EXCHANGE AGREEMENT, dated as of June [ ], 2001, among UNITED
SURGICAL PARTNERS INTERNATIONAL, INC., a Delaware corporation (the "Company"),
and the several persons and entities listed on Annex I hereto (being
hereinafter called individually, a "Holder", and collectively, the "Holders").
W I T N E S S E T H:
WHEREAS, pursuant to the Securities Purchase Agreement dated as of
October 26, 1998 (the "Purchase Agreement") among the Company and the Holders,
each of the Holders purchased 7% Senior Subordinated Notes (collectively, the
"Notes") of the Company in the aggregate principal amount set forth opposite
such Holder's name on Annex I under the heading "Aggregate Principal Amount of
Notes"; and
WHEREAS, for the benefit of the Company and the Holders, the Company
wishes to issue an aggregate 20,000 shares of Series D Redeemable Preferred
Stock, $.01 par value (the "Series D Preferred Stock"), of the Company, to the
Holders in exchange for the Notes, and the Holders wish to exchange the Notes
held by them for the Series D Preferred Stock, all on the terms and subject to
the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. EXCHANGE OF NOTES FOR SERIES D PREFERRED STOCK.
(a) On the effective date of 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 "Initial Public Offering"), each of
the Holders shall transfer and assign to the Company all of its right, title
and interest in and to his, her or its Notes and, in connection therewith,
such Holder shall deliver such Notes to the Company for cancellation.
(b) Solely in exchange for the Notes transferred and assigned to the
Company by each Holder, and against delivery thereof as aforesaid, the Company
shall (i)issue and deliver to such Holder a stock certificate in definitive
form, registered in the name of such Holder, evidencing the number of shares
of Series D Preferred Stock set forth opposite such Holder's name on Annex I
under the heading "Number of Shares of Series D Preferred Stock" and (ii) pay
to such Holder any accrued and unpaid interest on such Notes as of the date of
such exchange.
SECTION 2. CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION.
Concurrently with the exchange and issuance of the Series D Preferred Stock
described in Section 1 above, the Company shall amend its Certificate of
Incorporation in the manner specified in the Certificate of Amendment to the
Certificate of Incorporation (the "Certificate of Amendment") attached hereto
as Exhibit A.
SECTION 3. 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 at such other place as may be
mutually agreed upon by the Holders and the Company. The Company shall give
notice to each of the Holders at least five (5) days prior to the Initial
Public Offering.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Holders as follows:
(a) ORGANIZATION AND CORPORATE POWER. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. 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, deliver and perform this Agreement. The Company has the corporate
power and authority to issue, sell and deliver the Series D Preferred Stock to
the Holders.
(b) AUTHORIZATION OF AGREEMENTS, ETC. Each of (i) the execution and
delivery by the Company of this Agreement, (ii) the performance by the Company
of its respective obligations hereunder, (iii) the execution and delivery of
the Certificate of Amendment and (iv) the issuance, sale and delivery of the
Series D Preferred Stock, 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 the
Company, or any provision of any indenture, agreement or other instrument to
which the Company or any subsidiary, or any of the properties or assets of 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 the Company or any subsidiary. The Series
D Preferred Stock has been duly authorized by the Company and, when issued and
delivered in accordance with this Agreement, will be validly issued and
outstanding, fully paid and nonassessable shares of Series D Preferred Stock,
free and clear of all liens and encumbrances. The issuance, sale and delivery
of the Series D Preferred Stock 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.
(c) 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
principles of equity.
(d) GOVERNMENTAL APPROVALS. Subject to the accuracy of the
representations and warranties of the Holders set forth in Section 5 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
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Agreement, the execution and delivery of the Certificate of Amendment or the
issuance and delivery of the Series D Preferred Stock pursuant to the terms
hereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE HOLDERS. Each of the
Holders, severally and not jointly, represents and warrants to the Company as
follows:
(a) TITLE TO NOTES. Such Holder is the lawful owner, of record and
beneficially, of the Notes in the aggregate principal amount set forth
opposite its name on Annex I hereto, which Notes are free and clear of all
liens, charges and encumbrances and are not subject to any claims of any kind
whatsoever in favor of any person or entity.
(b) INVESTMENT REPRESENTATIONS. Such Holder is acquiring the Series
D Preferred Stock for its own account for the purpose of investment and not
with a view to or for sale in connection with any distribution thereof. Such
Holder understands that he, she or it, as the case may be, must bear the
economic risk of such Holder's investment for an indefinite period of time
because the shares of Series D Preferred Stock 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 Holder agrees
not to pledge, transfer, convey or otherwise dispose of any of the Series D
Preferred Stock, 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. Such Holder, to the extent that such Holder is
subject to the Connecticut Uniform Securities Act, is an institutional buyer
under Section 36b-21(b)(8) thereto.
SECTION 6. 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 Holders 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:
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(i) if to the Company, 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 Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
(ii) if to any Holder, to such Holder 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 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 (i) the Company and (ii) Holders
holding at least 66-2/3% of the principal amount of the Notes, or after the
Initial Public Offering, at least 66-2/3% of the outstanding Series D
Preferred Stock.
(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 Company and the Holders have executed this
Agreement as of the day and year first above written.
COMPANY: UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By
--------------------------------
Name:
Title:
HOLDERS: WELSH, CARSON, XXXXXXXX
& XXXXX VII, L.P.
By WCAS VII Partners, L.P.
General Partners
By
--------------------------------
Xxxxxxxx X. Rather
General Partner
WCAS HEALTHCARE PARTNERS, L.P.
By WCAS HC Partners
General Partners
By
--------------------------------
Xxxxxxxx X. Rather
Attorney-in-Fact
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Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxx XxxXxxxx
Xxxxxxx X. Xxxxxx
D. Xxxxx Xxxxxxx
Xxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. xxXxxxxx
Xxxx X. Xxxxxxx
By
--------------------------------
Xxxxxxxx X. Rather
Individually and as Attorney-in-Fact
----------------------------------
Xxxxxx Xxxxxx
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FFT PARTNERS I, L.P.
By Xxxxxx Xxxxxxx Xxxxxxxx & Co., LLC
General Partner
By
--------------------------------
Name:
Title:
FFT EXECUTIVE PARTNERS I, L.P.
By Xxxxxx Xxxxxxx Xxxxxxxx & Co., LLC
General Partner
By
--------------------------------
Name:
Title:
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ANNEX I
HOLDERS
Aggregate Principal Number of Shares of
Holder Amount of Note Series D Preferred Stock
------ -------------- ------------------------
Welsh, Carson, Xxxxxxxx & Xxxxx VII, L.P. $
WCAS Healthcare Partners, L.P.
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxx XxxXxxxx
Xxxxxxx X. Xxxxxx
D. Xxxxx Xxxxxxx
Xxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. xxXxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxx X. Rather
Xxxxxx Xxxxxx
FFT Partners I, L.P.
FFT Executive Partners I, L.P.
TOTAL $ 20,000,000 20,000
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