EXHIBIT 4.4
AMENDED AND RESTATED
SUBSCRIPTION AGREEMENT
Dated as of June 1, 2000
among
VANGUARD HEALTH SYSTEMS, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL PARTNERS III, L.P.
MSCP III 892 INVESTORS, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL INVESTORS, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS IV, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL INVESTORS IV, L.P.
MSDW IV 892 INVESTORS, L.P.
and
THE OTHER INVESTORS NAMED HEREIN
AMENDED AND RESTATED
SUBSCRIPTION AGREEMENT
AMENDED AND RESTATED AGREEMENT dated as of June 1, 2000 among Vanguard
Health Systems, Inc., a Delaware corporation (the "Issuer"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital Partners III, L.P., a Delaware limited partnership, MSCP III 892
Investors, L.P., a Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
Investors, L.P., a Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Capital Partners IV, L.P., a Delaware limited partnership ("MSCP"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital Investors IV, L.P. a Delaware limited partnership,
MSDW IV 892 Investors, L.P., a Delaware limited partnership, and the
individuals listed on the signature pages hereof. Each party to this Agreement
(other than the Issuer) is hereinafter referred to as an "Investor" and
collectively, as the "Investors".
WHEREAS, the Issuer and the Investors have executed and entered into a
certain Subscription Agreement (the "Original Agreement") dated as of June 1,
1998 related to the Issuer's issuance and sale to the Investors of up to
134,948 shares of its common stock, $.01 par value, and 114,334 of such shares
have been issued from June 1, 1998 to the date hereof;
WHEREAS, the proceeds from the issuance of such 114,334 shares were
utilized by the Issuer (i) at the First Closing to fund a portion of the
purchase price of Maryvale Medical Center in Phoenix, Arizona, (ii) at the
Second Closing to fund the purchase price of West Anaheim Medical Center in
Anaheim, California and Huntington Beach Hospital in Huntington Beach,
California and (iii) at the Third Closing to fund a portion of the purchase
price of ▇▇▇▇▇▇▇ Hospital in Berwyn, Illinois;
WHEREAS, one of the Investors (▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.) wishes to defer
his commitment under the Original Agreement to purchase an additional 4,377
shares of Issuer's common stock (such Investor having already purchased 8,270
shares of Issuer's common stock under the Original Agreement) until on and
after the first Closing which occurs subsequent to the Fourth Closing (as
defined below);
WHEREAS, since only a balance of 16,237 shares remain issuable under
the Original Agreement at the Fourth Closing (assuming deferral of ▇▇. ▇▇▇▇▇▇'▇
commitment under the Original Agreement in respect of such 4,377 shares), the
Issuer has now authorized the sale and issuance of 235,521 shares of its common
stock, $.01 par value (which shares when added to the shares of common stock
authorized to be issued and sold unless under the Original Agreement are
referred to as the "Common Shares") and MSCP and its Affiliates and certain new
Investors (such new Investors being all senior executives of Issuer working at
or closely with Issuer's hospitals) wish to commit to purchase such additional
shares;
WHEREAS, the Issuer and the Investors contemplate that the Issuer will
use the proceeds from the sale of Common Shares at a fourth closing (the
"Fourth Closing"), to be held on or about June 1, 2000, to fund a portion of
the purchase price of the assets constituting Phoenix Baptist Hospital and
Arrowhead Community Hospital in Phoenix, Arizona pursuant to the Agreement for
Purchase and Sale of Assets dated as of March 31, 2000 among the Issuer, VHS of
Phoenix, Inc.,
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Baptist Hospitals and Health Systems, Inc., Phoenix Baptist Hospital and
Medical Center, Inc., Arrowhead Community Hospital and Medical Center, Inc.,
Arizona Network Development, Inc., The Foundation for Baptist Health Systems
and Project Oasis, L.L.C.;
WHEREAS, the Issuer and the Investors understand that the Issuer will
use the proceeds from the sale of Common Shares at each Closing after the
Fourth Closing to fund the purchase from time to time by the Issuer of
hospitals, hospital systems, hospital management companies and assets related,
ancillary or complementary thereto; and
WHEREAS, the Investors desire to purchase the Common Shares which
remain unsold as of the date hereof, and the Issuer desires to issue and sell
such Common Shares to the Investors, on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree that Articles 1
through 9 of the Original Agreement are hereby amended and restated in their
entirety as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, the term "control" (including
its correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Ancillary Agreements" means (i) the Shareholders Agreement, (ii) the
Surviving Shareholders Agreement, (iii) the Employment Agreements dated as of
June 1, 1998 between the Issuer and each of the Executive Managers except ▇▇▇▇▇
▇. ▇▇▇▇▇, (iv) the Severance Protection Agreements dated as of the June 1, 1998
between the Issuer and (x) each of the Management Investors (as defined in the
Shareholders Agreement), other than the Executive Managers and (y) each
individual who becomes a senior vice president or vice president of the Issuer
after June 1, 1998, (v) the Option Plans, (vi) the Letter Agreement dated as of
June 1, 1998 between the Issuer, MSCP, the Executive Managers and the
Management Investors, and (vii) the Voting Proxy dated as of June 1, 1998 among
the Issuer, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and the other persons
listed on the signature pages thereof, as amended from time to time.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
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"Bylaws" means the amended and restated bylaws of the Issuer adopted
by the stockholders of the Issuer by a unanimous written consent dated May 21,
1998, as further amended from time to time.
"Charter" means the Amended and Restated Certificate of Incorporation
of the Issuer filed on May 29, 1998, at the office of the Secretary of State of
the State of Delaware, as further amended from time to time.
"Charter Amendment" means the Certificate of Amendment to Amended and
Restated Certificate of Incorporation of the Issuer substantially in the form
attached as Exhibit A hereto.
"Designated Holders" shall have the meaning set forth in the
Shareholders Agreement.
"Executive Managers" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Issuer Credit Documents" means (i) prior to February 1, 2000, the
$72.5 Million Credit Agreement dated as of June 1, 1998 between the Issuer and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Agent, and the related agreements,
schedules, exhibits, annexes and appendices thereto, (ii) on and after February
1, 2000, the $168 million Credit Agreement dated as of February 1, 2000 between
the Issuer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Administrative Agent, as
the same may be amended from time to time, and the related agreements,
schedules, exhibits, annexes and appendices thereto and (iii) any credit
agreement which is the successor to the Credit Agreement described in the
foregoing clause (ii) provided the total commitments of the lenders under such
successor credit agreement do not exceed $180 million.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset.
"Management Investors" shall have the meaning set forth in the
Shareholders Agreement.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business, assets, liabilities or results of operations of
the Issuer and its Subsidiaries, taken as a whole.
"MSCI" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III, Inc.
"Option Plans" means (i) the Vanguard Health Systems, Inc. Carry
Option Plan, (ii) the Vanguard Health Systems, Inc. 1998 Stock Option Plan,
(iii) the Vanguard Health Systems, Inc. 2000 Stock Option Plan, (iv) the
Vanguard Health Systems, Inc. Nonqualified Initial Option Plan, in each case
dated as of June 1, 1998 or the date hereof and as the same may be amended from
time to time, and (iv) any other option or equity-based compensation plan
adopted by the Issuer after the date hereof.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
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"Shareholders Agreement" means the Amended and Restated Shareholders
Agreement dated as of the date hereof among the Issuer and the Investors, as
amended from time to time.
"Surviving Shareholders Agreement" means the Surviving Shareholders
Agreement dated as of June 1, 1998 among the Issuer and the Investors, as
amended from time to time.
"Subsidiary" means any entity of which ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by the Issuer.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Carried Interest Arrangements 8.02
Closing 2.02
Closing Date 2.02
Common Shares Recitals
First Closing 2.01
First Closing Date 2.02
Fourth Closing Recitals
Fourth Closing Date 2.02
Intellectual Property Rights 4.06
Investor Preamble
Issuer Preamble
Issuer Securities 4.01
MSCP Preamble
Original Agreement Recitals
Purchase Price 2.01
Purchasing Investor 2.02
Second Closing 2.01
Subsidiary Securities 4.01
Third Closing 2.01
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
SECTION 2.01. Prior Closings; Commitment to Purchase and Sell. (a) At
a first closing (the "First Closing") held on June 1, 1998, a second closing
(the "Second Closing") held on September 1, 1999 and a third closing (the
"Third Closing") held on February 1, 2000, the Issuer issued and sold to each
Investor and, upon the basis of the representations and warranties herein
contained of the Issuer, each Investor severally but not jointly purchased from
the Issuer, the number of Common Shares set forth opposite such Investor's name
on Schedule 2.01(a) hereto.
(b) Subject to the terms and conditions of this Agreement and upon
the basis of the representations and warranties herein contained of each
Investor, the Issuer agrees to issue and sell to
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each Investor and, upon the basis of the representations and warranties herein
contained of the Issuer, (i) each Investor agrees, severally but not jointly,
to purchase from the Issuer at the Fourth Closing, the number of Common Shares
set forth opposite such Investor's name on Schedule 2.01(b) hereto and (ii)
each Investor specified on Schedule 2.01(c) hereto (other than ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇.) agrees to purchase from the Issuer at the Fourth Closing the
number of Common Shares set forth thereon which are designated as those to be
purchased by such Investor at the Fourth Closing.
(c) Subject to the terms and conditions of this Agreement and upon
the basis of the representations and warranties herein contained of each
Investor, the Issuer agrees to issue and sell to each Investor and, upon the
basis of the representations and warranties herein contained of the Issuer,
each Investor agrees, severally but not jointly, to purchase from the Issuer at
one or more Closings following the Fourth Closing, the number of Common Shares
set forth opposite such Investor's name on Schedule 2.01(c) hereto. The Issuer
shall deliver written notice to each Investor purchasing Common Shares at such
Closing at least 30 days prior to each such Closing. Such written notice shall
set forth the number of Common Shares to be purchased by the Investor at such
Closing, it being understood that, if fewer than all of the Common Shares set
forth on Schedule 2.01(c) hereto are to be purchased at such Closing, then each
Investor shall be allocated a number of Common Shares for purchase at such
Closing that will reflect each Investor's pro rata portion of the Common Shares
to be issued based upon the ratio that the total number of Common Shares set
forth opposite the name of each Investor on Schedule 2.01(c) which remain
unsold to such Investor at such time bears to the total number of Common Shares
set forth opposite the names of all of the Investors on Schedule 2.01(c) which
remain unsold to such Investors at such time.
(d) The purchase price (the "Purchase Price") of the Common Shares
purchased by each Investor pursuant to the terms hereof is $1,701.18 per Common
Share. The Purchase Price shall be paid as set forth in Section 2.02(b).
(e) The Common Shares purchased by the Investors pursuant to Article
2 shall be subject to the restrictions on transfer and other provisions of the
Shareholders Agreement and the Surviving Shareholders Agreement.
SECTION 2.02. The Closing. (a) The First Closing took place on June 1,
1998 at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇ and the Second and Third Closings took place on September 1, 1999 and
February 1, 2000, respectively, at the offices of the Issuer, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Each purchase and sale of Common
Shares pursuant to Article 2 after the Third Closing shall also take place at a
closing (the First Closing and each such subsequent closing shall be herein
referred to as a "Closing") at the offices of the Issuer, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Each Closing shall occur as
soon as practicable (but in no event later than 10 Business Days) after
satisfaction or waiver of the conditions set forth in Article 6, or at such
later time or other place as the Issuer and each Investor that is purchasing
Common Shares at such Closing (a "Purchasing Investor") may agree. The date and
time of each Closing are each referred to herein as the "Closing Date", June 1,
1998 is referred to herein as the "First Closing Date" and the date and time of
the Fourth Closing are referred to herein as the "Fourth Closing Date".
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(b) At each Closing, each Purchasing Investor shall deliver to the
Issuer an amount in immediately available funds equal to the aggregate Purchase
Price of the Common Shares to be purchased by such Investor at such Closing
pursuant to Article 2 by wire transfer to an account designated by the Issuer
by notice to such Investor, not later than two Business Days prior to such
Closing Date; provided that if such aggregate Purchase Price is less than
$50,000, such payment may be made by delivery of a cashier's or bank check
payable to the Issuer.
(c) At each Closing, the Issuer shall deliver to each Purchasing
Investor, against payment of the Purchase Price therefor, certificates
registered in the name of such Investor evidencing the number of Common Shares
to be purchased by such Investor at such Closing pursuant to Article 2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer represents and warrants to each Purchasing Investor as of
the date hereof and as of each Closing Date on and after the date hereof
(including the Fourth Closing Date) that:
SECTION 3.01. Corporate Existence and Power. (a) The Issuer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted and as presently proposed to be
conducted. The Issuer has delivered to such Purchasing Investor true and
complete copies of its certificate of incorporation and bylaws in effect on the
date of this Agreement and immediately prior to the Fourth Closing. The Charter
and Bylaws are true and complete copies of the certificate of incorporation and
bylaws of the Issuer that will be in effect immediately following such Closing.
(b) Each of the Issuer's Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by the Issuer of this Agreement and each Ancillary Agreement to
which the Issuer is a party are within the corporate powers of the Issuer, and
this Agreement and each Ancillary Agreement to which the Issuer is a party have
been duly authorized by all requisite corporate and shareholder action on the
part of the Issuer. This Agreement has been duly executed and delivered by the
Issuer and each Ancillary Agreement to which the Issuer is a party shall have
been duly executed and delivered by the Issuer. This Agreement and each
Ancillary Agreement to which the Issuer is a party constitutes a valid and
binding agreement of the Issuer. The purchase and sale of the Common Shares
hereunder is not subject to any preemptive rights or rights of first refusal
held by any Person.
SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by the Issuer of this Agreement and each Ancillary Agreement to
which the Issuer is a party requires no action by or in respect of, or filing
with, any governmental body, agency or official other than (i) compliance with
any applicable requirements of the HSR Act or (ii) any such action or filing
that has
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been made or obtained or as to which the failure to make or obtain would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.
SECTION 3.04. Non-contravention. The Issuer is not in violation or
default of any term of its Charter or Bylaws. The execution, delivery and
performance by the Issuer of this Agreement and each Ancillary Agreement to
which the Issuer is a party does not (i) violate the Charter or Bylaws
(assuming that Issuer has filed the Charter Amendment), (ii) assuming
compliance with the matters referred to in Section 3.03, violate any applicable
law, rule, regulation, judgment, injunction, order or decree, (iii) require any
consent or other action by any Person under, or constitute a default under, or
result in the loss of any material benefit or the acceleration of any material
obligation under, any agreement, contract or other instrument binding upon the
Issuer or (iv) result in the creation or imposition of any Lien on any asset of
the Issuer or the suspension, revocation, impairment, forfeiture or nonrenewal
of any permit, license, authorization or approval applicable to the Issuer, its
business or operations or any of its assets or properties, except, in the case
of clauses (ii), (iii) and (iv), as would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect.
SECTION 3.05. Common Shares. The Common Shares to be purchased by each
Investor hereunder, when issued and delivered in accordance with the terms of
this Agreement, will be duly authorized, validly issued, fully paid, and
non-assessable and free of all preemptive rights, Liens, voting or transfer
restrictions and encumbrances, except as specifically set forth in the
Ancillary Agreements or as may be provided under federal or state securities
laws.
SECTION 3.06. Investment Company. The Issuer is not, and after giving
effect to the issuance of the Common Shares will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.07. Obligations to Related Parties. There are no obligations
of the Issuer or its Affiliates to officers, directors, shareholders,
employees, consultants or agents of the Issuer other than (i) for payment of
salary or compensation for services rendered, (ii) reimbursement for reasonable
expenses incurred on behalf of the Issuer and (iii) for other standard employee
benefits made generally available to all employees (including stock option
agreements outstanding under the Option Plans or any stock option plan approved
by the Board of Directors of the Issuer). Except for agreements explicitly
contemplated by this Agreement or referred to in the immediately preceding
sentence, and except as set forth on Schedule 3.07, there are no (x) material
agreements, understandings or proposed transactions between the Issuer and its
Affiliates, on the one hand, and any of its employees, officers, directors,
consultants or agents or any Affiliate thereof, on the other hand, or (y)
agreements, understandings or proposed transactions among the Issuer or its
shareholders relating to the voting or disposition of capital stock of the
Issuer. Except pursuant to the Issuer Credit Documents or pursuant to
transactions authorized therein, neither the Issuer nor any Subsidiary is a
guarantor or indemnitor of, and none of such entities has pledged any of its
assets in respect of, any indebtedness of any other Person.
SECTION 3.08. Changes. Since the Issuer's incorporation, there has not
been (i) any adverse change in the assets, liabilities, financial condition or
results of operations of the Issuer, other than changes in the ordinary course
of business which individually or in the aggregate have not had and
7
would not reasonably be expected to have a Material Adverse Effect or (ii) any
other event or condition of any character that, either individually or
cumulatively, has had or would be reasonably likely to have a Material Adverse
Effect.
SECTION 3.09. Litigation. There is no action, suit, proceeding,
arbitration or investigation pending or, to the best of the Issuer's knowledge,
threatened (or any basis therefor known to the Issuer) against the Issuer that
questions the validity of this Agreement or the Ancillary Agreements or the
right of the Issuer to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any material adverse change in the
financial condition, business, assets or results of operations of the Issuer
and its Subsidiaries, taken as a whole, or, except as contemplated hereby, any
change in the current equity ownership of the Issuer, nor is the Issuer aware
that there is any basis for the foregoing. The foregoing includes, without
limitation, actions pending or threatened (or any basis therefor known to the
Issuer) involving the prior employment of any of the Issuer's employees, their
use in connection with the Issuer's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. Neither the Issuer nor any of its
Subsidiaries is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding, arbitration or
investigation by the Issuer currently pending or which the Issuer intends to
initiate.
SECTION 3.10. Tax Returns and Payments. Except as would not be
material to the Issuer and its Subsidiaries, taken as a whole, (i) the Issuer
(and, if applicable, each of its Subsidiaries) has timely filed all tax returns
(federal, state and local) required to be filed by it, and as of the time of
filing, each such return correctly reflected the facts regarding the income,
business, assets , operations, activities and status of the Issuer (and, if
applicable, any of its Subsidiaries), (ii) all taxes shown to be due and
payable on such returns and all other taxes due and payable by the Issuer (and,
if applicable, each of its Subsidiaries) on or before such Closing have been
paid or will be paid prior to the time they become delinquent (or are being
contested in good faith and for which adequate reserves have been established
on the Issuer's audited financial statements), (iii) there is no action, suit,
proceeding, audit or claim now proposed or pending against or with respect to
the Issuer (or, if applicable, any of its Subsidiaries) in respect of any tax,
and (iv) there are no agreements or waivers in effect extending the applicable
statutory period of limitation with respect to any return filed by the Issuer
(or, if applicable, any of its Subsidiaries).
SECTION 3.11. Compliance with Laws; Permits. Neither the Issuer nor
its Subsidiaries is in violation of any applicable statute, rule, regulation,
order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or
the ownership of its properties which violation would be reasonably likely to
have a Material Adverse Effect, including, but not limited to, laws, rules and
regulations relating to professional and specialty licensing, the corporate
practice of medicine, prohibitions on healthcare fraud and abuse, kickbacks and
referrals under Medicare, Medicaid or other governmental programs, federal and
state laws, health care, drug enforcement, zoning ordinances, building codes,
occupational health and safety, employee benefits, immigration, ▇▇▇▇▇▇
workplace safety, equal employment opportunity and race, religious, sex,
disability and age discrimination.
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SECTION 3.12. Offering Valid. Assuming the accuracy of the
representations and warranties of the Investors contained in Section 5.01, the
offer, sale and issuance of the Common Shares will be exempt from the
registration requirements of the Securities Act, and will have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws. Neither the Issuer nor any agent on its behalf has solicited
or will solicit any offers to sell or has offered to sell or will offer to sell
all or any part of the Common Shares to any Person or Persons so as to bring
the sale of such Common Shares by the Issuer within the registration provisions
of the Securities Act.
SECTION 3.13. Financial Statements; No Undisclosed Liabilities. (a)
The consolidated balance sheet dated March 31, 2000 and the related
consolidated statements of income and cash flows of the Issuer and the
Subsidiaries for the period then ended, and the consolidated balance sheet and
the related consolidated statements of income and cash flows of the Issuer and
its Subsidiaries most recently delivered to all of the Investors prior to such
Closing Date, fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis (except unaudited financial statements
may omit any notes thereto), the consolidated financial position of the Issuer
and the Subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements).
(b) There are no liabilities of the Issuer or any Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances which could reasonably be expected to result in such a
liability, other than:
(i) liabilities provided for in the balance sheet referred
to in Section 3.13(a);
(ii) liabilities disclosed on Schedule 3.13(b); and
(iii) other undisclosed liabilities which, individually or
in the aggregate, are not material to the Issuer and the
Subsidiaries, taken as a whole.
ARTICLE 4
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer represents and warrants to each Purchasing Investor, as of
the date hereof and as of the Fourth Closing Date, that:.
SECTION 4.01. Capitalization. (a) As of the date hereof, the
authorized capital stock of the Issuer consists of 350,000 shares of common
stock, par value $0.01 per share, and (ii) 100,000 shares of preferred stock,
par value $0.01 per share. As of the date hereof and immediately prior to the
Fourth Closing, there are 140,616 outstanding shares of common stock and 20,000
outstanding shares of the Issuer's preferred stock, all of such 20,000 shares
being a series entitled "Payable-in-Kind Cumulative Redeemable Convertible
Preferred Stock". Immediately after the Fourth Closing, there will be
outstanding 183,954 shares of common stock and 20,000 shares of preferred
stock.
9
(b) As of the date hereof, except as set forth in Section 4.01(a) or
pursuant to the Option Plans, there are no outstanding (i) shares of capital
stock or voting securities of the Issuer, (ii) securities of the Issuer
convertible into or exchangeable for shares of capital stock or voting
securities of the Issuer or (iii) options or other rights to acquire from the
Issuer, or other obligation of the Issuer to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Issuer (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Issuer Securities"). There are no outstanding
obligations of the Issuer or any Subsidiary to repurchase, redeem or otherwise
acquire any Issuer Securities. Schedule 4.01(b) identifies all options granted
under the Option Plans as of the date hereof and as of the Fourth Closing Date.
(c) Schedule 4.01(c) sets forth the authorized, issued and
outstanding capital stock of each Subsidiary of the Issuer that were owned by
the Issuer as of the date hereof. There are no outstanding (i) securities of
any such Subsidiary convertible into or exchangeable for shares of capital
stock or voting securities of any Subsidiary, (ii) options or other rights to
acquire from any such Subsidiary, or other obligation of any such Subsidiary to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of any Subsidiary (the
items in clauses (i) and (ii) being referred to collectively as the "Subsidiary
Securities"), or (iii) obligations of the Issuer or any such Subsidiary to
repurchase, redeem or otherwise acquire any Subsidiary Securities. The Issuer
does not own, directly or indirectly, any shares of capital stock of or any
equity interest in any Person, other than the Subsidiaries and other Persons
appearing on Schedule 4.01(c).
SECTION 4.02. No Prior Activities. Except as set forth on Schedule
4.02, prior to June 1, 1998 neither the Issuer nor any Subsidiary engaged in
any activities or incurred any liabilities other than in connection with its
incorporation, the Original Agreement, the Ancillary Agreements and the
transactions contemplated by the Original Agreement and the Ancillary
Agreements.
SECTION 4.03. Agreements; Action. (a) Except as set forth on Schedule
4.03, there are no agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees to which the Issuer or any of
its Subsidiaries is a party or by which any of them is bound which may involve
(i) obligations (contingent or otherwise) of, or payments to, the Issuer or any
of its Subsidiaries in excess of $20,000 (other than obligations of, or
payments to, the Issuer or any of its Subsidiaries entered into in the ordinary
course of business or in connection with the acquisition of a healthcare
business), (ii) the license of any patent, copyright, trade secret or other
proprietary right to or from the Issuer or any of its Subsidiaries (other than
licenses arising from the purchase of "off the shelf" or other standard
products), (iii) provisions restricting or affecting the development,
manufacture or distribution of the products or services of the Issuer or any of
its Subsidiaries, or (iv) a restriction in any manner on the Issuer's or any of
its Subsidiaries' right to compete with any other Person or a restriction on
the Issuer or any of its Subsidiaries' right to sell to or purchase from any
other Person.
(b) The Issuer has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to, or repurchases of,
any class or series of its capital stock, (ii) except pursuant to the Issuer
Credit Documents or as set forth on Schedule 4.03, incurred any indebtedness
for money borrowed that is outstanding as of the date hereof or any other
liabilities
10
(other than with respect to liabilities incurred in the ordinary
course of business) individually in excess of $5,000 or, in the case of
indebtedness and/or liabilities in excess of $5,000 individually or $25,000 in
the aggregate, (iii) made any loans or advances to any Person, other than
ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights.
(c) For the purposes of Section 4.03(a) and (b), all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same Person (including Persons the Issuer or its
Subsidiaries has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such Sections.
SECTION 4.04. Changes. Since the Issuer's or any Subsidiary's
incorporation, there has not been:
(a) except as set forth in Schedule 4.04(a), any resignation or
termination of any key officers of the Issuer or such Subsidiary; and, to the
best of its knowledge, neither the Issuer nor any Subsidiary, as the case may
be, knows of the impending resignation or termination of employment of any such
officer;
(b) any material change, except in the ordinary course of business,
in the contingent obligations of the Issuer or any Subsidiary by way of
guaranty, endorsement, indemnity, warranty or otherwise;
(c) any waiver by the Issuer or any Subsidiary of a valuable right or
of a material debt owed to it; or
(d) any material change in any compensation arrangement or agreement
with any employee, officer, director or shareholder of the Issuer or any
Subsidiary.
SECTION 4.05. Title to Properties and Assets, Liens, etc. Each of the
Issuer and its Subsidiaries has good and marketable title to its properties and
assets, and each of the Issuer and its Subsidiaries has good title to leasehold
estates, in each case subject to no Lien, other than (i) those resulting from
taxes which have not yet become delinquent, (ii) minor Liens which do not
materially detract from the value or present or intended use of the property
subject thereto or materially impair the operations of the Issuer or its
Subsidiaries, and (iii) those that have otherwise arisen in the ordinary course
of business. All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Issuer or its Subsidiaries are in good
operating condition and repair and are reasonably fit and usable for the
purposes for which they are being used.
SECTION 4.06. Patents and Trademarks. The Issuer or its Subsidiaries
owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information and other
proprietary rights and processes (the "Intellectual Property Rights") necessary
for its business as now conducted and as proposed to be conducted, without any
known infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, nor is the Issuer
or its Subsidiaries bound by or a party to any options, licenses or agreements
of any kind with respect to the patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information and other proprietary
rights and processes of any other Person other than such licenses or agreements
arising from the purchase of "off the shelf" or standard products. Except as
set forth in Schedule 4.06, neither the Issuer nor its Subsidiaries has
received any communications alleging that the Issuer or a Subsidiary has
violated or, by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names,
11
copyrights or trade secrets or other proprietary rights of any other Person.
Neither the Issuer nor any Subsidiary is aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
it or that would conflict with its business as proposed to be conducted.
Neither the execution nor delivery of this Agreement, nor the carrying on of
the Issuer's or any Subsidiary's business by the employees of the Issuer or any
Subsidiary, nor the conduct of the Issuer's or any Subsidiary's business as
proposed, will, to the Issuer's knowledge, conflict with or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any such employee is now
obligated. The Issuer does not believe that it is or will be necessary to
utilize any inventions, trade secrets or proprietary information of any of its
employees made prior to their employment by the Issuer or any Subsidiary,
except for inventions, trade secrets or proprietary information that have been
assigned to the Issuer or such Subsidiary.
SECTION 4.07. Employees. Except as set forth in Schedule 4.07, no
Employee of the Issuer or any Subsidiary has any agreement or contract, written
or verbal, regarding his or her employment. Except as set forth in Schedule
4.07, neither the Issuer nor any Subsidiary is a party to or bound by any
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other employee compensation
plan or agreement. To the best of the Issuer's knowledge, no employee of the
Issuer or any Subsidiary, nor any consultant with whom the Issuer or any
Subsidiary has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Issuer or any Subsidiary because of the nature of the business to be conducted
by the Issuer or any Subsidiary, and, to the best of Issuer's knowledge, the
continued employment by the Issuer or any Subsidiary of its present employees,
and the performance of the Issuer's or any Subsidiary's contracts with its
independent contractors, will not result in any such violation. Neither the
Issuer nor any Subsidiary has received any notice alleging that any such
violation has occurred. Other than pursuant to certain of the Ancillary
Agreements, no employee of the Issuer or any Subsidiary has been granted the
right to continued employment by the Issuer or any Subsidiary or to any
material compensation following termination of employment with the Issuer or
any Subsidiary. Neither the Issuer nor any Subsidiary is aware that any officer
or key employee, or that any group of key employees, intends to terminate their
employment with the Issuer or any Subsidiary. Neither the Issuer nor any
Subsidiary has a present intention to terminate the employment of any officer,
key employee or group of key employees.
SECTION 4.08. Environmental and Safety Laws. To the best of the
Issuer's knowledge, neither the Issuer nor its Subsidiaries is in violation of
any applicable statute, law, rule or regulation relating to the environment or
occupational health and safety, and, to the best of its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF EACH INVESTOR
Each Investor, severally but not jointly, hereby represents and
warrants to the Issuer as of the date hereof and as of each Closing Date that:
SECTION 5.01. Private Placement. (a) Such Investor understands that
(i) the offering and sale of the Common Shares is intended to be exempt from
registration under the Securities Act pursuant to Section 4(2) of the
Securities Act and (ii) there is no existing public or other market for the
Common Shares and there can be no assurance that such Investor will be able to
sell or dispose of its Common Shares.
(b) The Common Shares to be acquired pursuant to this Agreement are
being acquired for its own account and without a current view to the public
distribution of such Common Shares or any interest therein; provided that such
Investor may at any time after such Closing, or from time to time thereafter,
distribute any or all of its Common Shares to a Permitted Transferee (as
defined in the Shareholders Agreement) or an Affiliate of such Investor or to
certain stockholders of such Investor as permitted pursuant to the terms of the
Shareholders Agreement and the Surviving Shareholders Agreement.
(c) Such Investor is an "Accredited Investor" as such term is
defined in Regulation D under the Securities Act. Such Investor has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment in the Common Shares and
such Investor is capable of bearing the economic risks of such investment,
including a complete loss of its investment in the Common Shares.
(d) Such Investor has been furnished with and carefully read a copy
of this Agreement and has been given the opportunity to ask questions of, and
receive answers from, the Issuer concerning the terms and conditions of the
Common Shares and other related matters. Such Investor further represents and
warrants to the Issuer that the Issuer has made available to such Investor or
its agents all documents and information relating to an investment in the
Common Shares requested by or on behalf of the Investors.
(e) If such Investor is an individual, such Investor resides in the
state identified in the address of such Investor set forth on the signature
pages hereof. If the Investor is a partnership, corporation, limited liability
company or other entity, the office or offices of such Investor in which its
investment decision was made is located at the address or addresses of such
Investor set forth on the signature pages hereof.
SECTION 5.02. Existence and Power. Such Investor (if not an
individual) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all powers (corporate or
otherwise) and all material governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted. Such
Investor (if an individual) has the legal capacity to enter into this Agreement
and each Ancillary Agreement to which such Investor is a party.
13
SECTION 5.03. Authorization. If such Investor is not an individual,
the execution, delivery and performance of this Agreement and each Ancillary
Agreement to which such Investor is a party are within the powers of such
Investor and this Agreement and each Ancillary Agreement to which such Investor
is a party have been duly authorized by all requisite action on its part. This
Agreement has been duly executed and delivered by such Investor and, at the
First Closing, each Ancillary Agreement to which such Investor is a party will
be duly executed and delivered by such Investor. This Agreement constitutes
and, when executed and delivered, each Ancillary Agreement to which such
Investor is a party will constitute, a valid and binding agreement of such
Investor.
SECTION 5.04. Governmental Authorization. The execution, delivery and
performance by such Investor of this Agreement and each Ancillary Agreement to
which such Investor is a party requires no action by or in respect of, or
filing with any governmental body, agency or official, other than compliance
with any applicable requirements of the HSR Act.
SECTION 5.05. Non-contravention. The execution, delivery, and
performance by such Investor of this Agreement and each Ancillary Agreement to
which such Investor is a party does not and will not (iii) violate the
certificate of incorporation, bylaws or other constituent documents, if any, of
such Investor as currently in effect, (iv) assuming compliance with the matters
referred to in Section 5.04, violate any applicable law, rule, regulation,
judgment, injunction, order or decree, or (v) require any consent or other
action by any Person under, or constitute a default under, any material
agreement or other instrument binding upon such Investor.
SECTION 5.06. Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of such Investor threatened
against or affecting, such Investor before any court or arbitrator or any
governmental body, agency or official which in any manner challenges or seeks
to (i) prevent, enjoin, alter or materially delay the consummation of the
transactions contemplated by this Agreement or by any of the Ancillary
Agreements to which such Investor is a party or (ii) prevent such Investor from
performing its obligations hereunder or thereunder in any material respect.
SECTION 5.07. Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of such Investor who might be entitled to any fee or commission from
the Issuer, any other Investor or any of their Affiliates upon consummation of
the transactions contemplated by this Agreement or by any of the Ancillary
Agreements.
ARTICLE 6
CONDITIONS PRECEDENT TO CLOSING
SECTION 6.01. Conditions to Each Investors's Obligations. (a) The
obligation of each Investor to purchase the Common Shares pursuant to Article 2
hereof at each Closing held on or after the date hereof (including the Fourth
Closing) is subject to the satisfaction, at or prior to the
14
applicable Closing Date, of the following conditions (except for subsections
(vi), (vii) and (viii) each of which is only a condition to such purchase for
the Investor(s) identified in such subsections):
(i) As qualified by the information contained in any
Schedules thereto (including any Schedules revised pursuant to Section
9.10), the representations and warranties of the Issuer contained in
Article 3 and Article 4 that are qualified as to materiality shall be
true and correct and the representations and warranties of the Issuer
contained in each such Article that are not so qualified shall be true
and correct in all material respects, in each case (except to the
extent such representations and warranties speak as of an earlier
date) as if made on and as of such Closing Date;
(ii) The Issuer shall have performed and complied in all
material respects with all covenants and agreements required by this
Agreement to be performed or complied with or by it at or prior to
such Closing Date;
(iii) The Issuer shall have obtained any and all consents,
waivers or permits necessary for the consummation of the transactions
contemplated hereby;
(iv) Such Investor's purchase of and payment for the Common
Shares shall not be prohibited by any applicable law, court order or
governmental regulation;
(v) Such Investor shall have received a certificate dated
such Closing Date signed by an executive officer of the Issuer to the
effect set forth in subsections (i) and (ii) of Section 6.01(a);
(vi) If such Investor is MSCP or an Affiliate of MSCP, (x)
the MSCP Investment Committee shall have approved the purchase of
Common Shares by such Investor at such Closing and (y) some or all of
the Management Investors shall concurrently purchase all of the Common
Shares to be purchased by all of the Management Investors at such
Closing pursuant to Section 2.01(b); provided that, except as allowed
for ▇▇. ▇▇▇▇▇▇ in respect of the Fourth Closing and related to the
Common Shares specified for him on Schedule 2.01(c) hereto, each of
the Executive Managers shall have purchased at least 100% of the
number of Common Shares set forth opposite his name on the relevant
Schedule to this Agreement or his pro rata share of such amount;
(vii) If such Investor is not MSCP or an Affiliate of MSCP,
then MSCP and/or Affiliates of MSCP shall concurrently purchase the
number of Common Shares to be purchased by them at such Closing;
(viii) If such Investor is a Designated Holder (as defined in
the Shareholders Agreement), then such Investor shall have elected by
written notice to the Issuer to purchase the number of Common Shares
to be purchased by such Investor at such Closing (which number shall
be the number of Common Shares that such Designated Holder is entitled
to purchase pursuant to 2.01(b));
15
(ix) Such Investor shall have received an opinion of legal
counsel to the Issuer, dated as of such Closing Date, in form and
substance satisfactory to such Investor, as to the organization and
good standing of the Issuer, the authorization, legal validity and
enforceability of this Agreement, the Shareholders Agreement and the
Surviving Shareholders Agreement and non-contravention of this
Agreement, the Shareholders Agreement and the Surviving Shareholders
Agreement with any laws or regulations;
(x) Any applicable waiting period under the HSR Act relating
to the transactions contemplated hereby shall have expired or been
terminated;
(xi) Prior to any Closing in which the Issuer is to issue and
sell Common Shares at such Closing which would be in excess of the
number of shares of the Issuer's common stock authorized in the
Issuer's certificate of incorporation, the Charter Amendment shall
have been duly filed in the office of the Secretary of State of the
State of Delaware; and
(xii) Such Investor shall have received all documents
reasonably requested relating to the existence of the Issuer, the
corporate authority for entering into, and the validity of this
Agreement, the Ancillary Agreements and the Common Shares and any
other matters relevant hereto and thereto, all in form and substance
reasonably satisfactory to such Investor.
(b) [This Section is intentionally left blank.]
SECTION 6.02. Conditions to the Issuer's Obligations. (a) The
obligations of the Issuer to issue and sell the Common Shares to each Investor
at each Closing on or after the date hereof (including the Fourth Closing)
pursuant to this Agreement are subject to the satisfaction, at or prior to the
applicable Closing Date, of the following conditions:
(i) The representations and warranties of each Investor
contained herein shall be true and correct in all material respects on
and as of such Closing Date as if made on and as of such date;
(ii) Each Investor shall have performed and complied in all
material respects with all agreements required by this Agreement to be
performed or complied with by it at or prior to such Closing Date;
(iii) The issue and sale of the Common Shares by the Issuer
shall not be prohibited by any applicable law, court order or
governmental regulation; and
(iv) Any applicable waiting period under the HSR Act relating
to the transactions contemplated hereby shall have expired or been
terminated.
(b) [This Section is intentionally left blank.]
16
ARTICLE 7
TERMINATION
SECTION 7.01. Grounds for Termination. This Agreement may be
terminated at any time prior to any Closing:
(i) by either the Issuer or (solely with respect to the
rights and obligations of such Investor) any Investor if there shall
be any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited with respect to
the Issuer or such Investor or if consummation of the transactions
contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction with respect to the Issuer or such Investor;
(ii) by MSCP (solely with respect to the obligations of MSCP
and its Affiliates hereunder) on December 18, 2004; or
(iii) by MSCP or any Designated Holder (in either case, solely
with respect to the obligations of such Investor) pursuant to the
terms of Section 9.10 hereof.
The party desiring to terminate this Agreement shall give notice of
such termination to the other parties.
SECTION 7.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 7.01, termination shall be without liability of any
party (or any stockholder, director, officer, employee, partner, agent,
consultant or representative of such party) to any other party to this
Agreement, other than any such liability (including with respect to
representations and warranties) that may have arisen in connection with any
Closing that has been consummated prior to such termination; provided that if
such termination shall result from the willful failure of any party to fulfill
a condition to the performance of the obligations of any other party, failure
to perform a covenant of this Agreement or breach by any party hereto of any
representation or warranty or agreement contained herein, such party shall be
fully liable for any and all damages incurred or suffered by any other party as
a result of such failure or breach. The provisions of Article 8 shall survive
any termination hereof pursuant to Section 7.01.
ARTICLE 8
COVENANTS, ETC.
SECTION 8.01. Preferred Stock Election. On June 1, 1998, MSCI elected,
pursuant to Section 5(b) of the Certificate of Designation relating to the
Series A Preferred Stock of the Issuer, to exchange at the First Closing each
of its shares of such Series A Preferred Stock, in lieu of
17
redemption, for 587 Common Shares. The Issuer hereby makes, as of June 1, 1998,
for the benefit of MSCI, the representations and warranties set forth in
Articles 3 and 4 as of the date such shares were issued to MSCI, it being
understood that such Common Shares shall be deemed "Common Shares", and MSCI
shall be deemed an "Investor" for such purpose.
SECTION 8.02. Certain Financings. Following the purchase by the MSCP
Funds of all of the Common Shares listed on Schedules 2.01(b) and 2.01(c)
hereto to be purchased by them, but prior to the IPO (as defined in the
Shareholders Agreement), the Issuer shall, and shall cause each Subsidiary to,
offer MSCP and its Affiliates the exclusive opportunity to provide equity and
equity-linked financing to the Issuer or such Subsidiary, respectively, prior
to initiating discussions with any other Person (other than (i) the owner of a
hospital, hospital system or foundation solely as consideration for the
acquisition by the Issuer of (x) assets owned by such hospital, hospital system
or hospital foundation or (y) the capital stock of, or other equity interests
in, a Person owning the assets of such hospital, hospital system or hospital
foundation, (ii) issuances of capital stock or other equity securities of a
wholly owned Subsidiary of the Issuer to the Issuer or another wholly owned
Subsidiary of the Issuer, or (iii) issuances of capital stock or other equity
securities of any Subsidiary of the Issuer to physicians or other healthcare
providers (or any respective Affiliates thereof) in connection with bona fide
joint ventures with such Person) regarding obtaining such financing. The Issuer
and MSCP and/or its designated Affiliate(s) shall negotiate the terms of the
proposed financing, including arrangements (referred to herein as the "Carried
Interest Arrangements") providing for the Management Investors' opportunity to
receive a portion of the gains that would otherwise be realized by MSCP and/by
its designated Affiliate(s) (and by any other investor whom MSCP elects to
permit to participate in such financing, if applicable) on such proposed
financing, in good faith for a period of at least 60 days. If the Issuer and
MSCP or such Affiliate(s) cannot negotiate such financing on a mutually
acceptable basis during such 60-day period, the Issuer may initiate discussions
with and obtain such financing from a third party upon terms and subject to
conditions that (i) are at least as favorable to the Issuer as those discussed
with MSCP or such Affiliate(s) and (ii) contemplate carried interest
arrangements for the Management Investors that are more favorable to the
Management Investors than the Carried Interest Arrangements proposed by MSCP or
such Affiliate during the final round of such negotiations. If the Issuer shall
not have obtained such proposed financing within 180 days after the expiration
of such 60-day period, then the Issuer shall again comply with the procedures
set forth in this Section with respect to any proposed equity or equity-linked
financing.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopier) and shall be
deemed to have been duly given or made if sent by telecopy, delivered
personally or sent by registered or certified mail (postage prepaid, return
receipt requested) to such party at its address or telecopier number set forth
on the signature
18
pages hereof, or such other address or telecopier number as
such party may hereinafter specify for the purpose to the party giving such
notice provided notices to MSCP and its Affiliates must also be sent to the
following counsel for MSCP and its Affiliates: ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, phone (▇▇▇) ▇▇▇-▇▇▇▇, fax (▇▇▇)▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇, Esq. All such notices, requests and other communications
shall be deemed received on the date of receipt by the recipient thereof if
received prior to 5:00 p.m. in the place of receipt and such day is a Business
Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
SECTION 9.02. No Waivers; Amendments. (a) No failure or delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed, in the case of
an amendment, by the Issuer, MSCP and Investors (other than MSCP, its
Affiliates and their Permitted Transferees) owning at least 50% of the Common
Shares then owned by such Investors or, in the case of a waiver, by the party
or parties against whom the waiver is to be effective.
SECTION 9.03. Expenses; Documentary Taxes. Except as otherwise
provided in the Ancillary Agreements, each party hereto shall bear its own fees
and expenses incurred in connection with the preparation of this Agreement and
each Ancillary Agreement and the consummation of the transactions contemplated
hereby and thereby; provided that the Issuer shall pay any and all stamp,
transfer and other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement or any of the
Common Shares.
SECTION 9.04. Several Obligations. The obligations of the Investors
hereunder are several. Neither the failure of any Investor to carry out its
obligations hereunder nor of this Agreement to be duly authorized, executed and
delivered by any Investor shall relieve any other Investor of its obligations
hereunder (or affect the rights hereunder of such other Investor). No Investor
shall be responsible for the obligations of, or any action taken or omitted by,
any other Investor hereunder.
SECTION 9.05. Successors, Assigns, Transferees. The provisions of this
Agreement shall be binding upon and accrue to the benefit of the parties hereto
and their respective successors, heirs, executors and administrators.
Notwithstanding the foregoing, neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Issuer or any Investor without the consent of the other
parties hereto. Nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto, and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 9.06. Counterparts. This Agreement may be executed in any
number of counterparts each of which shall be an original with the same effect
as if the signatures thereto and
19
hereto were upon the same instrument. No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
SECTION 9.07. Entire Agreement. The Transaction Agreements (as defined
in the Shareholders Agreement), constitute the entire agreement and
understanding of the parties hereto and thereto in respect of the subject
matter contained herein and therein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter hereof or thereof, other than those expressly set forth or
referred to herein or therein. This Agreement, the Ancillary Agreements and the
other agreements referred to herein and therein supersede all prior agreements
and understandings between the parties hereto and thereto with respect to the
subject matter hereof and thereof, including the letter of intent dated as of
April 2, 1998 among the Issuer, the Executive Managers and MSCI.
SECTION 9.08. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts
to take, or to cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper and advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement.
SECTION 9.09. Applicable Law; Submission to Jurisdiction. This
Agreement shall be construed in accordance with and governed by the laws of the
State of Delaware, without regard to the conflicts of law rules of such state.
Each of the parties hereto hereby consents to the exclusive jurisdiction of the
United States District Court for the District of Delaware and the Chancery
Court of the State of Delaware (and of the appropriate appellate courts
therefrom) over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereto irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of venue in any such court or that any such proceeding which is brought
in accordance with this Section has been brought in an inconvenient forum.
Subject to applicable law, process in any such proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of any
such court. Without limiting the foregoing and subject to applicable law, each
party agrees that service of process on such party as provided in Section 9.01
shall be deemed effective service of process on such party. Nothing herein
shall affect the right of any party to serve legal process in any other manner
permitted by law or at equity or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction. WITH RESPECT TO A
PROCEEDING IN ANY SUCH COURT, EACH OF THE PARTIES IRREVOCABLY WAIVES AND
RELEASES TO THE OTHER ITS RIGHT TO A TRIAL BY JURY, AND AGREES THAT IT WILL NOT
SEEK A TRIAL BY JURY IN ANY SUCH PROCEEDING.
SECTION 9.10. Disclosure Schedules. After the Fourth Closing, the
Issuer may revise the Schedules to Article 3 of this Agreement by delivering
revised Schedules to MSCP and each Designated Holder who is a Purchasing
Investor not less than 15 Business Days prior to the date of each subsequent
Closing. If such Schedules are not revised in connection with a subsequent
Closing, then the Issuer shall deliver a notice to MSCP and each Designated
Holder who is a Purchasing Investor (at least 10 days prior to each such
Closing) that no such revised Schedules are being delivered by the Issuer in
connection with such subsequent Closing. MSCP and each Designated Holder shall
have the right to review the revised Schedules to Article 3 hereof for a period
of 10 Business Days after receipt thereof. At any time within such 10-Business
Day time period, ▇▇▇▇
▇▇
and each Designated Holder shall have the right to terminate this Agreement
(but only as to such Investor) by delivery of a notice to the Issuer if MSCP or
such Designated Holder, as applicable, reasonably believes that the revised
information would reasonably be likely to result in a Material Adverse Effect.
This notice, if given, shall specify the information forming the basis for the
decision to terminate. The Issuer shall have 5 Business Days after receipt of
such notice to review with each such Investor the information forming the basis
for the decision to terminate and to attempt to agree on corrective measures,
if any. If the parties cannot agree on corrective measures within such
5-Business Day period, then this Agreement shall terminate with respect to such
Investor. If this Agreement is not terminated by MSCP or a Designated Holder as
permitted by this Section and Section 7.01(iii), such Investor shall be deemed
to have accepted such revisions, and the Schedules to Article 3 hereof that are
attached to this Agreement as of June 1, 1998 shall be deemed to be superseded
by the revised Schedules to Article 3 hereof.
SECTION 9.11. Effectiveness. This Amended and Restated Subscription
Agreement shall become effective when both of the following have occurred: (1)
this instrument has been executed by the Issuer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
Partners III, L.P. and Investors (other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners
III, L.P., its Affiliates and their Permitted Transferees) owning at least 50%
of the Common Shares then owned by such Investors and (2) the Shareholders
Agreement has been executed by Investors owning at least 75% of the number of
outstanding Common Shares owned by all Investors as of the date hereof.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL PARTNERS III, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL INVESTORS, L.P.
MSCP III 892 INVESTORS, L.P.
By: MSCP III, LLC,
as General Partner of each of the limited
partnerships named above
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III, Inc.,
as Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Address: 1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS IV, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL INVESTORS IV, L.P.
MSDW IV 892 INVESTORS, L.P.
By: MSDW Capital Partners IV, LLC,
as General Partner of each of the limited
partnerships named above
By: MSDW Capital Partners IV, Inc.,
as Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Address: 1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
22
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chairman, President and Chief
Executive Officer
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
23
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Suite 400
District of Columbia 20005
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
24
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
25
/s/ ▇▇▇▇▇▇ ▇. Ways
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. Ways
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇'▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (615) 234-5999
26
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
MPSW PARTNERS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Partner
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
27
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
28
/s/ Art ▇▇▇▇▇
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Name: Art ▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ TRUST,
as Restated on April 26, 1999
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇., Co-Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Co-Trustee
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The undersigned is executing this Agreement as of the date first above written
solely for the purposes of agreeing to Section 8.01.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL PARTNERS III, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
29
SCHEDULE 2.01(a)
Number of Aggregate
Investor Shares Purchase Price
-------- ------ --------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital Partners III, L.P. 15,907 * $ 27,060,670.26
MSCP III 892
Investors, L.P. 1,689 $ 2,873,293.02
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
Investors, L.P. 462 $ 785,945.16
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Capital Partners IV, L.P. 74,760.512 $ 127,181,087.81
MSDW IV 892 Investors, L.P. 6,638.231 $ 11,292,825.81
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Capital Investors IV, L.P. 2,133.257 $ 3,629,054.14
▇▇▇▇▇▇ 8,270 $ 14,068,758.60
▇▇▇▇▇ 1,037 $ 1,764,123.66
▇▇▇▇▇ 791 $ 1,345,633.38
▇▇▇▇▇▇▇ 328 $ 557,987.04
▇▇▇▇▇▇ 162 $ 275,591.16
▇. ▇▇▇▇▇▇ 88 $ 149,703.84
▇▇▇ 112 $ 190,532.16
▇▇▇▇▇▇▇▇ 63 $ 107,174.34
▇▇▇▇▇▇▇▇ 63 $ 107,174.34
▇▇▇▇▇▇▇ 50 $ 85,059.00
Spalding 50 $ 85,059.00
Number of Aggregate
Investor Shares Purchase Price
-------- ------ --------------
▇▇▇▇▇▇▇ 37 $ 62,943.66
Ways 50 $ 85,059.00
▇▇▇▇▇▇ 74 $ 125,887.32
Adlerz 101 $ 171,819.18
▇. ▇▇▇▇▇▇ 24 $ 40,828.32
▇▇▇▇▇▇ 199 $ 338,534.82
▇▇▇▇▇▇▇ 101 $ 171,819.18
▇▇▇▇▇ 24 $ 40,828.32
▇▇▇▇▇▇▇ 374 $ 636,241.32
▇▇▇▇▇▇ 101 $ 171,819.18
▇▇▇▇▇▇▇ 75 $ 127,588.50
▇▇▇▇▇ 101 $ 171,819.18
MPSW Partners 101 $ 171,819.18
Pilgrim 19 $ 32,322.42
Price 50 $ 85,059.00
▇▇▇▇ 299 $ 508,652.82
------- ------------------
Total 114,334 $ 194,502,714.12
--------------------
* Does not include the 587 Common Shares held by MSCP as contemplated by
Section 8.01 of the Subscription Agreement.
SCHEDULE 2.01(b)
Number of Aggregate
Investor Shares Purchase Price
-------- ------ --------------
MSCP Funds* 15,388 $ 26,177,757.84
▇▇▇▇▇ 204 $ 347,040.72
▇▇▇▇▇ 156 $ 265,384.08
▇▇▇▇▇ 17 $ 28,920.06
▇▇▇▇▇▇▇ 64 $ 108,875.52
▇▇▇▇▇▇ 32 $ 54,437.76
▇. ▇▇▇▇▇▇ 18 $ 30,621.24
▇▇▇ 23 $ 39,127.14
▇▇▇▇▇▇▇▇ 13 $ 22,115.34
▇▇▇▇▇▇▇▇ 13 $ 22,115.34
▇▇▇▇▇▇▇ 9 $ 15,310.62
Spalding 9 $ 15,310.62
▇▇▇▇▇▇▇ 7 $ 11,908.26
Ways 9 $ 15,310.62
▇▇▇▇▇▇ 14 $ 23,816.52
Adlerz 17 $ 28,920.06
▇. ▇▇▇▇▇▇ 5 $ 8,505.90
▇▇▇▇▇▇ 36 $ 61,242.48
▇▇▇▇▇▇▇ 17 $ 28,920.06
▇▇▇▇▇ 5 $ 8,505.90
▇▇▇▇▇▇▇ 67 $ 113,979.06
Number of Aggregate
Investor Shares Purchase Price
-------- ------ --------------
▇▇▇▇▇▇ 17 $ 28,920.06
▇▇▇▇▇▇▇ 13 $ 22,115.34
MPSW Partners 17 $ 28,920.06
Pilgrim 4 $ 6,804.72
Price 9 $ 15,310.62
▇▇▇▇ 54 $ 91,863.72
▇▇▇▇▇▇▇ ▇▇ $ 100,369.62
▇▇▇▇▇▇▇▇▇ 29 $ 49,334.22
Faculak 125 $ 212,647.50
▇▇▇▇▇ 59 $ 100,369.62
Lemon 59 $ 100,369.62
▇▇▇▇▇▇▇▇▇▇ Trust 59 $ 100,369.62
------ -----------------
Total 16,627 $ 28,285,519.86
--------------------
*Common Shares to be purchased by the MSCP Funds at the Fourth Closing may be
allocated between the MSCP Funds as directed by the general partner of such
funds.
SCHEDULE 2.01(c)
Division Investor Number of Shares Aggregate Purchase Price
-------- -------- ---------------- ------------------------
I MSCP Funds* 235,131 ** $400,000,154.58
II ▇▇▇▇▇▇ 4,377 $ 7,446,064.86
---------------- ---------------
Total: 239,508 $407,446,219.44
--------------------
* Common Shares to be purchased by the MSCP Funds at the Fourth Closing and
each Closing after the Fourth Closing may be allocated between the MSCP Funds
as directed by the general partner of such funds.
** The number of these shares to be purchased by the MSCP Funds at the Fourth
Closing is 26,711, leaving a balance of 208,420 shares available for purchase
at Closings after the Fourth Closing.
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VANGUARD HEALTH SYSTEMS, INC.
-------------------------------------------------------------------------------
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
-------------------------------------------------------------------------------
Vanguard Health Systems, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware, does hereby certify:
FIRST: The first paragraph of the subsection of Section 3 of the
Amended and Restated Certificate of Incorporation of the Corporation which is
entitled "FOURTH" (that is, the first seven lines of text in said subsection
"FOURTH") is hereby amended to read in total as set forth below:
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 750,000 shares
of capital stock, classified as (i) 150,000 shares of
preferred stock, par value $.01 per share (the "Preferred
Stock"), and (ii) 600,000 shares of common stock, par value
$.01 per share (the "Common Stock"). The designations and the
powers, preferences, rights, qualifications, limitations, and
restrictions of the Preferred Stock and Common Stock are as
follows:
SECOND: This Amendment to the Amended and Restated Certificate of
Incorporation has been duly adopted by the Corporation's Board of Directors and
stockholders in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware, such adoption by the stockholders
being given by written consent in accordance with the provisions of Section 228
of the General Corporation Law of the State of Delaware.
1
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed in its corporate name this 20th day of June, 2000.
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
ATTEST:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary
