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EXHIBIT 4.7
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SECURITIES PURCHASE AGREEMENT
among
QUORUM HEALTH GROUP, INC.
WELSH, CARSON, XXXXXXXX & XXXXX VIII, L.P.
and
the Other Purchasers Named Herein
Dated as of August 18, 1999
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TABLE OF CONTENTS
Page
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I. PURCHASE AND SALE OF SECURITIES.................................. 1
SECTION 1.01. Issuance, Sale and Delivery of the Securities..... 1
SECTION 1.02. Closing Date...................................... 1
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................... 2
SECTION 2.01. Organization and Qualification.................... 2
SECTION 2.02. Subsidiaries...................................... 2
SECTION 2.03. Capitalization.................................... 2
SECTION 2.04. Authorization of Agreements, etc.................. 3
SECTION 2.05. Validity.......................................... 3
SECTION 2.06. Governmental Approvals............................ 4
SECTION 2.07. Financial Statements.............................. 4
SECTION 2.08. SEC Filings....................................... 4
SECTION 2.09. Absence of Certain Changes or Events.............. 5
SECTION 2.10. Actions Pending................................... 5
SECTION 2.11. Compliance with Law; Permits...................... 5
SECTION 2.12. Contracts......................................... 6
SECTION 2.13. Rights Agreement Amendment........................ 6
SECTION 2.14. Offering of the Debentures........................ 6
SECTION 2.15. Related-Party Transactions........................ 6
SECTION 2.16. Brokers........................................... 6
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS................. 7
SECTION 3.01. Beneficial Ownership.............................. 7
SECTION 3.02. Authorization..................................... 7
SECTION 3.03. Validity.......................................... 7
SECTION 3.04. Investment Representations........................ 7
SECTION 3.05. Governmental Approvals............................ 8
SECTION 3.06. Schedule 13D...................................... 8
SECTION 3.07. HSR............................................... 8
IV. CONDITIONS PRECEDENT............................................. 9
SECTION 4.01. Conditions Precedent to the Obligations of the
Purchasers...................................... 9
SECTION 4.02. Conditions Precedent to the Obligations of the
Company............................................ 10
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Page
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V. SURVIVAL OF REPRESENTATIONS; INDEMNITY.......................... 10
SECTION 5.01. Survival of Representations...................... 10
SECTION 5.02. General Indemnity................................ 10
SECTION 5.03. Conditions of Indemnification.................... 11
SECTION 5.04. Limitation on Certain Indemnities................ 12
VI. MISCELLANEOUS................................................... 12
SECTION 6.01. Restrictive Legends.............................. 12
SECTION 6.02. Expenses, etc.................................... 12
SECTION 6.03. Survival of Agreements........................... 12
SECTION 6.04. Parties in Interest.............................. 13
SECTION 6.05. Notices.......................................... 13
SECTION 6.06. Further Assurances............................... 14
SECTION 6.07. Entire Agreement; Assignment..................... 14
SECTION 6.08. Counterparts..................................... 14
SECTION 6.09. Governing Law.................................... 14
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INDEX TO EXHIBITS, SCHEDULES AND ANNEXES
Exhibit Description
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A Form of Debenture
B Form of Registration Rights Agreement
C Form of Stockholders Agreement
Schedule Description
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I Purchasers
2.02 Subsidiaries
2.03 Capitalization
2.07 Financial Statements
2.09 Certain Changes or Events
2.10 Actions Pending
2.12 Contracts
2.15 Related-Party Transactions
Annex Description
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I Form of Opinion of Counsel
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SECURITIES PURCHASE AGREEMENT dated as of August 18, 1999, among
QUORUM HEALTH GROUP, INC., a Delaware corporation (the "Company"), WELSH,
CARSON, XXXXXXXX & XXXXX VIII, L.P., a Delaware limited partnership ("WCAS
VIII"), and WCA MANAGEMENT CORPORATION ("WCA Management" and, collectively with
WCAS VIII and each other person that shall become a "Purchaser" pursuant to
Section 6.07 hereof, the "Purchasers").
WHEREAS, the Company desires to sell to the Purchasers, and the
Purchasers desire to purchase from the Company, on the terms and subject to the
conditions set forth herein, $150,000,000 aggregate principal amount of 6%
Convertible Subordinated Debentures ("Debentures") of the Company in
substantially the form of Exhibit A hereto; and
WHEREAS, in order to induce the Purchasers to consummate the
transactions contemplated by this Agreement, the Company has agreed to grant to
the Purchasers certain registration rights with respect to the shares (the
"Conversion Shares") of the Company's Common Stock, $.01 par value ("Common
Stock"), issuable upon conversion of the Debentures purchased hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
I. PURCHASE AND SALE OF SECURITIES
SECTION 1.01. Issuance, Sale and Delivery of the Securities. (a) On
the Closing Date (as defined below), the Company shall issue and sell to the
Purchasers, and each Purchaser shall purchase from the Company, a Debenture in
the aggregate principal amount set forth opposite the name of such Purchaser in
Schedule I hereto under the heading "Principal Amount of Debenture," for a
purchase price equal to such principal amount, and the Company shall issue and
deliver to each Purchaser a Debenture substantially in the form attached as
Exhibit A hereto, registered in the name of such Purchaser, evidencing the
indebtedness of the Company to such Purchaser in connection herewith.
(b) As payment in full for the Debenture being purchased by each
Purchaser hereunder, and against delivery of the Debenture as aforesaid, on the
Closing Date each Purchaser shall wire transfer to the account of the Company in
immediately available funds the sum set forth opposite the name of such
Purchaser in Schedule I hereto under the heading "Principal Amount of
Debenture."
SECTION 1.02. Closing Date. Subject to the terms and provisions of
this Agreement, the transfer, sale and delivery of the Debentures contemplated
hereby (the "Closing") shall take place at the offices of Reboul, MacMurray,
Xxxxxx, Xxxxxxx & Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, xx August
31, 1999, or at such date and time as may be mutually agreed upon among the
parties hereto (such date and time of the Closing being herein called the
"Closing Date").
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II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as follows:
SECTION 2.01. Organization and Qualification. The Company is a
corporation validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own or lease and
operate its properties and assets and to carry on its business as it is now
being conducted. The Company is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
have a material adverse effect on the properties, assets, financial condition,
operating results or business of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect").
SECTION 2.02. Subsidiaries. (a) Except as set forth on Schedule 2.02
hereto or as disclosed in the Company SEC Filings (as defined in Section 2.08),
the Company does not have any Significant Subsidiaries (as defined in Rule 1-02
of Regulation S-X).
SECTION 2.03. Capitalization. (a) The authorized capital stock of
the Company consists of 300,000,000 shares of Common Stock. As of August 17,
1999, 73,232,106 shares of Common Stock were issued and outstanding, all of
which were duly authorized and validly issued and are fully paid and
nonassessable.
(b) As of the date hereof, except (i) for options granted pursuant
to the Company's stock option plan (the "Stock Option Plan") to purchase an
aggregate 5,900,075 shares of Common Stock, (ii) for issuances of shares of
Common Stock pursuant to the Company's Employee Stock Purchase Plan, (iii) as
contemplated by the Rights Agreement dated as of April 16, 1997 (the "Rights
Agreement") between the Company and First Union National Bank (as successor to
First Union National Bank of North Carolina), as Rights Agent, (iv) for
obligations to issue shares of Common Stock pursuant to the Company's Deferred
Compensation Plan for Directors, and (v) as set forth on Schedule 2.03 hereof,
no subscription, warrant, option, convertible security, stock appreciation or
other right (contingent or other) to purchase or acquire any shares of any class
of capital stock of the Company or any of its subsidiaries is authorized or
outstanding, and (except as otherwise expressly contemplated by this Agreement)
there is not any commitment of the Company or any of its subsidiaries to issue
any shares, warrants, options or other such rights or to distribute to holders
of any class of its capital stock, any evidences of indebtedness or assets.
SECTION 2.04. Authorization of Agreements, etc. (a) Each of (i) the
execution and delivery by the Company of this Agreement, the Debentures, the
Registration Rights Agreement in substantially the form attached hereto as
Exhibit B (the "Registration Rights Agreement") and the Stockholders Agreement
in substantially the form attached hereto as
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Exhibit C (the "Stockholders Agreement," and, collectively with the Registration
Rights Agreement, the "Ancillary Agreements"), (ii) the performance by the
Company of its obligations hereunder and thereunder, and (iii) the issuance,
sale and delivery by the Company of the Debentures has been duly authorized by
all requisite corporate action and will not violate any provision of law, any
order of any court or other agency of government, the Certificate of
Incorporation or Bylaws of the Company, or any provision of any indenture,
agreement or other instrument to which the Company or any of its properties or
assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument, or result in the creation or imposition of any liens,
claims, charges, restrictions, rights of others, security interests, prior
assignments or other encumbrances (collectively, "Claims") in favor of any third
person upon any of the assets of the Company or any of its subsidiaries, except
that no representation is made as to the compliance of the indemnification or
contribution provisions of the Registration Rights Agreement with law or public
policy. The Board of Directors of the Company has taken all actions necessary
under the Delaware General Corporation Law (the "DGCL"), including approving the
transactions contemplated by this Agreement, to ensure that Section 203 of the
DGCL does not apply to the Purchasers so long as the Purchasers in the aggregate
do not beneficially own greater than 30% of the outstanding shares of Common
Stock. For purposes of this Agreement, the term "beneficially own" shall have
the meaning as set forth in the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder.
(b) The issuance, sale and delivery of the Debentures to the
Purchasers hereunder are not subject to any preemptive rights of stockholders of
the Company or to any right of first refusal or other similar right in favor of
any person.
(c) The Conversion Shares have been duly authorized by the Company
and, when issued in accordance with the provisions of the Debentures, will be
validly issued, fully paid and nonassessable shares of Common Stock. The
issuance, sale and delivery of the Conversion Shares to the Purchasers are not
and upon conversion of the Debentures will not be subject to any preemptive
rights of stockholders of the Company or to any right of first refusal or other
similar right in favor of any person.
SECTION 2.05. Validity. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
Each of the Debentures and the Ancillary Agreements, when executed and delivered
by the Company as provided in this Agreement, will constitute the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that no representation is made as to the
enforceability of the indemnification or contribution provisions of the
Registration Rights Agreement.
SECTION 2.06. Governmental Approvals. Subject to the accuracy of the
representations and warranties of the Purchasers set forth in Article III
hereof, no registration or
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filing with, or consent or approval of, or other action by, any federal, state
or other governmental agency or instrumentality is or will be necessary for the
valid execution, delivery and performance of this Agreement, the Debentures or
the Ancillary Agreements, or the issuance, sale and delivery of the Conversion
Shares.
SECTION 2.07. Financial Statements. (a) The Company has furnished to
the Purchasers the consolidated balance sheet of the Company and its
subsidiaries as of June 30, 1999 (the "June 30, 1999 Balance Sheet") and the
related consolidated statements of operations, stock holders' equity and cash
flows for the fiscal year then ended. All such financial statements (including
any related schedules and/or notes) have been prepared in accordance with
generally accepted accounting principles in the United States ("GAAP")
consistently applied and consistent with prior periods. Such balance sheet
fairly presents in all material respects the consolidated financial position of
the Company and its subsidiaries as of June 30, 1999, and such statements of
operations, stockholders' equity and cash flows fairly present in all material
respects the consolidated results of operations, stockholders' equity and cash
flows of the Company and its subsidiaries for the year ended June 30, 1999.
(b) Except as and to the extent (i) reflected on the June 30, 1999
Balance Sheet (including the notes thereto), (ii) incurred since June 30, 1999
in the ordinary course of business consistent with past practice, or (iii) set
forth on Schedule 2.07 hereto, neither the Company nor any of its subsidiaries
has any material liabilities or obligations of any kind or nature, whether known
or unknown, secured or unsecured, absolute, accrued, contingent or otherwise,
and whether due or to become due, that would be required to be reflected on a
balance sheet, or the notes thereto, prepared in accordance with GAAP. Since
June 30, 1999, neither the Company nor any of its subsidiaries has suffered any
Material Adverse Effect.
SECTION 2.08. SEC Filings. The Company has filed all forms, reports
and documents required to be filed with the Securities and Exchange Commission
(the "SEC") since June 30, 1997, and the Company has made available to the
Purchasers, as filed with the SEC, complete and accurate copies of (i) the
Annual Report of the Company on Form 10-K for the year ended June 30, 1998, and
(ii) all other reports, statements and registration statements (including
Current Reports on Form 8-K) filed by the Company with the SEC since June 30,
1998, in each case including all amendments and supplements (collectively, the
"Company SEC Filings"). The Company SEC Filings (excluding any financial
statements or schedules included therein, which are covered by the
representations and warranties of the Company in Section 2.07(a)) (i) were
prepared in compliance with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, and the rules and
regulations thereunder, as the case may be, and (ii) did not at the time of
filing (or if amended, supplemented or superseded by a filing prior to the date
hereof, on the date of that filing) contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
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SECTION 2.09. Absence of Certain Changes or Events. Except as set
forth on Schedule 2.09 hereto or as otherwise disclosed in the Company SEC
Filings and except as otherwise expressly contemplated by this Agreement, since
June 30, 1999, neither the Company nor any of its subsidiaries has (i) issued
any stock, bonds or other corporate securities, (ii) borrowed or refinanced any
indebtedness for borrowed money other than borrowings under the Company's
revolving credit facility, (iii) discharged or satisfied any material Claim or
incurred or paid any obligation or liability (absolute or contingent) other than
current liabilities shown on the June 30, 1999 Balance Sheet and current
liabilities incurred since the date of such balance sheet in the ordinary course
of business consistent with past practice, (iv) in the case of the Company only,
declared or made any payment or distribution to stockholders, or purchased or
redeemed any shares of its capital stock or other securities, or (v) except in
connection with this Agreement and the transactions contemplated hereby, entered
into any agreement, letter of intent or similar undertaking to take any of the
actions listed in clauses (i) through (iv) above.
SECTION 2.10. Actions Pending. Except (i) as set forth on Schedule
2.10 hereto or (ii) as set forth in the Company SEC Filings, there is no action,
suit, investigation or proceeding pending or, to the best knowledge of the
Company, threatened against or affecting the Company to which its property is
subject, before any court or by or before any governmental body or arbitration
board or tribunal, which the Company would be required to disclose pursuant to
Item 1 of Part II of Form 10-Q if such Form 10-Q were required to be filed on
and as of the date hereof. For the purposes of this Agreement, the term "best of
the knowledge of the Company" shall mean the actual knowledge, without
independent inquiry, of the executive officers of the Company.
SECTION 2.11. Compliance with Law; Permits. Neither the Company nor
any of its subsidiaries is in default in any respect under any order or decree
of any court, governmental authority, arbitrator or arbitration board or
tribunal or under any laws, ordinances, governmental rules or regulations to
which the Company or any of such subsidiaries or any of their respective
properties or assets is subject, except where such default would not have a
Material Adverse Effect. The Company possesses all permits, authorizations,
approvals, registrations, variances and licenses ("Permits") necessary for the
Company or its subsidiaries to own, use and maintain their properties and assets
or required for the conduct of its business in substantially the same manner as
it is currently conducted, except where the failure to possess any such Permit
would not have a Material Adverse Effect. Except to the extent the failure of
any of the following to be correct would not have a Material Adverse Effect,
each Permit is in full force and effect, and no proceeding is pending or, to the
best knowledge of the Company, threatened to modify, suspend, revoke or
otherwise limit any Permit, and no administrative or governmental actions have
been taken or, to the best knowledge of the Company, threatened in connection
with the expiration or renewal of any Permit.
SECTION 2.12. Contracts. Except as disclosed in Schedule 2.12 or the
Company SEC Filings, there are no contracts or agreements that are material to
the conduct of the Business or to the financial condition or results of
operations of the Company and its subsidiaries, taken as
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a whole, that the Company would be required to disclose pursuant to paragraph 10
of Item 601 of Regulation S-K if a Form 10-Q were required to be filed on and as
of the date hereof. Each of the agreements (collectively, the "Material
Agreements") disclosed as an exhibit in the Company SEC Filings in response to
paragraph 10 of Item 601 of Regulation S-K under which there are continuing
rights or obligations is a valid and enforceable obligation of the Company and,
to the best knowledge of the Company, of the other parties thereto, except where
the failure to be valid or enforceable would not have a Material Adverse Effect.
To the best knowledge of the Company, the Company has not been notified in
writing of any claim that any Material Agreement is not valid and enforceable in
accordance with its terms for the periods stated therein (other than where such
enforceability is in violation of public policy or law), or that there is under
any such contract any existing default or event of default or event that with
notice or lapse of time or both would constitute such a default, except any such
failure to be valid or enforceable and any such defaults that, in the aggregate,
would not have a Material Adverse Effect.
SECTION 2.13. Rights Agreement Amendment. The Company has taken the
requisite corporate action (and will promptly cause the Rights Agent under the
Rights Agreement to enter into an agreement embodying such action) so that none
of the Purchasers shall be deemed an Acquiring Person (as defined in the Rights
Agreement) unless and until the Purchasers become the Beneficial Owners (as
defined in the Rights Agreement) of greater than 30% of the Voting Shares (as
defined in the Rights Agreement).
SECTION 2.14. Offering of the Debentures. Assuming the accuracy of
the representations and warranties of the Purchasers set forth in Article III
hereof, neither the Company nor any person acting on the Company's behalf has
taken or will take any action (including, without limitation, any offer,
issuance or sale of any securities of the Company under circumstances which
might require the integration of such transactions with the sale of the
Debentures under the Securities Act or the rules and regulations of the SEC
thereunder) which would subject the offering, issuance or sale of the Debentures
to the Purchasers pursuant to this Agreement to the registration provisions of
the Securities Act.
SECTION 2.15. Related-Party Transactions. Except (i) as set forth on
Schedule 2.15 hereto, (ii) as set forth in the Company SEC Filings or (iii) as
contemplated hereby, there are no existing material arrangements or proposed
material transactions between the Company and any person or entity that the
Company would be required to disclose pursuant to Item 404 of Regulation S-K of
the SEC if a proxy statement of the Company were required to be filed on or as
of the date hereof, other than arrangements or transactions between the Company
and any of the Purchasers.
SECTION 2.16. Brokers. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by the Company
directly with the Purchasers, without the intervention of any other person on
behalf of the Company in such manner as to give rise to any valid claim by any
other person against the Purchasers for a finder's fee, brokerage commission or
similar payment.
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III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, represents and warrants
to the Company as follows:
SECTION 3.01. Beneficial Ownership. As of the date hereof, WCAS VIII
and its affiliates beneficially own an aggregate of 7,390,217 shares of Common
Stock.
SECTION 3.02. Authorization. The execution, delivery and performance
by such Purchaser of this Agreement and the Ancillary Agreements, and the
purchase and receipt by such Purchaser of the Debentures being acquired by it
hereunder, have been duly authorized by all requisite action on the part of such
Purchaser and will not violate any provision of law, any order of any court or
other agency of government, the charter or other governing documents of such
Purchaser, or any provision of any indenture, agreement or other instrument by
which such Purchaser or any of such Purchaser's properties or assets are bound,
or conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any such indenture, agreement or other
instrument, or result in any Claim upon any of the properties or assets of such
Purchaser.
SECTION 3.03. Validity. This Agreement has been duly executed and
delivered by such Purchaser and constitutes the legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms. Each of the Ancillary Agreements, when executed and delivered in
accordance with this Agreement, will constitute the legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms.
SECTION 3.04. Investment Representations. (a) Such Purchaser is
acquiring the Debentures being purchased by such Purchaser hereunder for such
Purchaser's own account, for investment, and not with a view toward the resale
or distribution thereof, except that WCA Management is acquiring the aggregate
principal amount of Debentures set forth opposite its name in Schedule I hereto
on behalf of certain persons affiliated or associated with Welsh, Carson,
Xxxxxxxx & Xxxxx (such persons being herein collectively referred to as the
"WCAS Persons").
(b) Such Purchaser understands that he, she or it, as the case may
be, must bear the economic risk of such Purchaser's investment for an indefinite
period of time, because the Debentures and, when issued upon conversion of
Debentures, the Conversion Shares are not registered under the Securities Act or
any applicable state securities laws and may not be resold unless subsequently
registered under the Securities Act and such other laws or unless an exemption
from such registration is available. Such Purchaser also understands that,
except as provided in the Registration Rights Agreement, it is not contemplated
that any registration will be made under the Securities Act or that the Company
will take steps which will make the
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provisions of Rule 144 under the Securities Act available to permit resale of
the Debentures or the Conversion Shares.
(c) Such Purchaser is able to fend for itself in the transactions
contemplated by this Agreement and has the ability to bear the economic risks of
the investment in the Debentures being purchased hereunder for an indefinite
period of time. Such Purchaser further acknowledges that he, she or it, as the
case may be, has received copies of the Company SEC Filings and has had the
opportunity to ask questions of, and receive answers from, officers of the
Company with respect to the business and financial condition of the Company and
the terms and conditions of the offering of the Debentures and to obtain
additional information necessary to verify such information or can acquire it
without unreasonable effort or expense.
(d) Such Purchaser has such knowledge and experience in financial
and business matters that such Purchaser is capable of evaluating the merits and
risks of its investment in the Debentures. Such Purchaser further represents
that he, she or it, as the case may be, is an "accredited investor" as such term
is defined in Rule 501 of Regulation D of the SEC under the Securities Act with
respect to its purchase of the Debentures, and that any such Purchaser that is a
limited partnership has not been formed solely for the purpose of purchasing the
Debentures.
(e) If such Purchaser is a limited partnership, such Purchaser
represents that it has been organized and is existing as a limited partnership
under the laws of the State of Delaware.
SECTION 3.05. Governmental Approvals. No registration or filing
with, or consent or approval of, or other action by, any Federal, state or other
governmental agency or instrumentality is or will be necessary by the Purchasers
for the valid execution, delivery and performance of this Agreement and the
Ancillary Agreements other than as has been obtained under the HSR Act.
SECTION 3.06. Schedule 13D. The Schedule 13D filed by the Purchasers
with the SEC on March 23, 1999 did not at the time of filing contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No amendment to the
Schedule 13D has been or, except as may be required by reason of the purchase of
the Debentures pursuant to this Agreement, is required to be, made.
SECTION 3.07. HSR. The requisite filing under the Xxxx-Xxxxx-Xxxxxx
Anti-Trust Improvements Act of 1976, as amended, with respect to the acquisition
by the Purchasers of the Conversion Shares issuable upon conversion of the
Debentures being purchased by the Purchasers has been made, and the applicable
waiting period thereunder has expired without any request for additional
information or documentary material.
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IV. CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to the Obligations of the
Purchasers. The obligations of the Purchasers hereunder are, at their option,
subject to the satisfaction, on or before the Closing Date, of the following
conditions:
(a) Representations and Warranties to Be True and Correct. The
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on the Closing Date,
with the same force and effect as though such representations and
warranties had been made on and as of such date, and the Company shall
have so certified to the Purchasers in writing.
(b) Performance. The Company shall have performed and complied in
all material respects with all agreements and conditions contained herein
required to be performed or complied with by it prior to or on the Closing
Date, and the Company shall have so certified to the Purchasers in
writing.
(c) All Proceedings to Be Satisfactory. All corporate and other
proceedings to be taken by the Company and all waivers and consents to be
obtained by the Company in connection with the transactions contemplated
hereby shall have been taken or obtained by the Company, and all documents
incident thereto shall be satisfactory in form and sub stance to the
Purchasers and their counsel.
(d) Opinion of Counsel. The Purchasers shall have received from
Xxxxx X. Xxxxx, General Counsel of the Company, an opinion dated the
Closing Date, substantially in the form of Annex I attached hereto.
(e) Legal Proceedings. No preliminary or permanent injunction or
other order, decree or ruling issued by any court of competent
jurisdiction nor any statute, rule, regulation or order entered,
promulgated or enacted by any governmental, regulatory or administrative
agency or authority, or national securities exchange shall be in effect
that would prevent the consummation of the transactions contemplated
Agreement.
(f) Ancillary Agreements. The Company shall have executed and
delivered each of the Ancillary Agreements.
(g) Financial Statements. The Company shall have delivered to the
Purchasers the financial statements described in Section 2.07 of this
Agreement in substantially the same form as already provided to the
Purchasers in accordance with Section 2.07, except that such financial
statements shall have been audited and certified by Ernst & Young LLP, the
independent certified public auditors retained by the Company.
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SECTION 4.02. Conditions Precedent to the Obligations of the
Company. The obligations of the Company hereunder are, at its option, subject to
the satisfaction, on or before the Closing Date, of the following conditions:
(a) Representations and Warranties to Be True and Correct. The
representations and warranties of the Purchasers contained in this
Agreement shall be true and correct in all material respects on the
Closing Date, with the same effect as though such representations and
warranties had been made on and as of such date, and the Purchasers shall
have so certified to the Company in writing.
(b) Performance. The Purchasers shall have performed and complied in
all material respects with all agreements and conditions contained herein
required to be performed or complied with by them prior to or on the
Closing Date, and the Purchasers shall have so certified to the Company in
writing.
(c) All Proceedings to Be Satisfactory. All proceedings to be taken
by the Purchasers and all waivers and consents to be obtained by the
Purchasers in connection with the transactions contemplated hereby shall
have been taken or obtained by the Purchasers and all documents incident
thereto shall be satisfactory in form and substance to the Company and its
counsel.
(d) Legal Proceedings. No preliminary or permanent injunction or
other order, decree or ruling issued by any court of competent
jurisdiction nor any statute, rule, regulation or order entered,
promulgated or enacted by any governmental, regulatory or administrative
agency or authority, or national securities exchange shall be in effect
that would prevent the consummation of the transactions contemplated by
this Agreement.
(e) Ancillary Agreements. Each Purchaser shall have executed and
delivered each of the Ancillary Agreements.
V. SURVIVAL OF REPRESENTATIONS; INDEMNITY
SECTION 5.01. Survival of Representations. Subject as set forth
below, all representations and warranties made by any party hereto in this
Agreement or pursuant hereto shall survive for the period commencing on the date
hereof and ending on the first anniversary of the date hereof.
SECTION 5.02. General Indemnity. (a) Subject to the terms and
conditions of this Article V, the Company hereby agrees to indemnify, defend and
hold the Purchasers harmless from and against all demands, claims, actions or
causes of action, assessments, losses (including diminution in value of the
Debentures), damages, liabilities, costs and expenses, including, without
limitation, interest, penalties and reasonable attorneys' fees and expenses
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(collectively, "Damages"), asserted against, resulting to, imposed upon or
incurred by the Purchasers by reason of or resulting from a breach of any
representation, warranty or covenant of the Company contained in or made
pursuant to this Agreement.
(b) Subject to the terms and conditions of this Article V, the
Purchasers hereby agree to indemnify, defend and hold the Company harmless from
and against all Damages asserted against, resulting to, imposed upon or incurred
by the Company by reason of or resulting from a breach of any representation,
warranty or covenant of the Purchasers contained in or made pursuant to this
Agreement.
SECTION 5.03. Conditions of Indemnification. The respective
obligations and liabilities of the Purchasers, on the one hand, and the Company,
on the other hand (the "indemnifying party"), to the other (the "party to be
indemnified") under Section 5.02 hereof with respect to claims resulting from
the assertion of liability by third parties shall be subject to the following
terms and conditions:
(a) within 20 days after receipt of notice of commencement of any
action or the assertion in writing of any claim by a third party, the
party to be indemnified shall give the indemnifying party written notice
thereof together with a copy of such claim, process or other legal
pleading, and the indemnifying party shall have the right to undertake the
defense thereof by representatives of its own choosing;
(b) in the event that the indemnifying party, by the 30th day after
receipt of notice of any such claim (or, if earlier, by the tenth day
preceding the day on which an answer or other pleading must be served in
order to prevent judgment by default in favor of the person asserting such
claim), does not elect to defend against such claim, the party to be
indemnified will (upon further notice to the indemnifying party) have the
right to undertake the defense, compromise or settlement of such claim on
behalf of and for the account and risk of the indemnifying party, subject
to the right of the indemnifying party to assume the defense of such claim
at any time prior to settlement, compromise or final determination
thereof, provided that the indemnifying party shall be given at least 15
days prior written notice of the effectiveness of any such proposed
settlement or compromise;
(c) anything in this Section 5.03 to the contrary notwithstanding
(i) if there is a reasonable probability that a claim may materially and
adversely affect the indemnifying party other than as a result of money
damages or other money payments, the indemnifying party shall have the
right, at its own cost and expense, to compromise or settle such claim,
but (ii) the indemnifying party shall not, without the prior written
consent of the party to be indemnified, settle or compromise any claim or
consent to the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to
the party to be indemnified a release from all liability in respect of
such claim; and
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(d) in connection with any such indemnification, the indemnified
party will cooperate in all reasonable requests of the indemnifying party.
SECTION 5.04. Limitation on Certain Indemnities. Notwithstanding
anything in this Article V to the contrary:
(a) the Company shall not be obligated to indemnify, defend and hold
harmless the Purchasers pursuant to Section 5.02 hereof unless the
aggregate amount of such Damages exceeds $2,500,000; and
(b) the Company's aggregate liability and obligation to indemnify,
defend and hold harmless the Purchasers pursuant to said Section 5.02
shall in no event exceed the aggregate purchase price paid by the
Purchasers for the Debentures pursuant to Section 1.01 hereof.
VI. MISCELLANEOUS
SECTION 6.01. Restrictive Legends. Each Debenture and each
certificate representing the Conversion Shares and any shares of capital stock
received in respect thereof, whether by reason of a stock split or share
reclassification thereof, a stock dividend thereon or otherwise, and each
certificate for any such securities issued to subsequent transferees of any such
certificate shall be stamped or otherwise imprinted with the legends required to
be borne by such securities by the Registration Rights Agreement and the
Stockholders Agreement, except as expressly provided in such agreements.
SECTION 6.02. Expenses, etc. The Company shall reimburse WCAS VIII
or pay on its behalf, up to a maximum of $175,000 in the aggregate, (i) fees and
expenses related to any filings made by WCAS VIII pursuant to the HSR Act and
(ii) the reasonable fees and expenses of counsel retained by WCAS VIII in
connection with this Agreement and the transactions contemplated hereby. Such
fees and expenses shall be payable on the Closing Date.
SECTION 6.03. Survival of Agreements. Except as specifically limited
as provided in Section 5.01 hereto, all covenants, agreements, representations
and warranties made herein shall survive the execution and delivery of this
Agreement and the issuance, sale and delivery of the Debentures pursuant hereto,
notwithstanding any investigation made at any time by or on behalf of any party
hereto. All statements contained in any certificate or other instrument
delivered by the Company hereunder shall be deemed to constitute representations
and warranties made by the Company.
SECTION 6.04. Parties in Interest. All covenants and agreements
contained in this Agreement by or on behalf of any party hereto shall bind and
inure to the benefit of the respective successors and permitted assigns of such
party hereto whether so expressed or not.
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SECTION 6.05. Notices. Any notice or other communications required
or permitted hereunder shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class certified
mail, postage prepaid, by nationally recognized overnight courier, or by
facsimile addressed to such party at the address or facsimile number set forth
below or such other address or facsimile number as may hereafter be designated
in writing by the addressee to the addressor listing all parties:
if to the Company, to
Quorum Health Group, Inc.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
with a copy to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
if to any Purchaser, to
Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
or, in any case, at such other address or addresses as shall have been furnished
in writing by such party to the other parties hereto. All such notices,
requests, consents and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of mailing, on the fifth business day following the date of such
mailing,
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(c) in the case of delivery by overnight courier, on the business day following
the date of delivery to such courier, and (d) in the case of facsimile, when
received.
SECTION 6.06. Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement.
SECTION 6.07 Entire Agreement; Assignment. This Agreement (including
the Schedules, Exhibits and Annexes thereto) constitutes the entire agreement of
the parties with respect to the subject matter hereof and may not be amended or
modified nor any provisions waived except in a writing signed by the Company and
the Purchasers. This Agreement shall not be assigned without the consent of the
other parties hereto, except that notwithstanding anything in this Agreement to
the contrary, WCA Management shall be entitled to assign its rights and
obligations under this Agreement to the WCAS Persons in its sole discretion. It
is understood and agreed that, in the event of such assignment, each of the WCAS
Persons shall, at such time, agree to be a "Purchaser" for all purposes of this
Agreement, and WCA Management shall not be released from its liabilities under
this Agreement.
SECTION 6.08 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 6.09 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflict of laws principles.
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IN WITNESS WHEREOF, the Company and the Purchasers have executed
this Agreement as of the day and year first above written.
QUORUM HEALTH GROUP, INC.
By /s/ Xxxxx X. Xxxxxx, Xx.
-----------------------------------
Name:
Title: President and CEO
WELSH, CARSON, XXXXXXXX &
XXXXX VIII, L.P.
By WCAS VIII Associates LLC,
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Managing Member
WCA MANAGEMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name:
Title: Authorized Officer
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SCHEDULE I
Purchasers
Principal Amount
Name of Debenture
------------------------------------------ ----------------
Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P. .............. $142,857,143.00
WCA Management Corporation .............................. 7,142,857.00
---------------
TOTAL ............................................. $150,000,000.00
===============
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The address for each of the Purchasers is c/o Welsh, Carson, Xxxxxxxx & Xxxxx,
000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000.
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