Exhibit 10.9
SHAREHOLDERS
AGREEMENT
dated as of
August 23, 2007
among
SYMBION HOLDINGS
CORPORATION,
CRESTVIEW SYMBION HOLDINGS,
L.L.C.,
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY,
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
(FOR ITS GROUP ANNUITY SEPARATE ACCOUNT),
TRIDENT IV, L.P.,
TRIDENT IV PROFESSIONALS FUND,
L.P.,
BANC OF AMERICA CAPITAL INVESTORS
V, L.P.,
R6 OVERSEAS OPPORTUNITY FUND,
LTD.,
R6 OPPORTUNITY FUND,
L.P.
and
CERTAIN OTHER PERSONS NAMED
HEREIN
TABLE OF CONTENTS
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ARTICLE 1
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DEFINITIONS
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Section 1.01 . Definitions.
(a) As used herein, the following terms have the following
meanings:
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Section 1.02 . Other
Definitional and Interpretative Provisions. The words
“hereof”, “herein” and
“hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The captions herein are
included for convenience of reference only and shall be ignored in
the construction or interpretation hereof. References to Articles,
Sections, Exhibits and Schedules are to Articles, Sections,
Exhibits and Schedules of this Agreement, unless otherwise
specified. All Exhibits and Schedules annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Any capitalized terms used in any
Exhibit or Schedule but not otherwise defined therein, shall
have the meaning as defined in this Agreement. Any singular term in
this Agreement shall be deemed to include the plural, and any
plural term the singular. Whenever the words “include”,
“includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words
“, but not limited to,”, whether or not they are in
fact followed by those words or words of like import.
“Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words
(including electronic media) in a visible form. References to any
agreement or contract are to that agreement or contract as amended,
modified or supplemented from time to time in accordance with the
terms hereof and thereof. References from or through any date mean,
unless otherwise specified, from and including or through and
including, respectively.
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ARTICLE 2
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CORPORATE GOVERNANCE
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Section 2.01 . Composition
of the Board. (a) The Board shall consist of up to seven
directors for so long as Mr. Richard E. Francis, Jr.
remains the Chief Executive Officer of the Company (and thereafter
shall be such size as the Board may determine). One of the
directors shall be Mr. Richard E. Francis, Jr. for so
long as he remains the Chief Executive Officer of the Company, one
of the directors shall be
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Mr. Clifford G. Adlerz for so long
as he remains the Chief Operating Officer and President of the
Company, one director shall be designated by Trident IV for so long
as Trident IV owns at least 50% of the Common Stock acquired by it
on the Closing Date and the remaining directors shall be designated
by Crestview Partners (ERISA), L.P. for so long as the Crestview
Shareholder owns at least 50% of the Common Stock acquired by it on
the Closing Date. Mr. Francis shall be the Chairman of the
Board for so long as he remains the Chief Executive Officer of the
Company. Crestview Partners (ERISA), L.P. and Trident IV shall
consult with Mr. Francis on the identity of their respective
designees to the Board before making such designations
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Section 2.02 . Removal.
Each Shareholder agrees that, if at any time it is then entitled to
vote for the removal of directors from the Board, it shall not vote
any of its Shares in favor of the removal of any director who shall
have been designated pursuant to Section 2.01 or
Section 2.03, unless such removal shall be for Cause or the
Person or Persons entitled to designate or nominate such director
shall have consented to such removal in writing; provided
that, if the Person or Persons entitled to designate any director
pursuant to Section 2.01 shall request in writing the removal,
with or without cause, of such director, such Shareholder shall
vote its Shares in favor of such removal
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Section 2.03 . Vacancies
. If, as a result of death, disability, retirement, resignation,
removal (with or without cause) or otherwise, there shall exist or
occur any vacancy on the Board:
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Section 2.04 . Meetings.
The Board shall hold a regularly scheduled meeting at least once
every calendar quarter. The Company shall pay all reasonable
out-of-pocket expenses incurred by each director in connection with
attending regular and special meetings of the Board and any
committee thereof, and any such meetings of the board of directors
of any Subsidiary of the Company and any committee
thereof
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Section 2.05 . Action by the
Board. (a) A quorum of the Board shall consist of a
majority of the directors which includes all of the designees of
the Crestview Shareholder who are employees, officers or partners
of a Crestview Fund itself (each such designee, a “
Crestview Fund Designee ”) unless otherwise waived in
writing by the Crestview Shareholder; provided that the
Crestview Shareholder shall have the right at any time to increase
the number of directors necessary to constitute such
quorum
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Section 2.06 . Actions
Requiring Consent. Subject to the provisos set forth at the end
of this Section, for so long as the Crestview Shareholder (together
with any Permitted Transferees thereof) shall own at
least
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50% of the Shares held by the
Crestview Shareholder on the Closing Date, the Company shall not,
shall not permit any of its wholly owned Subsidiaries to, and shall
use all commercially reasonable efforts to cause its less than
wholly owned Subsidiaries and joint ventures (whether majority or
minority owned by the Company) not to, take any of the following
actions (or agree or commit to take any of the following actions)
without (x) the approval of a majority of the Board and
(y) the prior written consent of the Crestview Shareholder,
acting in its capacity as a stockholder of the Company:
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Section 2.07 . Charter or
Bylaw Provisions. Each Shareholder agrees to vote its Shares or
execute proxies or written consents, as the case may be, and to
take all other actions necessary, to ensure that the Charter and
Bylaws (i) facilitate, and do not at any time conflict with,
any provision of this Agreement and (ii) permit each
Shareholder to receive the benefits to which each such Shareholder
is entitled under this Agreement. The Charter and Bylaws shall
provide for (x) the elimination of the liability of each
director on the Board to the maximum extent permitted by applicable
law and (y) indemnification of each director on the Board for
acts on behalf of the Company to the maximum extent permitted by
applicable law
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Section 2.08 . Notice of
Meeting . The Company shall give each director notice and the
agenda for each meeting of the Board or any committee thereof a
reasonable period of time before such meeting in light of the
circumstances thereof
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Section 2.09 . Subsidiary
Governance . The Company agrees that it will vote (or cause the
voting of) the shares of the capital stock of its Subsidiaries,
including shares of its less than wholly owned Subsidiaries or its
minority joint ventures, and each Shareholder agrees to vote its
Shares and to cause its representatives on the Board, subject to
their fiduciary duties, to vote and take other appropriate action,
in each case to give effect to the agreements in this
Article 2 in respect of any Subsidiary of the Company
(including Section 2.06 hereof)
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Section 2.10 . Rights to
Appoint Board Observers. NW Mutual shall have the right to
appoint two individuals to attend each meeting of the Board and
each meeting of the board of directors of Symbion, Inc. (the
“ Symbion, Inc. Board ”), BACI shall have
the right to appoint one individual to attend each meeting of the
Board and the Symbion, Inc. Board, and Trident IV shall have
the right to appoint one individual to attend each meeting of the
Symbion, Inc. Board, in each case as non-voting observers (the
“ Board Observers ”) and whether such meeting is
conducted in person or by teleconference. The Board Observers shall
be entitled to receive notices of all meetings of the Board and the
Symbion, Inc. Board and to obtain copies of all
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materials provided to the Board or
the Symbion, Inc. Board; provided that, for the sake of
clarity, the Board Observers shall have no voting rights whatsoever
with respect to actions taken by the Board or the
Symbion, Inc. Board. The Company shall provide to R6, at
substantially the same time as such materials are provided to
members of the Board or the Symbion, Inc. Board, as
applicable, copies of all materials formally provided to such
members in connection with meetings of the Board or the
Symbion, Inc. Board (including board meeting minutes and
resolutions that are formally adopted). The Board Observers will be
asked to leave all or a portion of a meeting of the Board or the
Symbion, Inc. Board to the extent such board of directors is
discussing (and will not be entitled to receive any) information
that is subject to any legal privilege. The Company shall pay all
reasonable out-of-pocket expenses incurred by each Board Observer
in connection with attending regular and special meetings of the
Board and the Symbion, Inc. Board
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ARTICLE 3
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RESTRICTIONS ON TRANSFER
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Section 3.01 . General
Restrictions on Transfer . (a) Each Shareholder
understands and agrees that the Company Securities have not been
registered under the Securities Act and are restricted securities
under such act. Each Shareholder agrees that it shall not Transfer
any Company Securities (or solicit any offers in respect of any
Transfer of any Company Securities), except in compliance with the
Securities Act, any other applicable securities or “blue
sky” laws, and the terms and conditions of this
Agreement
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Section 3.02 . Legends.
(a) In addition to any other legend that may be required, each
certificate for Company Securities issued to any Shareholder shall
bear a legend in substantially the following form:
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Section 3.03 . Permitted
Transferees. Notwithstanding anything in this Agreement to the
contrary, any Shareholder may at any time Transfer any or all of
its Company Securities to one or more of its Permitted Transferees
without the consent of the Board or any other Shareholder or group
of Shareholders and without compliance with Sections 3.04, 3.05,
4.01, 4.02 and 4.04 so long as (i) such Permitted Transferee
shall have agreed in writing to be bound by the terms of this
Agreement in the form of Exhibit A attached hereto and
(ii) the Transfer to such Permitted Transferee is in
compliance with the Securities Act and any other applicable
securities or “blue sky” laws
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Section 3.04 . Restrictions
on Transfers by Institutional Shareholders. (a) Except as
otherwise waived in any instance by the Company, the
Company’s Chief Executive Officer and the Crestview
Shareholder
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(who may each grant or withhold such
waiver in their sole discretion) in the case of a Transfer by any
Institutional Shareholder (other than the Crestview Shareholder),
no Institutional Shareholder shall Transfer any of its Company
Securities, except to one or more of its Permitted Transferees in
accordance with Section 3.03 or as follows:
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Section 3.05 . Restrictions
on Transfers by Management Shareholders . (a) Except as
otherwise waived in any instance by the Company, the
Company’s Chief Executive Officer and the Crestview
Shareholder (who may each grant or withhold such waiver in their
sole discretion), no Management Shareholder shall Transfer any of
its Company Securities, except to one or more of its Permitted
Transferees in accordance with Section 3.03 or as
follows:
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ARTICLE 4
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TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; RIGHTS OF
FIRST REFUSAL;
PREEMPTIVE RIGHTS; REPURCHASE RIGHTS
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Section 4.01 . Tag-Along
Rights . (a) Subject to Sections 4.01(g) and (h),
4.03 and 4.04, if any Shareholder (the “ Tag-Along
Seller ”) proposes to Transfer to a Third Party, in a
transaction otherwise permitted by Article 3, in a single
transaction or in a series of related transactions a number of
Company Securities held by the Tag-Along Seller that exceeds 2% of
the aggregate number of any outstanding Company Securities (a
“ Tag-Along Sale ”):
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Section 4.02 . Drag-Along
Rights . (a) Subject to Sections 4.02(e), 4.02(f), 4.03
and 4.04, if the Crestview Shareholder (the “ Drag-Along
Seller ”) enters into an agreement to sell all or
substantially all of its Company Securities to a Third Party
(whether pursuant to a merger acting through Parent, stock sale or
otherwise) (a “ Drag-Along Sale ”), the
Drag-Along Seller may at its option require all Other Shareholders
to, and the Other Shareholders shall, (i) Transfer the
Drag-Along Portion of Company Securities (“ Drag-Along
Rights ”) then held by every Other Shareholder (and shall
not exercise any appraisal or dissenter’s rights that may
otherwise be available to any such Other Shareholder under
applicable law), and (ii) subject to and at the closing of the
Drag-Along Sale, exercise such number of options or warrants for
Shares held by every Other Shareholder as is required in order that
a sufficient number of Shares are available to Transfer the
relevant Drag-Along Portion of Company Securities of each such
Other Shareholder, in each case for the same consideration per
Share as the Drag-Along Seller and otherwise on the same terms and
conditions as the Drag-Along Seller; provided that any Other
Shareholder that holds options the exercise price per share of
which is greater than the per share price at which the Shares are
to be
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Transferred to the Drag-Along
Transferee, if required by the Drag-Along Seller to exercise such
options, may, in lieu of such exercise, submit to irrevocable
cancellation thereof without any liability for payment of any
exercise price with respect thereto. If the Drag-Along Sale is not
consummated with respect to any Shares acquired upon exercise of
any options or warrants, or the Drag-Along Sale is not consummated,
any options or warrants exercised or canceled in contemplation of
such Drag-Along Sale shall be deemed not to have been exercised or
canceled, as applicable
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Section 4.03 . Additional
Conditions to Tag-Along Sales and Drag-Along Sales .
Notwithstanding anything contained in Section 4.01 or 4.02,
the rights and obligations of the Shareholders to participate in a
Tag-Along Sale under Section 4.01 or a Drag-Along Sale under
Section 4.02 are subject to the following
conditions:
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Section 4.04 . Rights of
First Refusal. (a) If, at any time, any Shareholder
receives from or otherwise negotiates with a Third Party an offer
to purchase any or all of the Company Securities owned or held by
that Shareholder (an “ Offer ”), and that
Shareholder (the “ ROFR Seller ”) intends to
pursue the Transfer of such Company Securities to that Third Party,
then the ROFR Seller shall give notice (an “ Offer
Notice ”) to the other Shareholders (the “ ROFR
Offerees ”) and to the Company that the ROFR Seller
desires to accept the Offer, which notice shall also set forth the
number and kind of Company Securities proposed to be sold (the
“ Offered Securities ”), the price per share
that the ROFR Seller proposes to be paid for those Offered
Securities (the “ Offer Price ”) and all other
material terms and conditions of the Offer
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Section 4.05 . Preemptive
Rights. (a) The Company shall give each Shareholder notice
(an “ Issuance Notice ”) of any proposed
issuance by the Company of any Company Securities at least 20
Business Days prior to the proposed issuance date. The Issuance
Notice shall specify the price at which such Company Securities are
to be issued and the other material terms of the issuance. Subject
to Section 4.05(f) below, each Shareholder shall be
entitled to purchase up to such Shareholder’s Preemptive
Rights Share of the Company Securities proposed to be issued, at
the price and on the terms specified in the Issuance Notice. For
purposes of this Agreement, the term “ Preemptive Rights
Share ” shall mean, with respect to any Holder, the
percentage that results from dividing (i) that
Shareholder’s Aggregate Ownership (immediately before giving
effect to the issuance) of Common Stock by (ii) the Aggregate
Ownership (immediately before giving effect to the issuance) of the
Common Stock held by all Shareholders
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Section 4.06 . Purchase
Option. (a) In the event that any Management Shareholder
shall cease to be employed by or in the service of the Company or
any of its Subsidiaries due to (i) death, disability,
retirement, or voluntary resignation or (ii) termination with
Cause, the Company shall have the right and option, at any time
within the 90-day period (the “ Option Period ”)
after the effective date of such termination of employment (the
“ Termination Date ”) or, if later, the exercise
date for the options under which such Option Shares are acquired
(which Option Period shall be extended if such transaction is
subject to regulatory approval until the expiration of five
Business Days after all such approvals have been received, but in
no event later than 180 days after the commencement of the Option
Period), to purchase from such Management Shareholder all of the
Option Shares then owned by such Management Shareholder (and his or
her Permitted Transferees) at a purchase price equal to the Option
Purchase Price (as defined below). The Company shall give notice to
the Management Shareholder of its intention to purchase the Option
Shares at any time not later than the end of the Option Period
(which period shall be extended if such transaction is subject to
regulatory approval until the expiration of five Business Days
after all such approvals have been received, but in no event later
than 180 days after the commencement of the Option Period). The
right of the Company set forth in this Section 4.06 to
purchase a Management Shareholder’s Option Shares is
hereinafter referred to as the “ Purchase Option
”. For the avoidance of doubt, the Purchase Option shall not
apply to the termination of a Management Shareholder’s
employment with the Company or any Subsidiary (x) by the
Company other than for Cause or (y) by either Mr. Francis
or Mr. Adlerz, or any other Management Shareholder with an
employment agreement or option award agreement that defines
“good reason”, for Good Reason
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Article 5
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REGISTRATION RIGHTS
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Section 5.01 . Demand
Registration . (a) If at any time following the Closing
Date, the Company shall receive a written request from the
Crestview Shareholder (the “ Requesting Shareholder
”) that the Company effect the registration under the
Securities Act of all or any portion (so long as the value of such
portion shall be equal to a minimum of $5 million for a S-1
registration and $1 million for a S-3 registration) of such
Requesting Shareholder’s Registrable Securities, and
specifying the intended method of disposition thereof and the
number of Registrable Securities for which the
Requesting
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Shareholder has requested
registration under this Section 5.01 (the “ Crestview
Request Amount ”), then the Company shall promptly give
notice of such requested registration (a “ Demand
Registration ”) at least 20 Business Days prior to the
anticipated filing date of the registration statement relating to
such Demand Registration to the Other Shareholders and thereupon
shall use its reasonable best efforts to effect, as expeditiously
as reasonably practicable, the registration under the Securities
Act, but subject to the restrictions set forth in Sections
5.01(e) and 5.02, of:
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Section 5.02 . Piggyback
Registration . (a) Subject to Section 5.02(c), if the
Company proposes to register any Company Securities under the
Securities Act after the IPO, including a Demand Registration
(other than a registration on Form S-8, S-4 or F-4, or any
successor forms, relating to Shares issuable upon exercise of
employee stock options or in connection with any employee benefit
or similar plan of the Company or in connection with a direct or
indirect acquisition by the Company of another Person), whether or
not for sale for its own account or for other Persons ( e.g.
, the Requesting Holder), the Company shall each such time give
prompt notice at least 20 Business Days prior to the anticipated
filing date of the registration statement relating to such
registration to each Shareholder (the “ Piggyback
Notice ”), which notice shall set forth such
Shareholder’s rights under this Section 5.02 and the
Crestview Request Amount (if such Public Offering is pursuant to a
Demand Registration) and shall offer such Shareholder the
opportunity to include in such registration statement the number of
Registrable Securities of the same class or series as those
proposed to be registered as each such Shareholder may request (a
“ Piggyback Registration ”), subject to the
provisions of Section 5.02(b). Subject to
Section 5.02(c), upon the request of any such Other
Shareholder made within 10 Business Days after the receipt of the
Piggyback Notice from the Company (which request shall specify the
number of Registrable Securities intended to be registered by such
Shareholder), the Company shall use its reasonable best efforts to
effect the registration under the Securities Act of all Registrable
Securities that the Company has been so requested to register by
all Shareholders, to the extent necessary to permit the disposition
of the Registrable Securities so to be registered; provided
that (i) if such registration involves an underwritten Public
Offering, all such Shareholders requesting to be included in the
Company’s registration must sell their Registrable Securities
to the underwriters selected as provided in
Section 5.04(f) on the same terms and conditions as apply
to the Company or the Requesting Shareholder, as applicable, and
(ii) if, at any time after giving notice of its intention to
register any Company Securities for
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the Company’s own account
pursuant to this Section 5.02(a) and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason
not to register such securities, the Company shall give notice to
all such Shareholders and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection
with such registration. No registration effected under this
Section 5.02 shall relieve the Company of its obligations to
effect a Demand Registration to the extent required by
Section 5.01. The Company shall pay all Registration Expenses
in connection with each Piggyback Registration
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Section 5.03 . Lock-Up
Agreements . If any registration of Registrable Securities
shall be effected in connection with a Public Offering, neither the
Company nor any Shareholder shall effect any public sale or
distribution, including any sale pursuant to Rule 144, of any
Company Securities or other security of the Company (except as part
of such Public Offering) during the period beginning 14 days prior
to the effective date of the applicable registration statement
until the earlier of (i) such time as the Company and the lead
managing underwriter shall agree and (ii) 180 days following
the effective date (such period, the “ Lock-Up Period
” for the applicable registration statement); provided
that in the case of any post-IPO Public Offering, such lock-up
restriction shall apply (x) only to any Registering
Shareholder(s) and the Company and (y) to all
Shareholders who beneficially own (as defined in the Exchange Act)
more than 1% of the aggregate number of then outstanding Company
Securities; and provided further that no such lock-up
restriction may be waived by the underwriter(s) for any
Institutional Shareholder unless such restriction shall
simultaneously be waived for all Institutional
Shareholders
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Section 5.04 . Registration
Procedures . Whenever Shareholders request that any Registrable
Securities be registered pursuant to Section 5.01 or 5.02,
subject to the provisions of such Sections, the Company shall use
its reasonable best efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended
method of disposition thereof as quickly as reasonably practicable.
In connection with any such request, the following shall
occur:
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Section 5.05 .
Indemnification by the Company . The Company agrees to
indemnify and hold harmless each Registering Shareholder
beneficially owning any Registrable Securities covered by a
registration statement, its officers, directors, employees,
partners and agents, and each Person, if any, who controls such
Shareholder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and
all losses, claims,
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damages, liabilities and expenses
(including reasonable expenses of investigation and reasonable
attorneys’ fees and expenses) (“ Damages
”) caused by or relating to any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus,
or caused by or relating to any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such Damages are caused by or related to any such untrue
statement or omission or alleged untrue statement or omission so
made based upon information furnished in writing to the Company by
such Shareholder or on such Shareholder’s behalf expressly
for use therein. The Company also agrees to indemnify any
underwriters of the Registrable Securities, their officers and
directors and each Person who controls such underwriters within the
meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act on substantially the same basis as that of the
indemnification of the Shareholders provided in this
Section 5.05
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Section 5.06 .
Indemnification by Registering Shareholders . Each
Registering Shareholder holding Registrable Securities included in
any registration statement agrees, severally but not jointly, to
indemnify and hold harmless the Company, its officers, directors
and agents and each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Shareholder, but only
with respect to information furnished in writing by such
Shareholder or by an authorized representative of such Shareholder
on such Shareholder’s behalf expressly for use in any
registration statement or prospectus relating to the Registrable
Securities, or any amendment or supplement thereto, or any
preliminary prospectus. Each such Shareholder also agrees to
indemnify and hold harmless underwriters of the Registrable
Securities, their officers and directors and each Person who
controls such underwriters within the meaning of either
Section 15 of the Securities Act or Section 20 of the
Exchange Act on substantially the same basis as that of the
indemnification of the Company provided in this Section 5.06.
As a condition to including Registrable Securities in any
registration statement filed in accordance with Article 5, the
Company may require that it shall have received an undertaking
reasonably satisfactory to it from any underwriter to indemnify and
hold it harmless to the extent customarily provided by underwriters
with respect to similar
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securities. No Registering
Shareholder shall be liable under this Section 5.06 for any
Damages in excess of the net proceeds realized by such Shareholder
in the sale of Registrable Securities of such Shareholder to which
such Damages relate
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Section 5.07 . Conduct of
Indemnification Proceedings . If any proceeding (including any
governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to this
Article 5, such Person (an “ Indemnified Party
”) shall promptly notify the Person against whom such
indemnity may be sought (the “ Indemnifying Party
”) in writing and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure
of any Indemnified Party so to notify the Indemnifying Party shall
not relieve the Indemnifying Party of its obligations hereunder
except to the extent that the Indemnifying Party is materially
prejudiced by such failure to notify. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) in the reasonable judgment
of such Indemnified Party representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that, in
connection with any proceeding or related proceedings in the same
jurisdiction, the Indemnifying Party shall not be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all
such Indemnified Parties, and that all such fees and expenses shall
be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the
Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment.
Without the prior written consent of the Indemnified Party, no
Indemnifying Party shall effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is
or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement
includes
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an unconditional release of such
Indemnified Party from all liability arising out of such
proceeding
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Section 5.08 .
Contribution . If the indemnification provided for in this
Article 5 is unavailable to the Indemnified Parties in respect
of any Damages, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such
Damages (i) as between the Company and the Registering
Shareholders holding Registrable Securities covered by a
registration statement on the one hand and the underwriters on the
other, in such proportion as is appropriate to reflect the relative
benefits received by the Company and such Shareholders on the one
hand and the underwriters on the other, from the offering of the
Registrable Securities, or if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the
Company and such Shareholders on the one hand and of such
underwriters on the other in connection with the statements or
omissions that resulted in such Damages, as well as any other
relevant equitable considerations and (ii) as between the
Company on the one hand and each such Shareholder on the other, in
such proportion as is appropriate to reflect the relative fault of
the Company and of each such Shareholder in connection with such
statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by the Company and
such Shareholders on the one hand and such underwriters on the
other shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company
and such Shareholders bear to the total underwriting discounts and
commissions received by such underwriters, in each case as set
forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Shareholders on the one hand
and of such underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company and such Shareholders or by such underwriters. The
relative fault of the Company on the one hand and of each such
Shareholder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and
the parties’ relative intent, knowledge, access to
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information and opportunity to
correct or prevent such statement or omission
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Section 5.09 . Participation
in Public Offering . No Shareholder may participate in any
Public Offering hereunder unless such Shareholder (i) agrees
to sell such Shareholder’s Registrable Securities on the
basis provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting
arrangements and the provisions of this Agreement in respect of
registration rights
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Section 5.10 . Other
Indemnification . Indemnification similar to that specified
herein (with appropriate modifications) shall be given by the
Company and each Registering Shareholder participating therein with
respect to any required registration or other qualification of
securities under any federal or state law or regulation or
governmental authority other than the Securities Act
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Section 5.11 . Cooperation
by the Company . If any Shareholder shall transfer any
Registrable Securities pursuant to Rule 144, the Company shall
cooperate, to the extent commercially reasonable, with such
Shareholder and shall provide to such Shareholder such information
as such Shareholder shall reasonably request
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Section 5.12 . No Transfer
of Registration Rights . None of the rights of Shareholders
under this Article 5 shall be assignable by any Shareholder to
any Person acquiring Securities in any Public Offering or pursuant
to Rule 144. The Demand Registration rights are not assignable
or transferable by the Crestview Shareholder
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ARTICLE 6
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CERTAIN COVENANTS AND
AGREEMENTS
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Section 6.01 .
Confidentiality . (a) Each Shareholder agrees that
Confidential Information furnished and to be furnished to it has
been and may in the future be made available in connection with
such Shareholder’s investment in the Company. Each
Shareholder agrees that it shall use, and that it shall cause any
Person to whom Confidential Information is disclosed pursuant to
clause (i) below to use, the Confidential Information only in
connection with its investment in the Company and not for any other
purpose. Each Shareholder further acknowledges and agrees that it
shall not disclose any Confidential Information to any Person,
except that Confidential Information may be disclosed:
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Section 6.02 . Reports .
The Company agrees to furnish each Institutional Shareholder, for
so long as such Shareholder owns at least 3% of the Common Stock or
50% of the Common Stock held by such Institutional Shareholder on
the Closing Date:
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Section 6.03 . Limitations
on Subsequent Registration Rights . The Company agrees that it
shall not enter into any agreement with any holder or prospective
holder of any securities of the Company (i) that would allow
such holder or prospective holder to include such securities in any
Demand Registration or Piggyback Registration unless, under the
terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent
that their inclusion would not reduce the amount of the Registrable
Securities of the Shareholders included therein or (ii) on
terms otherwise more favorable than this Agreement
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Section 6.04 . Affiliate
Transactions . The Company shall not, and shall not permit any
of its Subsidiaries or Affiliates to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase, lease or otherwise acquire any property or
assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with
or for the benefit of, any Institutional Shareholder or any
Affiliate or “Associate” of any Institutional
Shareholder (within the meaning of Rule 12b-2 under the
Exchange Act), unless such transaction is on terms that are
disclosed to the Board and each Board Observer and are no less
favorable to the Company or such Subsidiary than those that would
have been obtained in a comparable transaction by the Company or
such Subsidiary with an unrelated Person; provided that the
parties understand and agree that entry into, the performance of,
and payment under, the Advisory Fee and Monitoring Agreement dated
as of the date hereof between the Company and Crestview Advisor
shall be deemed for all purposes to be consistent with this
Section 6.04
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Section 6.05 . Conflicting
Agreements . The Company and each Shareholder represents and
agrees that it shall not (i) grant any proxy or enter into or
agree to be bound by any voting trust or agreement with respect to
the Company Securities, except as expressly contemplated by this
Agreement, (ii) enter into any agreement or arrangement of any
kind with any Person with respect to any Company Securities that is
inconsistent with the provisions of this Agreement or for the
purpose or with the effect of denying or reducing the rights of any
other Shareholder under this Agreement, including agreements or
arrangements with respect to the Transfer or voting of its Company
Securities or (iii) act, for any reason, as a member of a
group or in concert with any other Person in connection with the
Transfer or
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voting of its Company Securities in
any manner that is inconsistent with the provisions of this
Agreement
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ARTICLE 7
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MISCELLANEOUS
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Section 7.01 . Binding
Effect; Assignability; Benefit. (a) This Agreement shall
inure to the benefit of and be binding upon the parties hereto and
their respective heirs, successors, legal representatives and
permitted assigns. Any Shareholder that ceases to own beneficially
any Company Securities shall cease to be bound by the terms hereof
(other than (i) the provisions of Sections 5.05, 5.06, 5.07,
5.08 and 5.10 applicable to such Shareholder with respect to any
offering of Registrable Securities completed before the date such
Shareholder ceased to own any Company Securities and
(ii) Sections 6.01 (which shall survive as against such
Shareholder for two years after such Shareholder ceases to
beneficially own any Company Securities), 7.02, 7.05, 7.06, 7.07
and 7.08)
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Section 7.02 . Notices .
All notices, requests and other communications to any party shall
be in writing and shall be delivered in person, mailed by certified
or registered mail, return receipt requested, or sent by facsimile
transmission,
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Section 7.03 . Waiver;
Amendment; Termination . (a) No provision of this
Agreement may be waived except by an instrument in writing executed
by the party against whom the waiver is to be effective. No
provision of this Agreement may be amended or otherwise modified,
except by an instrument in writing executed by the Company with the
approval of the Board, the Crestview Shareholder (for so long as it
holds at least 50% of the Common Stock it acquired on the Closing
Date) and Other Shareholders owning a majority of the outstanding
Common Stock held by all Other Shareholders at that time;
provided that (u) no amendment or modification that by
its terms (as opposed to its effect) would adversely and
disparately affect any Shareholder under the terms of this
Agreement (relative to other Shareholders) shall be effective
without the prior written consent of that Shareholder, (v) no
amendment or modification of this Section 7.03 shall be
effective without the prior written consent of the Company (with
Board approval) and each Shareholder, (w) no amendment or
modification of Section 3.05 or Section 4.06 shall be
effective without the prior written consent of Management
Shareholders owning a majority of the Company Securities held by
the Management Shareholders on a Fully Diluted basis at that time,
(x) no amendment or modification of Section 3.04 or
Section 3.05 (as such Sections speak of the Chief Executive
Officer of the Company)
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shall be effective without the
consent of Mr. Francis, but only for so long as
Mr. Francis remains CEO of the Company, and only as relates to
the language in such Sections addressing the rights of the Chief
Executive Officer of the Company thereunder, (y) no amendment
or modification of Section 2.01(a) (as such
Section speaks of Mr. Francis or Mr. Adlerz) shall
be effective without the consent of Mr. Francis or
Mr. Adlerz, as applicable, but only for so long as such Person
remains CEO or COO of the Company, respectively, and only as
relates to the language in such Section addressing his
personal rights thereunder and (z) no amendment or
modification of Section 2.01(a) (as such
Section speaks of Trident IV) or Section 2.10 (as such
Section speaks of NW Mutual, BACI or R6) shall be effective
without the consent of Trident IV, NW Mutual, BACI or R6, as
applicable
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Section 7.04 . Fees and
Expenses . (a) Unless otherwise provided herein or in any
other written agreements between the parties hereto, all costs and
expenses incurred in connection with the transactions contemplated
by this Agreement, the Merger Agreement, the Subscription Agreement
and all related transactions shall be paid by the party incurring
such costs and expenses
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Section 7.05 . Governing
Law . This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard
to the conflicts of laws rules of such state
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Section 7.06 .
Jurisdiction . Except for any determination of Fair Market
Values for purposes of this Agreement (which shall be determined in
accordance with the definition thereof), the parties hereby 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 sitting
in New York County, so long as one of such courts shall have
subject matter jurisdiction over such suit, action or proceeding,
and that any case of action arising out of this Agreement shall be
deemed to have arisen from a transaction of business in the State
of New York, 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 which is brought in any
such court has been brought in an inconvenient form. 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
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court. Without limiting the
foregoing, each party agrees that service of process on such party
as provided in Section 7.02 shall be deemed effective service
of process on such party
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Section 7.07 . WAIVER OF
JURY TRIAL . 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
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Section 7.08 . Specific
Enforcement . Each party hereto acknowledges that the remedies
at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this
fact, any party to this Agreement, without posting any bond, and in
addition to all other remedies that may be available, shall be
entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy that may then be
available
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Section 7.09 . Counterparts;
Effectiveness . This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, with
the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when
each party hereto shall have received counterparts hereof signed by
all of the other parties hereto. Until and unless each party has
received a counterpart hereof signed by the other party hereto,
this Agreement shall have no effect and no party shall have any
right or obligation hereunder (whether by virtue of any other oral
or written agreement or other communication)
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Section 7.10 . Entire
Agreement . This Agreement, the Subscription Agreement and the
Employee Contribution Agreements constitute the entire agreement
among the parties hereto and thereto and supersede all prior and
contemporaneous agreements and understandings, both oral and
written, among the parties hereto with respect to the subject
matter hereof and thereof
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Section 7.11 .
Severability . If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially
adverse to any party
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Exhibit A
Joinder
Agreement
Exhibit B
Contact
Information
xvii
SHAREHOLDERS
AGREEMENT
AGREEMENT (as the same may be amended from time to time,
this “ Agreement ”) dated as of
August , 2007 among the following
parties:
(i)
Symbion Holdings Corporation, a
Delaware corporation (the “ Company
”);
(ii)
Crestview Symbion Holdings, L.L.C.,
a Delaware limited liability company (the “ Crestview
Shareholder ”);
(iii)
The Northwestern Mutual Life
Insurance Company, a Wisconsin corporation, on behalf of itself and
on behalf of its Group Annuity Separate Account (“ NW
Mutual ”);
(iv)
Trident IV, L.P. a Cayman Islands
exempted limited partnership (“ Trident IV
”);
(v)
Trident IV Professionals Fund, L.P.,
a Cayman Islands exempted limited partnership (“ Trident
IV PF ”, and each of Trident IV and Trident IV PF, a
“ Trident Fund ” and collectively, the “
Trident Funds ”);
(vi)
Banc of America Capital Investors V,
L.P., a Delaware limited partnership (“ BACI
”);
(vii)
R6 Opportunity Fund, L.P., a
Delaware limited partnership, and R6 Overseas Opportunity Fund,
Ltd., a Cayman Islands exempted company, (collectively, “
R6 ”) (each of the Crestview Shareholders, NW Mutual,
Trident IV, Trident IV PF, BACI and R6, an “ Institutional
Shareholder ”, and collectively, the “
Institutional Shareholders ”); and
(viii)
Mr. Richard E.
Francis, Jr., Mr. Clifford G. Adlerz and any other
individual (or Person controlled by an individual) (A) who is
or becomes a holder of capital stock of the Company and
(B) who is or was in the employ of, or a consultant to, the
Company or any Subsidiary (each such individual or Person, a
“ Management Shareholder ” and collectively, the
“ Management Shareholders ”).
Each of the Crestview Shareholder, NW Mutual,
Trident IV, Trident IV PF, BACI, R6, the Institutional Shareholders
and the Management Shareholders shall each also mean, if such
Persons shall have Transferred any of their Company Securities to
any of their respective Permitted Transferees, such Person and its,
his or her Permitted Transferees, taken together, and any right,
obligation or action that may be exercised or taken at the election
of such Person may be taken at the election of such Persons and
its, his or her Permitted Transferees.
W I T N E S S E T H
:
WHEREAS, pursuant to the terms of
the Agreement and Plan of Merger dated as of April 24, 2007
(the “ Merger Agreement ”) by and among
Symbion, Inc., a Delaware corporation, Symbol Acquisition,
L.L.C., a Delaware limited liability company, and Symbol Merger
Sub, Inc., a Delaware corporation, Symbol Merger
Sub, Inc. will be merged with and into Symbion, Inc.,
with Symbion, Inc. as the surviving corporation (the “
Merger ”);
WHEREAS, prior to but in connection
with the Merger, Symbol Acquisition, L.L.C. will be converted into
the Company, which will become the parent holding company of
Symbion, Inc. by virtue of the Merger;
WHEREAS, in connection with the
Merger, (i) the Institutional Shareholders and the Company
have entered into a Subscription Agreement (the “
Subscription Agreement ”) dated as of August 17,
2007 pursuant to which each such Institutional Shareholder has
agreed to make an equity investment in the Company and will become
a stockholder of the Company on the Closing Date, and
(ii) each of Mr. Richard E. Francis, Jr. and
Mr. Clifford G. Adlerz have entered into an Employee
Contribution Agreement with the Company (collectively, the “
Employee Contribution Agreements ”) each dated as of
August , 2007 pursuant to which
(A) each of Mr. Richard E. Francis, Jr. and
Mr. Clifford G. Adlerz has agreed to contribute to the Company
the number of shares of common stock of Symbion, Inc. that is
held by him on the Closing Date and specified therein to be
contributed by such Management Shareholder, and (B) in
consideration of such contribution, the Company will issue the
number of Shares to such Management Shareholder that is similarly
specified therein;
WHEREAS, the parties hereto desire
to enter into this Agreement to govern certain of their rights,
duties and obligations after consummation of the transactions
contemplated by the Merger Agreement and the Subscription
Agreement;
NOW, THEREFORE, in consideration of
the covenants and agreements contained herein, and for other good
and valuable consideration (the receipt and sufficiency of which is
hereby acknowledged), the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.01 .
Definitions. (a) As used herein, the following terms
have the following meanings:
2
“ Affiliate ”
means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with
such Person; provided that no Shareholder shall be deemed an
Affiliate of the Company or any other Shareholder solely by reason
of any investment in the Company, the existence or exercise of any
rights or obligations under this Agreement or the Company
Securities held by that Shareholder. For the purpose of this
definition, the term “ control ” (including,
with 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.
“ Aggregate Ownership
” means, with respect to any Shareholder or group of
Shareholders, and with respect to any class of Company Securities,
the total amount of Company Securities “beneficially
owned” (as such term is defined in Rule 13d-3 of the
Exchange Act) (without duplication) by such Shareholder or group of
Shareholders as of the date of such calculation, calculated on a
Fully Diluted basis.
“ Board ” means
the board of directors of the Company.
“ Business Day ”
means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law
to close.
“ Bylaws ” means
the bylaws of the Company, as the same may be amended from time to
time.
“ Cause ” means,
with respect to a Management Shareholder, the meaning assigned to
such term in such Management Shareholder’s employment
agreement, if any; provided, however, that if “
Cause ” is not defined in such employment agreement or
such employment agreement does not exist, “ Cause
” means: (i) the conviction of such Management
Shareholder of (including such Management Shareholder’s plea
of guilty or nolo contendere to) a felony (other than a
violation of a motor vehicle or moving violation law) which in the
reasonable judgment of the Board materially affects such Management
Shareholder’s ability to perform his duties to
Symbion, Inc. (or any of its Subsidiaries);
(ii) voluntary engagement by such Management Shareholder in
conduct constituting larceny, embezzlement, conversion or any other
act involving the misappropriation of any funds of
Symbion, Inc. (or any of its Subsidiaries) in the course of
such Management Shareholder’s employment; (iii) the
willful refusal (following written notice) by such Management
Shareholder to carry out specific directions of (A) the Board,
(B) the Chief Executive Officer or Chief Operating Officer of
Symbion, Inc. or (C) the board of directors of any
Subsidiary of Symbion, Inc. with which such Management
Shareholder is employed or of which such Management
Shareholder
3
is an officer, which directions are consistent
with his duties to Symbion, Inc. (or any of its Subsidiaries),
as the case may be; (iv) violation by such Management
Shareholder of any provision of any written restrictive covenants
of Symbion, Inc. applicable to such Management Shareholder or
a significant violation of the written material policies of
Symbion, Inc. applicable to such Management Shareholder; or
(v) the commission by such Management Shareholder of any act
of gross negligence or intentional misconduct in the performance of
his duties as an officer or employee of Symbion, Inc. or any
of its Subsidiaries.
“ Charter ” means
the Certificate of Incorporation of the Company, as the same may be
amended from time to time.
“ Closing Date ”
means August , 2007.
“ Common Stock ”
means the common stock, par value $0.01 per share, of the Company
and any stock into which such Common Stock may thereafter be
converted or changed.
“ Company Securities
” means (i) the Common Stock, (ii) securities
convertible into or exchangeable for Common Stock, (iii) any
other equity or equity-linked security issued by the Company and
(iv) options, warrants or other rights to acquire Common Stock
(including the Option Shares), or any other equity or equity-linked
security issued by the Company; and, to the extent applicable, the
number of Company Securities described in clause (ii),
(iii) or (iv) being the number of shares of Common Stock
into which such Company Securities are convertible, exchangeable or
exercisable or to which such Company Securities are
linked.
“ Cost ” means
(i) $10 per Share with respect to Rollover Option Shares in
respect of which options have been exercised and (ii) the
price paid per Share by a Management Shareholder in connection with
the exercise of any other option to acquire Common
Stock.
“ Crestview Fund
” means each of the following: (i) Crestview Partners,
L.P., a Delaware limited partnership, (ii) Crestview Partners
(PF), L.P., a Delaware limited partnership, (iii) Crestview
Holdings (TE), L.P., a Delaware limited partnership,
(iv) Crestview Partners (ERISA), L.P., a Delaware limited
partnership and (v) Crestview Offshore Holdings (Cayman),
L.P., a Cayman Islands limited partnership.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
“ Fair Market Value
” means with respect to any Option Share owned by a
Management Shareholder (i) if the Shares are listed on a
national securities
4
exchange or quotation system on the relevant
determination date of such Management Shareholder, the average
reported closing price of a Share on such national securities
exchange or quotation system that is the principal trading market
for such Shares for the three trading days immediately preceding
such date in accordance with Treasury Regulation
1.409A-1(b)(5)(iv)(A) or (ii) if the Shares are not
listed on a national securities exchange or quotation system on the
relevant determination date of such Management Shareholder, the
fair market value of a Share on such date as determined by the
Board in good faith based on the reasonable application of a
reasonable valuation method in accordance with Treasury Regulation
1.409A-1(b)(5)(iv)(B). The determination of Fair Market Value
by the Board under clause (ii) shall be final and binding,
unless such determination is challenged by (1) a Management
Shareholder who is a senior executive of the Company at the
relevant determination date with the title of senior vice president
or above, which dispute shall be resolved by a binding appraisal
process conducted by a mutually acceptable appraisal firm of
nationally recognized standing, and that is in compliance with the
requirements of Treasury Regulation
1.409A-1(b)(5)(iv)(B)(2)(i) or (2) any other Management
Shareholder, which will nevertheless remain final and binding on
such other Management Shareholders unless the Board elects, in its
sole discretion, to submit any such dispute to a binding appraisal
process conducted by a mutually acceptable appraisal firm of
nationally recognized standing, and that is in compliance with the
requirements of Treasury Regulation 1.409A-1(b)(5)(iv)(B)(2)(i);
provided that in all circumstances the Board shall exercise
its discretion in determining Fair Market Value and hereunder in a
manner that complies with the valuation requirements of Treasury
Regulation 1.409A-1(b)(5)(iv)(B)(3). The costs of any binding
appraisal process conducted pursuant to clause (1) or
(2) above shall be borne by the Company.
“ Fully Diluted ”
means, with respect to any class of Company Securities, all
outstanding shares and all shares issuable in respect of securities
convertible into or exchangeable for such shares, all stock
appreciation rights, options, warrants and other rights to purchase
or subscribe for such Company Securities or securities convertible
into or exchangeable for such Company Securities; provided
that, if any of the foregoing stock appreciation rights, options,
warrants or other rights to purchase or subscribe for such Company
Securities are subject to vesting (whether time-vested or
performance-vested), the Company Securities subject to vesting
shall be included in the definition of “ Fully Diluted
” only upon and to the extent of such vesting (after giving
effect to any then pending transaction).
“ GAAP ” means
generally accepted accounting principles in the United
States.
“ Good Reason ”
shall exist with respect to a Management Shareholder and shall have
the meaning assigned to such term in such Management
Shareholder’s
5
Employment Agreement or option award agreement;
provided, however, that to the extent “ Good
Reason ” is not defined in such Employment Agreement or
option award agreement, or such employment agreement or option
award agreement does not exist, then all references herein shall be
disregarded for all purposes.
“ IPO ” means the
first Public Offering after the date hereof that results in gross
proceeds to the Company and any Registering Shareholders of not
less than $40 million.
“ NASD ” means
the National Association of Securities
Dealers, Inc.
“ Option Plan ”
means the Symbion Holdings Corporation 2007 Equity Incentive Plan,
as the same may be amended from time to time.
“ Option Shares ”
means any Shares issued to a Management Shareholder upon the
exercise of any options to purchase Shares granted to such
Management Shareholder pursuant to the Option Plan.
“ Other Shareholders
” means all Shareholders, other than the Crestview
Shareholder.
“ Permitted Transferee
” means
(i)
in the case of any Institutional
Shareholder, (A) any Affiliate of such Institutional
Shareholder, (B) any of its affiliated investment funds
(“ Affiliated Fund ”) or any general or limited
partner of, or Affiliate of, such Affiliated Fund, (C) any
equity holder in any general partner of any Affiliated Fund, or any
Affiliate of any such equity holder (an “
Institutional Shareholder Associate ”) or
(D) with respect to any Institutional Shareholder Associate,
(x) the lineal descendants, heirs, executors, administrators,
testamentary trustees, legatees, equity holders or beneficiaries of
any such Institutional Shareholder Associate and (y) any trust
or similar entity, the beneficiaries of which, or a corporation,
limited liability company or partnership, the shareholders, members
or general or limited partners of which, include only such
Institutional Shareholder Associate, its equity holders or
beneficiaries or, in the case of a Institutional Shareholder
Associate that is an individual, his or her spouse, members of his
or her immediate family or household or his or her lineal
descendants; provided that in no event shall any direct or
indirect portfolio company of such Institutional Shareholder or any
of its Affiliated Funds be deemed to be a Permitted Transferee of
such Institutional Shareholder, any of its Affiliated Funds or any
other Permitted Transferee thereof; and
6
(ii)
in the case of any Management Shareholder, (A) a Person to
whom Company Securities are Transferred from such Management
Shareholder (1) by will or the laws of descent and
distribution or (2) by gift without consideration of any kind
; provided that, in the case of clause (2), such transferee
is the spouse or the lineal descendant, sibling or parent of such
Management Shareholder, or (B) a trust that is for the
exclusive benefit of such Management Shareholder or its Permitted
Transferees under (A) above.
“ Person ” means
an individual, corporation, limited liability company, partnership,
association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
“ Public Offering
” means an underwritten public offering of Registrable
Securities of the Company pursuant to an effective registration
statement under the Securities Act, other than pursuant to a
registration statement on Form S-4 or Form S-8 or any
similar or successor form.
“ Registrable
Securities ” means, at any time, any Shares and any
securities issued or issuable in respect of such Shares by way of
conversion, exchange, stock dividend, split or combination,
recapitalization, merger, consolidation, other reorganization or
otherwise until (i) a registration statement covering such
Shares has been declared effective by the SEC and such Shares have
been disposed of pursuant to such effective registration statement,
(ii) such Shares are sold under circumstances in which all of
the applicable conditions of Rule 144 (or any similar
provisions then in force) under the Securities Act are met or such
securities may be sold in a single transaction pursuant to
Rule 144(k) and are permitted to then be sold under
Section 3.04(iii) or Section 3.05(iii) and
Error! Reference source not found. of this Agreement without
restriction or (iii) such Shares are otherwise Transferred,
the Company has delivered a new certificate or other evidence of
ownership for such Shares not bearing the legend required pursuant
to this Agreement and such Shares may be resold without subsequent
registration under the Securities Act.
“ Registration Expenses
” means any and all expenses incident to the performance of
or compliance with any registration or marketing of securities,
including all (i) registration and filing fees, and all other
fees and expenses payable in connection with the listing of
securities on any securities exchange or automated interdealer
quotation system, (ii) fees and expenses of compliance with
any securities or “blue sky” laws (including reasonable
fees and disbursements of counsel in connection with “blue
sky” qualifications of the securities registered),
(iii) expenses in connection with the preparation, printing,
mailing and delivery of any registration statements, prospectuses
and other documents in connection therewith and any amendments or
supplements thereto, (iv) security engraving and printing
expenses, (v) internal expenses of the Company (including
all
7
salaries and expenses of its officers and
employees performing legal or accounting duties),
(vi) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified
public accountants retained by the Company (including the expenses
relating to any comfort letters or costs associated with the
delivery by independent certified public accountants of any comfort
letters requested pursuant to Section 5.04(h)),
(vii) reasonable fees and expenses of any special experts
retained by the Company in connection with such registration,
(viii) reasonable fees, out-of-pocket costs and expenses of
the Shareholders, including one counsel for all of the Shareholders
participating in the offering selected by the Crestview Shareholder
if the Crestview Shareholder is exercising either a Demand
Registration or a Piggyback Registration in connection with the
relevant Public Offering (and in all other cases, by the holders of
a majority of the Registrable Securities held by the Shareholders
participating therein), (ix) fees and expenses in connection
with any review by the NASD of the underwriting arrangements or
other terms of the offering, and all fees and expenses of any
“qualified independent underwriter,” including the fees
and expenses of any counsel thereto, (x) fees and
disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding any underwriting fees,
discounts and commissions attributable to the sale of Registrable
Securities, (xi) costs of printing and producing any agreements
among underwriters, underwriting agreements, any “blue
sky” or legal investment memoranda and any selling agreements
and other documents in connection with the offering, sale or
delivery of the Registrable Securities, (xii) transfer
agents’ and registrars’ fees and expenses and the fees
and expenses of any other agent or trustee appointed in connection
with such offering, (xiii) expenses relating to any analyst or
investor presentations or any “road shows” undertaken
in connection with the registration, marketing or selling of the
Registrable Securities, (xiv) fees and expenses payable in
connection with any ratings of the Registrable Securities,
including expenses relating to any presentations to rating agencies
and (xv) all out-of pocket costs and expenses incurred by the
Company or its appropriate officers in connection with their
compliance with Section 5.04(m).
“ Rollover Option
Shares ” means (i) the Option Shares issued to a
Management Shareholder upon the exercise of any options to purchase
Shares granted to such Management Shareholder pursuant to any 2007
Substitute Option Award Document under the Option Plan and
(ii) the Shares issued to a Management Shareholder (if any)
pursuant to the Employee Contribution Agreement to which such
Management Shareholder is a party.
“ Rule 144 ”
means Rule 144 (or any successor provisions) under the
Securities Act.
“ SEC ” means the
Securities and Exchange Commission.
8
“ Securities Act
” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
“ Shareholder ”
means at any time, any Person (other than the Company) who shall
then be a party to or bound by this Agreement, so long as such
Person shall “beneficially own” (as such term is
defined in Rule 13d-3 of the Exchange Act) any Company
Securities.
“ Shares ” means
shares of Common Stock.
“ Subsidiary ”
means, with respect to any Person, any entity of which securities
or other 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
such Person.
“ Third Party ”
means a prospective purchaser(s) of Company Securities in an
arm’s-length transaction from a Shareholder, other than a
Permitted Transferee.
“ Transfer ”
means, with respect to any Company Securities, to sell, assign,
dispose of, exchange, pledge, encumber, hypothecate or otherwise
transfer such Company Securities or any participation or interest
therein, whether directly or indirectly (including via any
derivative transaction), or agree or commit to do any of the
foregoing. When the term “ Transfer ” is
used as a noun, that term shall have the correlative
meaning.
(b)
Each of the following terms is
defined in the Section set forth opposite such
term:
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Term
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Section
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Agreement
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Preamble
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BACI
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Preamble
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Board of Observers
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2.10
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Business Plan
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2.06(b)
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Company
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Preamble
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Confidential Information
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6.01(b)
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Crestview Fund Designee
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2.05(a)
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Crestview Request Amount
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5.01(a)
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Crestview Shareholder
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Preamble
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Damages
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5.05
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Demand Registration
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5.01(a)
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Drag-Along Portion
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4.02(a)
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Drag-Along Rights
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4.02(a)
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Drag-Along Sale
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4.02(a)
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Drag-Along Sale Notice
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4.02(a)
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9
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Term
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Section
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Drag-Along Sale Notice Period
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4.02(a)
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Drag-Along Sale Price
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4.02(a)
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Drag-Along Seller
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4.02(a)
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Drag-Along Transferee
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4.02(a)
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Employee Contribution Agreements
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Recitals
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Exercise Notice
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4.05(b)
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Indemnified Party
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5.07
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Indemnifying Party
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5.07
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Inspectors
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5.04(g)
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Institutional Shareholders
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Preamble
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Issuance Notice
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4.05(a)
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Lock-Up Period
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5.03
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Management Shareholders
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Preamble
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Maximum Offering Size
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5.01(e)
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Merger
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Recitals
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Merger Agreement
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Recitals
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NW Mutual
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Preamble
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Offer
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4.04(a)
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Offered Securities
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4.04(a)
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Offer Notice
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4.04(a)
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Offer Price
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4.04(a)
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Option Period
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4.06(a)
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Option Purchase Price
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4.06(d)
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Piggyback Notice
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5.02(a)
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Piggyback Registration
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5.02(a)
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Preemptive Rights Share
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4.05(a)
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Purchase Option
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4.06(a)
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R6
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Preamble
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Records
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5.04(g)
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Registering Shareholders
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5.01(a)
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Replacement Nominee
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2.03(a)
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Representatives
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6.01(b)
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Requesting Shareholder
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5.01(a)
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ROFR Offerees
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4.04(a)
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ROFR Portion
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4.04(b)
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ROFR Seller
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4.04(a)
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Shareholder
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7.01(b)
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Subscription Agreement
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Recitals
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Symbion, Inc. Board
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2.10
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Tag-Along Notice
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4.01(a)
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Tag-Along Notice Period
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4.01(a)
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Tag-Along Offer
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4.01(a)
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Tag-Along Portion
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4.01(a)
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10
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Term
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Section
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Tag-Along Response Notice
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4.01(a)
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Tag-Along Right
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4.01(a)
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Tag-Along Sale
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4.01(a)
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Tag-Along Seller
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4.01(a)
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Tagging Person
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4.01(a)
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Termination Date
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4.06(a)
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Trident IV
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Preamble
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Trident IV PF
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Preamble
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Trident Funds
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Preamble
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Section 1.02 . Other
Definitional and Interpretative Provisions. The words
“hereof”, “herein” and
“hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The captions herein
are included for convenience of reference only and shall be ignored
in the construction or interpretation hereof. References to
Articles, Sections, Exhibits and Schedules are to Articles,
Sections, Exhibits and Schedules of this Agreement, unless
otherwise specified. All Exhibits and Schedules annexed
hereto or referred to herein are hereby incorporated in and made a
part of this Agreement as if set forth in full herein. Any
capitalized terms used in any Exhibit or Schedule but not
otherwise defined therein, shall have the meaning as defined in
this Agreement. Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the
singular. Whenever the words “include”,
“includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words
“, but not limited to,”, whether or not they are in
fact followed by those words or words of like import.
“Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words
(including electronic media) in a visible form. References to
any agreement or contract are to that agreement or contract as
amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. References from or through
any date mean, unless otherwise specified, from and including or
through and including, respectively.
ARTICLE 2
CORPORATE GOVERNANCE
Section 2.01 .
Composition of the Board. (a) The Board shall
consist of up to seven directors for so long as Mr. Richard E.
Francis, Jr. remains the Chief Executive Officer of the
Company (and thereafter shall be such size as the Board may
determine). One of the directors shall be Mr. Richard E.
Francis, Jr. for so long as he remains the Chief Executive
Officer of the Company, one of the directors shall be
Mr. Clifford G. Adlerz for so long as he remains the Chief
Operating Officer and President of the Company, one director shall
be designated
11
by Trident IV for so long as Trident IV owns at
least 50% of the Common Stock acquired by it on the Closing Date
and the remaining directors shall be designated by Crestview
Partners (ERISA), L.P. for so long as the Crestview Shareholder
owns at least 50% of the Common Stock acquired by it on the Closing
Date. Mr. Francis shall be the Chairman of the Board for
so long as he remains the Chief Executive Officer of the
Company. Crestview Partners (ERISA), L.P. and Trident IV
shall consult with Mr. Francis on the identity of their
respective designees to the Board before making such
designations.
(b)
Each Shareholder agrees that, if at any time it is then entitled to
vote for the election of directors to the Board, it shall vote its
Shares or execute proxies or written consents, as the case may be,
and take all other necessary action (including causing the Company
to call a special meeting of shareholders) in order to ensure that
the composition of the Board is as set forth in this
Section 2.01.
(c)
The Company agrees to cause each individual designated pursuant to
Section 2.01 or 2.03 to be nominated to serve as a director on
the Board, and to take all other necessary actions (including
calling a special meeting of the Board and/or shareholders) to
ensure that the composition of the Board is as set forth in this
Section 2.01.
Section 2.02.
Removal. Each Shareholder agrees that, if at any time
it is then entitled to vote for the removal of directors from the
Board, it shall not vote any of its Shares in favor of the removal
of any director who shall have been designated pursuant to
Section 2.01 or Section 2.03, unless such removal shall
be for Cause or the Person or Persons entitled to designate or
nominate such director shall have consented to such removal in
writing; provided that, if the Person or Persons entitled to
designate any director pursuant to Section 2.01 shall request
in writing the removal, with or without cause, of such director,
such Shareholder shall vote its Shares in favor of such
removal.
Section 2.03.
Vacancies . If, as a result of death, disability,
retirement, resignation, removal (with or without cause) or
otherwise, there shall exist or occur any vacancy on the
Board:
(a)
the Person or Persons entitled under Section 2.01 to designate
such director whose death, disability, retirement, resignation or
removal resulted in such vacancy, subject to the provisions of
Section 2.01, may designate another individual (the “
Replacement Nominee ”) to fill such vacancy and serve
as a director on the Board; provided , however ,
Crestview Partners (ERISA), L.P. shall have the right to designate
the Replacement Nominee to fill the vacancy resulting from the
departure of either Mr. Francis or Mr. Adlerz from his
respective employment as the Chief Executive Officer or the Chief
Operating Officer and President of the Company, as the case may be;
and
12
(b)
subject to Section 2.01, each Shareholder agrees that if it is
then entitled to vote for the election of directors to the Board,
it shall vote its Shares, or execute proxies or written consents,
as the case may be, in order to ensure that the Replacement Nominee
is elected to the Board.
Section 2.04.
Meetings. The Board shall hold a regularly scheduled
meeting at least once every calendar quarter. The Company
shall pay all reasonable out-of-pocket expenses incurred by each
director in connection with attending regular and special meetings
of the Board and any committee thereof, and any such meetings of
the board of directors of any Subsidiary of the Company and any
committee thereof.
Section 2.05. Action
by the Board. (a) A quorum of the Board shall
consist of a majority of the directors which includes all of the
designees of the Crestview Shareholder who are employees, officers
or partners of a Crestview Fund itself (each such designee, a
“ Crestview Fund Designee ”) unless otherwise
waived in writing by the Crestview Shareholder; provided
that the Crestview Shareholder shall have the right at any time to
increase the number of directors necessary to constitute such
quorum.
(b)
Subject to Section 2.06, all actions of the Board shall
require (i) the affirmative vote of at least a majority of the
votes of the directors present at a duly convened meeting of the
Board at which a quorum is present or (ii) the unanimous
written consent of the Board ; provided that, if there is a
vacancy on the Board and an individual has been nominated to fill
such vacancy, the first order of business shall be to fill such
vacancy.
(c)
The Board may create executive, compensation, audit and such other
committees as it may determine. The Crestview Shareholder
shall be entitled to majority representation on any committee
created by the Board.
Section 2.06 . Actions
Requiring Consent. Subject to the provisos set forth at
the end of this Section, for so long as the Crestview Shareholder
(together with any Permitted Transferees thereof) shall own at
least 50% of the Shares held by the Crestview Shareholder on the
Closing Date, the Company shall not, shall not permit any of its
wholly owned Subsidiaries to, and shall use all commercially
reasonable efforts to cause its less than wholly owned Subsidiaries
and joint ventures (whether majority or minority owned by the
Company) not to, take any of the following actions (or agree or
commit to take any of the following actions) without (x) the
approval of a majority of the Board and (y) the prior written
consent of the Crestview Shareholder, acting in its capacity as a
stockholder of the Company:
13
(a)
Constitutional Documents . Alter, repeal, amend or
adopt (whether by merger, consolidation or otherwise) any provision
of the organizational or constitutional documents of the
Company;
(b)
Debt. (i) Incur, assume or guarantee any
indebtedness for borrowed money in any one or series of related
transactions, except (A) as contemplated by the then current
fiscal year’s business plan and budget that was most recently
approved by the Board (the “ Business Plan ”)
and (B) for indebtedness for borrowed money from a third party
or from the Company or any of its Subsidiaries in any fiscal year
outside of the Business Plan not in excess of (1) $15 million
in such fiscal year or (2) $1 million in respect of any
facility in a single transaction for equipment, working capital or
facility improvement o
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