (including the Summary of Terms) but not the
Fee Letter (a) after your acceptance of this Commitment Letter
and the Fee Letter, in filings with the Securities and Exchange
Commission and other applicable regulatory authorities and stock
exchanges and (b) with prompt written notice to the Lead
Arranger of any legally required disclosure, as otherwise required
by law.
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You acknowledge that Bank of America
and BAS or their affiliates may be providing financing or other
services to parties whose interests may conflict with yours.
However, be assured that, consistent with their longstanding policy
to hold in confidence the affairs of their customers, Bank of
America and BAS will not furnish confidential information obtained
from you to any of their other customers and will treat
confidential information relating to the Companies and their
respective affiliates with the same degree of care as they treat
their own confidential information. By the same token, Bank of
America and BAS will not make available to you confidential
information that they have obtained or may obtain from any other
customer. In connection with the services and transactions
contemplated hereby, you agree that Bank of America and BAS are
permitted to access, use and share with any of their bank or
non-bank affiliates, agents, advisors (legal or otherwise) or
representatives, any information concerning the Companies or any of
their respective affiliates that is or may come into the possession
of Bank of America, BAS or any of such affiliates.
In connection with all aspects of
each transaction contemplated by this letter, you acknowledge and
agree, and acknowledge your affiliates’ understanding, that:
(i) the Credit Facilities and any related arranging or other
services described in this letter is an arm’s-length
commercial transaction between you and your affiliates, on the one
hand, and Bank of America and BAS, on the other hand, and you are
capable of evaluating and understanding and understand and accept
the terms, risks and conditions of the transactions contemplated by
this letter; (ii) in connection with each transaction
contemplated hereby and the process leading to such transaction,
each of Bank of America and BAS is and has been acting solely as a
principal and is not acting as an agent or fiduciary, for you or
any of your affiliates, stockholders, creditors or employees or any
other party; (iii) neither Bank of America nor BAS has assumed
or will assume an advisory or fiduciary responsibility in your or
your affiliates’ favor with respect to any of the
transactions contemplated hereby or the process leading thereto
(irrespective of whether Bank of America or BAS has advised or is
currently advising you or your affiliates on other matters) and
neither Bank of America nor BAS has any obligation to you or your
affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth in this letter or any
other written agreement between you and BAS or its affiliates;
(iv) Bank of America and BAS and their respective affiliates
may be engaged in a broad range of transactions that involve
interests that differ from yours and your affiliates and Bank of
America and BAS have no obligation to disclose any of such
interests by virtue of any fiduciary or advisory relationship as a
consequence of this Commitment Letter; and (v) Bank of America
and BAS have not provided any legal, accounting, regulatory or tax
advice with respect to any of the transactions contemplated hereby
and you have consulted your own legal, accounting, regulatory and
tax advisors to the extent you have deemed appropriate. You hereby
waive and release, to the fullest extent permitted by law, any
claims that you may have against Bank of America and BAS with
respect to any breach or alleged breach of fiduciary duty as a
consequence of this Commitment Letter.
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Bank of America and BAS hereby
notify you that pursuant to the requirements of the USA PATRIOT
Act, Title III of Pub. L. 107-56 (signed into law October 26,
2001) (the “ Act ”), each of them is required to
obtain, verify and record information that identifies you, which
information includes your name and address and other information
that will allow Bank of America or BAS, as applicable, to identify
you in accordance with the Act.
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7.
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Survival of
Obligations. The
provisions of numbered paragraphs 3, 4 and 6 shall remain in full
force and effect regardless of whether any definitive documentation
for the Credit Facilities shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or any
commitment or undertaking of Bank of America or BAS.
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8.
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Miscellaneous. This Commitment Letter and the Fee Letter may be
executed in multiple counterparts and by different parties hereto
in separate counterparts, all of which, taken together, shall
constitute an original. Delivery of an executed counterpart of a
signature page to this Commitment Letter or the Fee Letter by
telecopier shall be effective as delivery of a manually executed
counterpart thereof.
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This Commitment Letter and the Fee
Letter shall be governed by, and construed in accordance with, the
laws of the State of New York. Each of you, Bank of America and BAS
hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Commitment Letter
(including, without limitation, the Summary of Terms), the Fee
Letter, the Transaction and the other transactions contemplated
hereby and thereby or the actions of Bank of America and BAS in the
negotiation, performance or enforcement hereof. Each of you, Bank
of America and BAS hereby irrevocably submits to the jurisdiction
of any New York State court or Federal court sitting in the Borough
of Manhattan in New York City in respect of any suit, action or
proceeding arising out of or relating to the provisions of this
Commitment Letter (including, without limitation, the Summary of
Terms), the Fee Letter, the Transaction and the other transactions
contemplated hereby and thereby and irrevocably agrees that all
claims in respect of any such suit, action or proceeding may be
heard and determined in any such court. Each of you, Bank of
America and BAS waives, to the fullest extent permitted by
applicable law, any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceedings
brought in any such court, and any claim that any such suit, action
or proceeding brought in any such court has been brought in an
inconvenient forum.
This Commitment Letter, together
with the Summary of Terms and the Fee Letter, embodies the entire
agreement and understanding among Bank of America, BAS, you and
your and its affiliates with respect to the Credit Facilities and
supersedes all prior agreements and understandings relating to the
subject matter hereof. However, please note that the terms and
conditions of the commitments of Bank of America and undertaking of
BAS hereunder are not limited to those set forth herein or in the
Summary of Terms. Those matters that are not covered or made clear
herein or in the Summary of Terms or the Fee Letter are subject to
mutual agreement of the parties. No party has been authorized by
Bank of America or BAS to make any oral or written statements that
are inconsistent with this Commitment Letter.
This Commitment Letter is not
assignable by
