EXHIBIT 10.16
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
OR OTHER SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT
HAS BEEN REGISTERED UNDER SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
STOCK PURCHASE WARRANT
To Subscribe for and Purchase Class A Common Stock of
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
VOID AFTER JUNE 18, 2009
Warrant to subscribe for 800,000 March 27, 2000
shares of Class A Common Stock,
$.01 par value, as determined in
accordance with the first
paragraph hereof
THIS CERTIFIES that, for value received, Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
VII, L.P., or its registered assigns, is entitled, subject to the terms of
Section 1 hereof, to subscribe for and purchase from United Surgical Partners
International, Inc., a Delaware corporation, (the "Company"), at the price of
$.01 per share (such price, as the same may from time to time be adjusted as
hereinafter provided, being hereinafter called the "Warrant Price"), at any time
on or prior to June 18, 2009 up to 800,000 shares of Class A Common Stock, $.01
par value, of the Company ("Common Stock"); subject, however, to the provisions
and upon the terms and conditions hereinafter set forth, including, without
limitation, the provisions of Section 3 hereof. This Warrant, and any warrant or
warrants subsequently issued upon exchange or transfer thereof are hereinafter
called, collectively, the "Warrants."
Section 1. EXERCISE OF WARRANT. (a) This Warrant may be exercised by
the holder hereof, in whole or in part, by the completion of the subscription
form attached hereto and by the surrender of the Warrant (properly endorsed) at
the principal executive offices of the Company (or at such other agency or
office of the Company as it may designate by notice in writing to
the holder hereof at the address of the holder hereof appearing on the books of
the Company), and by payment to the Company of the Warrant Price, at the
election of such holder, (i) in cash or by certified or official bank check, for
the aggregate Warrant Price for the shares being purchased, or, (ii) by
surrender to the Company for cancellation any indebtedness of (whether for
principal, interest or any other indebtedness), or claim against, the Company,
or any portion thereof, for which credit shall be given toward the Warrant Price
for each share of Common Stock being acquired upon the exercise hereof on a
dollar-for-dollar basis with reference to the amount of the indebtedness or
claim cancelled, or (iii) by receiving from the Company the number of shares of
Common Stock equal to the number of shares of Common Stock otherwise issuable
upon such exercise less the number of shares of Common Stock having a fair
market value on the date of exercise equal to the Warrant Price applicable to
the number of shares of Common Stock for which this Warrant is being exercised,
or (iv) by payment of the Warrant Price for each share of Common Stock being
acquired upon exercise hereof in any combination of two or more of the methods
described in clauses (i), (ii) and (iii) above.
(b) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the shares of Common Stock so
purchased, registered in the name of the holder hereof, shall be delivered to
the holder hereof within seven business days after the rights represented by
this Warrant shall have been so exercised; and, unless this Warrant has expired
or been exercised in full, a new Warrant representing the number of shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be issued to the holder hereof within such time. With respect to any such
exercise, the holder hereof shall for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock evidenced by such
certificate or certificates from the date on which this Warrant was surrendered
and payment of the Warrant Price was made irrespective of the date of delivery
of such certificate, except that, if the date of such surrender and payment is a
date on which the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open.
(c) For purposes hereof, the fair market value of a share of Common
Stock on any date shall be equal to the fair market value of the Company's
Common Stock determined on the basis of (1) the last sale price of shares of
Common Stock, regular way, on such date or, if no such sale takes place on such
date, the average of the closing bid and asked prices thereof on such date, in
each case as officially reported on the principal national securities exchange
on which the Common Stock is then listed or admitted to trading, or (2) if no
shares of Common Stock are then listed or admitted to trading, or (2) if no
shares of Common Stock are then listed or admitted to trading on any national
securities exchange but the Common stock is designated as a national market
system security by the National Association of Securities Dealers, the last
trading price of the Common Stock on such date. If the shares of Common Stock
are not then listed or admitted to trading on any national exchange or
designated as a national market system security, the fair market value shall be
the most recent purchase price per share of Common Stock issued in a financing
or the purchase price plus exercise price of options for Common Stock, in each
case within the last six months. If no such issuance of Common
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Stock or options has occurred within the last six months, then the fair market
value shall be determined in good faith by mutual agreement of the Company and
the holders of not less than 66-2/3% of the shares of Common Stock issuable upon
exercise of the outstanding Warrants (including this Warrant) issued pursuant to
the Warrant Agreement. If the Company and such holder or holders, as the case
may be, are unable to agree on a value within 30 days, the fair market value
shall be determined by a mutually agreed-upon nationally recognized investment
bank firm (to be retained solely at the expense of the Company).
Section 2. ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of
the Warrant Price as provided in Section 3, the holder of this Warrant shall
thereafter be entitled to purchase, at the Warrant Price resulting from such
adjustment, the number of shares (calculated to the nearest tenth of a share)
obtained by multiplying the Warrant Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the Warrant Price
resulting from such adjustment.
Section 3. ADJUSTMENT IN CERTAIN EVENTS.
(a) SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Warrant Price in effect immediately prior to such
subdivision shall be proportionately reduced, i.e., the holder shall be
entitled to purchase after such subdivision, for the same consideration as
applicable prior to such subdivision, the same percentage of outstanding Common
Stock that such holder was entitled to purchase prior to such subdivision, and
conversely, in case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the Warrant Price in effect
immediately prior to such combination shall be proportionately increased.
(b) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization or reclassification of the capital stock of the
Company or any consolidation or merger of the Company with another corporation,
or the sale of all or substantially all its assets to another corporation shall
be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions shall be made
whereby each holder of the Warrants shall thereafter have the right to receive
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock of the Company immediately therefore receivable upon
the exercise of such Warrant and Warrants, such shares of stock, securities or
assets (including cash) as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal to the number
of shares of such stock immediately theretofore so receivable had such
reorganization, reclassification, consolidation, merger or sale not taken place,
and in any such case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including, without limitation,
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provisions for adjustments of the Warrant Price) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such Warrants (including an
immediate adjustment, by reason of such consolidation or merger, of the Warrant
Price to the value for the Common Stock reflected by the terms of such
consolidation or merger if the value so reflected is less than the Warrant Price
in effect immediately prior to such consolidation or merger). In the event of a
merger or consolidation of the Company as a result of which a greater or lesser
number of shares of common stock of the surviving corporation are issuable to
holders of Common Stock of the Company outstanding immediately prior to such
merger or consolidation, the Warrant Price in effect immediately prior to such
merger or consolidation shall be adjusted in the same manner as though there
were a subdivision or combination of the outstanding shares of Common Stock of
the Company. The Company shall not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument executed
and mailed or delivered to each holder hereof at the last address of such holder
appearing on the books of the Company, the obligation to deliver to such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to receive upon exercise of such
Warrants.
(c) NOTICE OF ADJUSTMENT. Upon any adjustment of the Warrant Price,
then and in each such case the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to each holder hereof at the
address of such holder as shown on the books of the Company, which notice shall
state the Warrant Price resulting from such adjustment and the number of shares
for which this Warrant may be exercised, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
(d) STOCK TO BE RESERVED. The Company shall at all times reserve and
keep available out of its authorized Common Stock or its treasury shares, solely
for the purpose of issuance upon the exercise of this Warrant as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the exercise of this Warrant. The Company covenants that all shares of Common
Stock which shall be so issued shall be duly and validly issued and fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and, without limiting the generality of the foregoing, the
Company covenants that it shall from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock shall be at
all times equal to or less than the effective Warrant Price. The Company shall
take all such action as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange upon
which the Common Stock of the Company may be listed. The Company shall not take
any action which results in any adjustment of the Warrant Price if the total
number of shares of Common Stock issued and issuable after such action upon
exercise of this Warrant would exceed the total number of shares of Common Stock
then authorized by the Company's Certificate of Incorporation. The Company has
not
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granted and will not grant any right of first refusal with respect to shares
issuable upon exercise of this Warrant, and there are no preemptive rights
associated with such shares.
(e) ISSUE TAX. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the holder
hereof for any issuance tax in respect thereof; PROVIDED that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the holder hereof; and PROVIDED FURTHER, that the Company shall not be
liable for any federal, state or local income or similar tax on the holder
hereof in connection with any exercise of this Warrant.
(f) CLOSING OF TRANSFER BOOKS. The Company will at no time close its
transfer books against the transfer of the shares of Common Stock issued or
issuable upon the exercise of this Warrant in any manner which interferes with
the timely exercise of this Warrant.
(g) DEFINITION OF COMMON STOCK. As used herein the term "Common
Stock" shall mean and include the Class A Common Stock, par value $.01 per
share, of the Company as authorized on June 18, 1999 and also any capital stock
of any class of the Company hereinafter authorized that shall not be limited to
a fixed sum or percentage in respect of the rights of the holders thereof to
participate in dividends or in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Company; PROVIDED,
HOWEVER, that the shares purchasable pursuant to this Warrant shall include only
shares designated as Class A Common Stock, par value $.01 per share, of the
Company on June 18, 1999 or shares of any class or classes resulting from any
reclassification or reclassifications thereof and in case at any time there
shall be more than one such resulting class, the shares of each class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
Section 4. REGISTRATION RIGHTS. The rights of the holders hereof
with respect to the registration under the Securities Act of 1933, as amended,
of shares of Common Stock issuable upon the exercise of the Warrants are set
forth in the Registration Agreement, dated as of April 30, 1998, among the
Company and the other parties named therein, as amended.
Section 5. NOTICES OF RECORD DATES. In the event of:
(1) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right
to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any right to sell
shares of stock of any class or any other right; or
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(2) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
al or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other corporation or entity; or
(3) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then and in each such event the Company shall give notice to the holder of this
Warrant specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, and
applicable state securities laws, or (y) a favorable vote of stockholders, if
either is required.
Section 6. NO STOCKHOLDER RIGHTS. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the Warrant Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
Section 7. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall, on such
terms as to indemnify or otherwise as it may in its discretion reasonably impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 8. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by national overnight courier service
or by certified or registered mail, postage prepaid and addressed, if to the
holder, to such holder at the address shown on the records of the Company or at
such other address as shall have been furnished to the Company by notice from
such holder and, if to the Company, addressed to the Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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North Dallas, Texas 75248 or at such other address as shall have been furnished
to the holder by notice from the Company.
Section 9. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
Section 10. AMENDMENTS. The provisions of this Warrant may be
amended only with the prior written consent of the holders of not less than
66-2/3% of the shares of Common Stock issuable upon exercise of the outstanding
Warrants.
Section 11. TRANSFERABILITY. This Warrant and all rights hereunder
shall not be transferable except to partners or affiliates of Welsh, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VII, L.P.
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IN WITNESS WHEREOF, UNITED SURGICAL PARTNERS INTERNATIONAL, INC.,
has executed this Warrant on and as of the day and year first above written.
UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Attest:
____________________________
Secretary