EXHIBIT 10.7
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SECURITIES PURCHASE AGREEMENT
among
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
WELSH, CARSON, XXXXXXXX & XXXXX VII, L.P
and
THE SEVERAL OTHER PURCHASERS NAMED IN ANNEX I HERETO
Dated as of April 30, 1998
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TABLE OF CONTENTS
PAGE
I. PURCHASE AND SALE OF SECURITIES
SECTION 1.01 Issuance, Sale and Delivery of Securities on
the Initial Closing Date......................................2
SECTION 1.02 Initial Closing Date..........................................3
SECTION 1.03 The Company's Right to Request Purchases of
Additional Securities.........................................3
SECTION 1.04 Issuance, Sale and Delivery of Additional
Securities on Subsequent Closing Dates........................5
SECTION 1.05 Subsequent Closing Dates......................................5
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 2.01 Organization, Qualifications and Corporate Power.........6
SECTION 2.02 Authorization of Agreements, Etc.........................6
SECTION 2.03 Validity.................................................7
SECTION 2.04 Authorized Capital Stock.................................7
SECTION 2.05 Governmental Approvals...................................7
SECTION 2.06 Corporate Transactions...................................8
SECTION 2.07 Events Subsequent to Date of Incorporation...............8
SECTION 2.08 Actions Pending..........................................8
SECTION 2.09 Trade Secrets............................................8
SECTION 2.10 Taxes....................................................8
SECTION 2.11 Other Agreements.........................................9
SECTION 2.12 Title to Properties......................................9
SECTION 2.13 Compliance with Laws, Etc................................9
SECTION 2.14 Affiliated Transactions..................................9
SECTION 2.15 Brokers' or Finders' Fees................................9
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
SECTION 3.01 Authorization...........................................10
SECTION 3.02 Validity................................................10
SECTION 3.03 Investment Representations..............................10
SECTION 3.04 Governmental Approvals..................................11
SECTION 3.05 Brokers' or Finders' Fees...............................11
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PAGE
IV. CONDITIONS PRECEDENT
SECTION 4.01 Conditions Precedent to the Obligations of the
Purchasers..............................................12
SECTION 4.02 Conditions Precedent to the Obligations of the
Company.................................................14
SECTION 4.03 Conditions Precedent to the Obligations of the
Purchasers with Respect to each Subsequent Closing......14
SECTION 4.04 Conditions Precedent to the Obligations of the
Company with Respect to each Subsequent Closing.........16
V. COVENANTS
SECTION 5.01 Financial Statements, Reports, Etc......................17
SECTION 5.02 Rights of Inspection....................................18
SECTION 5.03 Notice of Certain Events................................18
SECTION 5.04 Use of Proceeds.........................................19
SECTION 5.05 Consents and Approvals..................................19
SECTION 5.06 Compliance with Laws....................................19
SECTION 5.07 Preemptive Rights.......................................19
VI. MISCELLANEOUS
SECTION 6.01 Expenses, Etc...........................................20
SECTION 6.02 Survival of Agreements..................................21
SECTION 6.03 Parties in Interest.....................................21
SECTION 6.04 Notices.................................................21
SECTION 6.05 Entire Agreement; Modifications.........................22
SECTION 6.06 Counterparts............................................22
SECTION 6.07 Assignment..............................................22
SECTION 6.08 Governing Law...........................................22
TESTIMONIUM
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INDEX TO EXHIBITS, ANNEXES AND SCHEDULES
EXHIBIT DESCRIPTION
A Form of Promissory Note
B Form of Amended and Restated Registration Rights Agreement
C Form of Amended and Restated Stockholders Agreement
D Form of Certificate of Amendment to the Certificate of
Incorporation
E Form of Stock Option Plan
F Form of Opinion of Counsel to the Company
ANNEX DESCRIPTION
I Purchasers
II Initial Shares Purchased
III Additional Shares to be Purchased
IV Subsequent Closing Representations
SCHEDULE DESCRIPTION
2.01(b) Company Ownership of Stock or Other Interests
2.04(a) Ownership of Capital Stock of Company
2.04(b) Rights, Warrants, Options, Etc.
2.05 Government Approvals
2.06 Corporate Transactions
2.07 Events Subsequent to Date of Incorporation
2.08 Actions Pending
2.12 Title to Properties.
2.14 Affiliated Transactions
2.15 Brokers' or Finders' Fee
3.03(d) Certain Purchasers
3.05 Brokers' or Finders' Fee
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SECURITIES PURCHASE AGREEMENT, dated as of April 30, 1998, among UNITED
SURGICAL PARTNERS INTERNATIONAL, INC., a Delaware corporation (the "Company"),
WELSH, CARSON, XXXXXXXX & XXXXX VII, L.P., a Delaware limited partnership
("WCAS VII") and the several other purchasers named in Annex I hereto (such
purchasers and WCAS VII being hereinafter at times referred to individually as a
"Purchaser" and collectively as the "Purchasers").
WHEREAS, the Company has been formed to engage in the business of owning
and operating hospitals and/or surgical centers and acquiring additional
hospitals and/or surgical centers and other businesses related thereto
(collectively, the "Business");
WHEREAS, on the Initial Closing Date (as hereinafter defined), the Company
wishes to issue, sell and deliver (i) to WCAS VII and the several other
Purchasers listed on Annex I hereto under the heading "WCAS Purchasers"
(WCAS VII and such listed Purchasers being hereinafter collectively called the
"WCAS Purchasers") an aggregate 6,487,789 shares of Class A Common Stock, $.01
par value ("Class A Common Stock"), and (ii) to the several Purchasers listed on
Annex I hereto under the heading "Management Purchasers" (such listed Purchasers
being hereinafter collectively called the "Management Purchasers") an aggregate
1,012,211 shares of Class A Common Stock (said shares of Class A Common Stock,
together with the shares of Class A Common Stock referred to in clause (i),
being hereinafter collectively called the "Initial Shares");
WHEREAS, the Purchasers, severally and not jointly, wish to purchase the
Initial Shares, all on the terms and subject to the conditions hereinafter set
forth;
WHEREAS, from time to time during the five-year period after the Initial
Closing Date, subject to the terms and conditions hereinafter set forth, (i) the
WCAS Purchasers may wish to purchase up to an aggregate 3,118,750 shares (the
"Additional WCAS Class A Common Shares") of Class A Common Stock and, only after
the issuance, sale and delivery of the Additional WCAS Class A Common Shares and
the Additional Management Class A Common Shares (as hereinafter defined), up to
an aggregate 30,000 shares (the "WCAS Preferred Shares") of Series A Redeemable
Preferred Stock, $.01 par value ("Preferred Stock") and (ii) the Management
Purchasers may wish to purchase up to an aggregate 356,250 shares (the
"Additional Management Class A Common Shares") of Class A Common Stock, all in
order to finance the expansion of the Business through additional acquisitions
or for certain operating expenses approved by the Board of Directors of the
Company;
WHEREAS, the Company wishes to issue, sell and deliver said Additional
WCAS Class A Common Shares, WCAS Preferred Shares and Additional Management
Class A Common Shares, all on the terms and subject to the conditions
hereinafter set forth;
WHEREAS, concurrently with the purchase and sale of the Initial Shares on
the Initial Closing Date, the Company is consummating the transactions
contemplated by the Stock
Purchase Agreement, dated as of the date hereof (the "Stock Purchase
Agreement"), between the Company and Xxxxx International Holdings, Inc., a
Kentucky corporation (the "Seller"), pursuant to which the Company shall acquire
all of the outstanding capital stock of the Seller's wholly owned subsidiary,
Columbia International Holdings, Inc., a Delaware corporation ("Columbia
International");
WHEREAS, the issuance of the Initial Shares under this Agreement and the
transactions contemplated by the Stock Purchase Agreement shall occur
simultaneously; and
WHEREAS, the effectiveness of the issuance of the Initial Shares, on the
one hand, and the consummation of the transactions contemplated by the Stock
Purchase Agreement, on the other, shall be contingent upon the effectiveness of
the other;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
SECTION 1.01 ISSUANCE, SALE AND DELIVERY OF SECURITIES ON THE INITIAL
CLOSING DATE. (a) Subject to the terms and conditions set forth herein, on the
Initial Closing Date, the Company shall issue, sell and deliver to each
Purchaser, and each Purchaser shall purchase from the Company (i) the number of
shares of Class A Common Stock set forth opposite the name of such Purchaser on
Annex II hereto under the heading "Number of Initial Class A Common Shares" at a
purchase price of $2.00 per share and (ii) the number of shares, if any, of
Preferred Stock set forth opposite the name of such Purchaser on Annex II hereto
under the heading "Number of Initial Preferred Shares" at a purchase price of
$1,000 per share. On the Initial Closing Date, the Company shall issue a
certificate or certificates in definitive form, registered in the name of each
Purchaser, evidencing the securities being purchased by each such Purchaser
hereunder.
(b) As payment in full for the shares of Class A Common Stock and the
shares, if any, of Preferred Stock being purchased by each Purchaser hereunder
on the Initial Closing Date, and against delivery thereof as aforesaid, on the
Initial Closing Date, each Purchaser shall (i) pay to the Company, by wire
transfer of immediately available funds to an account or accounts designated by
the Company, the amount set forth opposite the name of such Purchaser on
Annex II hereto under the heading "Cash Purchase Price" and (ii) deliver to the
Company a Promissory Note, substantially in the form attached hereto as
Exhibit A (each, a "Promissory Note"), in the principal amount set forth
opposite the name of such Purchaser on Annex II hereto under the heading "Note
Principal Amount".
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SECTION 1.02 INITIAL CLOSING DATE. The closing of the sale and purchase of
the Initial Shares shall take place at the offices of Nossaman, Guthner, Xxxx &
Xxxxxxx, LLP, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxxx Xxxxxxxxxx, at 10 a.m., Los
Angeles time, on April 30, 1998, or at such other date and time as may be
mutually agreed upon among the Purchasers and the Company (such closing being
herein called the "Initial Closing" and such date and time being herein called
the "Initial Closing Date").
SECTION 1.03 THE COMPANY'S RIGHT TO REQUEST PURCHASES OF ADDITIONAL
SECURITIES. (a) In addition to the Initial Shares to be issued and sold to the
Purchasers on the Initial Closing Date, the WCAS Preferred Shares and the
Additional WCAS Class A Common Shares shall be reserved for issuance to the WCAS
Purchasers and the Additional Management Class A Common Shares shall be reserved
for issuance to the Management Purchasers (together with the WCAS Purchasers
being hereinafter collectively called the "Additional Purchasers"), all
pursuant to this Section 1.03 (such WCAS Preferred Shares, Additional
WCAS Class A Common Shares and Additional Management Class A Common Shares being
hereinafter collectively called the "Additional Shares", and together with the
Initial Shares, being hereinafter collectively called the "Securities").
(b) The maximum number of Additional Shares that may be purchased by each
Additional Purchaser on a Subsequent Closing Date (as hereinafter defined) is
set forth opposite the name of such Additional Purchaser on Annex III hereto
under the heading "Maximum Number of Additional Class A Common Shares" and/or
"Maximum Number of Additional Preferred Shares", as the case may be. The
issuance, sale and delivery of the Additional WCAS Class A Common Shares to the
WCAS Purchasers and the Additional Management Class A Common Shares to the
Management Purchasers on any Subsequent Closing Date shall be PRO RATA among the
WCAS Purchasers and the Management Purchasers in proportion to the maximum
number of shares of Class A Common Stock to be purchased by such Purchaser on
Subsequent Closing Dates as set forth on Annex III. After all of such Additional
WCAS Class A Common Shares and Additional Management Class A Common Shares have
been issued, sold and delivered (it being understood and agreed that the Company
shall first issue, sell and deliver all the available Additional WCAS Class A
Common Shares and Additional Management Class A Common Shares prior to the
issuance, sale or delivery of any WCAS Preferred Shares hereunder), the
issuance, sale and delivery of the WCAS Preferred Shares on any Subsequent
Closing Date shall be PRO RATA among the WCAS Purchasers in proportion to the
maximum number of shares of Preferred Stock to be purchased by such WCAS
Purchaser on Subsequent Closing Dates as set forth on Annex III hereto. The
aggregate number of Additional Shares available for purchase by each Additional
Purchaser on a Subsequent Closing Date shall be reduced by the aggregate number
of Additional Shares purchased by such Additional Purchaser on previous
Subsequent Closing Dates.
(c) On the date (the "Termination Date") that is the earlier to occur
of (i) the fifth anniversary of the Initial Closing Date, (ii) such time as the
Company shall have consummated an initial public offering (an "IPO") of its
common stock registered under the Securities Act of 1933,
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as amended (the "Securities Act"), and (iii) a Change of Control, the number, if
any, of Additional Shares available for purchase hereunder, after taking into
account all reductions thereof, shall no longer be subject to any of the
provisions of this Section 1.03.
As used in this Section 1.03(c), the term "Change of Control" shall mean
(i) a consolidation or merger of the Company with or into any other corporation
(other than a merger which will not result in more than 50% of the voting
capital stock of the Company outstanding being owned of record or beneficially
by persons other than the holders of such capital stock immediately prior to
such merger in the same proportions in which such shares were held immediately
prior to such merger), (ii) a sale of all or substantially all of the properties
and assets of the Company as an entirety in a single transaction or in a series
or related transactions to any other person, or (iii) the acquisition of
"beneficial ownership" by any "person" or "group" (other than the WCAS
Purchasers or their affiliates) of voting capital stock of the Company
representing more than 50% of the voting power of all outstanding shares of such
voting stock, whether by way of merger or consolidation or otherwise. In
addition, (i) the terms "person" and "group" shall have the meanings set forth
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not applicable, (ii) the term "beneficial owner"
shall have the meaning set forth in Rules 13d-3 and 13d-5 under the Exchange
Act, whether or not applicable, except that a person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time or upon the occurrence of certain events, and (iii) any "person" or
"group" will be deemed to beneficially own any voting stock of the Company so
long as such person or group beneficially owns, directly or indirectly, in the
aggregate a majority of the voting stock of a registered holder of the voting
stock of the Company.
(d) At any time prior to the Termination Date, in the event that the
Company desires to finance (x) capital expenditures approved by the Board of
Directors for the expansion of the Business through additional acquisitions or
(y) operating expenses approved by the Board of Directors of the Company, the
Company may, on one or more occasions, notify the WCAS Purchasers and the
Management Purchasers that it wishes to issue and sell all or any portion of the
Additional Shares in accordance with paragraph (b) above. Such notice (a "Notice
of Financing Event") shall be in writing and shall specify (i) the applicable
capital expenditure or operating expense (including a brief description
thereof), (ii) the aggregate number of Additional Shares (collectively, the
"Call Securities") that the Company proposes to issue to the WCAS Purchasers
and, if applicable, to the Management Purchasers, (iii) that the Notice of
Financing Event has been authorized by the Board of Directors of the Company,
(iv) that the anticipated net proceeds from the sale of the Call Securities will
not be greater than is reasonably necessary for the applicable capital
expenditure or operating expense and (v) the Subsequent Closing Date for the
issuance and sale of the Call Securities; PROVIDED that no Subsequent Closing
Date shall be scheduled to occur less than 10 or more than 45 days after the
date of the Notice of Financing Event.
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(e) Within five business days after receipt of a Notice of Financing Event
pursuant to paragraph (d) above, WCAS VII (on behalf of the Additional
Purchasers) shall deliver a notice to the Company (a "Call Notice") that shall
state the number of Call Securities allocated to each Additional Purchaser and
confirm the Subsequent Closing Date specified in the Notice of Financing Event.
Upon receipt of a Call Notice, the Company shall be required to sell such Call
Securities to the Additional Purchasers in accordance with Section 1.04 below.
(f) It is understood and agreed that the Additional Purchasers, as
determined by WCAS VII in its sole discretion, shall be entitled to deliver a
Call Notice to the Company to purchase any Additional Shares not previously
purchased by the Additional Purchasers pursuant to this Section 1.03 at any time
prior to the Termination Date, whether or not the Company shall have delivered a
Notice of Financing Event.
SECTION 1.04 ISSUANCE, SALE AND DELIVERY OF ADDITIONAL SECURITIES ON
SUBSEQUENT CLOSING DATES. (a) In the event that the Additional Purchasers shall
have delivered a Call Notice to the Company as specified in Section 1.03, then,
subject to the other terms and conditions of this Agreement, on the Subsequent
Closing Date specified in such Call Notice, the Company shall issue, sell and
deliver (i) to each WCAS Purchaser, and each WCAS Purchaser shall purchase from
the Company, (x) the number of WCAS Preferred Shares, if any, specified in the
Call Notice at a purchase price equal to $1,000 per share and/or (y) the number
of Additional WCAS Class A Common Shares specified in the Call Notice at a
purchase price equal to $2.00 per share and (ii) to each Management Purchaser,
and each Management Purchaser shall purchase from the Company, the number of
Additional Management Class A Common Shares specified in the Call Notice at a
purchase price equal to $2.00 per share. On each Subsequent Closing Date, the
Company shall issue to each Additional Purchaser stock certificates in
definitive form, registered in the name of such Additional Purchaser evidencing
the Additional Shares being purchased by such Additional Purchaser hereunder.
(b) As payment in full for the Additional Shares being purchased by it
hereunder, and against delivery of the certificate or certificates therefore as
aforesaid, each Additional Purchaser shall transfer by wire transfer to the
account or accounts designated by the Company on each Subsequent Closing Date an
amount equal to the applicable purchase price per share referred to in
paragraph (a) above multiplied by the number of Additional Shares set forth in
the relevant Call Notice.
SECTION 1.05 SUBSEQUENT CLOSING DATES. Each closing of a sale and
purchase of Additional Shares shall take place at the offices of the Company,
00000 Xxxxxxx Xxxx, Xxxxx 000 Xxxxx, Xxxxxx, Xxxxx, at 10 a.m., Dallas time, on
such date, (which shall not be a day on which banking institutions in the State
of Texas or New York are required or authorized to close) as shall be specified
in any Call Notice (each such closing being herein called a "Subsequent Closing"
and each such date and time being herein called a "Subsequent Closing Date").
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II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as follows:
SECTION 2.01 ORGANIZATION. QUALIFICATIONS AND CORPORATE POWER. (a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and is duly licensed or
qualified in each jurisdiction in which the nature of its business or the
ownership of its properties makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
material adverse effect on its ability to carry on its business. The Company has
the corporate power and authority to own and hold its properties, to carry on
its business as currently conducted and to execute and deliver this Agreement,
the Amended and Restated Registration Rights Agreement dated as of the date
hereof substantially in the form attached hereto as Exhibit B (the "Amended and
Restated Registration Rights Agreement") among the Company and the several other
parties named therein and the Amended and Restated Stockholders Agreement dated
as of the date hereof substantially in the form attached hereto as Exhibit C
(the "Amended and Restated Stockholders Agreement") among the Company and the
several other parties named therein, to perform its obligations under this
Agreement, the Amended and Restated Stockholders Agreement and the Amended and
Restated Registration Rights Agreement, and to issue, sell and deliver the
Securities.
(b) Except as set forth on Schedule 2.01(b) hereto, the Company does not
own of record or beneficially, directly or indirectly, (i) any shares of capital
stock or securities convertible into capital stock of any other corporation or
(ii) any participating interest in any partnership, joint venture or other
non-corporate business enterprise.
SECTION 2.02 AUTHORIZATION OF AGREEMENTS, ETC.
(a) Each of the execution and delivery by the Company of this Agreement,
the Amended and Restated Stockholders Agreement and the Amended and Restated
Registration Rights Agreement, the performance by the Company of its obligations
hereunder and thereunder, and the issuance, sale and delivery by the Company of
the Securities have 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 By-laws of the Company, or any
provision of any indenture, agreement or other instrument to which the Company
or any of the properties or assets of the Company 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 the Company or any subsidiary
thereof.
(b) The Securities have been duly authorized by the Company and, when sold
and paid for in accordance with this Agreement, will be validly issued, fully
paid and non-assessable
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shares of Class A Common Stock or Series A Redeemable Stock, as the case may be.
The issuance, sale and delivery of the Securities to the Purchasers hereunder is
not subject to any preemptive rights of stockholders of the Company or to any
right of first refusal or other similar right in favor of any person.
SECTION 2.03 VALIDITY. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company 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 equity
principles. The Amended and Restated Stockholders Agreement and the Amended and
Restated Registration Rights Agreement, when executed and delivered by the
Company as provided in this Agreement, and when executed and delivered by the
other parties hereto, will constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, subject 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 equity principles.
SECTION 2.04 AUTHORIZED CAPITAL STOCK.
(a) The authorized capital stock of the Company consists of (i) 30,000,000
shares of Common Stock, $.01 par value, (ii) 20,000,000 shares of Class A Common
Stock and (iii) 31,200 shares of Preferred Stock, $.01 par value. All of the
issued and outstanding shares of capital stock of the Company are owned of
record as set forth on Schedule 2.04(a) hereto.
(b) Except as contemplated by this Agreement, the Amended and Restated
Stockholders Agreement, the Company's Certificate of Incorporation or as set
forth on Schedule 2.04(b) hereto, (i) no subscription, warrant, option,
convertible security or other right (contingent or other) to purchase or acquire
any shares of any class of capital stock of the Company is authorized or
outstanding, (ii) there is no binding commitment of the Company to issue any
shares, warrants, options or other such rights or to distribute to holders of
any class of the Company's capital stock, any evidences of indebtedness or
assets, and (iii) the Company has no obligations (contingent or other) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof
SECTION 2.05 GOVERNMENTAL APPROVALS. Subject to the accuracy of the
representations and warranties of the Purchasers set forth in Article III
hereof, except as set forth on Schedule 2.05 hereto, 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 and delivery of this Agreement, the Amended and Restated Stockholders
Agreement and the Amended and Restated Registration Rights Agreement, the
performance of this Agreement, the Amended and Restated Stockholders Agreement
and the Amended and
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Restated Registration Rights Agreement, or the issuance, sale and delivery of
the Securities, other than, if applicable, compliance with the requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act").
SECTION 2.06 CORPORATE TRANSACTIONS. The Company was incorporated on
February 27, 1998. Since such date of incorporation, the Company has not
conducted any business or otherwise entered into any transactions other than
(w) its organization, the adoption of its By-laws and the election of directors
and officers, (x) the authorization and execution of the Stock Purchase
Agreement, the Stockholders Agreement and the Registration Rights Agreement,
each dated as of March 2, 1998 and among the Company and the several parties
named therein, (y) the authorization of the this Agreement, the Amended and
Restated Stockholders Agreement, the Amended and Restated Registration Rights
Agreement and the transactions contemplated hereby and thereby and (z) the other
transactions set forth on Schedule 2.06 hereto.
SECTION 2.07 EVENTS SUBSEQUENT TO DATE OF INCORPORATION. Except as
contemplated by this Agreement or as set forth on Schedule 2.07 hereto, the
Company has not (a) issued any stock, bonds or other corporate securities,
(b) borrowed any amount or incurred any liabilities (absolute or contingent),
(c) discharged or satisfied any lien or incurred or paid any obligation or
liability (absolute or contingent), other than expenses incidental to the
Company's formation, (d) declared or made any payment or distribution to
stockholders or purchased or redeemed any shares of its capital stock or other
securities or (e) conducted any business of a material nature.
SECTION 2.08 ACTIONS PENDING. Except as set forth on Schedule 2.08 hereto,
there is no action, suit, investigation or proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
subsidiary or any of their respective properties or rights before any court or
by or before any governmental body or arbitration board or tribunal, the outcome
of which might reasonably be expected to result in any material adverse effect
on the properties, assets, condition (financial or other), prospects, operating
results or business of the Company and its subsidiaries taken as a whole. To the
knowledge of the Company, except as set forth on Schedule 2.08 hereto, there
does not exist any reasonable basis for any such action, suit, investigation or
proceeding.
SECTION 2.09 TRADE SECRETS. To the knowledge of the Company, (a) no third
party has claimed that any person affiliated with the Company or any subsidiary
has violated any of the terms or conditions of his employment contract with such
third party, or disclosed or utilized any trade secrets or proprietary
information or documentation of such third party , or interfered in the
employment relationship between such third party and any of its employees and
(b ) no person affiliated with the Company or any subsidiary has employed any
trade secrets or any information or documentation proprietary to any former
employer.
SECTION 2.10. TAXES. The Company and each subsidiary, as applicable, has
duly and timely filed or caused to be filed all Federal, state, local and
foreign tax returns that have been
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required to be filed to date by it and has timely paid or caused to be timely
paid all taxes or all assessments received by it to the extent that such taxes
or assessments have become due.
SECTION 2.11 OTHER AGREEMENTS. Neither the Company nor any subsidiary is
in default in any material respect in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any material
agreement or instrument to which it is a party.
SECTION 2.12 TITLE TO PROPERTIES. Except as set forth on Schedule 2.12
hereto, the Company and each of its subsidiaries owns its properties and assets
free and clear of mortgages, pledges, security interests, liens, charges and
other encumbrances.
SECTION 2.13 COMPLIANCE WITH LAWS. ETC. (a) Each of the Company and its
subsidiaries has all material governmental licenses, franchises and permits for
the conduct of its business as currently conducted (collectively, "Governmental
Permits").
(b) The business of the Company and each of its subsidiaries is being
conducted in compliance with all applicable laws, ordinances, rules and
regulations of all governmental authorities relating to their respective
properties or applicable to their respective businesses, including without
limitation the terms of all Governmental Permits and federal securities laws,
other than minor non-compliance that can be cured at nominal cost without
adversely affecting the business of the Company or any subsidiary as it is
currently conducted. Neither the Company nor any subsidiary has received any
notice of any alleged violation of any of the foregoing, nor is the Company
aware of any basis for any such allegation.
SECTION 2.14 AFFILIATED TRANSACTIONS. Except as contemplated by this
Agreement or as set forth on Schedule 2.14 hereto, to the knowledge of the
Company, no officer, director or stockholder of the Company or any person
related by blood or marriage to any such person or any entity in which any such
person owns any beneficial interest, is a party to any agreement, contract,
commitment or transaction with the Company or has any material interest in any
material property used by the Company.
SECTION 2.15 BROKERS' OR FINDERS' FEES. Except as set forth on Schedule
2.15, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the Company with the Purchasers,
without the intervention of any person on behalf of the Company in such a manner
to give rise to any claim by any person for a finders' fee, brokerage commission
or similar payment.
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III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser represents and warrants to the Company, severally and not
jointly, as follows:
SECTION 3.01 AUTHORIZATION. The execution, delivery and performance by
such Purchaser of this Agreement, the Amended and Restated Stockholders
Agreement, the Amended and Restated Registration Rights Agreement, such
Purchaser's Promissory Note, if any, and the purchase and receipt by such
Purchaser of the Securities being purchased by it hereunder have been duly
authorized by all requisite action on the part of such Purchaser, and will not
violate any provision of law, any order of any court or other agency of
government applicable to such Purchaser, or any provision of any indenture,
agreement or other instrument by which such Purchaser or any of such Purchaser's
properties or assets are 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.
SECTION 3.02 VALIDITY. This Agreement has been duly executed and delivered
by such Purchaser and constitutes the legal, valid and binding obligation of
such Purchaser, enforceable against such Purchaser in accordance with its terms,
subject 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 equity principles. The Amended and Restated
Stockholders Agreement, the Amended and Restated Registration Rights Agreement
and such Purchaser's Promissory Note, if any, when executed and delivered by
such Purchaser in accordance with this Agreement, and when executed and
delivered by the other parties thereto, will constitute the legal, valid and
binding obligation of such Purchaser, enforceable in accordance with their
terms, subject 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 equity principles.
SECTION 3.03 INVESTMENT REPRESENTATIONS. (a) Such Purchaser is acquiring
the Securities for its own account, for investment, and not with a view toward
the resale or distribution thereof in violation of applicable law.
(b) Such Purchaser understands that it must bear the economic risk of its
investment for an indefinite period of time because the Securities are 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. Such
Purchaser also understands that, except as provided in the Amended and Restated
Registration Rights Agreement, it is not contemplated that any registration will
be made under the Securities Act or that the Company will take steps which will
make the provisions of Rule 144 under the Securities Act available to permit
resale of the
10
Securities. Such Purchaser will not pledge, transfer, convey or otherwise
dispose of any of the Securities, except in a transaction that is the subject of
either (x) an effective registration statement under the Securities Act and any
applicable state securities laws, or (y) an opinion of counsel to the effect
that such registration is not required (which opinion and counsel shall be
reasonably satisfactory to the Company, it being agreed that Reboul, MacMurray,
Xxxxxx, Xxxxxxx & Kristol shall be satisfactory, and may be relied on by the
Company in making such determination), it being intended that the agreements
with respect to the Securities contained in this sentence shall be construed
consistently with the provisions relating to the same subject matter contained
in the Amended and Restated Registration Rights Agreement.
(c) Such Purchaser is able to fend for itself in the transactions
contemplated by this Agreement and has the ability to bear the economic risks of
its investment in the Shares being purchased by it for an indefinite period of
time. Such Purchaser has had the opportunity to ask questions of, and receive
answers from, officers of the Company with respect to the business and financial
condition of the Company and the terms and conditions of the offering of the
Shares and to obtain additional information necessary to verify such information
or can acquire it without unreasonable effort or expense.
(d) Such Purchaser has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the Securities. Such Purchaser (other than the Purchasers set
forth on Schedule 3.03(d) hereto) is an "accredited investor" as such term is
defined in Rule 501 of Regulation D under the Securities Act with respect to its
purchase of the Securities, and that if such Purchaser is a partnership, it has
not been formed solely for the purpose of purchasing the Securities it is
purchasing hereunder (unless each of the partners of such partnership is an
accredited investor).
SECTION 3.04 GOVERNMENTAL APPROVALS. 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 by such Purchaser
for the valid execution, delivery and performance of this Agreement, the Amended
and Restated Stockholders Agreement, the Amended and Restated Registration
Rights Agreement and such Purchaser's Promissory Note, other than, if
applicable, compliance with the requirements of the HSR Act.
SECTION 3.05 BROKERS' OR FINDERS' FEES. Except as set forth on Schedule
3.05, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the Purchasers with the Company,
without the intervention of any person on behalf of the Purchasers in such a
manner as to give rise to any claim by any person for a finders' fee, brokerage
commission or similar payment.
11
IV
CONDITIONS PRECEDENT
SECTION 4.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASERS.
The obligations of each Purchaser hereunder are, at its option, subject to the
satisfaction, on or before the Initial Closing Date, of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on the Initial Closing Date, with
the same force and effect as though such representations and warranties had been
made on and as of such date, and the Company shall have certified to such effect
to the Purchasers in writing.
(b) PERFORMANCE. The Company shall have performed and complied with all
agreements and conditions contained herein required to be performed or complied
with by it prior to or on the Initial Closing Date, and the Company shall have
certified to such effect to the Purchasers in writing.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and other
proceedings to be taken by the Company and all waivers and consents to be
obtained by the Company in connection with the transactions contemplated hereby
shall have been taken or obtained by the Company and all documents incident
thereto shall be satisfactory in form and substance to such Purchaser and its
counsel.
(d) LEGAL ACTIONS OR PROCEEDINGS. No legal action or proceeding shall have
been instituted or threatened seeking to restrain, prohibit, invalidate or
otherwise affect the consummation of the transactions contemplated hereby.
(e) AMENDED AND RESTATED STOCKHOLDERS AGREEMENT AND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT. The Company shall have executed and delivered the
Amended and Restated Stockholders Agreement and the Amended and Restated
Registration Rights Agreement.
(f) CERTIFICATE OF AMENDMENT. The Certificate of Amendment to the
Certificate of Incorporation of the Company substantially in the form of
Exhibit D hereto shall have been duly adopted and shall have been duly filed
with the Secretary of State of the State of Delaware and become legally
effective.
(g) STOCK OPTION PLAN. A stock option plan for the Company substantially
in the form of Exhibit E hereto (the "Stock Option Plan") shall have been
approved by the Company.
12
(h) OPINION OF COUNSEL. The Purchasers shall have received an opinion of
Nossaman, Guthner, Xxxx & Xxxxxxx, LLP, substantially in the form of Exhibit F
hereto.
(i) SUPPORTING DOCUMENTS. WCAS VII (on behalf of the Purchasers) and its
counsel shall have received copies of the following supporting documents:
(i)(x) copies of the Certificate of Incorporation of the Company, and all
amendments thereto, certified as of a recent date by the Secretary of State
of the State of Delaware, and (y) a certificate of said Secretary dated as of
a recent date as to the due incorporation and good standing of the Company
and listing all documents of the Company on file with said Secretary;
(ii) a certificate of the Secretary or an Assistant Secretary of the
Company dated the Initial Closing Date and certifying (w) that attached
thereto is a true and complete copy of the By-laws of the Company as in
effect on the date of such certification; (x) that attached thereto is a true
and complete copy of resolutions adopted by the Board of Directors of the
Company authorizing the execution, delivery and performance of this
Agreement, the Amended and Restated Registration Rights Agreement, the
Amended and Restated Stockholders Agreement and the issuance, sale and
delivery of the Securities, and that all such resolutions are still in full
force and effect and are all the resolutions adopted in connection with the
transactions contemplated hereby and thereby; (y) that the Certificate of
Incorporation of the Company has not been amended since the date of the last
amendment referred to in the certificate delivered pursuant to clause (i)(x)
above; and (z) as to the incumbency and specimen signature of each officer of
the Company executing this Agreement, the Amended and Restated Registration
Rights Agreement, the Amended and Restated Stockholders Agreement and the
stock certificates representing the Initial Shares and any certificate or
instrument furnished pursuant hereto, and a certification by another officer
of the Company as to the incumbency and signature of the officer signing the
certificate referred to in this paragraph (ii); and
(iii) such additional supporting documents and other information with
respect to the operations and affairs of the Company as the Purchasers or
their counsel may reasonably request.
All such documents shall be satisfactory in form and substance to the
Purchasers and their counsel.
(j) CONSENTS; HSR ACT WAITING PERIOD. The Company shall have obtained all
consents required to be obtained pursuant to Section 5.05 hereof. Without
limiting the generality of the foregoing, all applicable waiting periods under
the HSR Act with respect to the transactions contemplated hereby shall have
expired or been terminated.
13
(k) STOCK PURCHASE AGREEMENT. On the Initial Closing Date, the Stock
Purchase Agreement shall have been executed and delivered by each party thereto
and the transactions contemplated thereby shall have been consummated.
SECTION 4.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company hereunder are, at its option, subject to the
satisfaction, on or before the initial Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Purchasers contained in this Agreement
shall be true and correct in all material respects on the Initial Closing Date,
with the same effect as though such representations and warranties had been made
on and as of such date.
(b) PERFORMANCE. The Purchasers shall have performed and complied with all
agreements and conditions contained herein required to be performed or complied
with by them prior to or on the Initial Closing Date.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. All proceedings to be taken by the
Purchasers and any waivers and consents to be obtained by the Purchasers in
connection with the transactions contemplated hereby shall have been taken or
obtained by the Purchasers and all documents incident thereto shall be
satisfactory in form and substance to the Company and its counsel.
(d) LEGAL ACTIONS OR PROCEEDINGS. No legal action or proceeding shall have
been instituted or threatened seeking to restrain, prohibit, invalidate or
otherwise affect the consummation of the transactions contemplated hereby.
(e) AMENDED AND RESTATED STOCKHOLDERS AGREEMENT. AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE. Each of the Purchasers shall
have executed and delivered the Amended and Restated Stockholders Agreement, the
Amended and Restated Registration Rights Agreement and such Purchaser's
Promissory Note, if any.
SECTION 4.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASERS
WITH RESPECT TO EACH SUBSEQUENT CLOSING. The obligations of each Additional
Purchaser to purchase and pay for the Additional Shares being purchased by such
Additional Purchaser on each Subsequent Closing Date are, at such Additional
Purchaser's option, subject to the satisfaction, on or before such date, of the
following conditions:
(a) CONSUMMATION OF INITIAL CLOSING AND EACH PRIOR SUBSEQUENT CLOSING. On
the Initial Closing Date the Company shall have issued and sold the Initial
Shares, and on each prior Subsequent Closing Date, the Company shall have issued
and sold the Additional Shares being issued and sold on such Subsequent Closing
Date.
14
(b) PRELIMINARY DOCUMENTATION. If applicable, a Notice of Financing Event
shall have been given and shall have been delivered to the Additional Purchasers
pursuant to Section 1.03(d) hereof.
(c) OPINION OF COUNSEL. The Additional Purchasers shall have received from
Nossaman, Guthner, Xxxx & Xxxxxxx, LLP (or such other counsel satisfactory to
the Additional Purchasers) an opinion dated such Subsequent Closing Date
confirming the opinion delivered by such counsel in accordance with
Section 4.01(h) hereof, with such other changes as may be required as a result
of the transactions contemplated by this Agreement.
(d) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Company set forth herein shall be true and
correct as of such Subsequent Closing Date (except (i) as disclosed in writing
to the Additional Purchasers at least three business days prior to such
Subsequent Closing Date, which exceptions shall be acceptable to such Additional
Purchasers and (ii) that the representations contained in Sections 2.06 and 2.07
hereof shall be replaced in their entirety with the representations as to the
financial statements of the Company contained in Annex IV hereto, which
representations will be true and correct as of such Subsequent Closing Date),
and the Company shall have certified to such effect to the Additional Purchasers
in writing.
(e) PERFORMANCE. The Company shall have performed and complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at such Subsequent Closing
Date, and the Company shall have certified to such effect to the Additional
Purchasers in writing.
(f) NO MATERIAL ADVERSE CHANGE. Since the Subsequent Closing Date next
preceding such Subsequent Closing Date (or in the case of the first Subsequent
Closing Date, since the Initial Closing Date), there shall have been no material
adverse change in the properties, assets, condition (financial or other),
prospects, operating results or business of the Company and its subsidiaries
taken as a whole, and the Company shall have certified to such effect to the
Additional Purchasers in writing.
(g) ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and other
proceedings to be taken by the Company and all waivers and consents to be
obtained by the Company in connection with the transactions contemplated hereby
and all documents incident thereto shall be satisfactory in form and substance
to the Additional Purchasers and their counsel, and the Additional Purchasers
and said counsel shall have received all such counterpart originals or certified
or other copies of such documents as they may reasonably request.
(h) SUPPORTING DOCUMENTS. On or prior to such Subsequent Closing Date
WCAS VII (on behalf of the Additional Purchasers) and its counsel shall have
received copies of the supporting documents referred to in Section 4.01(i) above
as if such Subsequent Closing Date were the Initial Closing Date.
15
All such documents shall be satisfactory in form and substance to the
Additional Purchasers and their counsel.
In the event that the Certificate of Incorporation and/or By-laws of the
Company shall not have been amended since the Initial Closing Date, the Company
may, in lieu of furnishing such documents, cause the certificate with respect
thereto contemplated by paragraphs 4.01(i)(i) and 4.01(i)(ii) above to be
replaced by a certificate as to the fact that such documents were previously
furnished and as to the absence of any amendments thereto.
(i) LEGAL ACTIONS OR PROCEEDINGS. No legal action or proceeding shall have
been instituted or threatened seeking to restrain, prohibit, invalidate or
otherwise affect the consummation of the transactions contemplated hereby.
(j) CONSENTS; HSR ACT WAITING PERIOD. The Company shall have obtained all
consents required to be obtained pursuant to Section 5.05 hereof. Without
limiting the generality of the foregoing, all applicable waiting periods under
the HSR Act with respect to the transactions contemplated hereby shall have
expired or been terminated.
SECTION 4.04 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY WITH
RESPECT TO EACH SUBSEQUENT CLOSING. The obligations of the Company to issue and
sell the Additional Shares on each Subsequent Closing Date are, at its option,
subject to the satisfaction, on or before such date, of the following
conditions:
(a) CONSUMMATION OF INITIAL CLOSING AND EACH PRIOR SUBSEQUENT CLOSING. On
the Initial Closing Date the Purchasers shall have purchased and paid for the
Initial Shares, and on each prior Subsequent Closing Date, the Additional
Purchasers shall have purchased and paid for the Additional Shares being issued
and sold on such Subsequent Closing Date.
(b) PRELIMINARY DOCUMENTATION. A Call Notice shall have been given
pursuant to Section 1.03(e)or 1.03(f).
(c) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties contained in Article III hereof as made by the
Additional Purchasers shall be true and correct in all material respects on such
Subsequent Closing Date with the same effect as though such representations and
warranties had been made on and as of such date.
(d) PERFORMANCE. Each Additional Purchaser shall have performed and
complied in all material respects with all agreements and conditions contained
herein required to be performed or complied with by it prior to or at such
Subsequent Closing Date.
(e) ALL PROCEEDINGS TO BE SATISFACTION. All corporate or partnership and
other proceedings to be taken by each Purchaser and all waivers and consents to
be obtained by any
16
Purchaser in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and substance to the
Company and its counsel.
V
COVENANTS
SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC.
The Company shall furnish to WCAS VII, prior to the consummation of the
Company's IPO and for so long as WCAS VII shall hold at least 10% of the
Company's outstanding shares of the Class A Common Stock, Common Stock or
Preferred Stock:
(a) within 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company as of the end of such fiscal year
and the related consolidated statements of operations and retained earnings,
changes in stockholders' equity and cash flows of the Company for the fiscal
year then ended, together with supporting notes thereto, certified in
accordance with generally accepted accounting principles, without
qualification as to scope of audit, by a firm of independent public
accountants of recognized national standing selected by the Company;
(b) within 30 days after the end of each month in each fiscal year (other
than the last month in each fiscal year), a consolidated balance sheet of the
Company and the related consolidated statement of operations and retained
earnings, unaudited but certified by the principal financial officer of the
Company, such balance sheets to be as of the end of such month and such
statements of operations and retained earnings to be for such month and for
the period from the beginning of the fiscal year to the end of such month, in
each case subject to normal year-end adjustments;
(c) within 30 days prior to the beginning of each fiscal year of the
Company (and with respect to any revision thereof, promptly after such
revision has been prepared), a proposed annual operating budget for the
Company, including projected monthly income statements, cash flow statements
during such fiscal year and a projected consolidated balance sheet as of the
end of such fiscal year, and each monthly financial statement furnished
pursuant to (b) above shall reflect variances from such operating budget, as
the same may from time to time be revised; and
(d) promptly upon filing, copies of all registration statements,
prospectuses, periodic reports and other documents filed by the Company or
any subsidiary with the Securities and Exchange Commission.
17
SECTION 5.02 RIGHTS OF INSPECTION. The Company shall, and shall cause its
subsidiaries, officers, directors, employees, representatives, advisors and
agents to, afford, from the date hereof, the representatives, advisors and
agents of WCAS VII (on behalf of the Additional Purchasers) complete access at
all reasonable times during normal business hours to its officers, employees,
agents, properties, books, records and workpapers, and shall furnish WCAS VII
all financial, operating and other information and data that WCAS VII may
reasonably request through such representatives, advisors or agents. At the
request of WCAS VII, the Company shall promptly furnish to WCAS VII a copy of
all material written correspondence, filings, communications (or memoranda
setting forth the substance thereof) between the Company or any of its officers,
employees, representatives, advisors or agents and any governmental entity with
respect to the obtaining of any waivers, consent or approvals and the making of
any registrations or filings that are necessary to the transactions contemplated
by this Agreement. The Additional Purchasers agree to keep confidential any
confidential business information that may be provided to them by the Company
pursuant to this Agreement, unless disclosure is required by law as advised by
counsel.
SECTION 5.03 NOTICE OF CERTAIN EVENTS. (a) The Company shall give WCAS VII
prompt notice of (i) the occurrence, or failure to occur, of any event that the
Company believes would be likely to cause any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied in any material
respect, (ii) any failure of the Company, or any officer, director, employee or
agent thereof, to comply in any material respect with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it hereunder, (iii) any event of default under any agreement with respect to
indebtedness for borrowed money or a purchase money obligation, and any event
which, upon notice or lapse of time or both, would constitute such an event of
default, that would permit the holder of such indebtedness or obligation to
accelerate the maturity thereof and (iv) any claim, action, suit or proceeding
at law or in equity or by or before any governmental instrumentality or agency
which, if adversely determined, would materially impair the ability of the
Company to carry on its business substantially as now or then conducted.
(b) For purposes of permitting the WCAS Purchasers to purchase any of the
remaining Additional WCAS Class A Common Shares prior to the Termination Date
pursuant to Section 1.03(f) hereof, the Company shall give the WCAS Purchasers
notice of an IPO or a Change of Control Event at least 20 days prior to the
consummation of such IPO or Change of Control Event.
SECTION 5.04 USE OF PROCEEDS. The Company shall use the proceeds from the
sale of the Initial Shares hereunder for the acquisition of Columbia
International pursuant to the Stock Purchase Agreement and for general corporate
or other purposes approved by WCAS VII.
SECTION 5.05 CONSENTS AND APPROVALS. Prior to the Initial Closing Date and
each Subsequent Closing Date, the Company shall promptly apply for or otherwise
seek and use its best efforts to obtain all authorizations, consents, waivers
and approvals (whether by or from
18
any person, entity, court or governmental agency or authority) as may be
required in connection with the consummation of this Agreement and the
transactions contemplated hereby. In addition, the Company shall pay any filing
fees and expenses relating to compliance with the HSR Act in connection with any
transaction to which the Company is a party, regardless of who may be deemed to
be the "ultimate parent" of the Company (as such term is defined in the HSR
Act).
SECTION 5.06 COMPLIANCE WITH LAWS. The Company shall comply, and shall
cause each of its subsidiaries to comply, with all applicable laws, rules,
regulations and orders, the noncompliance with which could have a material
adverse effect on the properties, assets, condition (financial or other),
prospects, operating results or business of the Company and its subsidiaries
taken as a whole.
SECTION 5.07 PREEMPTIVE RIGHTS. (a) Until such time as the Company has
consummated an IPO, the Company hereby grants to each of the WCAS Purchasers and
Xxxxxx Xxxxx (collectively the "Original Investors") the right to purchase such
Original Investor's Proportionate Percentage (as hereinafter defined) of any
future Eligible Offering (as hereinafter defined). For the purposes of this
Section 5.07, the following terms shall have the meanings set forth below:
"PROPORTIONATE PERCENTAGE" means, with respect to any such Original
Investor as of any date, the result (expressed as a percentage) obtained by
dividing (i) the number of shares of Class A Common Stock and Common Stock
owned by such Original Investor as of such date, by (ii) the total number of
shares of Class A Common Stock and Common Stock outstanding as of such date.
"ELIGIBLE OFFERING" means an offer by the Company to sell to investors
(including any of the Purchasers) for cash shares of capital stock of the
Company, or any security convertible into or exchangeable for, or carrying
rights or options to purchase, capital stock of the Company, other than an
offering of securities by the Company:
(i) to its full-time employees, and/or officers and/or directors and/or
consultants and/or advisors of options to purchase shares of Common Stock
in connection with or pursuant to the Stock Option Plan as in effect from
time to time; or
(ii) in connection with any merger of, or acquisition by, the Company;
(iii) in connection with the conversion or exercise of outstanding
securities of the Company;
(iv) in connection with the issuance of any Additional Shares;
19
(v) in a public offering of shares of Common Stock registered under the
Securities Act; or
(vi) to certain investors approved by WCAS VII and the Company;
PROVIDED that (x) such securities shall consist of no more than 400,000
shares of Class A Common Stock (at a purchase price of $2.00 per share)
and 1,200 shares of Preferred Stock (at a purchase price of $1,OOO per
share) and (y) such securities are issued, sold and delivered prior to 60
days after the date hereof.
(b) The Company shall, before issuing any securities pursuant to an
Eligible Offering, give written notice thereof to each Original Investor. Such
notice shall specify the security or securities the Company proposes to issue
and the consideration that the Company intends to receive therefor. For a period
of ten (10) days following the date of such notice, each Original Investor shall
be entitled, by written notice to the Company, to elect to purchase all or any
part of such Original Investor's Proportionate Percentage of the securities
being sold in the Eligible Offering; PROVIDED, HOWEVER, that if two or more
securities shall be proposed to be sold as a "unit" in an Eligible Offering, any
such election must relate to such unit of securities. In the event that
elections pursuant to this Section 5.07 shall not be made with respect to any
securities included in an Eligible Offering within such ten (10) day period,
then the Company may issue such securities to investors, but only for a
consideration payable in cash not less than, and otherwise on no more favorable
terms to the investors than, that set forth in the Company's notice and only
within 180 days after the end of such ten (10) day period. In the event that any
such offer is accepted by a Original Investor or Original Investors, the Company
shall sell to such Original Investor or Original Investors, and such Original
Investor or Original Investors shall purchase from the Company, for the
consideration and on the terms set forth in the notice as aforesaid, the
securities that such Original Investor or Original Investors shall have elected
to purchase.
VI
MISCELLANEOUS
SECTION 6.01 EXPENSES, ETC. The Company shall pay its own expenses. All
fees and expenses of WCAS VII incident to the negotiation, preparation and
execution of this Agreement, including the fees and expenses of counsel,
accountants or other advisors (i) shall be paid by the Company in the event that
such transactions are consummated and (ii) shall be borne by the party incurring
such expense in the event such transactions are not consummated. Each party
hereto will indemnify and hold harmless the others against and in respect of any
claim for brokerage or other commissions relative to this Agreement or to the
transactions contemplated hereby, made as a result of any agreements,
arrangements or understandings made or claimed to have been made by such party
with any third party.
20
SECTION 6.02 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the issuance, sale and delivery of the Securities
pursuant hereto and all statements contained in any certificate or other
instrument delivered by the Company hereunder shall be deemed to constitute
representations and warranties made by the Company.
SECTION 6.03 PARTIES IN INTEREST. All covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not.
SECTION 6.04 NOTICES. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient if contained in a written
instrument delivered in person or by overnight courier or duly sent by first
class certified mail, postage prepaid, or by facsimile addressed to such party
at the address or facsimile number set forth below:
if to the Company, to:
United Surgical Partners International, Inc.
00000 Xxxxxxx Xxxx Xxxxx 000 Xxxxx
Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxx
with a copy to:
Nossaman, Guthner, Xxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
if to any Purchaser, to such Purchaser at the address appearing on Annex I
hereto;
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 or courier delivery, on the date of such
delivery, (b) in the case of mailing, on the fifth business day following the
date of such mailing and (c) in the case of facsimile, when received.
SECTION 6.05 ENTIRE AGREEMENT; MODIFICATIONS. This Agreement (including
the Exhibits, Annexes and Schedules hereto) constitutes the entire agreement of
the parties with
21
respect to the subject matter hereof and may not be amended or modified nor any
provisions waived except in a writing signed by the party to be charged.
SECTION 6.06 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.
SECTION 6.07 ASSIGNMENT. This Agreement may not be assigned by the Company
or the Purchasers without the prior written consent of the Company and each of
the Purchasers, except that (i) an Additional Purchaser who is an individual may
assign the obligation to purchase Additional Shares to an Individual Retirement
Account or trust established for such Additional Purchaser's benefit and (ii) an
Additional Purchaser may assign the obligation to purchase Additional Shares to
an affiliate (as defined in Rule 405 under the Securities Act) of such
Additional Purchaser; PROVIDED, that in any such case each assignee agrees to
become a party to and be bound by this Agreement and the Amended and Restated
Stockholders Agreement.
SECTION 6.08 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
22
IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement as of the day and year first above written.
UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By /s/ XXXXXX XXXXX
Xxxxxx Xxxxx
Chief Executive Officer
WCAS PURCHASERS:
WELSH, CARSON, XXXXXXXX
& XXXXX VII, L.P.
By: WCAS VII Partners, L.P.
General Partner
By /s/ XXXXX XXXXXXXX
Xxxxx XxxXxxxx
General Partner
WCAS HEALTHCARE PARTNERS, L.P.
By: WCAS HC Partners
General Partner
By /s/ XXXXX XXXXXXXX
Xxxxx XxxXxxxx
Attorney-in-Fact
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. xxXxxxxx
Xxxx X. Xxxxxxx
/s/ XXXXX XXXXXXXX
Xxxxx XxxXxxxx
Attorney-in-Fact
/s/ XXXXX XXXXXXXX
Xxxxx XxxXxxxx
/s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx
/s/ D. XXXXX XXXXXXX
D. Xxxxx Xxxxxxx
/s/ XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
MANAGEMENT PURCHASERS:
/s/ XXXXXX XXXXX
Xxxxxx Xxxxx
/s/ XXX XXXXXXX
Xxx Xxxxxxx
/s/ XXXXXX XXXXX
Xxxxxx Xxxxx
/s/ XXXXXXX XXXXX
Xxxxxxx Xxxxx
/s/ XXXXX XXXXXX
XxXxx Xxxxxx
/s/ XXXXX XxXXXXXX
Xxxxx XxXxxxxx
