NOTE EXCHANGE AGREEMENT, dated as of June [ ], 2001, among UNITED
SURGICAL PARTNERS INTERNATIONAL, INC., a Delaware corporation (the "Company"),
USP DOMESTIC HOLDINGS, INC., a Delaware corporation ("USP Domestic"), and WCAS
CAPITAL PARTNERS III, L.P., a Delaware limited partnership (the "Holder").
W I T N E S S E T H:
WHEREAS, pursuant to the Securities Purchase Agreement dated as of
March 27, 2000 (the "Purchase Agreement") among the Company, the Holder and
certain other investors, the Holder purchased a 10% Senior Subordinated Note in
the principal amount of $36,000,000 (the "Note") of the Company; and
WHEREAS, the Company used the proceeds from the sale of the Note to
make loans to USP Domestic, which is a wholly owned subsidiary of the Company;
and
WHEREAS, in consideration for the loans made by the Company and for
purposes of this Agreement, USP Domestic will issue its 10% Senior Subordinated
Note in the principal amount of $36,000,000, which will be in the form attached
hereto as Annex 1 (the "New Note"); and
WHEREAS, the Company has agreed to deliver to the Holder, and the
Holder has agreed to accept, the New Note as payment in full of the Note, all on
the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. EXCHANGE OF NOTES.
(a) Immediately prior to the effective date of the
initial public offering (the "Initial Public Offering") of the Company's Common
Stock, $.01 par value ("Common Stock"), registered under the Securities Act of
1933, as amended (the "Securities Act"), the Holder shall transfer and assign to
the Company all of its right, title and interest in and to the Note and, in
connection therewith, the Holder shall deliver Note to the Company for
cancellation.
(b) Solely in exchange for the Note transferred and
assigned to the Company by the Holder, and against delivery thereof as
aforesaid, (i) USP Domestic shall execute and deliver the New Note, dated as of
the date of such exchange, to the Company, (ii) the Company shall deliver the
New Note to the Holder and (iii) the Company shall pay to the Holder any accrued
and unpaid interest on the Note as of the date of such exchange.
SECTION 2. CLOSING. The closing of the transactions contemplated by
Section 1 hereof shall take place immediately prior to the Initial Public
Offering at the offices of the Company, or
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at such other place as may be mutually agreed upon by the Holder and the
Company. The Company shall give notice to the Holder at least five days prior
to the Initial Public Offering.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND USP
DOMESTIC. The Company and USP Domestic each represents and warrants to the
Holder as follows:
(a) ORGANIZATION AND CORPORATE POWER. The Company and USP
Domestic each is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The Company and USP Domestic
each has the corporate power and authority to own and hold its properties, to
carry on its business as currently conducted and to execute, deliver and perform
this Agreement. USP Domestic has the corporate power and authority to execute
and deliver the New Note as provided in this Agreement. The Company has the
corporate power and authority to assign and deliver the New Note to the Holder.
(b) AUTHORIZATION OF AGREEMENTS, ETC. Each of (i) the
execution and delivery by the Company and USP Domestic of this Agreement, (ii)
the performance by the Company and USP Domestic of their respective obligations
hereunder and (iii) the execution and delivery of the New Note by USP Domestic,
has been duly authorized by all requisite corporate action and will not violate
any provision of law, any order of any court or other agency of government, the
Certificate of Incorporation or Bylaws of either USP Domestic or the Company, or
any provision of any indenture, agreement or other instrument to which USP
Domestic, the Company or any subsidiary, or any of the properties or assets of
USP Domestic, the Company or any subsidiary is bound, or conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of USP Domestic, the Company or
any subsidiary. The New Note has been duly authorized by USP Domestic and, when
issued and delivered in accordance with this Agreement, will be a valid and
enforceable obligation of USP Domestic.
(c) VALIDITY. This Agreement has been duly executed and
delivered by the Company and USP Domestic and constitutes the legal, valid and
binding obligation of the Company and USP Domestic, enforceable against each of
them in accordance with its terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
from time to time in effect affecting the enforcement of creditors' rights
generally and to general principles of equity.
(d) GOVERNMENTAL APPROVALS. Subject to the accuracy of
the representations and warranties of the Holder set forth in Section 4 hereof,
no registration or filing with, or consent or approval of, or other action by,
any federal, state or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance of this Agreement or
the execution and delivery of the New Note pursuant to the terms hereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder
represents and warrants to the Company as follows:
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(a) TITLE TO NOTE. The Holder is the lawful owner, of
record and beneficially, of the Note, which is free and clear of all liens,
charges and encumbrances and is not subject to any claims of any kind whatsoever
in favor of any person or entity.
(b) INVESTMENT REPRESENTATIONS. The Holder is acquiring
the New Note for its own account for the purpose of investment and not with a
view to or for sale in connection with any distribution thereof. The Holder
understands that it must bear the economic risk of the Holder's investment for
an indefinite period of time because the New Note is not registered under the
Securities Act or any applicable state securities laws, and may not be resold
unless subsequently registered under the Securities Act and such other laws or
unless an exemption from such registration is available. The Holder agrees not
to pledge, transfer, convey or otherwise dispose of any interest in the New
Note, except in a transaction that is the subject of either (i) an effective
registration statement under the Securities Act and any applicable state
securities laws or (ii) an opinion of counsel to the effect that such
registration is not required.
SECTION 5. MISCELLENEOUS.
(a) SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement. Nothing in this Agreement shall in any manner alter
the rights of the Holder under the Purchase Agreement.
(b) PARTIES IN INTEREST; THIRD PARTY BENEFICIARIES. All
the covenants and agreements in this Agreement contained by or on behalf of the
parties hereto shall bind their successors and assigns, whether so expressed or
not. This Agreement is not intended to confer any rights or remedies upon any
person other than the parties hereto.
(c) NOTICES. Any notice or other communication required
or permitted hereunder shall be deemed to be sufficient if contained in a
written instrument that is (w) delivered in person, (x) sent by first class
certified mail, postage prepaid, (y) sent by nationally recognized overnight
courier or (z) sent by facsimile (and followed by a copy of such notice sent in
a manner described (in any of (w)-(y) above), in each case addressed to such
party as follows:
(i) if to the Company or USP Domestic, to:
United Surgical Partners International, Inc.
00000 Xxxxxxx Xxxx
Xxxxx 000 Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Nossaman, Guthner, Xxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
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Facsimile No.: (000) 000-0000
(ii) if to the Holder:
c/o Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
or, in any case, at such other address or addresses as shall have been furnished
in writing by such party to the other parties hereto. All such notices,
requests, consents and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of mailing, on the fifth business day following the date of such
mailing, (c) in the case of delivery by overnight courier, on the business day
following the date of delivery to such courier, and (d) in the case of
facsimile, when received.
(d) ENTIRE AGREEMENT; AMENDMENT. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof. This Agreement may not
be amended or modified except in a writing signed by all of the parties hereto.
(e) TERMINATION. If the Initial Public Offering has not
occurred on or prior to December 31, 2001, this Agreement shall automatically
terminate.
(f) COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(g) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Note Exchange
Agreement as of the day and year first above written.
COMPANY: UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By________________________________
Name:
Title:
USP DOMESTIC: USP DOMESTIC HOLDINGS, INC.
By________________________________
Name:
Title:
HOLDER: WCAS CAPITAL PARTNERS III, L.P..
By: WCAS CP III Associates, L.L.C.
General Partner
By___________________________
Xxxxxxxx X. Rather
General Partner
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