EXHIBIT 4.3.1
Execution Copy
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
Apri1 30, 1998
To the several persons listed
in Schedule I attached hereto:
Ladies and Gentlemen:
This Amended and Restated Registration Rights Agreement amends and
restates in its entirety the Registration Rights Agreement dated as of March 2,
1998 among United Surgical Partners International, Inc., a Delaware corporation
(the "Company"), and the several parties named therein. This will confirm that
in consideration of (i) the purchase on March 2, 1998 by the several persons
listed on Annex I of the Stock Purchase Agreement dated as of March 2, 1998 (the
"Stock Purchase Agreement") among the Company and the several persons named in
Annex I thereto of 500,000 shares of Class A Common Stock (the "March 1998 Class
A Common Shares"), $.01 par value ("Class A Common Stock"), of the Company
pursuant to the Stock Purchase Agreement, (ii) the purchase on the date hereof
by the several persons listed on Schedule I hereto of an aggregate 7,500,000
shares of Class A Common Stock (said shares, together with the March 1998 Class
A Common Shares, being hereinafter collectively referred to as the "Initial
Class A Common Shares") pursuant to the Securities Purchase Agreement dated as
of the date hereof (the "Securities Purchase Agreement") among the Company and
the several persons listed on Annex I thereto, and as an inducement to them to
consummate the transactions contemplated by the Securities Purchase Agreement
and (iii) the purchase on Subsequent Closing Dates (as defined in the Securities
Purchase Agreement) by the purchasers listed under the headings "Management
Stockholders" and "WCAS Stockholders" on Schedule I hereto of up to an aggregate
3,475,000 shares of Class A Common Stock (said shares, together with the Initial
Class A Common Shares being hereinafter collectively referred to as the "Class A
Common Shares") pursuant to the Securities Purchase Agreement, and as an
inducement to them to consummate the transactions contemplated by the Securities
Purchase Agreement, the Company hereby covenants and agrees with each of you,
and with each subsequent holder of Restricted Stock and Investor Shares (as each
such term is defined herein) as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall have
the following respective meanings:
"CLASS A COMMON STOCK" shall mean the Class A Common Stock, $.01 par
value, of the Company, as constituted as of the date of this Agreement, subject
to adjustment pursuant to the provisions of Section 10 hereof.
"CLASS A CONVERSION SHARES" shall mean the shares of Common Stock issued
upon conversion of the Class A Common Shares.
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the Common Stock, $.01 par value, of the
Company, as constituted as of the date of this Agreement, subject to adjustment
pursuant to the provisions of Section 10 hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"INVESTOR CONVERSION SHARES" shall mean the shares of Common Stock
issuable upon conversion of the Investor Shares.
"INVESTOR SHARES" shall mean the shares of Class A Common Stock purchased
(x) on March 2, 1998 pursuant to the Stock Purchase Agreement by ▇▇▇▇▇▇ ▇▇▇▇▇
and (Y) pursuant to the Securities Purchase Agreement by the parties listed on
Schedule I hereto under the heading "Management Stockholders". Except as
otherwise provided herein, each reference in this Agreement to the term
"Investor Shares" shall be deemed to include the Investor Conversion Shares.
"REGISTRATION EXPENSES" shall mean the expenses so described in Section 8
hereof.
"RESTRICTED STOCK" shall mean any shares of capital stock of the Company,
the certificates for which are required to bear the legend set forth in Section
2 hereof, except such term shall not include the Investor Shares.
"SECURITIES ACT" shall mean the Securities Act of 1933 or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 8
hereof.
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2. RESTRICTIVE LEGEND. Each certificate representing the Class A Common
Shares and Class A Conversion Shares, and each certificate issued upon exchange
or transfer of any of such securities, as the case may be, other than in a
public sale or as otherwise permitted by the last paragraph of paragraph 3
hereof shall be stamped or otherwise imprinted with a legend substantially in
the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of any
Restricted Stock or Investor Shares, as the case may be, (other than under the
circumstances described in Section 4, 5 or 6 hereof), the holder thereof shall
give written notice to the Company of its intention to effect such transfer.
Each such notice shall describe the manner of the proposed transfer and, if
requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company (it being agreed that Nossaman, Guthner,
▇▇▇▇ & ▇▇▇▇▇▇▇, LLP shall be satisfactory) to the effect that the proposed
transfer of the Restricted Stock or Investor Shares, as the case may be, may be
effected without registration under the Securities Act, whereupon the holder of
such Restricted Stock or Investor Shares, as the case may be, shall be entitled
to transfer such Restricted Stock or Investor Shares, as the case may be, in
accordance with the terms of its notice; PROVIDED, HOWEVER, that no such opinion
or other documentation shall be required if such notice shall cover a
distribution by Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VII, L.P. ("WCAS VII") or WCAS
Healthcare Partners, L.P. to their respective partners. Each certificate for
Restricted Stock or Investor Shares, as the case may be, transferred as above
provided shall bear the legend set forth in Section 2, unless (i) such transfer
is in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act.
The foregoing restrictions on transferability of Restricted Stock or
Investor Shares shall terminate as to any particular shares of Restricted Stock
or Investor Shares when such shares shall have been effectively registered under
the Securities Act and sold or otherwise disposed of in accordance with the
intended method of disposition by the seller or sellers thereof set forth in the
registration statement concerning such shares. Whenever a holder of Restricted
Stock or Investor Shares is able to demonstrate to the Company (and its counsel)
that the provisions of Rule 144(k) ( or other equivalent rule) of the Securities
Act are available to such holder without limitation, such holder of Restricted
Stock or Investor Shares shall be entitled to receive from the Company, without
expense, a new certificate not bearing the restrictive legend set forth in
Section 2.
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4. REQUIRED REGISTRATION.
(a) At any time, WCAS VII (on behalf of the holders of Restricted Stock)
may request the Company to register under the Securities Act all or any portion
of the Restricted Stock held by such requesting holder or holders for sale in
the manner specified in such notice; PROVIDED, HOWEVER, that the only securities
which the Company shall be required to register pursuant hereto shall be shares
of Common Stock.
(b) Promptly following receipt of any notice under paragraph 4(a) above,
the Company shall immediately notify any holders of Restricted Stock from whom
notice has not been received and holders of Investor Shares and shall use its
best efforts to register under the Securities Act, for public sale in accordance
with the method of disposition specified in such notice from requesting holders,
the number of shares of Restricted Stock specified in such notice (and in any
notices received from other holders of Restricted Stock and holders of Investor
Shares within 20 days after their receipt of such notice from the Company);
PROVIDED, HOWEVER, that if the proposed method of disposition specified by the
requesting holders shall be an underwritten public offering, the number of
shares of Restricted Stock or Investor Shares or both, as the case may be, to be
included in such an offering may be reduced (PRO RATA among the requesting
holders of Investor Shares and Restricted Stock based on the number of shares of
Investor Shares and Restricted Stock so requested to be registered) if and to
the extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the Restricted Stock and
Investor Shares, as the case may be, to be sold. If such method of disposition
shall be an underwritten public offering, the selling holders of at least two
thirds of the Restricted Stock included in the offering may designate the
managing underwriter of such offering, subject to the approval of the Company,
which approval shall not be unreasonably withheld. The Company shall be
obligated to register Restricted Stock and Investor Shares pursuant to this
paragraph 4(b) on two occasions only. Notwithstanding anything to the contrary
contained herein, the obligation of the company under this paragraph 4(b)
shall be deemed satisfied only when a registration statement covering all shares
of Restricted Stock specified in notices received as aforesaid, for sale in
accordance with the method of disposition specified by the requesting holder,
shall have become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto.
(c) The Company shall be entitled to include in any registration statement
referred to in this Section 4, for sale in accordance with the method of
disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock and Investor Shares to be sold. Except as
provided in this paragraph (c), the Company will not effect any other
registration of its Common Stock, whether for its own account or that of other
holders, from the date of receipt of a notice from requesting holders pursuant
to this Section 4 until the completion of the period of distribution of the
registration contemplated thereby.
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5. FORM S-3 REGISTRATION.
(a) If the Company shall receive from any holder or holders of Restricted
Stock, a written request or requests that the Company effect a registration on
Form S-3 and any related qualification or compliance with respect to Restricted
Stock owned by such holder or holders, the Company will:
(i) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other holders of
Restricted Stock and Investor Shares; and
(ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualifications
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and
any other government requirements or regulations) as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such holder's or holders' Restricted Stock or Investor Shares,
as the case may be, as are specified in such request, together with all or
such portion of the Restricted Stock or Investor Shares of any holder or
holders joining in such request as are specified in a written request
given within twenty (20) days after receipt of such written notice from
the Company PROVIDED, HOWEVER, that the Company shall not be obligated to
effect any such registration, qualification or compliance pursuant to this
Section 5 (A) more than once in any 180-day period, or (B) if the Company
is not entitled to use Form S-3; and PROVIDED, FURTHER, HOWEVER, that the
only securities which the Company shall be required to register pursuant
hereto shall be shares of COMMON STOCK. Subject to the foregoing, the
Company shall file a registration statement covering the Restricted Stock
and Investor Shares so requested to be registered as soon as practicable
after receipt of the request or requests of the holders of the Restricted
Stock and Investor Shares, as the case may be.
(b) Registrations effected pursuant to this Section 5 shall not be counted
as requests for registration effected pursuant to Section 4.
(c) Notwithstanding anything to the contrary contained in this Agreement,
the Board of Directors of the Company will be entitled to postpone the filing
period (or suspend the effectiveness or use) of any registration statement
relating to the Restricted Stock or Investor Shares, as the case may be,
pursuant to this Section 5 for a reasonable period of time not in excess of 90
calendar days, if the Board determines, in its reasonable business judgment,
that such registration and offering could materially interfere with BONA FIDE
financing plans of the Company or would require disclosure of information, the
premature disclosure of which could, in the Board's reasonable business
judgment, materially and adversely affect the Company. If the Board postpones
the filing (or suspends the effectiveness or use) of a registration statement
pursuant to this Section 5, it will promptly notify, in writing, the holders of
Restricted Stock or Investor
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Shares, as the case may be, that requested such registration when the events or
circumstances permitting such postponement have ended.
6. INCIDENTAL REGISTRATION. If the Company at any time (other than
pursuant to Section 4 or 5 hereof) proposes to register any of its Common Stock
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Form S-4 or S-8 or another form not available for
registering the Restricted Stock of Investor Shares for sale to the public), it
will give written notice at such time to all holders of outstanding Restricted
Stock and Investor Shares of its intention to do so. Upon the written request of
any such holder, given within twenty (20) days after receipt of any such notice
by the Company, to register any of its Restricted Stock or Investor Shares or
both, as the case may be (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Restricted Stock or Investor Shares or both, as the case may be, as to which
registration shall have been so requested, to be included in the securities to
be covered by the registration statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by the
holder (in accordance with its written request) of such Restricted Stock or
Investor Shares, as the case may be, so registered; PROVIDED, HOWEVER, that
nothing herein shall prevent the Company from abandoning or delaying such
registration at any time; PROVIDED, FURTHER, HOWEVER, that the only securities
which the Company shall be required to register pursuant hereto shall BE SHARES
OF COMMON STOCK. In the event that any registration pursuant to this Section 6
shall be in whole or in part, an underwritten public offering of Common Stock,
any request by a holder pursuant to this Section 6 to register Restricted Stock
or Investor Shares, as the case may be, shall specify that either (i) such
Restricted Stock or Investor Shares, as the case may be, is to be included in
the underwriting on the same terms and conditions as the shares of Common Stock
otherwise being sold through underwriters under such registration or (ii) such
Restricted Stock or Investor Shares, as the case may be, is to be sold in the
open market without any underwriting, on terms and conditions comparable to
those normally applicable to offerings of common stock in reasonably similar
circumstances. The number of shares of Restricted Stock or Investor Shares or
both, as the case may be, to be included in such an underwriting may be reduced
(pro rata among the requesting holders of Investor Shares and Restricted Stock
based upon the number of shares of Investor Shares and Restricted Stock so
requested to be registered) if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the marketing
of the securities to be sold by the Company therein or by holders of Restricted
Stock if such securities are being sold pursuant to Section 4 hereof; PROVIDED,
HOWEVER, that such number of shares of Restricted Stock or Investor Shares or
both, as the case may be, shall not be reduced if any shares are to be included
in such underwriting for the account of any person other than the Company or the
holders of Restricted Stock and Investor Shares.
Notwithstanding anything to the contrary contained in this Agreement, in
the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration covering Restricted Stock
or Investor Shares or both, as the case may be) and a holder of Restricted Stock
or Investor Shares, as the case may be) does not elect to sell his Restricted
Stock or Investor Shares, as the case may be) to the underwriters of the
Company's
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securities in connection with such offering, such holder shall refrain from
selling such Restricted Stock or Investor Shares, as the case may be, during the
period of distribution of the Company's securities by such underwriters and the
period in which the underwriting syndicate participates in the after market;
PROVIDED, HOWEVER, that such holder shall, in any event, be entitled to sell its
Restricted Stock or Investor Shares, as the case may be, commencing on the 90th
day after the effective date of such registration statement.
7. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of Section 4, 5 or 6 hereof to use its best efforts to effect the
registration of any of the Restricted Stock or Investor Shares or both, as the
case may be, under the Securities Act, the Company will, as expeditiously as
possible:
(a) prepare (and afford one counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement (which, in the case of an underwritten public offering
pursuant to Section 4 hereof, shall be on Form S-l or another form of general
applicability satisfactory to the managing underwriter selected as therein
provided) with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided);
(b) prepare (and afford one counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and as
comply with the provisions of the Securities Act with respect to the disposition
of all Restricted Stock or Investor Shares or both, as the case may be, covered
by such registration statement in accordance with the sellers' intended method
of disposition set forth in such registration statement for such period;
(c) furnish to each seller and to each underwriter such number of copies
of the registration statement and the prospectus included therein (including
each preliminary prospectus) as such persons may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock or
Investor Shares or both, as the case may be, covered by such registration
statement;
(d) use its best efforts to register or qualify the Restricted Stock or
Investor Shares or both, as the case may be, covered by such registration
statement under the securities or blue sky laws of such jurisdictions as the
sellers of Restricted Stock or Investor Shares or both, as the case may be, or,
in the case of an underwritten public offering, the managing underwriter, shall
reasonably request;
(e) immediately notify each seller under such registration statement and
each underwriter, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus contained in such
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registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing;
(f) use its best efforts (if the offering is underwritten) to furnish, at
the request of any seller, on the date that Restricted Stock or Investor Shares
or both, as the case may be, is delivered to the underwriters for sale pursuant
to such registration: (i) an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters and
to such seller, stating that such registration statement has become effective
under the Securities Act and that (A) to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act, (B) the registration statement, the related
prospectus, and each amendment or supplement thereof, comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except that such counsel
need express no opinion as to financial statements, the notes thereto, and the
financial schedules and other financial and statistical data contained therein)
and (C) to such other effects as may reasonably be requested by counsel for the
underwriters or by such seller or its counsel, and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters, stating that they are independent public accountants within
the meaning of the Securities Act and that, in the opinion of such accountants,
the financial statements of the Company included in the registration statement
or the prospectus, or any amendment or supplement thereof, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than five
business days prior to the date of such letter) with respect to the registration
in respect of which such letter is being given as such underwriters or seller
may reasonably request; and
(g) make available for inspection by each seller, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller or underwriter,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement and permit
such seller, attorney, accountant or agent to participate in the preparation of
such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 4(e) hereof, the
period of distribution of Restricted Stock or Investor Shares or both, as the
case may be, in a firm commitment underwritten public offering shall be deemed
to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Restricted Stock
or Investor Shares or both, as the case may be, in any other registration shall
be deemed to extend until the earlier of the sale of all Restricted Stock or
Investor Shares or both, as the case may be, covered thereby or six months after
the effective date thereof.
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In connection with each registration hereunder, the selling holders of
Restricted Stock and Investor Shares, if applicable, will furnish to the Company
in writing such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
In connection with each registration pursuant to Sections 4, 5 and 6
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature, PROVIDED, HOWEVER, that
such agreement shall not contain any such provision applicable to the Company
which is inconsistent with the provisions hereof and PROVIDED, FURTHER, HOWEVER,
that the time and place of the closing under said agreement shall be as mutually
agreed upon among the Company, such managing underwriter and the selling holders
of Restricted Stock and Investor Shares, if applicable.
8. EXPENSES. All expenses incurred by the Company in complying with
Sections 4, 5 and 6 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc. or any successor thereto, transfer taxes, fees of
transfer agents and registrars, costs of insurance and reasonable fees and
expenses of one counsel for all sellers of Restricted Stock and Investor Shares,
as the case may be, but excluding any Selling Expenses, are herein called
"Registration Expenses". All underwriting discounts and selling commissions
applicable to the sale of Restricted Stock or Investor Shares or both, as the
case may be, are herein called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Section 4, 5 or 6 hereof. All Selling
Expenses in connection with any registration statement filed pursuant to Section
4, 5 or 6 hereof shall be borne by the participating sellers in proportion to
the number of shares sold by each, or by such persons other than the Company
(except to the extent the Company shall be a seller) as they may agree.
9. INDEMNIFICATION. In the event of a registration of any of the
Restricted Stock or Investor Shares or both, as the case may be, under the
Securities Act pursuant to Section 4, 5 or 6 hereof, the Company will indemnify
and hold harmless each seller of such Restricted Stock or Investor Shares, as
the case may be, thereunder and each underwriter of Restricted Stock or Investor
Shares or both, as the case may be, thereunder and each other person, if any,
who controls such seller or underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which such seller or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Restricted Stock or Investor Shares
or both, as the case may be, was registered
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under the Securities Act pursuant to Section 4, 5 or 6, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such seller, such underwriter
or such controlling person in writing specifically for use in such registration
statement or prospectus.
In the event of a registration of any of the Restricted Stock or Investor
Shares or both, as the case may be, under the Securities Act pursuant to Section
4, 5 or 6 hereof, each seller of such Restricted Stock or Investor Shares, as
the case may be, thereunder, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer or director or underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
or Investor Shares or both as the, case may be, was registered under the
Securities Act pursuant to Section 4, 5 or 6, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and each such
officer, director, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that such seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
such seller, as such, furnished in writing to the Company by such seller
specifically for use in such registration statement or prospectus; PROVIDED
FURTHER, HOWEVER, that the liability of each seller hereunder shall be limited
to the proportion of any such loss, claim, damage, liability or expense which is
equal to the proportion that the public offering price of shares sold by such
seller under such registration statement bears to the total public offering
price of all securities sold thereunder, but not to exceed the proceeds (net of
underwriting discounts and commissions) received by such seller from the sale of
Restricted Stock or Investor Shares, as the case may be, covered by such
registration statement.
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Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 9. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 8 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; PROVIDED, HOWEVER, that, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the interests of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the right
to retain its own counsel in any such action, but the fees and disbursements of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for such indemnified
party as aforesaid, (ii) the interests of such indemnified party may be
reasonably deemed to conflict with the interests of the indemnifying party as
aforesaid or (iii) the indemnifying party and such indemnified party shall have
mutually agreed to the retention of such counsel. It is understood that the
indemnifying party shall not, in connection with any action or related actions
in the same jurisdiction, be liable for the fees and disbursements of more than
one separate firm qualified in such jurisdiction to act as counsel for the
indemnified party (except to the extent set forth in clause (ii) and (iii) in
the prior sentence of this paragraph). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under such paragraphs in respect of any losses, claims, damages or liabilities
or actions in respect thereof referred to therein, then each indemnifying party
shall in lieu of indemnifying such indemnified party contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or actions in such proportion as appropriate to reflect the
relative fault of the Company, on the one hand, and the underwriters and the
sellers of such Restricted Stock or Investor Shares, as the case may be, on the
other, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions as well as any other relevant
equitable
11
considerations, including the failure to give any notice under the third
paragraph of this Section 9. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact relates to information supplied by the Company, on the one hand,
or the underwriters and the sellers of such Restricted Stock or Investor Shares,
as the case may be, on the other, and to the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each of you agree that it would not be
just and equitable if contributions pursuant to this paragraph were determined
by PRO RATA allocation (even if all of the sellers of such Restricted Stock or
Investor Shares, as the case may be, were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of such Restricted Stock or Investor Shares, as the case may be shall not be
required to contribute any amount in excess of the amount, if any, by which the
total price at which the Common Stock sold by each of them was offered to the
public exceeds the amount of any damages which they would have otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission. No person guilty of fraudulent misrepresentations (within the meaning
of Section 11(f) of the Securities Act), shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation.
The indemnification of underwriters provided, for in this Section 9 shall
be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event the indemnification of
the sellers of Restricted Stock or Investor Shares or both, as the case may be,
in such underwriting shall at the sellers' request be modified to conform to
such terms and conditions.
10. CHANGES IN COMMON STOCK AND CLASS A COMMON STOCK. If, and as often as,
there are any changes in the Common Stock or Class A Common Stock by way of
stock split, stock dividend, combination or reclassification, or through merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Common Stock and Class A Common Stock as so changed.
11. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company 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 it or any of
its properties or assets 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,
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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.
(b) This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, subject to considerations of public policy in the
case of the indemnification provisions hereof.
12. RULE 144 REPORTING. The Company agrees with you as follows:
(a) The Company shall make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times from and after the date it is first required to do so.
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section 13(a)
or 15(d) of the Exchange Act at any time after the Company has become subject
to such reporting requirements of the Exchange Act.
(c) The Company shall furnish to such holder of Restricted Stock forthwith
upon request (i) a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 (at any time from and after the date it
first becomes subject to such reporting requirements) and of the Securities
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), (ii) a copy of the most recent annual or quarterly
report of the Company, and (iii) such other reports and documents so filed as a
holder may reasonably request to avail itself of any rule or regulation of the
Commission allowing a holder of Restricted Stock to sell any such securities
without registration.
13. MISCELLANEOUS.
(a) 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. Without limiting the generality of the foregoing, the registration rights
conferred herein on the holders of Restricted Stock shall inure to the benefit
of any and all subsequent holders from time to time of the Restricted Stock for
so long as the certificates representing the Restricted Stock shall be required
to bear the legend specified in Section 2 hereof.
(b) All notices, requests, consents and other communications hereunder
shall be in writing, and shall be personally delivered, or shall be sent by
national overnight courier service or by certified or registered mail, postage
prepaid and addressed as follows:
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if to the Company, to it at:
United Surgical Partners International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
Nossaman, Guthner, ▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to any holder of Restricted Stock, to it at the address set forth
in Schedule I hereto;
if to any holder of Investor Shares, to it at the address set forth
in Schedule I hereto;
if to any subsequent holder of Restricted Stock or Investor Shares,
to it at such address as may have been furnished to the Company in writing
by such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Restricted
Stock or Investor Shares) or to the holders of Restricted Stock or
Investor Shares (in the case of the Company).
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
(d) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be modified or amended except
in writing signed by the Company and the holders of not less than two thirds of
the Restricted Stock and Investor Shares then outstanding; Provided that no
such modification or amendment shall deprive any holder of Restricted Stock or
Investor Shares of any material right under this Agreement without such holder's
consent. The Company will not grant any registration rights to any other person
without the written consent of the holders of at least two thirds of the
Restricted Stock and Investor Shares then outstanding if such rights could
reasonably be expected to conflict with, or be on a parity with, the rights of
holders of Restricted Stock of Investor Shares granted under this Agreement;
Provided, however, that notwithstanding the foregoing, any amendment solely to
grant registration rights to additional holders of the capital stock of the
Company may be effected
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in a writing executed solely by the Company and such additional holders if such
registration rights are no more favorable than the registration rights granted
to any holder of Investor Shares. Any amendment to this Agreement to grant such
registration rights to the such additional holders of the capital stock of the
Company shall not be deemed to be an amendment that adversely affects the rights
of any holder hereunder.
(e) 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.
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Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this letter (herein sometimes
called "this Agreement") shall be a binding agreement between the Company and
you.
Very truly yours,
UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
AGREED TO AND ACCEPTED
as of the date first above written:
WCAS STOCKHOLDERS:
WELSH, CARSON, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ VII, L.P.
By: WCAS VII Partners, L.P.
General Partner
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
General Partner
WCAS HEALTHCARE PARTNERS, L.P.
By: WCAS HC Partners
General Partner
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attorney-in-Fact
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attorney-in-Fact
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
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MANAGEMENT STOCKHOLDERS:
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