EXHIBIT 2.3
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT (this "AGREEMENT"), dated as of July 23, 2004,
by and among VHS Holdings LLC, a Delaware limited liability company ("PARENT"),
Vanguard Health Systems, Inc., a Delaware corporation (the "COMPANY"), and each
of the stockholders of the Company and holders of Options (as defined in the
Merger Agreement (as defined below)) set forth on Schedule I to this Agreement.
WITNESSETH:
WHEREAS, Parent, Health Systems Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent ("SUB"), and the Company are parties to
that certain Agreement and Plan of Merger dated as of the date hereof ("MERGER
AGREEMENT"); and
WHEREAS, pursuant to the Merger Agreement, Sub shall merge into the
Company (the "MERGER"), the separate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION"), and as a result of which, Parent shall be the sole stockholder of
the Surviving Corporation; and
WHEREAS, in connection with the Merger Agreement and the consummation of
the transactions contemplated thereby, including the Merger, the Stockholders
(as defined below) wish to indemnify Parent against certain Losses (as defined
below) and to enter into certain covenants and agreements with Parent and the
Company and among each other;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and subject to and on the terms and conditions herein set
forth, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND TERMS
Section 1.01. Certain Definitions. Terms used, but not defined herein,
shall have the meaning set forth in the Merger Agreement. As used in this
Agreement, the following terms shall have the meanings set forth or as
referenced below:
"AGREEMENT" shall mean this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"APPRAISER" shall have the meaning set forth in Section 4.04(b) hereof.
"CAP" shall have the meaning set forth in Section 4.02 hereof.
"CASH INDEMNITORS" means all Stockholders other than the MSCP Indemnitors
and the Stock Indemnitors.
"CLAIM" shall mean either a Third-Party Claim, a Voluntary Disclosure
Claim, or both, depending on the context.
"CLAIM FACTS" shall have the meaning set forth in Section 4.03(d).
"COMMON STOCK" shall mean the common stock, par value of $.01 per share,
of the Company.
"DEDUCTIBLE" shall have the meaning set forth in Section 4.02 hereof.
"E-MAIL" shall have the meaning set forth in Section 6.01 hereof.
"ELECTION" shall have the meaning set forth in Section 4.04(a) hereof.
"FAIR MARKET VALUE" means, as of any determination time, the fair market
value of a Parent Interest, such value to be determined based on the price at
which a willing seller in possession of all relevant information and under no
compulsion to sell would sell, and a willing buyer in possession of all relevant
information and under no compulsion to purchase would purchase, all of the
outstanding Parent Interests, without applying any minority or illiquidity
discount to such value. Each of the references to "relevant information" in the
preceding sentence shall include, without limitation, all information available
to the Company or Parent relating to the relevant Claim or Claims, regardless of
whether such information becomes available before or after the delivery of the
notice of such Claim or Claims.
"HEALTH CARE REGULATORY LAWS" means the federal Medicare and Medicaid
statutes (which include, but are not limited to, 42 U.S.C. Sections 1320a-7,
1320a-7a, 1320a-7b, 1395nn), the federal TRICARE statute, the Federal False
Claims Act (31 U.S.C. Sections 3729-33), 18 U.S.C. Section 1892, 18 U.S.C.
Section 1341, 18 U.S.C. Section 1343, 18 U.S.C. Sections 1961-63, 18 U.S.C.
Section 286, 18 U.S.C. Section 1001, 18 U.S.C. Section 664, 18 U.S.C. Section
666, 18 U.S.C. Section 1510, 18 U.S.C. Section 1516, 18 U.S.C. Section 1347, 18
U.S.C. Section 669, 18 U.S.C. Section 1035, 18 U.S.C. Section 1518, 31 U.S.C.
Section 3730, and, with respect to each of the above, any ordinance, rule,
regulation or order, all federal Laws regulating prescription drug and
controlled substance sale, use, distribution, marketing and security; all
federal Laws pertaining to human subjects research; Laws pertaining to
precautions against the spread of bloodborne pathogens in the workplace or
healthcare facilities; and all federal Laws pertaining to the licensure and
operation of managed care plans and
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health plans offering health services under Title XIX of the Social Security
Act. Health Care Regulatory Laws shall also mean, with respect to any applicable
state, the state Laws pertaining to substantially similar subject matter, as
well as any state Laws pertaining to the practice of medicine or the allied
health professions.
"INDEMNIFIABLE LOSSES" shall have the meaning set forth in Section 4.01
hereof.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 4.01
hereof.
"JOINDER AGREEMENT" means a Joinder to Indemnification Agreement in
substantially the form of Exhibit A hereto.
"LOSSES" shall mean repayments, refunds, retroactive adjustments or
reimbursement reductions, payments, direct damages or set-offs of any
reimbursement previously received or to be received under any federal healthcare
program (as defined in 42 U.S.C. Section 1320a-7(b)(f)), together with any
penalties, assessments, fines, other obligations, interest (including
prejudgment interest), costs and expenses (including court costs and reasonable
attorneys' fees and expenses (including in connection with the enforcement of
this Agreement) and costs of investigating, preparing or defending any claims)
related thereto.
"MERGER" shall have the meaning set forth in the recitals hereto.
"MERGER AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"MSCP INDEMNITORS" means Xxxxxx Xxxxxxx Capital Partners III, L.P., Xxxxxx
Xxxxxxx Capital Investors, L.P., MSCP III 892 Investors, L.P., Xxxxxx Xxxxxxx
Xxxx Xxxxxx Capital Partners IV, L.P., Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital
Investors, L.P. and MSDW IV 892 Investors, L.P.
"PARENT" shall have the meaning set forth in the preamble hereto.
"PARENT INTERESTS" means Class A membership interests in Parent.
"PERCENTAGE INTEREST" shall mean, with respect to any Stockholder, the
applicable proportional liability (stated as a percentage) of such Stockholder
hereunder, as set forth on a schedule to be delivered by the Company to Parent
prior to the Effective Time. The "Percentage Interest" of each Stockholder shall
be based on the aggregate consideration received by such Stockholder under the
Merger Agreement with respect to Common Shares and Options (including the
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value of any Parent Interests received in exchange for Vanguard Stockholders
Rollover Shares).
"PRIOR AGREEMENTS" means the Shareholders Agreement; the Amended and
Restated Subscription Agreement dated as of June 1, 2000 among the Company, the
MSCP Indemnitors and the other investors named therein; the Surviving
Shareholders Agreement dated as of June 1, 1998 among the Company and the MSCP
Indemnitors and other persons listed on the signature pages thereof; the Voting
Proxy dated as of June 1, 1998 among Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxx,
each of the other persons listed on the signature pages thereof and the Company;
and all letter agreements related thereto (including the letter agreement dated
as of June 1, 1998 among the Company, Xxxxxx Xxxxxxx Capital Partners III, L.P.
and the other persons listed on the signature pages thereof).
"SHAREHOLDERS AGREEMENT" means the Amended and Restated Shareholders
Agreement dated as of June 1, 2000 among the Company, the MSCP Indemnitors and
the other persons listed on the signature pages thereto.
"STOCKHOLDERS" means the stockholders of the Company and holders of
Options set forth on the signature pages hereto together with any other
stockholder of the Company or holder of Options who prior to the Effective Time
executes and delivers a Joinder Agreement.
"STOCKHOLDERS' REPRESENTATIVE" shall have the meaning set forth in Section
5.04 hereof.
"STOCK INDEMNITORS" means the Stockholders that the Company shall have
notified Parent prior to the Closing Date have elected to be "Stock
Indemnitors."
"SUB" shall have the meaning set forth in the preamble hereto.
"SURVIVING CORPORATION" shall have the meaning set forth in the recitals
hereto.
"THIRD-PARTY CLAIM" shall have the meaning set forth in Section
4.03(a)(i).
"VOLUNTARY DISCLOSURE CLAIM" shall have the meaning set forth in Section
4.01.
Section 1.02. Other Terms. Other terms may be defined elsewhere in the
text of this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
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Section 1.03. Other Definitional Provisions.
(a) The words "HEREOF", "HEREIN", "HERETO", "HEREUNDER" and "HEREINAFTER"
and words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) The term "DOLLARS" and character "$" shall mean United States dollars.
(d) The word "INCLUDING" shall mean including, without limitation, and the
words "INCLUDE" and "INCLUDES" shall have corresponding meanings.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND CONSENT OF THE STOCKHOLDERS
Section 2.01. Representations and Warranties. Each of the Stockholders,
severally and not jointly, hereby represents and warrants to each other party
hereto, solely to the extent that any of the following representations and
warranties is applicable to such Stockholder, as follows:
(a) Authority; Binding Effect. Such Stockholder has the requisite power,
capacity and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of such Stockholder, and no other action on the
part of such Stockholder, or the stockholders, members or partners of such
Stockholder, is required to authorize the execution, delivery and performance
hereof by such Stockholder and the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by such
Stockholder and constitutes a valid and binding agreement of such Stockholder,
enforceable against such Stockholder in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.
(b) Title to Company Shares. Such Stockholder is the record and beneficial
owner, and has good and valid title to, all of the Company Shares listed as
owned by it (or to be owned by it) on Schedule I hereto, free and clear of all
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liens other than those arising under the Existing Credit Agreement and the
Shareholders Agreement.
(c) Consents and Approvals; No Violation.
(i) The execution and delivery of this Agreement by such Stockholder
do not, and the performance by such Stockholder of this Agreement and the
consummation of the transactions contemplated hereby will not, require
such Stockholder to make any filing with, or obtain any permit,
authorization, consent or approval of, any governmental authority, or any
third party, other than filings under the HSR Act, if required.
(ii) Assuming that all filings required by the HSR Act are duly made
and all applicable waiting periods thereunder have expired or have been
terminated, the execution and delivery of this Agreement by such
Stockholder and the consummation by such Stockholder of the transactions
contemplated hereby will not (A) conflict with or violate its certificate
of incorporation or by-laws, limited liability company agreement or
similar organizational documents if such Stockholder is not an individual,
in each case, as currently in effect, (B) require any consent or other
action by any Person under, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, payment or
acceleration or result in any other change of any right or obligation or
the loss of any benefit to which such Stockholder is entitled) under, any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation
to which the Company or any of the Company Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound, (C)
result in the creation or imposition of any restriction, mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of
any kind, including any lien for taxes, on any asset of the Company or any
Company Subsidiary, or (D) violate (or result in any change of any right
or obligation or the loss of any benefit to which such Stockholder is
entitled under) any order, writ, injunction, decree, Permit, law, statute,
rule or regulation applicable to such Stockholder or any of such
Stockholder's properties or assets, except in the case of clauses (B), (C)
and (D) for violations, breaches or defaults which would not individually
or in the aggregate have a material adverse effect on such Stockholder or
its ability to perform its obligations hereunder.
(d) Absence of Litigation. There is no claim, dispute, suit, action,
arbitration or, to the knowledge of such Stockholder, investigation or inquiry
pending, or to the knowledge of such Stockholder, threatened against such
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Stockholder, the outcome of which, if adversely determined, would be reasonably
likely individually or in the aggregate, to have a Company Material Adverse
Effect or to materially impair such Stockholder's ability to perform its
obligations hereunder or to consummate the transactions contemplated hereby.
(e) Brokers. No broker, finder or financial advisor is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of such Stockholder.
(f) Compliance. Such Stockholder is not excluded from participation in
Medicare or Medicaid, or barred for cause from participation in any federal
heath care program (as defined in 42 U.S.C. Section 1320a-7(b)(f)).
Section 2.02. Consent. Effective as of immediately following the execution
and delivery of the Merger Agreement, each Stockholder hereby approves and
consents to the Merger and the other transactions contemplated by the Merger
Agreement for all purposes of the GCL.
Section 2.03. Appraisal Rights. Each Stockholder hereby agrees not to
exercise any rights (including, without limitation, under Section 262 of the
GCL) to demand appraisal or any Shares which may arise with respect to the
Merger.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PARENT
Section 3.01. Representations and Warranties. Parent hereby represents and
warrants to each other party hereto as follows:
(a) Authority; Binding Effect. Parent has the requisite power, capacity
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby have been duly authorized by the members of
Parent, and no other limited liability company action or proceeding on the part
of Parent is necessary to authorize the execution, delivery and performance
hereof by Parent and the consummation of the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Parent and
constitutes a valid and binding agreement of Parent, enforceable against Parent
in accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors'
rights generally or to general principles of equity.
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(b) Consents and Approvals; No Violation.
(i) The execution and delivery of this Agreement by Parent do not,
and the performance by Parent of this Agreement and the consummation of
the transactions contemplated hereby will not, require Parent to make any
filing with, or obtain any permit, authorization, consent or approval of,
any governmental authority, or any third party, other than filings under
the HSR Act, if required.
(ii) Assuming that all filings required by the HSR Act are duly made
and all applicable waiting periods thereunder have expired or have been
terminated, the execution and delivery of this Agreement by Parent and the
consummation by Parent of the transactions contemplated hereby will not
(A) conflict with or result in any breach of any provisions of Parent's
organizational documents, (B) require any consent or other action by any
Person under, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, payment or acceleration or result
in any other change of any right or obligation or the loss of any benefit
to which Parent or any Parent Subsidiary is entitled) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which
Parent or any of the Parent Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound, (C) result in the
creation or imposition of any restriction, mortgage, lien, pledge, charge,
security interest, encumbrance or other adverse claim of any kind,
including any lien for taxes, on any asset of Parent or Parent Subsidiary,
or (D) violate (or result in any change of any right or obligation or the
loss of any benefit to which such Stockholder is entitled under) any
order, writ, injunction, decree, Permit, law, statute, rule or regulation
applicable to Parent, any of the Parent Subsidiaries or any of their
properties or assets, except in the case of clauses (B), (C) and (D) for
violations, breaches or defaults which would not individually or in the
aggregate have a Parent Material Adverse Effect.
ARTICLE 4
INDEMNIFICATION
Section 4.01. Indemnification. Subject to Sections 4.02 and 4.03 hereof,
from and after the Effective Time, each Stockholder, severally but not jointly,
hereby agrees to indemnify and hold, to the extent of its Percentage Interest
set forth on Schedule I hereto, Parent and its Affiliates, directors, officers,
employees, agents, shareholders, members and partners (collectively, the
"INDEMNIFIED
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PARTIES") harmless from and against any and all Losses suffered by an
Indemnified Party or by the Company based upon, attributable to or resulting
from a Third-Party Claim (as defined below) or a voluntary disclosure or
rebilling that has been made or submitted to a governmental authority and has
not been made or submitted in response to a Third-Party Claim (each, a
"VOLUNTARY DISCLOSURE CLAIM") relating to (i) the submission, prior to the
Effective Time, by the Company or any Company Subsidiary of any improper xxxx to
any federal health care program (as defined in 42 U.S.C. Section 1320a-7(b)(f))
(such Losses to be computed net of any additional revenue received by any
Company Facility as a result of rebillings after the Effective Time for services
rendered prior to the Effective Time), other than any Losses relating to
settlements of Medicare, Medicaid or Medi-Cal cost reports with fiscal
intermediaries for such programs, or (ii) a violation of 42 U.S.C. Section
1320a-7b occurring prior to the Effective Time. For purposes of this Section
4.01, an improper xxxx includes (without limitation) any xxxx submitted as part
of any pattern or practice of billing federal health care programs in a manner
that violates applicable Laws or regulations, including, without limitation, the
following practices: (A) upcoding; (B) unbundling; (C) miscoding; (D)
double-billing; (E) submitting a xxxx that is prohibited to be submitted due to
a violation of 42 U.S.C. Section 1395nn and the regulations promulgated
thereunder; or (F) submitting a xxxx for services rendered if the services are
related to an arrangement that violates any Health Care Regulatory Laws. Losses
for which indemnification is required pursuant to the first sentence of this
Section 4.01 shall be referred to herein as "INDEMNIFIABLE LOSSES."
Section 4.02. Limitations on Indemnification. The Stockholders shall not
have any liability under Section 4.01:
(a) unless and until it is finally determined that the total amount of
Indemnifiable Losses to the Indemnified Parties exceeds, in the aggregate,
$10,000,000 (the "DEDUCTIBLE"), and then only to the extent that such
Indemnifiable Losses exceed the Deductible;
(b) for Indemnifiable Losses in an aggregate amount exceeding $50,000,000
(the "CAP");
(c) for any Indemnifiable Loss arising from a Third-Party Claim or
Voluntary Disclosure Claim as to which notice, under the circumstances and in
the manner specified in Section 4.03, has not been provided within eighteen (18)
months of the Closing Date; or
(d) for any individual Stockholder, in amplification of the foregoing, (i)
with respect to any particular Claim, in an amount greater than the product of
(A) the amount of Indemnifiable Losses in respect of such Claim and (B) such
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Stockholder's Percentage Interest, and (ii) for all Claims which may be made
under Section 4.01, in an aggregate amount exceeding the product of the Cap and
the Percentage Interest of such Stockholder.
Section 4.03. General Indemnification Procedures. (a) Any Claim for
indemnification shall be made by providing notice of an expected Indemnifiable
Loss within eighteen (18) months of the Closing Date as follows:
(i) With respect to an expected Indemnifiable Loss related to a
Third-Party Claim for which an Indemnified Party seeks indemnification
under this Article 4, by giving written notice promptly after such
Indemnified Party receives notice or otherwise becomes aware of the
commencement of the judicial (criminal or civil), administrative or
arbitral action, suit (including cross-claims and counter-claims),
proceeding (public or private), investigation, claim, demand, hearing,
inquiry, subpoena, governmental allegation or proceeding, including any of
the foregoing as to which the response may be a voluntary disclosure or
rebilling (each, a "THIRD-PARTY CLAIM"), against such Indemnified Party,
the Company or any Company Subsidiary. Such notice shall be delivered to
counsel for the Stockholders (designated by the Stockholders'
Representative) pursuant to a common interest agreement and shall: (A)
identify the provision(s) of this Agreement upon which such Claim is
based, (B) include true and correct copies of any written document related
to such Claim furnished to the Indemnified Party by the Person asserting
such Claim, including all correspondence received from the applicable
governmental authority involved in such Claim, and (C) describe in
reasonable detail the nature of the Claim and the facts and circumstances
giving rise thereto, including a good faith estimate of the amount
believed to be in controversy and the basis for such estimate, the
governmental authority involved and specifying the Company Facility or
Company Facilities and the relevant service, contract or transaction to
which the Claim relates as well as the time periods covered. The parties
agree that the good faith estimate of the amount believed to be in
controversy shall be the basis for a determination as to whether the
Deductible has been met.
(ii) With respect to any expected Indemnifiable Loss related to a
Voluntary Disclosure Claim for which an Indemnified Party seeks
indemnification, by giving written notice promptly upon making such
voluntary disclosure or upon submitting such rebilling. Such notice shall
be delivered to counsel for the Stockholders (designated by the
Stockholders' Representative) pursuant to a common interest agreement and
shall (A) identify the provision(s) of this Agreement upon which such
Claim is based and (B) describe in reasonable detail the nature of the
Claim and the facts and circumstances giving rise thereto, including a
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good faith estimate of the amount believed to be in controversy, and the
governmental authority involved and specifying the Company Facility or
Company Facilities and the relevant service, contract or transaction to
which the Claim relates as well as the time periods covered. With respect
to Indemnifiable Losses relating to any Voluntary Disclosure Claim, the
Indemnified Party may estimate the size of the expected Indemnifiable Loss
in good faith based upon all information available (and shall provide all
such information to the Stockholders' Representative) in order to
determine whether the Deductible has been met. Prior to any voluntary
disclosure or rebilling which may result in an Indemnifiable Loss
hereunder, the Indemnified Party shall notify the Stockholders'
Representative of the potential voluntary disclosure or rebilling and
shall consult with the Stockholders' Representative, or Stockholders'
counsel reasonably satisfactory to the Indemnified Party, with respect
thereto. Subject to Section 4.03(e), no Indemnified Party shall settle or
compromise any Voluntary Disclosure Claim or make any admission of guilt
or liability with respect thereto without the prior written consent of the
Stockholders' Representative, which shall not be unreasonably withheld,
unless such settlement or compromise does not involve any Indemnifiable
Losses for which an Indemnified Party is entitled to indemnification
pursuant to Section 4.01. Any Indemnifiable Losses incurred as a result of
(1) a voluntary disclosure or rebilling which is made in response to or
after being contacted by a governmental authority or (2) an action taken
by a Governmental Authority that would constitute a Third-Party Claim
which is taken in response to a voluntary disclosure or rebilling shall be
treated as a Third-Party Claim for all purposes under this Agreement and,
among other things, the procedures set forth in Sections 4.03(a)(i)
through 4.03(a)(iv) and 4.03(b) shall apply.
(iii) The Stockholders shall have the right, at their sole option
and expense, to assume control of the defense of any Third-Party Claim
(other than those related to a self-disclosure or rebilling not related to
an inquiry by any governmental authority) which relates to any
Indemnifiable Losses hereunder with respect to which an Indemnified Party
is seeking indemnification hereunder, with counsel reasonably satisfactory
to the Indemnified Party. Notwithstanding the foregoing, however, the
Stockholders may not assume control of the defense of any Third-Party
Claim to the extent that (A) the Third-Party Claim relates to or arises in
connection with any criminal liability of the Indemnified Party, (B) the
Third-Party Claim seeks an injunction or equitable relief against the
Indemnified Party, or (C) the Indemnified Party reasonably believes an
adverse determination with respect to the Third-Party Claim would be
materially detrimental to the Indemnified Party's reputation or future
business prospects, but in any event, the Stockholders shall remain
subject
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to their indemnification obligations set forth in this Article 4. Nothing
in this paragraph shall be construed to impair the right of the
Stockholders to participate in the defense of any Third-Party Claim for
which an Indemnified Party is seeking indemnification under this
Agreement.
(iv) The Indemnified Party shall have the right to employ separate
counsel in the defense (including any decision as to voluntary disclosure
or rebilling) of any Third-Party Claim and to participate in the defense
thereof at its own expense; provided such separate counsel may be retained
at the expense of the Stockholders if (A) the retention of such counsel
has been specifically authorized by the Stockholders, (B) in the written
opinion of counsel to the Indemnified Party a conflict of interests
exists, or (C) the Stockholders fail to take reasonable steps to
diligently defend such claim. So long as the Stockholders are diligently
defending any Third-Party Claim, or if the Stockholders are not permitted
to assume the defense of such Third-Party Claim as the result of the
second sentence of Section 4.03(a)(iii), the Indemnified Party shall not
settle any Third-Party Claim or make any admission of guilt or liability
with respect thereto without the consent of the Stockholders, which
consent shall not be unreasonably withheld or delayed. If the Stockholders
do not elect to assume the defense of such Third-Party Claim, the
Indemnified Party shall have the right, in addition to any other right or
remedy it may have hereunder, at the Stockholders' expense, to defend such
Third-Party Claim; provided that (1) the Indemnified Party shall not have
any obligation to participate in the defense of, or defend, any such
Third-Party Claim; and (2) the Indemnified Party's defense of or
participation in the defense of any such claim shall not in any way
diminish or lessen the obligations of the Stockholders under this Article
4.
(b) Subject to Section 4.03(e), the Stockholders shall not settle or
compromise any Third-Party Claim with respect to which an Indemnified Party is
seeking indemnification hereunder unless (i) the Indemnified Party consents
(which consent shall not be unreasonably withheld if such settlement or
compromise includes no admission or concession of wrongdoing by the Indemnified
Party) or (ii) the relief consists solely of money damages and the Indemnified
Party is given a full and complete release in a form reasonably satisfactory to
the Indemnified Party of any and all liability by all relevant parties to such
Third-Party Claim. The parties hereto agree to cooperate fully with each other
in connection with the defense, negotiation or settlement of any such
Third-Party Claim.
(c) The failure of an Indemnified Party to give prompt notice of any Claim
as described in the first sentence of Section 4.03 shall not release, waive or
otherwise affect the Stockholders' obligations with respect thereto, except to
the
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extent that the Stockholders can demonstrate actual loss and prejudice as a
result of such failure; provided that nothing in this Section shall be deemed to
extend or otherwise affect the 18-month period within which any Claim for
indemnification must be submitted pursuant to Section 4.02(c).
(d) The scope of any Claim made hereunder shall be limited to the facts
and circumstances set forth in the notice of such Claim, as described in Section
4.03 (the "CLAIM FACTS"); provided that such limitation shall not limit or
reduce the scope of Indemnifiable Losses in respect of such Claim, regardless of
when such Losses are identified or incurred, which may include (i) other Losses
based upon, attributable to or resulting from the facts and circumstances
underlying the Claim Facts, in the case of a Third-Party Claim, (ii) Losses
based upon, attributable to or resulting from actions of the type described in
the last sentence of Section 4.03(a)(ii) taken in response to the Claim Facts
and (iii) Losses based upon, attributable to or resulting from the expansion of
a governmental investigation or proceeding that is the subject of, or which, in
the circumstances described in the immediately preceding clause (ii), is taken
in response to, the Claim Facts.
(e) In making any determination regarding whether the withholding of
consent to the settlement or compromise of any Third-Party Claim or Voluntary
Disclosure Claim, or the admission of guilt or liability with respect thereto,
is reasonable, the Stockholder's Representative or Indemnified Party, as the
case may be, shall make its determination based on an objective standard, taking
into account solely the size and merits of the claims made and applicable
defenses, and the projected effect upon the Company, and without regard to the
indemnification obligations or the limitations on such obligations as
established by this Agreement. If (i) an Indemnified Party requests the consent
of the Stockholders' Representative, and such consent is not received within
fifteen (15) days of such request (or such shorter period as may be demanded by
the other parties to the proposed settlement, compromise or admission), and (ii)
the Indemnified Party determines in good faith that the withholding of consent
with respect to the proposed settlement or compromise is unreasonable in
accordance with the standard set forth in the preceding sentence, then the
Indemnified Party may settle or compromise the matter at issue, and the fact of
such action (including, without limitation, the conditions upon, or the manner
or form of such settlement or compromise) shall not impair the Indemnified
Party's right to indemnification hereunder in respect of such settlement or
compromise, subject to a final judicial determination of (A) whether the
Indemnified Party is entitled to indemnification hereunder and/or the amount of
indemnification, if any, that such Indemnified Party is entitled to receive
under this Article 4 with respect to the claim so settled or compromised and (B)
whether withholding of consent was reasonable pursuant to the aforesaid
standard.
13
Section 4.04. Payment. Any payment or series of related payments by the
MSCP Indemnitors under this Article 4 that (i) is less than $5 million (with
respect to all MSCP Indemnitors in the aggregate) shall be made in cash and (ii)
that is equal to or greater than $5 million (with respect to all MSCP
Indemnitors in the aggregate) shall be made, at the election (the "ELECTION") of
the MSCP Indemnitors, in (A) cash and/or (B) by surrendering Parent Interests
having an aggregate Fair Market Value (determined as of the date on which the
relevant notice made pursuant to Section 4.03(a)(i) or (ii), as the case may be,
is received by counsel for the Stockholders) equal to the amount of such payment
less the amount of any cash payment that the MSCP Indemnitors elect to make
pursuant to clause (ii)(A) of this sentence; provided that if the MSCP
Indemnitors do not make the Election by written notice to Parent within 10
business days of the final determination of Fair Market Value pursuant to
Section 4.04(b), then the MSCP Indemnitors shall be deemed to have elected to
make such payment or series of payments solely in cash. Any payment by the Cash
Indemnitors under this Article 4 shall be made in cash. Any payment by the Stock
Indemnitors under this Article 4 shall be made by surrendering Parent Interests
having an aggregate value equal to the amount of such payment, it being
understood that for this purpose each Parent Interest shall be deemed to have a
value equal to the value of a Parent Interest at the Effective Time that is
implied by the Vanguard Stockholders Equity Commitment Letter dated the date
hereof among Parent and certain executive officers of the Company.
(b) If the MSCP Indemnitors shall elect to surrender Parent Interests
pursuant to Section 4.04(a), then Parent and the MSCP Indemnitors shall seek to
agree on the Fair Market Value. If Parent and the MSCP Indemnitors cannot agree
on the Fair Market Value within 30 days of the date on which the MSCP
Indemnitors shall have acknowledged their obligation (or become obligated
pursuant to a final, non-appealable order of a court of competent jurisdiction)
to surrender such Parent Interests, then the Board of Directors of Parent shall
reasonably and in good faith select an investment banking firm of recognized
national standing that is independent of the MSCP Indemnitors and any affiliate
thereof, one the one hand, and Parent and any affiliate thereof, on the other
hand (the "APPRAISER") to determine the Fair Market Value. Parent and the MSCP
Indemnitors shall jointly instruct the Appraiser to determine the Fair Market
Value within 45 days of the date of its engagement, and such determination shall
be final, binding and conclusive upon Parent and the MSCP Indemnitors. The fees
and expenses of the Appraiser shall be shared equally by Parent, on the one
hand, and the MSCP Indemnitors, on the other hand.
Section 4.05. Treatment of Indemnity Payments. The Stockholders and the
Indemnified Parties agree that for Federal, state and local income tax purposes,
all indemnification payments made in accordance with this Article 4
14
will be treated by the parties as an adjustment to the Merger Consideration,
unless otherwise required by applicable Law.
Section 4.06. Sole Remedy. Each of the Company and Parent acknowledges and
agrees that the sole and exclusive remedy of all Indemnified Parties from and
after the Closing, with respect to any and all claims (whether relating to
third-party claims or otherwise) relating to the subject matter described in
Article 4 of this Agreement and the Merger Agreement, shall be pursuant to the
provisions set forth in this Article 4. In furtherance of the foregoing, each of
the Company and Parent hereby waives, to the fullest extent permitted under
applicable Law, any and all rights, including any rights it may have to seek
punitive or consequential damages from the other parties hereto, and all claims
and causes of action it may have against the other parties hereto from and after
the Closing arising under any federal, state, local or foreign statute, law,
ordinance, rule or regulation (including, without limitation, any such right,
claim or cause of action arising under or based upon common law or otherwise).
The foregoing limitations and waivers shall not apply in respect of claims for
fraud in the inducement or any claim arising under any agreement other than this
Agreement or the Merger Agreement.
Section 4.07. Equal Treatment Of Stockholders. No Indemnified Party may
seek indemnification from any Stockholder in respect of any Indemnifiable Loss
or otherwise enforce this Article 4 against any Stockholder except to the extent
that it seeks indemnification from all Stockholders (in proportion to their
respective Percentage Interests) in respect of such Indemnifiable Loss or
otherwise enforces this Article 4 against all Stockholders in the same manner.
No Indemnified Party may release any Stockholder from, or enter into a
settlement with any Stockholder with respect to, any of such Stockholder's
obligations pursuant to this Article 4 except to the extent that such
Indemnified Party simultaneously releases all Stockholders from, or offers to
enter into an equivalent settlement with all Stockholders with respect to, such
obligations.
ARTICLE 5
COVENANTS
Section 5.01. Confidentiality. From and after the Closing Date, each of
the Stockholders shall hold, and shall cause its Affiliates, advisors,
accountants, attorneys and representatives to hold, any material non-public
information concerning or relating to the Company, the Surviving Corporation or
any of the Subsidiaries in confidence except for such disclosures as may be (i)
consented to by Parent in writing or (ii) required by Law.
15
Section 5.02. Termination of Prior Agreements. With respect to the
transactions contemplated by the Merger Agreement, each Stockholder hereby
waives the applicability of and such Stockholder's rights under any preemptive
right, right of first refusal or any similar right that such Stockholder has or
may have under or pursuant to the Prior Agreements. Each Stockholder who is a
party to a Prior Agreement hereby covenants and agrees with the other
Stockholders, the Company and Parent that, effective immediately upon the
Closing, such Prior Agreement shall terminate and be deemed canceled in its
entirety, and each Stockholder unconditionally and forever releases and
discharges each other party to such Prior Agreement from all obligations and
liabilities arising thereunder. From and after the Closing, Parent agrees that
the Company and its successors and assigns unconditionally release and forever
discharge each party to each Prior Agreement (other than the Company) from all
obligations and liabilities arising thereunder. The foregoing termination of the
Prior Agreements and Parent's covenant in this paragraph shall be of no force or
effect unless and until the Closing shall have occurred and shall have no effect
on any Stockholder's right to receive the Merger Consideration for each Share or
payment under the Merger Agreement in respect of Options, and the Prior
Agreements shall remain in full force and effect in accordance with their terms
unless and until such time as the Closing has occurred.
Section 5.03. Release. Effective as of the Effective Time, each
Stockholder unconditionally and irrevocably and forever releases and discharges
the Company, its successors and assigns, and any present or former directors,
officers, employees or agents of the Company (collectively, the "RELEASED
PARTIES"), of and from, and hereby unconditionally and irrevocably waives, any
and all claims, debts, losses, expenses, proceedings, covenants, liabilities,
suits, judgments, damages, actions and causes of action, obligations, accounts,
liabilities of any kind or character whatsoever, known or unknown, suspected or
unsuspected, in contract or in to, direct or indirect, at law or in equity,
arising out of or relating to the business, affairs and management of the
Company and the transactions contemplated by the Merger Agreement (collectively,
"RELEASED CLAIMS"), that each such Stockholder ever had, now has or ever may
have or claim to have against any Released Party, for or by reason of any
matter, circumstance, event, action, inaction, omission, cause or thing
whatsoever arising prior to the Effective Time; provided that this release does
not extend to (a) claims to enforce the terms or any breach of this Agreement or
the Merger Agreement or any document or agreement delivered hereunder or
thereunder or any of the provisions set forth herein or therein, or (b) any
claim for indemnification or contribution by a Stockholder in his, or her or its
capacity as a former officer, director or fiduciary of the Company. In addition,
nothing in this Section 5.04 affects a Stockholder's rights to recover wages,
bonuses, employee benefits, and other compensatory amounts that are due to him
or her in the ordinary course of business, consistent with past practice, or to
receive the Merger
16
Consideration for each Share, payment under the Merger Agreement in respect of
such Stockholder's Options or any other payment otherwise due to such
Stockholder under the Merger Agreement.
Section 5.04. Stockholders' Representative. (a) Each Stockholder hereby
irrevocably appoints MSDW Capital Partners IV, LLC (the "STOCKHOLDERS'
REPRESENTATIVE") as its agent and attorney-in-fact, with full power, by and in
the name of such Stockholder, to execute any and all instruments or other
documents on behalf of such Stockholder, and to do any and all other acts or
things on behalf of such Stockholder, which the Stockholders' Representative may
deem necessary or advisable, or which may be required pursuant to this Agreement
or otherwise, in connection with the consummation of the transactions
contemplated by this Agreement and the Merger Agreement and the performance of
all obligations hereunder or thereunder at or following the Closing. Without
limiting the generality of the foregoing, the Stockholders' Representative shall
have the full and exclusive authority to (i) agree with Parent with respect to
any matter or thing required or deemed necessary by the Stockholders'
Representative in connection with the provisions of this Agreement calling for
the agreement of Stockholders, give and receive notices and receive service of
process on behalf of all Stockholders, and act on behalf of Stockholders in
connection with any matter as to which Stockholders are or may be obligated
under the Merger Agreement or this Agreement, all in the absolute discretion of
the Stockholders' Representative; provided that the Stockholders' Representative
shall not be required to make any payments on a behalf of any Stockholder
pursuant to Article 4 hereof; (ii) in general, do all things and perform all
acts, including without limitation executing and delivering all agreements,
certificates, receipts, consents, elections, instructions, and other instruments
or documents contemplated by, or deemed by the Stockholders' Representative to
be necessary or advisable in connection with, the Merger Agreement or this
Agreement; and (iii) take all actions necessary or desirable in connection with
the performance of obligations under Article 3 of the Merger Agreement,
including to withhold funds for satisfaction of expenses or other liabilities
and obligations.
(b) Notwithstanding anything to the contrary contained herein, without the
prior written consent of the Stockholders, the Stockholders' Representative
shall not agree to any amendment or modification of this Agreement, enter into
any other contract, agreement, arrangement or understanding or execute any
document or instrument, that would: (i) expand the indemnification obligations
of the Stockholders under Article 4 of this Agreement; (ii) impose any
obligations on the Stockholders not set forth in this Agreement as of the date
hereof (other than administrative, technical or procedural matters relating to
the performance of this Agreement and the discharge of the Stockholders'
obligations hereunder); or (iii) materially alter the economic terms of the
Merger as set forth in the Merger Agreement as of the date hereof.
17
(c) The Stockholders shall cooperate with the Stockholders' Representative
and any accountants, attorneys or other agents whom it may retain to assist in
carrying out its duties hereunder. All decisions by the Stockholders'
Representative shall be binding upon all Stockholders, and no Stockholder shall
have the right to object, dissent, protest or otherwise contest the same. The
Stockholders' Representative may communicate with any Stockholder or any other
Person concerning its responsibilities hereunder, but it is not required to do
so. The Stockholders' Representative has a duty to serve in good faith the
interests of the Stockholders and to perform its designated role under this
Agreement, but the Stockholders' Representative shall have no fiduciary duty or
financial liability whatsoever to any Person relating to its service hereunder
(including any action taken or omitted to be taken), except that it shall be
liable for harm which it directly causes by its gross negligence or an act of
willful misconduct.
(d) Each Stockholder, severally but not jointly, hereby agrees to
indemnify and hold, to the extent of its Percentage Interest set forth on
Schedule I hereto, harmless the Stockholders' Representative against any
out-of-pocket loss, reasonable expense (including reasonable attorney's fees) or
other liability arising out of its service as Stockholders' Representative under
this Agreement, other than for harm directly caused by its gross negligence or
an act of willful misconduct; provided that no Stockholder shall be required to
indemnify the Stockholders' Representative against any loss, expense or
liability arising from an action, suit, proceeding or other claim brought by
another Stockholder. In furtherance of the foregoing, Parent and the Company
shall withhold from the aggregate amount payable to each Stockholder as Merger
Consideration or payment in respect of Options pursuant to the Merger Agreement
an amount equal to the product of (i) $100,000 times (ii) such Stockholder's
Percentage Interest. All such amounts so withheld shall be deposited in escrow
for the benefit of and use by the Stockholders' Representative promptly after
the Effective Time with a third-party escrow agent designated by the
Stockholders' Representative for the purpose of funding indemnification
obligations arising pursuant to this Section 5.04(d). Any amounts remaining in
such escrow account after settlement of all Claims hereunder shall be
distributed to the Stockholders in proportion to their respective Percentage
Interests.
(e) The Stockholders' Representative may resign at any time by notifying
in writing Parent and the Stockholders. The Stockholders' Representative shall
not appoint any substitute or replacement Stockholders' Representative without
the prior written consent of Stockholders holding a majority of the aggregate
Percentage Interests set forth on Schedule I hereto, which consent shall not be
unreasonably withheld. The term Stockholders' Representative shall include any
substitute appointed pursuant hereto.
18
ARTICLE 6
MISCELLANEOUS
Section 6.01. Notices. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed duly given or
made as follows: (a) if delivered personally, upon receipt; (b) if sent by
registered or certified mail (postage prepaid, return receipt requested), upon
receipt; (c) if sent by reputable overnight air courier (such as Federal Express
or DHL), two business days after mailing; or (d) if sent by facsimile
transmission or electronic mail ("E-MAIL") transmission, so long as a receipt of
such e-mail is requested and received), with a copy mailed as provided in
clauses (b) or (c) above, when transmitted and the appropriate confirmation is
received. Such notices, claims, demands and other communications shall be sent
to the respective parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to the Stockholders' Representative:
Xxxxxx Xxxxxxx Capital Partners
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxx
Fax: 000.000.0000
Email: xxxx.xxx@xxxxxxxxxxxxx.xxx
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Fax: 000.000.0000
Email: xxxx@xxx.xxx
If to any Stockholder:
To such Stockholder's address, fax number
or e-mail as set forth on the signature pages hereto
If to the Company:
Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Esq.
19
Fax: 000.000.0000
Email: xxxxxxxx@xxxxxxxxxxxxxx.xxx
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Fax: 000.000.0000
Email: xxxx@xxx.xxx
If to Parent:
VHS Holdings LLC
c/o Blackstone Management Associates IV L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax: 000.000.0000
e-mail: xxxxxxxx@xxxxxxxxxx.xxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx Xxxxx
Fax: 000.000.0000
Email: xxxxxx@xxxxxx.xxx
Section 6.02. Amendment; Waiver, Etc. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Parent, the Company and the
Stockholders' Representative, or in the case of a waiver, by the party against
whom the waiver is to be effective; provided that any amendment or waiver of
Section 5.04(b) shall require the prior written consent of all Stockholders. No
failure or delay by 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. Except as specifically provided
otherwise herein, the rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
20
Section 6.03. Assignment. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other parties hereto and any attempt to assign this Agreement without such
consent shall be void and of no effect; provided that Parent shall be entitled
to assign its rights and obligations hereunder, in part or in full, to an
Affiliate so long as Parent shall remain liable for its obligations hereunder.
Section 6.04. Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without giving effect to the provisions thereof relating to
conflicts of law. The parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Southern District of New
York or any New York state court situated in the Borough of Manhattan, and each
of the parties hereby irrevocably consents to the jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or 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, each party agrees that service of process
on such party as provided in Section 6.01 shall be deemed effective service of
process on such party.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 6.05. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
Section 6.06. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
21
IN WITNESS WHEREOF, the Company, Parent and each of the Stockholders have
executed and delivered the agreement, or caused this Agreement to be executed
and delivered by their duly authorized representatives, as of the date first
written above.
THE COMPANY:
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Chairman of the Board and
Chief Executive Officer
PARENT:
VHS HOLDINGS LLC
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: President and Treasurer
STOCKHOLDERS:
XXXXXX XXXXXXX CAPITAL
PARTNERS III, X.X.
XXXXXX XXXXXXX 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: Xxxxxx Xxxxxxx Capital
Partners III, Inc., as Member
By: /s/ Xxxx Xxx
-----------------------------------
Name: Xxxx Xxx
Title: Managing Director
XXXXXX XXXXXXX XXXX XXXXXX
CAPITAL PARTNERS IV, X.X.
XXXXXX XXXXXXX XXXX XXXXXX
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/ Xxxx Xxx
-----------------------------------
Name: Xxxx Xxx
Title: Managing Director
/s/ Xxxxxxx X. Xxxxxx, Xx.
----------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx
EXHIBIT A
JOINDER TO INDEMNIFICATION AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the date
written below by the undersigned (the "JOINING PARTY") in accordance with the
Indemnification Agreement dated as of July 23, 2004 (the "INDEMNIFICATION
AGREEMENT") among VHS Holdings LLC, Vanguard Health Systems, Inc. and the
Stockholders named therein, as the same may be amended from time to time.
Capitalized terms used, but not defined, herein shall have the meaning ascribed
to such terms in the Indemnification Agreement.
The Joining Party hereby acknowledges, agrees and confirms that, by its
execution of this Joinder Agreement, the Joining Party shall be deemed to be a
party to the Indemnification Agreement as of the date hereof and shall have all
of the rights and obligations of a "Stockholder" thereunder as if it had
executed the Indemnification Agreement. The Joining Party hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Indemnification Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as
of the date written below.
Date: [ ], 2004
[NAME OF JOINING PARTY]
By:
Name:
Title:
Address, fax and e-mail for notices:
