Exhibit 10.10
ADVISORY SERVICES AND MONITORING
AGREEMENT
This Advisory Services and
Monitoring Agreement (this “ Agreement ”) is
entered into as of August 23, 2007, among Symbion, Inc.,
a Delaware corporation (the “ Company ”),
Symbion Holdings Corporation, a Delaware corporation (“
Parent ”), and Crestview Advisors, L.L.C., a Delaware
limited liability company (“ Advisor
”).
WHEREAS , pursuant to the terms of the Agreement and
Plan of Merger dated as of April 24, 2007 (the “
Merger Agreement ”) by and among the Company, Symbol
Acquisition, L.L.C., a Delaware limited liability company (and
predecessor entity of Parent), and Symbol Merger Sub, Inc., a
Delaware corporation, Symbol Merger Sub, Inc. will be merged
with and into the Company, with the Company as the surviving
corporation (the “ Merger ”);
WHEREAS , prior to but in connection with the Merger,
Symbol Acquisition, L.L.C. will be converted into Parent, which
will become the holding company of the Company by virtue of the
Merger;
WHEREAS , in connection with the Merger, the Advisor
(together with any investment funds managed or advised by such
entity) has provided advice and analysis including assistance with
due diligence and other investigatory matters related to the
Company, Parent, their subsidiaries and other affiliates and the
industries in which they operate, and advice with respect to
financing facilities and related arrangements and other matters
(collectively, “ Advisory Services
”);
WHEREAS , Advisor has staff specially skilled in
corporate finance, strategic corporate planning, and other
management skills and advisory and business monitoring
services;
WHEREAS , Parent, the Company and subsidiaries of the
Company (collectively, the “ Company Group ”)
will require such skills and services from Advisor in connection
with their business operations and execution of their strategic
plan going forward;
WHEREAS , Advisor is willing to provide such skills and
services to Parent, the Company and the other members of the
Company Group; and
WHEREAS , concurrently herewith, Parent, Crestview
Symbion Holdings, L.L.C., a Delaware limited liability company (the
“ Crestview Shareholder ”) and certain other
persons named therein are entering into a shareholders agreement
relating to their shareholdings in Parent and certain matters
applicable to Parent (the “ Shareholders Agreement
”).
NOW, THEREFORE
, in consideration of the mutual
covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1.
Appointment.
(a)
The Company and Parent hereby
appoint Advisor, or its designees, as one of their financial
advisors with respect to the following services to the extent
appropriate and requested by Parent, the Company or any member of
the Company Group: (i) assisting Parent, the Company or any
member of the Company Group in analyzing its operations and
historical performance; (ii) assisting Parent, the Company or
any member of the Company Group in analyzing future prospects;
(iii) assisting Parent, the Company or any member of the
Company Group with respect to future proposals for tender offers,
acquisitions, sales, mergers, financings, exchange offers,
recapitalizations, restructurings or other similar transactions
that may be consummated during the term of this Agreement; and
(iv) providing financial and business monitoring services,
including with respect to assisting Parent, the Company or any
member of the Company Group in preparing a strategic
plan.
(b)
Advisor does not make any
representations or warranties, express or implied, in respect of
the services to be provided by Advisor or any of its designees
hereunder. In no event shall Advisor or any of its respective
Affiliates (as defined in the Shareholders Agreement) be liable to
Parent, the Company, any other member of the Company Group or any
of their respective Affiliates for any act, alleged act, omission
or alleged omission that does not constitute gross negligence or
willful misconduct of Advisor or its designee as determined by a
final, non-appealable determination of a court of competent
jurisdiction.
(c)
Advisor or its designees shall
devote such time and efforts to the performance of services
contemplated hereby as Advisor or its designees reasonably deems
necessary or appropriate; provided , however , that
no minimum number of hours is required to be devoted by Advisor or
its designees on a weekly, monthly, annual or other basis.
Parent and the Company acknowledge that Advisor’s or its
designees’ services are not exclusive to Parent, the Company
or any other members of the Company Group and that Advisor and its
designees may render similar services to other persons and
entities.
2.
Payment of Fees.
(a)
In consideration of the Advisory
Services provided by Advisor in connection with the transactions
related to the consummation of the Merger, Parent agrees to pay to
Advisor (or its designees) upon execution of this Agreement, a
one-time fee (the “ Transaction Fee ”) equal to
$6,300,000.
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(b)
In consideration of the ongoing
management and other advisory services to be provided by Advisor to
Parent, the Company and any other member of the Company Group and
their respective subsidiaries, the Company will pay to Advisor (or
its designees) an annual fee (“ Annual Fee ”)
equal to $1 million on the date this agreement becomes effective
(the “ Effective Date ”) and on each anniversary
of the Effective Date. The Annual Fee shall also be payable
on the date of termination or expiration of this Agreement (if
payable upon termination or expiration of this Agreement, such
final installment to be paid on the effective date of such
termination or expiration and prorated for any final period
consisting of less than one year).
(c)
All payments and reimbursements made
to Advisor pursuant to any of Sections 2 , 3 or
4 will be paid by wire transfer of immediately available
U.S. Dollars to an account specified by Advisor in writing to the
Company.
3.
Term and
Termination.
(a)
This Agreement shall be in effect
for an initial term commencing on the Effective Date and ending on
the tenth anniversary of the Effective Date (the “
Term ”), which Term shall automatically be extended
thereafter on a year to year basis unless Parent, the Company or
the Advisor provides written notice of its desire to terminate this
Agreement to each of Parent, the Company and the Advisor at least
90 days prior to the expiration of the Term or any extension
thereof.
(b)
In connection with the consummation
of an IPO (as defined in the Shareholders Agreement), either the
Advisor, or the Company and Parent, may terminate this Agreement by
delivery of written notice of termination to the other parties to
this Agreement. In the event of a termination of this Agreement in
connection with the consummation of an IPO, the Company shall pay
in cash to the Advisors (i) all unpaid Annual Fees and all
Out-of-pocket Expenses (as hereinafter defined) due under this
Agreement with respect to periods prior to the termination date,
plus (ii) the net present value (using a discount rate equal
to the yield as of such termination date on U.S. Treasury
securities of like maturity based on the times such payments would
have been due) of the Annual Fees that would have been payable with
respect to the period from to the termination date through the
tenth anniversary of the Effective Date or, in the case of any
extension thereof, through the end of such extension
period.
(c)
This Agreement may be terminated by
Advisor at any time upon written notice to Parent and the
Company. Upon termination of this Agreement not in connection
with the consummation of an IPO, Advisor will be entitled to prompt
payment by the Company of all reasonable fees, including, but not
limited, to the Annual Fee accrued prior to such termination in
accordance with Section 2(c), and all Out-of-pocket Expenses
due under this Agreement with respect to periods prior to the
termination date. Upon any termination or
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expiration of this Agreement, the Annual Fee
shall cease to accrue for any period thereafter.
(d)
No termination of Advisor’s
engagement hereunder shall affect any of the Company’s
obligations under this Agreement, including, without limitation,
the Company’s indemnity obligations as set forth
herein.
(e)
The terms and provisions of
Sections 2 , 3 , 4 , 5 ,
7 , 12 and 18 shall survive any termination of
this Agreement.
4.
Expenses;
Indemnification.
(a)
Expenses . In addition to the compensation to be
paid pursuant to Section 2 above, promptly upon request
by Advisor from time to time, the Company shall reimburse Advisor
for its Out-of-pocket Expenses (as defined below) incurred in
connection with the provision of services hereunder to Parent, the
Company or other member of the Company Group. “
Out-of-pocket Expenses ” means the reasonable
out-of-pocket costs and expenses incurred by or on behalf of
Advisor in connection with the Advisory Services provided under
this Agreement (including prior to the Effective Date), including,
without limitation, (a) fees and disbursements of any
independent professionals and organizations, including independent
accountants, outside legal counsel or consultants, retained by
Advisor or any of its Affiliates, (b) costs of any outside
services or independent contractors such as couriers, business
publications, on-line financial services or similar services,
retained or used by Advisor or any of its Affiliates and
(c) transportation, per diem costs, word processing expenses
or any similar expense not associated with Advisor’s or its
Affiliates’ ordinary operations. All payments or
reimbursements for out-of-pocket expenses will be made by wire
transfer in same-day funds to the bank account designated by
Advisor promptly upon or as soon as practicable following request
for reimbursement in accordance with this Agreement, to the account
indicated to the Company by the relevant payee.
(b)
Indemnification
. Parent and the Company shall
indemnify and hold harmless Advisor, its Affiliates, and their
respective partners (both general and limited), members (both
managing and otherwise), directors, officers, controlling persons
(within the meaning of Section 15 of the Securities Act of
1933, as amended, or Section 20(a) of the Securities
Exchange Act of 1934, as amended), if any, agents and employees
(Advisor, its Affiliates, and such other specified persons being
collectively referred to as “ Indemnified Persons
,” and individually as an “ Indemnified Person
”) from and against any and all claims, liabilities, losses,
damages and expenses, whether joint or several (the “
Liabilities ”) incurred by any Indemnified Person
(including those arising out of an Indemnified Person’s
negligence and reasonable fees and disbursements of the respective
Indemnified Person’s counsel) which (A) are related to
or arise out of (i) actions taken or omitted to be taken
(including, without limitation, any untrue statements made or any
statements omitted to be made) by Parent or the Company
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or (ii) actions taken or omitted to be
taken by an Indemnified Person with Parent’s or the
Company’s consent or in conformity with Parent’s or the
Company’s instructions or Parent’s or the
Company’s actions or omissions or (B) are otherwise
related to or arise out of Advisor’s engagement, and will
reimburse each Indemnified Person for all costs and expenses,
including, without limitation, reasonable fees and disbursements of
any Indemnified Person’s counsel, as they are incurred, in
connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation,
inquiry or other proceeding, whether or not in connection with
pending or threatened litigation, caused by or arising out of or in
connection with Advisor’s acting pursuant to Advisor’s
engagement, whether or not any Indemnified Person is named as a
party thereto and whether or not any liability results
therefrom. Parent and the Company will not, however, be
responsible for a
