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EXHIBIT 10.1
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of
October 8, 1999, is among IASIS Healthcare Corporation, a Delaware
corporation (formerly known as PHC/Psychiatric Healthcare Corporation) (the
"Company"), JLL Healthcare, LLC, a Delaware limited liability company ("JLL
Healthcare"), ▇▇▇▇▇▇▇▇▇▇ Healthcare Corporation, a California corporation
("PHC"), Triumph Partners III, L.P., a Delaware limited partnership ("Triumph
Partners"), Triumph III Investors, L.P., a Delaware limited partnership
("Triumph Investors" and, together with Triumph Partners, "Triumph"), and
General Electric Capital Corporation, a New York corporation ("GECC" and,
together with Triumph, the "Outside Investors"), each of the former equity
holders of IASIS Healthcare Corporation, a Tennessee corporation ("IHC"), who
are listed on Schedule I hereto and subsequently become a signatory to this
Agreement (the "IHC Investors"), those members of management of the Company who
subsequently become signatories to this Agreement (the "Management Investors"),
and each other Person (as hereinafter defined) who subsequently becomes a
signatory to this Agreement (each, an "Investor" and, collectively, the
"Investors") (JLL Healthcare, ▇▇▇▇▇▇▇▇▇▇, each of the Outside Investors, each of
the IHC Investors, each of the Management Investors and each of the Investors
being referred to herein as a "Stockholder" and, collectively, being referred to
herein as the "Stockholders").
W I T N E S S E T H
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WHEREAS, JLL Hospital, LLC, a Delaware limited liability
company ("JLL Hospital"), the Company, PHC and certain subsidiaries of PHC have
entered into a Recapitalization Agreement dated as of August 16, 1999 (the
"Recapitalization Agreement");
WHEREAS, prior to the date hereof, JLL Hospital assigned all
of its rights and interests under the Recapitalization Agreement to JLL
Healthcare, Triumph and GECC;
WHEREAS, pursuant to the Recapitalization Agreement, on the
date hereof, PHC has, among other things, (i) transferred, or caused to be
transferred, certain assets, subject to certain liabilities, to the Company and
(ii) caused the Company to be recapitalized (collectively, the "Recapitalization
Transactions"), all in accordance with the terms and conditions of the
Recapitalization Agreement;
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WHEREAS, in connection with the Recapitalization Transactions,
JLL Healthcare and the Outside Investors are acquiring Common Stock (as
hereinafter defined);
WHEREAS, pursuant to a merger agreement to be entered into
(the "IASIS Merger Agreement) among IHC, the Company and IASIS Management
Company, a Delaware corporation and a wholly owned subsidiary of the Company
("IMC"), IHC will be merged with and into IMC in accordance with the Tennessee
Business Corporation Act and the Delaware General Corporation Law (the "IASIS
Merger"), with IMC as the surviving entity;
WHEREAS, upon consummation of the IASIS Merger, the issued and
outstanding capital stock of IHC will be converted into shares of Common Stock
and Series B Preferred Stock (as hereinafter defined), in accordance with the
terms of the IASIS Merger Agreement;
WHEREAS, pursuant to a merger agreement to be entered into,
JLL Hospital is being merged with and into the Company in accordance with the
Delaware General Corporation Law, with the Company as the surviving entity (the
"Hospital Merger");
WHEREAS, JLL Hospital and ▇▇▇▇▇ Healthcare Corporation, a
California corporation, have entered into an Asset Sale Agreement dated as of
August 15, 1999 (the "Asset Sale Agreement");
WHEREAS, in order to finance, in part, the transactions
contemplated by the Asset Sale Agreement, JLL Healthcare and the Outside
Investors are acquiring Series A Preferred Stock (as hereinafter defined);
WHEREAS, as soon as practical after the date hereof, the Board
of Directors of the Company will adopt a Management Option Plan of the Company
(the "Management Option Plan") pursuant to which certain members of management
of the Company shall be granted options to acquire shares of Common Stock
("Options");
WHEREAS, following the date hereof, certain members of
management will be entitled to acquire shares of Common Stock and, upon such
purchase or any exercise of Options, such members of management will execute
this
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Agreement and the Common Stock to be held by them will become subject to the
terms of this Agreement;
WHEREAS, as a result of the transactions contemplated by the
Recapitalization Agreement, the Asset Sale Agreement, the IASIS Merger and the
Hospital Merger (collectively, the "Transactions"): (i) on the date hereof, each
Stockholder owns the number of shares of Common Stock set forth in Annex I
hereto; and (ii) upon the closing of the transactions contemplated by the Asset
Sale Agreement and the IASIS Merger, each Stockholder will own the number of
shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock
set forth in columns A, B and C, respectively, of Annex II hereto; and
WHEREAS, in connection with the Transactions, the Company and
each Stockholder desire to enter into this Agreement, all in accordance with the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
Certain Definitions
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For purposes of this Agreement, the following terms shall have
the following meanings:
(a) The term "Affiliate" shall have the meaning set
forth in Rule 405 promulgated under the Securities Act.
(b) The term "Board" shall mean the Board of Directors
of the Company.
(c) The term "Business Day" shall mean any day other
than a Saturday, Sunday or day upon which banks in the City of New York are
authorized or required to be closed.
(d) The term "Change in Control" shall mean (A) at such
time as the Stockholders, directly or indirectly, shall fail to own an aggregate
of at least 50% of the voting equity securities of the Company, and any other
Person or
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"group" of Persons (within the meaning of Section 13(d) of the Exchange Act)
shall acquire, beneficially or of record, a greater percentage of the
outstanding voting equity securities of the Company than the percentage of the
outstanding voting equity securities of such entity owned, directly or
indirectly, by the Stockholders, in the aggregate or (B) upon a sale of all or
substantially all of the assets of the Company.
(e) The term "Commission" shall mean the United States
Securities and Exchange Commission or any successor agency.
(f) The term "Common Stock" shall mean the common stock,
par value $.01 per share, of the Company.
(g) The term "Credit Agreement" means that certain
Credit Agreement, dated as of October 15, 1999 by and among the Company, and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as administrative agent, and the
other lenders that are a party thereto, together with the related documents
thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended, (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowings thereunder or adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
(h) The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
(i) The term "Fair Market Value" shall mean the fair
market value of the Common Stock determined by such methods or procedures as
shall be established from time to time by the Board. Unless otherwise determined
by the Board in good faith, the per share Fair Market Value of Common Stock as
of a particular date shall mean (i) the closing sales price per share of the
Common Stock on the national securities exchange on which the Common Stock is
principally traded, for the last preceding date on which there was a sale of
such Common Stock on such exchange, or (ii) if the shares of Common Stock are
then traded in an over-the-counter market, the average of the closing bid and
asked prices for the shares of Common Stock in such over-the-counter market for
the last preceding date on which there was a sale of such Common Stock in such
market, or (iii) if the shares of Common Stock are not then listed on a national
securities exchange or traded in an over-the-counter market, such value as the
Board, in its reasonable discretion, shall determine.
(j) The term "Initial Public Offering" shall mean the
first Public Offering of shares of Common Stock.
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(k) The term "Permitted Transferee" shall mean, with
respect to each Stockholder bound by the terms of this Agreement, (i) any
descendant, Affiliate or Associate (as defined in Rule 405 of the Securities
Act) of such Stockholder or any Permitted Transferee of such Affiliate; (ii) the
Company; (iii) in the event of the dissolution, liquidation or winding up, or
other distribution of assets, of any such Stockholder that is a partnership,
limited liability company or corporation, the partners of a partnership that is
such Stockholder, the members of a limited liability company that is such
Stockholder, the stockholders of a corporation that is such Stockholder or a
successor partnership, limited liability company or corporation all of the
partners, members or stockholders of which are the Persons who were the partners
of such partnership, members of such limited liability company or stockholders
of such corporation immediately prior to the dissolution, liquidation or winding
up of such Stockholder; (iv) a transferee by testamentary or intestate
disposition; (v) a transferee by inter vivos transfer to the transferring
Person's spouse, children and/or other lineal descendants; (vi) a trust
transferee by inter vivos transfer, the only beneficiaries of which are the
transferring Person, spouse, children and/or other lineal descendants; (vii) a
successor nominee or trustee for the beneficial owner of the Shares for which
such Person acts as nominee or trustee, as the case may be; (viii) an
institutional lender for money borrowed pursuant to a bona fide pledge of or the
granting of a security interest in such Stockholder's Shares, including, without
limitation, the lenders (or an agent acting on behalf of the lenders) under the
Credit Agreement pursuant to a pledge as security for the obligations of the
Company and its subsidiaries under the Credit Agreement and interest rate,
commodity and currency hedging agreements; (ix) any transferee of an
institutional lender described in (viii) above which transferee acquires such
Shares in connection with a foreclosure sale of such Shares; it being understood
that in the event that JLL Healthcare distributes Shares or other exercise of
remedies with respect thereto; provided, however, that such transferee as
described in this subsection (ix) shall not be required to acquire such Shares
subject to the terms of this Agreement, and shall take such Shares free of any
of the provisions hereof unless such transferee elects in writing to be bound by
the terms of this Agreement to its Members, the definition of Permitted
Transferee shall be amended to include all categories of "Permitted Transferees"
under the Operating Agreement of JLL Healthcare.
(l) The term "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, trust or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(m) The term "Preferred Stock" shall mean the Series A
Preferred Stock and the Series B Preferred Stock.
(n) The term "Public Offering" shall mean a public
offering of equity securities of the Company pursuant to an effective
registration statement under the Securities Act (other than (i) a registration
statement filed under Regulation A or on form S-4 or any successor form or (ii)
a registration statement filed on Form S-8 or any successor form).
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(o) The term "Registrable Securities" shall mean (i) the
shares of Common Stock owned by each Stockholder on the date hereof as set forth
opposite each Stockholder's name on Annex I hereto, (ii) additional shares of
Common Stock acquired by one or more Stockholders after the date hereof, (iii)
the shares of Preferred Stock owned by each Stockholder on the date hereof as
set forth opposite each Stockholder's name on Annex I hereto and (iv) additional
shares of Preferred Stock acquired by one or more Stockholders after the date
hereof. As to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when (i) a registration statement registering such
securities under the Securities Act has been declared effective and such
securities have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement, or (ii) such securities are
sold in accordance with Rule 144 (or any successor provision) promulgated under
the Securities Act, or (iii) such securities are transferred under circumstances
in which any legend borne by the certificates for such securities relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Company and any stop transfer instructions issued by the
Company to any transfer agent for such securities are rescinded by the Company.
(p) The term "Registration Period" shall mean the period
from and after 180 days following an Initial Public Offering of Common Stock of
the Company.
(q) The term "Requisite Amount" shall mean Registrable
Securities having an aggregate Fair Market Value as of the date of any Demand
(as hereinafter defined) following an Initial Public Offering of at least $10
million.
(r) The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(s) The term "Series A Preferred Stock" shall mean the
series A preferred stock, par value $.01 per share, of the Company.
(t) The term "Series B Preferred Stock" shall mean the
series B preferred stock, par value $.01 per share, of the Company.
(u) The term "Shares" shall mean (i) the shares of
Company Common Stock owned by each Stockholder on the date hereof, as set forth
opposite each Stockholder's name on Annex I hereto, and additional shares of
Common Stock acquired by one or more Stockholders after the date hereof,
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including shares of Common Stock acquired by one or more Stockholders as a
result of a subsequent purchase, conversion, reorganization, recapitalization,
reclassification, stock dividend, split-up, sale of assets, distribution or
redemption of securities and (ii) the shares of Preferred Stock to be owned by
each Stockholder following consummation of the Transactions, as set forth
opposite each Stockholder's name on Annex II hereto, and additional shares of
Preferred Stock acquired by one or more Stockholders after the date hereof.
(v) The term "Transfer" shall mean any voluntary or
involuntary attempt to, directly or indirectly through the transfer of interests
in controlled Affiliates or otherwise, offer, sell, assign, transfer, pledge or
otherwise dispose of any Shares, or the consummation of any such transactions,
or the soliciting of any offers to purchase or otherwise acquire, or taking a
pledge of, any of the Shares; provided, however, that the transfer of an
interest in any of the Stockholders shall not be deemed to be a transfer.
ARTICLE II
Representations and Warranties and Covenants
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Section 2.01 Representations and Warranties of the Company.
The Company represents and warrants to each Stockholder, as of the
date hereof, as follows:
(a) Authority. The Company has full power and authority
to execute, deliver and perform this Agreement;
(b) Due Authorization. This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting creditors' rights, (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought, and (iii) the rights to indemnity
hereunder may be limited by federal or state securities laws or the public
policy underlying such laws; and
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(c) No Conflict. The execution, delivery and performance
of this Agreement by the Company do not violate or conflict with or constitute a
default under (i) the Company's certificate of incorporation and by-laws, (ii)
any judgment, order or decree or statute, law, ordinance, rule or regulation of
any governmental entity applicable to the Company or (iii) any material
agreement to which it is a party or by which it or its property is bound.
Section 2.02 Representations and Warranties of the Stockholders.
Each Stockholder individually represents and warrants to each
other Stockholder and the Company, as of the date hereof, as follows:
(a) Corporate Authority. The Stockholder has full power,
capacity and authority to execute, deliver and perform this Agreement;
(b) Due Authorization. This Agreement has been duly and
validly authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except that (i) the enforceability
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting creditors' rights, (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which any proceedings therefor may be brought, and (iii) the rights
to indemnity and contribution hereunder may be limited by federal or state
securities laws or the public policy underlying such laws;
(c) No Conflict. The execution, delivery and performance
of this Agreement by the Stockholder do not violate or conflict with or
constitute a default under (i) the Stockholder's organizational documents,
provided that this clause (i) is inapplicable to any Stockholder that is an
individual, (ii) any judgment, order or decree or statute, law ordinance, rule
or regulation of any governmental entity applicable to the Stockholder, or (iii)
any material agreement to which the Stockholder is a party or by which it or its
property is bound; and
(d) Acquisition of Shares for Investment.
(i) Each Stockholder will be acquiring the Shares
for investment purposes only, without any intention of distributing or
selling such Shares in violation of federal, state or other securities
laws. If such Stockholder should in the future decide
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to dispose of any of such Shares, such Stockholder understands and
agrees that it may do so only in compliance with the terms of Article
IV hereof and the Securities Act and applicable state securities laws,
as then in effect. Such Stockholder agrees to the imprinting, so long
as required by law, of legends on certificates representing all of the
Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF ("TRANSFERRED") EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS OF THE STOCKHOLDERS AGREEMENT DATED AS OF OCTOBER __, 1999
AND MAY NOT BE TRANSFERRED UNLESS SUCH TRANSFER COMPLIES WITH THE
PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT. A COPY OF SUCH STOCKHOLDERS
AGREEMENT IS ON FILE WITH THE SECRETARY OF IASIS HEALTHCARE CORPORATION
AND IS AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.
(ii) Each Stockholder which is acquiring Shares on
or after the date hereof understands that the Shares will not be
registered at the time of their issuance under the Securities Act for
the reason that the issuance of the Shares is exempt under the
Securities Act and that the reliance of the Company on such exemption
is predicated in part on such Stockholder's representations set forth
herein. Each Stockholder represents that either (a) it is experienced
in evaluating companies such as the Company, has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment and has the ability
to suffer the total loss of its investment or (b) such
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Stockholder is an "Accredited Investor" within the meaning of Rule 501
of Regulation D under the Securities Act, as presently in effect. Each
Stockholder further represents that it has had the opportunity to
conduct due diligence on the Company, to ask questions of and receive
answers from the Company concerning the terms and conditions of the
offering and to obtain additional information to such Stockholder's
satisfaction.
Section 2.03 Covenants.
(a) The Company covenants to each Stockholder that it
will, from and after the Initial Public Offering, timely file all reports
required to be filed by it under the Exchange Act, and if at any time the
Company is not required to file such reports, it will take such further action
as a Stockholder may reasonably require, including, without limitation, supply
and make publicly available any other information in the possession of or
reasonably obtainable by the Company, with the purpose of allowing such
stockholder, subject to the terms and conditions hereof, to avail itself of Rule
144 of the Securities Act or any other rule or regulation of the Commission
allowing it to sell securities without registration under the Securities Act.
Upon the request of any Stockholder, the Company will deliver to such
Stockholder a written statement as to its compliance with such filing
requirements;
(b) Prior to the Initial Public Offering and (i) with
respect to PHC, for so long as PHC owns at least twenty-five percent (25%) of
the number of shares of Common Stock held by PHC on the date hereof, or (ii)
with respect to any Stockholder other than PHC, for so long as such Stockholder
and its Affiliates own at least three percent (3%) of the then outstanding
shares of Common Stock, the Company will deliver to PHC or such other
Stockholder the following documents, at the same time as required to be
furnished to the lenders under the Credit Agreement:
(i) Annual audited consolidated financial statements
and quarterly unaudited consolidated financial statements of the
Company and its subsidiaries;
(ii) Monthly financial reports furnished to the
lenders under the Credit Agreement, if any;
(iii) Copies of reports, if any, submitted to the
Company by independent accountants in connection with each
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annual or interim audit of the books of the Company made by such
accountants;
(iv) Copies of required covenant compliances and
information regarding events of default under any agreement with the
lenders under the Credit Agreement; and
(v) Promptly upon the occurrence thereof, notice of
any waiver of any event of default or compliance with any covenant in
the Company's senior secured loan agreements or subordinated agreements
or any amendment or modification of any such agreements;
(c) The Company agrees that it shall permit each
Stockholder, or member of a Stockholder, which is entitled to designate (or
cause to be designated) a director to the Board or an observer to the Board,
reasonable inspection rights, during normal business hours, of the books and
records of the Company and reasonable access to the Company's senior executives
and to the Company's premises; and
(d) Unless otherwise required by law, each Stockholder
agrees that it shall (i) hold in confidence and cause its lenders to hold in
confidence all non-public information furnished to such Stockholder by the
Company and (ii) not use or disclose any such information to any third party
without the Company's prior written consent.
ARTICLE III
Board of Directors
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Section 3.01 Composition of Board of Directors.
(a) The Board shall initially consist of thirteen (13)
members, of which: (i) ten (10) members shall be designees of JLL Healthcare;
(ii) one member shall be the Chairman of the Board of the Company; (iii) one
member shall be the Chief Executive Officer of the Company; and (iv) one member
shall be an independent physician recommended by the Chief Executive Officer of
the Company and reasonably acceptable to the other Board members. During the
term of this Agreement, the size of the Board may be increased and the Board
shall have the authority to appoint individuals to fill the vacancies created by
such new
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director positions; provided, however, that so long as JLL Healthcare owns a
majority of the voting power of the Company, JLL Healthcare shall have the right
to designate a majority of the directors on the Board. During the term of this
Agreement and subject to the fiduciary duties of the Board, the Company shall
use its best efforts and shall exercise all authority under applicable law to
nominate for election and cause to be elected or appointed, as the case may be,
as directors of the Company, a slate of directors consisting of individuals
meeting the requirements of the previous sentence.
(b) No Voting Agreement. Each of the Stockholders
acknowledges and agrees that nothing contained in this Agreement shall
constitute a voting agreement or require any Stockholder to vote its shares of
Common Stock in any manner other than as it deems fit.
(c) Observation Rights. Notwithstanding any other
provision of this Agreement, so long as Triumph owns more than three percent
(3%) of the issued and outstanding shares of Common Stock, it shall be entitled
to have a representative attend and observe all meetings of the Board; provided
that such individual shall not be entitled to vote upon any matter before the
Board and shall not be counted for purposes of determining if a quorum of
directors is present at such meeting. Such representative shall be bound by the
provisions of Section 2.03(d) hereof.
ARTICLE IV
Transfer of Shares
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Section 4.01 General Restrictions.
(a) Except as set forth in clause (b) below and Sections
4.04 and 5.02 hereof, during the Term of this Agreement, no Stockholder (other
than JLL Healthcare) may Transfer any Shares, without the prior written approval
of JLL Healthcare, which approval shall not be unreasonably withheld, except for
Transfers (i) to any of its Permitted Transferees; provided, however, that prior
to any such Transfer of Shares, such Permitted Transferee (other than a
Permitted Transferee described in subsection (ix) of the definition of Permitted
Transferee, which shall acquire such Shares free of the provisions of this
Agreement) shall agree in writing to take such Shares subject to, and to comply
with, all of the provisions of this Agreement, a copy of which agreement shall
be filed with the Secretary of the Company and shall include the address of such
Permitted Transferee to which notices hereunder shall be sent, (ii) pursuant to
any offer, including a tender or exchange offer, by any Person (including the
Company) to purchase all of the outstanding Shares, which offer has
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been approved by the Board, or (iii) pursuant to any transaction requiring the
approval of the holders of at least a majority of the issued and outstanding
voting securities of the Company and as to which the requisite approval of the
Board and the Stockholders shall have been obtained. Each Stockholder agrees
that it shall provide the Company with prior written notice of any proposed
Transfer of Shares.
(b) Notwithstanding the provisions of Section 4.01(a),
following the first anniversary of the closing of the transactions contemplated
by the Recapitalization Agreement, PHC may Transfer its Shares to any Person;
provided, however, that prior to any Transfer of Shares that occurs prior to the
third anniversary of the closing of the transactions contemplated by the
Recapitalization Agreement, such Person shall agree in writing to take such
Shares subject to, and to comply with, all of the provisions of this Agreement,
a copy of which agreement shall be filed with the Secretary of the Company and
shall include the address of such Person to which notices hereunder shall be
sent. Subject to compliance with the preceding sentence by any Person to whom
PHC proposes to Transfer its Shares, upon such Transfer, such Person shall be
deemed a Stockholder hereunder and the Shares so Transferred shall continue to
be Registrable Securities.
Section 4.02 Compliance with Securities Laws. Each Stockholder
agrees that every Transfer of its Shares shall comply with all federal, state
and local securities laws applicable to such Transfer. At the request of the
Company, the transferring Stockholder shall deliver to the Company an opinion of
counsel, which counsel and opinion shall be reasonably satisfactory to the
Company, to the effect that the Transfer satisfies this Section 4.02.
Section 4.03 Transfers Not In Compliance. In the event of any
purported or attempted Transfer of Shares by a Stockholder that does not comply
with this Agreement, the purported transferee or successor by operation of law
shall not be deemed to be a stockholder of the Company for any purpose and shall
not be entitled to any of the rights of a stockholder, including, without
limitation, the right to vote the Shares or to receive a certificate for the
Shares or any dividends or other distributions on or with respect to the Shares.
Section 4.04 Tag-Along Rights.
(a) Except as provided below, if, at any time prior to
the Initial Public Offering, JLL Healthcare or any Affiliate to which it
Transferred Shares, proposes to Transfer, directly or indirectly, any of its
Shares to a Person (other than (i) to an Affiliate of JLL Healthcare or (ii)
pursuant to a distribution to a
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member of JLL Healthcare), JLL Healthcare shall provide each other Stockholder
(each, a "Notice Recipient") and the Company with not less than twenty (20)
Business Days' prior written notice (the "Sale Notice") of such proposed
Transfer, which notice shall include all of the terms and conditions of such
proposed Transfer and which shall identify such purchaser; and each Notice
Recipient shall have the option, exercisable by written notice to JLL Healthcare
within ten (10) Business Days after the receipt of the Sale Notice, to require
JLL Healthcare to arrange for such purchaser or purchasers to purchase the same
percentage (the "Percentage") of the Shares then owned by such Notice Recipient
as the ratio of the total number of Shares which are to be Transferred by JLL
Healthcare and/or such Affiliate pursuant to the proposed Transfer to the total
number of Shares owned by JLL Healthcare and such Affiliate immediately prior to
such Transfer, or any lesser amount of Shares as such Notice Recipient shall
desire, together with JLL Healthcare's Shares at the same time as, and upon the
same terms and conditions (including all direct or indirect consideration or
compensation) at which, JLL Healthcare and/or such Affiliate sells its Shares.
If a Notice Recipient shall so elect, JLL Healthcare agrees that it shall either
(a) arrange for the proposed purchaser or purchasers to purchase all or a
portion (as such Notice Recipient shall specify) of the same Percentage of the
Shares then owned by such Notice Recipient at the same time as, and upon the
same terms and conditions at which, JLL Healthcare sells its Shares; provided,
however, that no Stockholder will be required to sign a covenant not to compete
or similar restriction in connection with such sale and, provided further, that
any indemnification obligations of such Notice Recipient in connection with such
sale shall be borne ratably by the Stockholders participating in such sale and
shall not exceed the lesser of (x) such Stockholder's ratable share of any loss
and (y) the net proceeds received by such Notice Recipient in connection with
such sale; and, provided further, that if such purchaser or purchasers shall
elect to purchase less than the aggregate number of Shares originally agreed
with JLL Healthcare and the number of shares to be sold by all Notice Recipients
electing to participate in the proposed Transfer, then the number of Shares to
be sold by JLL Healthcare and all Notice Recipients electing to participate in
the proposed Transfer shall be reduced pro rata to such aggregate number, or (b)
JLL Healthcare may elect not to effect the proposed Transfer to such purchaser
or purchasers. In the event that a Notice Recipient does not exercise its right
to participate in such Transfer or declines to so participate, JLL Healthcare
shall have 180 days from the date of such Sale Notice to consummate the
transaction on the terms set forth therein without being required to provide an
additional Sale Notice to the other Stockholders and comply with the terms of
this Section 4.04.
(b) Notwithstanding any other provision hereof to the
contrary, the provisions of this Section 4.04 shall not apply to any Transfer
unless
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and until JLL Healthcare shall or will have Transferred, in one or more
transactions, including the proposed transaction, an aggregate of at least two
percent (2%) of the number of Shares held by it on the date hereof.
Section 4.05 Effect of Notices. Notwithstanding any provision
hereof to the contrary, the giving to any Stockholder of any Sale Notice shall
not obligate JLL Healthcare to consummate or effect any transaction referred to
therein, and JLL Healthcare shall be free to abandon any such transaction prior
to the effectiveness thereof. If any such transaction is so abandoned, each
Stockholder shall continue to be subject to the terms of this Article IV with
respect to the Shares included in such Sale Notice.
Section 4.06 Transfers of JLL Healthcare Common Interests
Notwithstanding any other provision hereof, in the event that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇ Fund III, L.P. Transfers any of its Interests in JLL Healthcare, the
provisions of Section 4.04 hereof shall be applicable to such Transfer in a
manner that fairly and equitably preserves the original rights thereunder, and
each of the other Stockholders shall have such rights and obligations
thereunder, as if such Transfer were a Transfer of the Shares held by JLL
Healthcare.
ARTICLE V
Registration Rights
-------------------
Section 5.01 Demand Registrations.
(a) Requests for Registration. At any time after 180
days following the consummation of the Initial Public Offering, subject to the
conditions set forth herein and subject to the prior written approval of JLL
Healthcare, which approval shall not be unreasonably withheld, any Stockholder
meeting the requirements set forth in paragraph (b) below shall be entitled to
make a written request of the Company (a "Demand") for registration under the
Securities Act of all or part of the Registrable Securities (a "Demand
Registration"). Such Demand shall specify: (i) the aggregate number of
Registrable Securities requested to be registered, (ii) the intended method of
distribution in connection with such Demand Registration to the extent then
known and (iii) the identity of each Stockholder (a "Demanding holder")
requesting such Demand. Within ten (10) Business Days after receipt of a Demand,
the Company shall give written notice of such Demand to all other Stockholders
and shall include in such registration all Registrable Securities with respect
to which the Company has received a written request for inclusion
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therein within twenty (20) days after the receipt by such Stockholder of the
Company's notice required by this paragraph; provided, however, that the Company
shall not be required to file any registration statement covering Registrable
Securities with a Fair Market Value of less than the Requisite Amount.
(b) Number of Demands. JLL Healthcare shall be entitled
to eight (8) Demand Registrations; each other Stockholder, together with its
Permitted Transferees and Affiliates, owning more than five percent (5%) of the
then outstanding shares of Common Stock shall be entitled to two (2) Demand
Registrations; and each Stockholder, together with its Permitted Transferees and
Affiliates, owning more than three percent (3%) and less than five percent (5%)
of the then outstanding shares of Common Stock shall be entitled to one (1)
Demand Registration; provided, however, that each Stockholder who is identified
as a Demanding holder in any Demand Registration shall be deemed to have made a
demand with respect to such Demand Registration.
(c) Satisfaction of Obligations. Subject to Section
5.03, a registration shall not be treated as a permitted Demand for a Demand
Registration until (i) the applicable registration statement under the
Securities Act has been filed with the Commission with respect to such Demand
Registration (which shall include any registration statement that is not
withdrawn by holders of Registrable Securities in the circumstances contemplated
by Section 5.03), and (ii) such registration statement shall have been
maintained continuously effective for a period of at least ninety (90) days or
such shorter period during which all Registrable Securities included therein
have been disposed of thereunder in accordance with the method of distribution
set forth in such registration statement.
(d) Availability of Short Form Registrations. The
Company shall use its best efforts to comply with the requirements for use of
short form registration for the sale of Registrable Securities under the
Securities Act.
(e) Restrictions on Demand Registrations. The Company
shall not be obligated (i) in the case of a Demand Registration, to maintain the
effectiveness of a registration statement under the Securities Act, for a period
longer than ninety (90) days or (ii) to effect any Demand Registration within
one hundred eighty (180) days after the effective date of (A) a "firm
commitment" underwritten registration in which all Stockholders were given
"piggyback" rights pursuant to Section 5.02 hereof (provided that, with respect
to such a registration in which such piggyback rights were exercised, each such
Stockholder exercising such piggyback rights was permitted to include in such
registration 50% of the Registrable Securities
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that such Stockholder sought to include therein) or (B) any other Demand
Registration. In addition, the Company shall be entitled to postpone (upon
written notice to all Stockholders) for up to ninety (90) days the filing or the
effectiveness of a registration statement in respect of a Demand (but no more
than once in any period of twelve (12) consecutive months) if the Board
determines in good faith and in its reasonable judgment that effecting the
Demand Registration in respect of such Demand would have a material adverse
affect on any proposal or plan by the Company to engage in any debt or equity
offering, material acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or other
similar transaction. In the event of a postponement by the Company of the filing
or effectiveness of a registration statement in respect of a Demand, the
Demanding holders shall have the right to withdraw such Demand in accordance
with Section 5.03 hereof.
(f) Participation in Demand Registrations. The Company
shall not include any securities other than Registrable Securities in a Demand
Registration, except with the written consent of the holders of the majority of
the Registrable Securities sought to be registered pursuant to such Demand
Registration held by all the Demanding holders. If, in connection with a Demand
Registration, any managing underwriter (or, if such Demand Registration is not
an underwritten offering, a nationally recognized independent underwriter
selected by the Demanding holders of a majority of the Registrable Securities
held by all the Demanding holders (which such underwriter shall be reasonably
acceptable to the Company and whose fees and expenses shall be borne solely by
the Company)) advises the Company and the Demanding holders of a majority of the
Registrable Securities held by all the Demanding holders in writing that, in its
opinion, the inclusion of all the Registrable Securities and, if authorized
pursuant to this Article V, other securities of the Company, in each case,
sought to be registered in connection with such Demand Registration would
adversely affect the marketability of the Registrable Securities sought to be
sold pursuant thereto, then the Company shall furnish each such Demanding holder
with a copy of such opinion and a notice of the number of Registrable Securities
held by such Demanding holder to be included in the registration statement and
shall include in the registration statement applicable to such Demand
Registration only such securities as the Company and the holders of Registrable
Securities sought to be registered therein ("Demanding Sellers") are advised by
such underwriter can be sold without such an effect (the "Maximum Demand
Number"), as follows and in the following order of priority:
(i) first, the number of Registrable Securities
sought to be registered by each Demanding Seller and
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PHC, pro rata in proportion to the number of Registrable Securities
sought to be registered by all such sellers; and
(ii) second, if the number of Registrable Securities
to be included under clause (i) above is less than the Maximum Demand
Number, the number of securities sought to be included by each other
seller, pro rata in proportion to the number of securities sought to be
sold by all such other sellers, which in the aggregate, when added to
the number of securities to be included pursuant to clause (i) above,
equals the Maximum Demand Number.
(g) Selection of Underwriters. If the Demanding holders
of a majority of the Registrable Securities held by all the Demanding holders
request that such Demand Registration be an underwritten offering, then the
Company shall select a nationally recognized underwriter or underwriters to
manage and administer such offering, such underwriter or underwriters, as the
case may be, to be subject to the approval of the Demanding holders of a
majority of the Registrable Securities held by all the Demanding holders, which
approval shall not be unreasonably withheld or delayed.
(h) Other Registrations. If the Company has received a
Demand and if the applicable registration statement in respect of such Demand
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (other than a registration relating to the Company employee
benefit plans, exchange offers by the Company or a merger or acquisition of a
business or assets by the Company, including, without limitation, a registration
on Form S-4 or S-8 or any successor form), whether on its own behalf or at the
request of any holder or holders of such securities, until a period of at least
ninety (90) days has elapsed from the effective date of any Demand Registration,
unless a shorter period of time is approved by the Demanding holders of a
majority of the Registrable Securities held by all the Demanding holders.
Notwithstanding the foregoing, the Company shall be entitled to postpone any
such Demand Registration and may file or cause to be effected such other
registration in accordance with the terms of Section 5.01(e) hereof.
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Section 5.02 Piggyback Registrations.
(a) Right to Piggyback. At any time after 180 days
following the consummation of the Initial Public Offering, whenever the Company
proposes to register any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (other than a registration relating to the Company employee benefit plans,
exchange offers by the Company or a merger or acquisition of a business or
assets by the Company including, without limitation, a registration on Form S-4
or Form S-8 or any successor form) (a "Piggyback Registration"), subject to the
conditions set forth herein, the Company shall give all Stockholders prompt
written notice thereof (but not less than ten (10) Business Days prior to the
filing by the Company with the Commission of any registration statement with
respect thereto). Such notice (a "Piggyback Notice") shall specify, at a
minimum, the number of securities proposed to be registered, the proposed date
of filing of such registration statement with the Commission, the proposed
method of distribution, the proposed managing underwriter or underwriters (if
any and if known), and a good faith estimate by the Company of the proposed
minimum offering price of such securities. Upon the written request of a
Stockholder given within ten (10) Business Days of such Stockholder's receipt of
the Piggyback Notice (which written request shall specify the number of
Registrable Securities intended to be disposed of by such Stockholder and the
intended method of distribution thereof), the Company shall include in such
registration all Registrable Securities with respect to which the Company has
received such written requests for inclusion.
(b) Priority on Piggyback Registrations. If, in
connection with a Piggyback Registration, any managing underwriter (or, if such
Piggyback Registration is not an underwritten offering, a nationally recognized
independent underwriter selected by the Company (reasonably acceptable to the
holders of a majority of the Registrable Securities sought to be included in
such Piggyback Registration and whose fees and expenses shall be borne solely by
the Company)) advises the Company and the holders of the Registrable Securities
sought to be included in such Piggyback Registration, that, in its opinion, the
inclusion of all the securities sought to be included in such Piggyback
Registration by the Company, any Persons who have sought to have shares
registered thereunder pursuant to rights to demand (other than pursuant to
"piggyback" or other incidental or participation registration rights) such
registration (such demand rights being "Other Demand Rights" and such Persons
being "Other Demanding Sellers"), any holders of Registrable Securities seeking
to sell such securities in such Piggyback Registration
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("Piggyback Sellers") and any other proposed sellers, in each case, if any,
would adversely affect the marketability of the securities sought to be sold
pursuant thereto, then the Company shall include in the registration statement
applicable to such Piggyback Registration only such securities as the Company,
the Other Demanding Sellers, and the Piggyback Sellers are so advised by such
underwriter can be sold without such an effect (the "Maximum Piggyback Number"),
as follows and in the following order of priority:
(i) if the Piggyback Registration is an offering on
behalf of the Company and not any Person exercising Other Demand Rights
(whether or not other Persons seek to include securities therein
pursuant to "piggyback" or other incidental or participatory
registration rights) (a "Primary Offering"), then (A) first, such
number of securities to be sold by the Company as the Company, in its
reasonable judgment and acting in good faith and in accordance with
sound financial practice, shall have determined, and (B) second, if the
number of securities to be included under clause (A) above is less than
the Maximum Piggyback Number, the number of Registrable Securities
sought to be registered by each Piggyback Seller and other proposed
seller, pro rata in proportion to the number of Registrable Securities
sought to be registered by all the Piggyback Sellers and all other
proposed sellers, which, in the aggregate, when added to the number of
securities to be registered under clause (A) above, equals the Maximum
Piggyback Number; and
(ii) if the Piggyback Registration is an offering
other than pursuant to a Primary Offering, then (A) first, such number
of securities sought to be registered by each Other Demanding Seller,
pro rata in proportion to the number of securities sought to be
registered by all such Other Demanding Sellers, and (B) second, if the
number of securities to be included under clause (A) above is less than
the Maximum Piggyback Number, the number of Registrable Securities
sought to be registered by each Piggyback Seller and other proposed
seller, pro rata in proportion to the number of Registrable Securities
sought to be registered by all the Piggyback Sellers and all other
proposed sellers, which, in the aggregate, when added to the number of
securities to be registered under clause (A) above, equals the Maximum
Piggyback Number.
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(c) Withdrawal by the Company. If, at any time after
giving written notice of its intention to register any of its securities as set
forth in Section 5.02 and prior to time the registration statement filed in
connection with such registration is declared effective, the Company shall
determine for any reason not to register such securities, the Company may, at
its election, give written notice of such determination to each Stockholder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such particular withdrawn or abandoned
registration (but not from its obligation to pay the Registration Expenses (as
defined below) in connection therewith as provided herein). In the event that
the Piggyback Sellers of such a registration hold the Requisite Amount of
Registrable Securities, such holders may continue the registration as a Demand
Registration if the requirements of Section 5.01(b) are met. The continuation of
such registration shall be counted as a Demand for one Stockholder, which meets
the requirements of Section 5.01(b), and continues as a participant in such
registration. The Stockholder having a Demand right with the largest number of
Registrable Securities included in such registration among all Stockholders
having such right shall be deemed to be the Demanding holder.
Section 5.03 Withdrawal Rights. Any Stockholder having notified or
directed the Company to include any or all of its Registrable Securities in a
registration statement under the Securities Act shall have the right to withdraw
any such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to such
effect to the Company at least five (5) Business Days prior to the effective
date of such registration statement. In the event of any such withdrawal, the
Company shall not include such Registrable Securities in the applicable
registration and such Registrable Securities shall continue to be Registrable
Securities hereunder. No such withdrawal shall affect the obligations of the
Company with respect to the Registrable Securities not so withdrawn; provided
that in the case of a Demand Registration, if such withdrawal shall reduce the
number of Registrable Securities sought to be included in such registration
below the Requisite Amount, then the Company shall as promptly as practicable
give each holder of Registrable Securities sought to be registered notice to
such effect, referring to this Agreement and summarizing this Section 5.03, and
within five (5) Business Days following the effectiveness of such notice, either
the Company or the holders of a majority of the Registrable Securities sought to
be registered may, by written notices made to each holder of Registrable
Securities sought to be registered and the Company, respectively, elect that
such registration statement not be filed or, if theretofore filed, be withdrawn.
During such five (5) Business Day period, the Company shall not file such
registration statement if not theretofore filed or, if such registration
statement
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has been theretofore filed, the Company shall not seek, and shall use its best
efforts to prevent, the effectiveness thereof. Any registration statement
withdrawn or not filed (i) in accordance with an election by the Company, (ii)
in accordance with an election by the holders of the majority of the Registrable
Securities sought to be registered pursuant to such Demand Registration held by
all the Demanding holders, (iii) in accordance with an election by the holders
of the majority of the Registrable Securities sought to be registered pursuant
to such Demand Registration held by all the Demanding holders prior to the
effectiveness of the applicable Demand Registration Statement or (iv) in
accordance with an election by the holders of the majority of the Registrable
Securities sought to be registered pursuant to such Demand Registration held by
all the Demanding holders subsequent to the effectiveness of the applicable
Demand Registration Statement, if any post-effective amendment or supplement to
the applicable Demand Registration Statement contains adverse information
regarding the Company shall not be counted as a Demand. Except as set forth in
clause (iv) of the previous sentence, any Demand withdrawn in accordance with an
election by the Demanding holders subsequent to the effectiveness of the
applicable Demand Registration Statement shall be counted as a Demand unless the
Stockholders reimburse the Company for its reasonable out-of-pocket expenses
(but not including any Internal Expenses, as defined below) related to the
preparation and filing of such registration statement (in which event such
registration statement shall not be counted as a Demand hereunder). Upon the
written request of a majority of the Stockholders, the Company shall promptly
prepare a definitive statement of such out-of-pocket expenses in connection with
such registration statement in order to assist such holders with a determination
in accordance with the next preceding sentence.
Section 5.04 Holdback Agreements. Each Stockholder agrees not to
effect any public sale or distribution (including, without limitation, sales
pursuant to Rule 144) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
ten (10) day period prior to the date which the Company has notified the
Stockholders that it or any Demanding holders intend to commence an underwritten
Public Offering through the sixty (60) day period immediately following the
effective date of any Demand Registration or any Piggyback Registration (in each
case, except as part of such registration), or, in each case, if later, the date
of any underwriting agreement with respect thereto; provided, however, that the
Stockholders shall not be obligated to comply with this Section 5.04 on more
than one (1) occasion in any nine (9) month period.
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Section 5.05 Registration Procedures.
(a) Whenever the Stockholders have requested that any
Registrable Securities be registered pursuant to this Agreement (whether
pursuant to Demand Registration or Piggyback Registration), the Company (subject
to its right to withdraw such registration as contemplated by Section 5.02(c))
shall use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of distribution
thereof and, in connection therewith, the Company shall as expeditiously as
possible:
(i) prepare and file with the Commission a
registration statement with respect to such Registrable
Securities on any form for which the Company then qualifies
and is available for the sale of Registrable Securities to be
registered thereunder in accordance with the intended method
of distribution and use its best efforts to cause such
registration statement to become effective within ninety (90)
days of the date thereof;
(ii) prepare 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 a
continuous period of not less than ninety (90) days (or, if
earlier, until all Registrable Securities included in such
registration statement have been sold thereunder in accordance
with the method of distribution set forth therein) and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof as set forth in
such registration statement (including, without limitation, by
incorporating in a prospectus supplement or post-effective
amendment, at the request of a seller of Registrable
Securities, the terms of the sale of such Registrable
Securities);
(iii) before filing with the Commission any such
registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to counsel
selected by the Demanding holders of a majority of the
Registrable Securities held by the Demanding holders, counsel
for the underwriter or sales
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or placement agent, if any, and any other counsel for holders
of Registrable Securities, if any, in connection therewith,
drafts of all such documents proposed to be filed and provide
such counsel with a reasonable opportunity for review thereof
and comment thereon, such review to be conducted and such
comments to be delivered with reasonable promptness;
(iv) promptly (i) notify each seller of Registrable
Securities of each of (x) the filing and effectiveness of the
registration statement and prospectus and any amendment or
supplements thereto, (y) the receipt of any comments from the
Commission or any state securities law authorities or any
other governmental authorities with respect to any such
registration statement or prospectus or any amendments or
supplements thereto, and (z) any oral or written stop order
with respect to such registration, any suspension of the
registration or qualification of the sale of such Registrable
Securities in any jurisdiction or any initiation or threat of
any proceedings with respect to any of the foregoing and (ii)
use its reasonable best efforts to obtain the withdrawal of
any order suspending the registration or qualification (or the
effectiveness thereof) or suspending or preventing the use of
any related prospectus in any jurisdiction with respect
thereto;
(v) furnish to each seller of Registrable Securities,
the underwriters and the sales or placement agent, if any, and
counsel for each of the foregoing, a conformed copy of such
registration statement and each amendment and supplement
thereto (in each case, including all exhibits thereto and
documents incorporated by reference therein) and such
additional number of copies of such registration statement,
each amendment and supplement thereto (in such case without
such exhibits and documents), the prospectus (including each
preliminary prospectus) included in such registration
statement and prospectus supplements and all exhibits thereto
and documents incorporated by reference therein and such other
documents as such seller, underwriter, agent or counsel may
reasonably request in order to facilitate the disposition of
the Registrable Securities owned by each such seller;
(vi) if requested by the managing underwriter or
underwriters of any registration or by the Demanding
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holders of a majority of the Registrable Securities held by
the Demanding holders, subject to approval of counsel to the
Company in its reasonable judgment, promptly incorporate in a
prospectus, supplement or post-effective amendment to the
registration statement such information concerning
underwriters and the plan of distribution of the Registrable
Securities as such managing underwriter or underwriters or
such holders shall reasonably furnish to the Company in
writing and request be included therein, including, without
limitation, with respect to the number of Registrable
Securities being sold by such holders to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other
terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required
filings of such prospectus, supplement or post-effective
amendment as soon as possible after being notified of the
matters to be incorporated in such prospectus, supplement or
post-effective amendment;
(vii) use its best efforts to register or qualify
such Registrable Securities under such securities or "blue
sky" laws of such jurisdictions as the holders of a majority
of Registrable Securities sought to be registered reasonably
request and do any and all other acts and things which may be
reasonably necessary or advisable to enable the holders of a
majority of Registrable Securities sought to be registered to
consummate the disposition in such jurisdictions of the
Registrable Securities owned by such holders and keep such
registration or qualification in effect for so long as the
registration statement remains effective under the Securities
Act (provided that the Company shall not be required to (x)
qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this
paragraph, (y) subject itself to taxation in any such
jurisdiction where it would not otherwise be subject to
taxation but for this paragraph or (z) consent to the general
service of process in any jurisdiction where it would not
otherwise be subject to general service of process but for
this paragraph);
(viii) notify each seller of such Registrable
Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon the
discovery that, or of
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the happening of any event as a result of which, the
registration statement covering such Registrable Securities,
as then in effect, contains an untrue statement of a material
fact or omits to state any material fact required to be stated
therein or any fact necessary to make the statements therein
not misleading, and promptly prepare and furnish to each such
seller a supplement or amendment to the prospectus contained
in such registration statement so that such registration
statement shall not, and such prospectus as thereafter
delivered to the purchasers of such Registrable Securities
shall not, contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein
or any fact necessary to make the statements therein not
misleading;
(ix) cause all such Registrable Securities to be
listed on the New York Stock Exchange and/or any other
securities exchange and included in each established
over-the-counter market on which or through which similar
securities of the Company are listed or traded and, if not so
listed or traded, to be listed on the NASD automated quotation
system ("Nasdaq") and if listed on Nasdaq, use its reasonable
efforts to secure designation of all such Registrable
Securities covered by such registration statement as a Nasdaq
"national market system security" within the meaning of Rule
11Aa2- 1 under the Securities Exchange Act of 1934, as
amended, or, failing that, to secure Nasdaq authorization for
such Registrable Securities;
(x) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any
attorney, accountant or other agent retained by any such
seller or underwriter all financial and other records,
pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees,
attorneys and independent accountants to supply all
information reasonably requested by any such sellers,
underwriters, attorneys, accountants or agents in connection
with such registration statement. Information which the
Company determines, in good faith, to be confidential shall
not be disclosed by such persons unless (x) the disclosure of
such information is necessary to avoid or correct a
misstatement or omission in such registration statement, or
(y) the release of such information is ordered pursuant to a
subpoena or other order from a court of competent
jurisdiction. Each seller of
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Registrable Securities agrees, on its own behalf and on behalf
of all its underwriters, accountants, attorneys and agents,
that the information obtained by it as a result of such
inspections and which the Company determines, in good faith,
to be confidential, shall not be used by it as the basis for
any market transactions in the securities of the Company
unless and until such is made generally available to the
public. Each seller of Registrable Securities further agrees,
on its own behalf and on behalf of all its underwriters,
accountants, attorneys and agents, that it will, upon learning
that disclosure of such information is sought in a court of
competent jurisdiction, give notice to the Company and allow
the Company, at its expense, to undertake appropriate action
to prevent disclosure of the information deemed confidential;
(xi) use its best efforts to comply with all
applicable laws related to such registration statement and
offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act
and the Exchange Act) and make generally available to its
security holders as soon as practicable (but in any event not
later than fifteen (15) months after the effectiveness of such
registration statement) an earnings statement of the Company
and its subsidiaries complying with Section 11(a) of the
Securities Act;
(xii) permit any Stockholder, which Stockholder, in
its sole and exclusive judgment, might be deemed to be an
underwriter or controlling person of the Company, to
participate in the preparation of such registration statement
and to require the insertion therein of material, furnished to
the Company in writing, which in the reasonable judgment of
such holder and such holder's counsel should be included;
(xiii) use reasonable best efforts to furnish to each
seller of Registrable Securities a signed counterpart of (x)
an opinion of counsel for the Company and (y) a comfort letter
signed by the independent public accountants who have
certified the Company's financial statements included or
incorporated by reference in such registration statement,
covering such matters with respect to such registration
statement and, in the case of the accountants' comfort letter,
with respect to events subsequent to the date of such
financial
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statements, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to the
underwriters in underwritten Public Offerings of securities
for the account of, or on behalf of, an issuer of common
stock, such opinion and comfort letters to be dated the date
such opinions and comfort letters are customarily dated in
such transactions, and covering in the case of such legal
opinion, such other legal matters and, in the case of such
comfort letter, such other financial matters, as the holders
of a majority of the Registrable Securities being sold may
reasonably request; and
(xiv) take all such other actions as the holders of a
majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities.
(b) Underwriting. Without limiting any of the foregoing, in the event
that any offering of Registrable Securities is to be made by or through an
underwriter, the Company shall enter into an underwriting agreement with a
managing underwriter or underwriters containing representations, warranties,
indemnities and agreements customarily included (but not inconsistent with the
agreements contained herein) by an issuer of common stock in underwriting
agreements with respect to offerings of common stock for the account of, or on
behalf of, such issuers. In connection with the sale of Registrable Securities
hereunder, any seller of such Registrable Securities may, at its option, require
that any and all representations and warranties by, and indemnities and
agreements of, the Company to or for the benefit of such underwriter or
underwriters (or which would be made to or for the benefit of such an
underwriter or underwriter if such sale of Registrable Securities were pursuant
to a customary underwritten offering) be made to and for the benefit of such
seller and that any or all of the conditions precedent to the obligations of
such underwriter or underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting agreement) be
conditions precedent to the obligations of such seller in connection with the
disposition of its securities pursuant to the terms hereof (it being agreed that
in connection with any Demand Registration, without limiting any rights or
remedies of the Stockholders, in the event any such condition precedent shall
not be satisfied and, if not so satisfied, shall not be waived by the holders of
a majority of the Registrable Securities to be included in such Demand
Registration, such Demand Registration shall not be counted as a permitted
Demand hereunder). In connection with any offering of Registrable Securities
registered pursuant to this Agreement, the
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Company shall (x) furnish to the underwriter, if any (or, if no underwriter, the
sellers of such Registrable Securities), unlegended certificates representing
ownership of the Registrable Securities being sold, in such denominations as
requested and (y) instruct any transfer agent and registrar of the Registrable
Securities to release any stop transfer order with respect thereto.
(c) Return of Prospectuses. Each seller of Registrable
Securities hereunder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5.05(a)(viii), such
seller shall forthwith discontinue such seller's disposition of Registrable
Securities pursuant to the applicable registration statement and prospectus
relating thereto until such seller's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 5.05(a)(viii) and, if so directed
by the Company, deliver to the Company all copies, other than permanent file
copies, then in such seller's possession of the prospectus current at the time
of receipt of such notice relating to such Registrable Securities. In the event
the Company shall give such notice, the ninety (90)-day period during which such
registration statement must remain effective pursuant to this Agreement shall be
extended by the number of days during the period from the date of giving of a
notice regarding the happening of an event of the kind described in Section
5.05(a)(viii) to the date when all such sellers shall receive such a
supplemented or amended prospectus and such prospectus shall have been filed
with the Commission.
Section 5.06 Registration Expenses. Except as otherwise provided in
this Section 5.06, all expenses incident to the Company's performance of, or
compliance with, its obligations under Article V of this Agreement, including,
without limitation, all registration and filing fees, all fees and expenses of
compliance with securities and "blue sky" laws (including, without limitation,
the fees and expenses of counsel for underwriters or placement or sales agents,
if any, in connection therewith), all printing and copying expenses, all
messenger and delivery expenses, all fees and expenses of underwriters and sales
and placement agents, if any, in connection therewith (excluding discounts and
commissions and the fees and expenses of counsel for such underwriters or
placement or sales agents), all fees and expenses of the Company's independent
certified public accountants and counsel (including, without limitation, with
respect to "comfort" letters and opinions) (collectively, the "Registration
Expenses") shall be borne by the Company; provided, however, that all
underwriting discounts and commissions allocable to each Stockholder selling
Registrable Securities shall be borne by such Stockholder. The Company shall be
responsible for the fees and expenses of one (1) legal counsel retained by all
of the Stockholders in the aggregate in connection with the sale of
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Registrable Securities. Notwithstanding the foregoing, the Company shall not be
responsible for the fees and expenses of any additional counsel, or any of the
accountants, agents or experts retained by the Stockholders in connection with
the sale of Registrable Securities. The Company will pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties, the expense of any annual audit
and the expense of any liability insurance) (collectively, "Internal Expenses")
and the expenses and fees for listing the securities to be registered on each
securities exchange and included in each established over-the-counter market on
which similar securities issued by the Company are then listed or traded or for
listing on Nasdaq.
Section 5.07 Indemnification.
(a) By the Company. The Company agrees to indemnify, to the
fullest extent permitted by law, each holder of Registrable Securities being
sold, its officers, directors, members, employees and agents and each Person who
controls (within the meaning of the Securities Act) such holder or such an other
indemnified Person against all losses, claims, damages, liabilities and expenses
(collectively, the "Losses") caused by, resulting from or relating to any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or a fact necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished to the Company in writing by or on behalf of such holder
expressly for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering and without limiting
any of the Company's other obligations under this Agreement, the Company shall
indemnify such underwriters, their officers, directors, employees and agents and
each Person who controls (within the meaning of the Securities Act) such
underwriters or such an other indemnified Person to the same extent as provided
above with respect to the indemnification of the holders of Registrable
Securities being sold.
(b) By Stockholders. In connection with any registration
statement in which a holder of Registrable Securities is participating, each
such holder will furnish, or cause to be furnished, to the Company in writing
information regarding such holder's ownership of Registrable Securities and its
intended method of distribution thereof and, to the extent permitted by law,
shall indemnify the
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Company, its directors, officers, employees and agents and each Person who
controls (within the meaning of the Securities Act) the Company or such an other
indemnified Person against all Losses caused by, resulting from or relating to
any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
caused by and contained in such information so furnished in writing by or on
behalf of such holder; provided, however, that each holder's obligation to
indemnify the Company hereunder (other than with respect to information provided
by a Stockholder) shall be apportioned between each holder based upon the net
amount received by each holder from the sale of Registrable Securities, as
compared to the total net amount received by all of the holders of Registrable
Securities sold pursuant to such registration statement, no such holder being
liable to the Company in excess of the net amount received by such holder from
the sale of Registrable Securities.
(c) Notice. Any Person entitled to indemnification hereunder shall give
prompt written notice to the indemnifying party of any claim with respect to
which its seeks indemnification; provided, however, the failure to give such
notice shall not release the indemnifying party from its obligation, except to
the extent that the indemnifying party has been materially prejudiced by such
failure to provide such notice.
(d) Defense of Actions. In any case in which any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not (so long as it shall
continue to have the right to defend, contest, litigate and settle the matter in
question in accordance with this paragraph) be liable to such indemnified party
hereunder for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, supervision and monitoring (unless such indemnified
party reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to the defenses
available to such indemnifying party, in which event the indemnified party shall
be reimbursed by the indemnifying party for the expenses incurred in
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connection with retaining separate legal counsel). An indemnifying party shall
not be liable for any settlement of an action or claim effected without its
consent. The indemnifying party shall lose its right to defend, contest,
litigate and settle a matter if it shall fail diligently to contest such matter
(except to the extent settled in accordance with the next following sentence).
No matter shall be settled by an indemnifying party without the consent of the
indemnified party (which consent shall not be unreasonably withheld).
(e) Survival. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified Person and will survive the transfer of
the Registrable Securities and the termination of this Agreement.
(f) Contribution. If recovery is not available under the
foregoing indemnification provisions for any reason or reasons other than as
specified therein, any Person who would otherwise be entitled to indemnification
by the terms thereof shall nevertheless be entitled to contribution with respect
to any Losses with respect to which such Person would be entitled to such
indemnification but for such reason or reasons. In determining the amount of
contribution to which the respective Persons are entitled, there shall be
considered the Persons' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and other equitable
considerations appropriate under the circumstances. It is hereby agreed that it
would not necessarily be equitable if the amount of such contribution were
determined by pro rata or per capita allocation. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not found guilty of
such fraudulent misrepresentation. Notwithstanding the foregoing, no Stockholder
shall be required to make a contribution in excess of the net amount received by
such holder from the sale of Registrable Securities.
ARTICLE VI
Co-Investment Rights
Section 6.01 Preemptive Rights. If, prior to the Initial Public
Offering, the Company proposes to issue and sell any shares of capital stock of
the Company (or other securities convertible into or exchangeable for shares of
such capital stock) to any Person, including to any Stockholder (whether for
cash, securities or other property), each Stockholder shall have the right to
purchase from
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the Company a number of shares of such class or series of capital stock of the
Company (or other securities convertible into or exchangeable for shares of such
capital stock) proposed to be sold to such Person such that, following such
transaction, such Stockholder shall maintain the same proportionate interest in
the issued shares of capital stock of the Company proposed to be issued as held
by such Stockholder immediately prior to such transaction. Such purchase by each
Stockholder shall be on the same terms and conditions as such purchase by such
Person, except that, in lieu of delivering securities or property as
consideration for shares of capital stock, such Stockholder shall be entitled to
purchase such shares for cash in an amount equal to the fair market value per
share of the securities or property being delivered by such Person, as
determined by the Board in good faith. Each such issuance and sale to any Person
shall be subject to the rights set forth in this Article VI.
Section 6.02 Purchase Rights. Subject to Section 6.01, each Stockholder
hereby agrees that, prior to the consummation of the Initial Public Offering,
the Company may undertake one or more issuances and sales of shares of Common
Stock to any Person at the price of $100 per share and one or more issuances and
sales of shares of Preferred Stock to any Person at the price of $1,000 per
share. Each Stockholder further hereby acknowledges and agrees that, subject to
Section 7.13 hereof, and, unless otherwise determined by the Board, in its
reasonable discretion, the payment of $100 per share of Common Stock or $1,000
per share of Preferred Stock by such Person, which payment shall be made in
cash, securities or such other property as determined by the Board, shall be
conclusive and binding as evidence of the Fair Market Value at such time of the
shares of Common Stock or Preferred Stock, as the case may be. Moreover, each
Stockholder hereby acknowledges and agrees that the Fair Market Value of the
Preferred Stock is and shall continue to be $1,000 per share, unless otherwise
determined by the Board, in its reasonable discretion.
Section 6.03 Notice. If, prior to the Initial Public Offering, the
Company proposes to issue shares of capital stock (or other securities
convertible into or exchangeable for shares of capital stock) to any Person,
including any other Stockholder, it shall give each Stockholder written notice
of such issuance, describing the price and terms upon which the Company intends
to issue the same, and the number of shares of capital stock (or other
securities convertible into or exchangeable for shares of capital stock)
eligible to be purchased by each such Stockholder pursuant to Section 6.01
above. Any revision of any material term of such intended issuance shall require
re-notification to each Stockholder and a restarting of the fifteen (15)
Business Day period provided in Section 6.04 below.
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Section 6.04 Exercise. Upon receipt by any Stockholder of the written
notice of the Company pursuant to Section 6.03 above, such Stockholder shall
have fifteen (15) Business Days during which to exercise the right pursuant to
Section 6.01 above to purchase its proportionate share of Company capital stock
for the price and upon the terms specified in such notice. If any Stockholder
fails to notify the Company of its exercise of such rights within such fifteen
(15) Business Day period, such Stockholder shall have no further rights with
regard to such purchase by such Person at the price and upon the terms specified
in the notice to the Stockholder, subject to Section 6.05 below.
Section 6.05 Limitations. If the Company has not sold the shares of
capital stock (or other securities convertible into or exchangeable for shares
of capital stock) to such Person within sixty (60) days following the expiration
of the fifteen (15) Business Day period referred to above, the Company shall not
thereafter issue or sell any such shares to such Person without also offering
the same to each Stockholder in the manner provided above.
Section 6.06 Scope. Each Share issued and sold to any Stockholder
pursuant to the rights set forth in this Article VI shall be subject to this
Agreement; and each certificate representing such Shares shall bear
substantially the legend set forth in Section 7.01 hereof.
Section 6.07 Exclusion. Notwithstanding the foregoing, each Stockholder
acknowledges and agrees that (i) the capital structure of the Company following
consummation of the Transactions and the financing thereof is set forth on Annex
II hereto and no Stockholder shall have preemptive rights pursuant to this
Article VI with respect to the issuance or sale of any such securities
contemplated in connection therewith and (ii) such Stockholder shall not have
any preemptive right pursuant to this Article VI with respect to the issuance of
any equity security (A) to employees of the Company under any equity
compensation plan approved by the Board or (B) to the selling parties as
consideration with respect to any acquisition or business combination.
Section 6.08 Calculation of Percentages. Solely for purposes of
Articles IV, V and VI, in determining each Stockholder's proportionate interest
of the Company's issued and outstanding capital stock and calculating the number
of shares of capital stock which Stockholders are entitled to purchase pursuant
to Section 6.01 hereof, the Company shall be deemed to have one class of capital
stock outstanding,
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and each outstanding share of Preferred Stock shall be deemed to be the
equivalent of ten shares of Common Stock.
ARTICLE VII
Miscellaneous
Section 7.01 Expenses. The Company hereby agrees that it shall
reimburse each of the Stockholders for their fees and expenses in connection
with the acquisition of Shares on the date hereof and the negotiation and
execution of this Agreement, including, without limitation, fees and expenses of
one outside counsel for each of (i) JLL Healthcare, (ii) Triumph, (iii) GECC,
(iv) the IHC Investors, (v) the Management Investors, (vi) CIBC WMC, Inc. and
(vii) ▇.▇. ▇▇▇▇▇▇ Capital Corporation. The Company further agrees that it will
reimburse JLL Healthcare for its administrative fees and expenses incurred
during the Term of this Agreement.
Section 7.02 Specific Performance. Each of the Stockholders
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party or parties would be irreparably harmed and could not be made
whole solely by monetary damages. The Stockholders hereby agree that in addition
to any other remedy to which any party may be entitled at law or in equity, they
shall be entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction for such action.
Section 7.03 Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
Section 7.04 Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
Section 7.05 Notices. All notices and other communications
required or permitted to be given hereunder shall be in writing and shall be (i)
delivered by hand, (ii) delivered by a nationally recognized commercial
overnight
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delivery service, (iii) mailed postage prepaid by first class mail or (iv)
transmitted by facsimile transmitted, if, (a) to the Company, JLL Healthcare or
PHC to the address below or (b) to any other Stockholder (and any other Person
designated by such Stockholder) at the address or telecopier number set forth in
Annex I hereto. Such notices shall be effective: (i) in the case of hand
deliveries when received; (ii) in the case of an overnight delivery service, on
the next business day after being placed in the possession of such delivery
service, with delivery charges prepaid; (iii) in the case of mail, seven (7)
Business Days after deposit in the postal system, first class mail, postage
prepaid; and (iv) in the case of facsimile notices, when electronic confirmation
of receipt is received by the sender. Any party may change its address and
telecopy number by written notice to the others given in accordance with this
Section 7.05.
If to the Company, to:
IASIS Healthcare Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
JLL Healthcare, LLC
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇ ▇▇▇, LP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to JLL Healthcare, to:
JLL Healthcare, LLC
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇ ▇▇▇, LP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇▇▇ Healthcare Corporation, to:
▇▇▇▇▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Mayor, Day, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Outside Investors, to:
General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Fax:
Triumph Partners III, L.P.
and
Triumph III Investors, L.P.
c/o Triumph Capital Group, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Fax:
If to the IHC Investors, to:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 7.06 Applicable Law. The substantive laws of the State
of Delaware shall govern the interpretation, validity and performance of the
terms of this Agreement, regardless of the law that might be applied under
applicable principles of conflicts of laws. THE PARTIES HERETO WAIVE THEIR RIGHT
TO A JURY TRIAL WITH RESPECT TO DISPUTES HEREUNDER; ALL SUCH DISPUTES SHALL BE
SETTLED BY BINDING ARBITRATION PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION IN NEW YORK, NEW YORK AND THE ORDER OF SUCH ARBITRATORS SHALL BE
FINAL AND BINDING ON ALL PARTIES HERETO AND MAY BE ENTERED AS A JUDGMENT IN A
COURT HAVING JURISDICTION OVER THE PARTIES.
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Section 7.07 Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including, without limitation, any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
Section 7.08 Successors; Assigns; Third-Party Beneficiaries.
The provisions of this Agreement shall be binding upon the parties hereto and
their respective heirs, successors and permitted assigns. Neither this Agreement
nor the rights or obligations of any Stockholder hereunder, including, without
limitation, any rights pursuant to Article VI hereof, may be assigned, except in
connection with the transfer by a Stockholder of Shares to a Permitted
Transferee. Any such attempted assignment in contravention of this Agreement
shall be void and of no effect. Except for Sections 5.07 and 7.09 hereof, this
Agreement is for the sole benefit of the parties hereto and their respective
heirs, successors and permitted assigns and no provision hereof, whether express
or implied, is intended, or shall be construed, to give any other Person any
other rights or remedies, whether legal or equitable, hereunder.
Section 7.09 Amendments. This Agreement may not be amended,
modified or supplemented unless such modification is in writing and signed by
the Company and Stockholders owning at least a majority (50.1%) of the
outstanding shares of Common Stock as of the date hereof; provided, however,
that no such amendment or modification that materially and adversely affects any
Stockholder or any member of JLL Healthcare shall be effective against such
Stockholder or in respect of such member without such Stockholder's or member's
express written consent.
Section 7.10 Additional Parties. Any Person who is a Permitted
Transferee or who is approved by the Board and who executes a Stockholders
Agreement shall be deemed to be a Stockholder and shall be bound by all
obligations and, except to the extent limited in the Stockholders Agreement,
entitled to all rights and privileges of a Stockholder as if he, she or it had
been an original signatory to this Agreement.
Section 7.11 Waiver. Any provision of this Agreement may be
waived if, but only if, such waiver is in writing and is signed by the Company
and each Stockholder whose rights or duties are affected by such waiver. Any
waiver
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(express or implied) of any default or breach of this Agreement shall not
constitute a waiver of any other or subsequent default or breach.
Section 7.12 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
Section 7.13 Recapitalization. In the event that any capital
stock or other securities are issued in respect of, in exchange for, or in
substitution of, any Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Shares or any other change in the Company's
capital structure, appropriate adjustments shall be made to the terms hereof if
necessary to fairly and equitably preserve the original rights and obligations
of the parties hereto under this Agreement.
Section 7.14 Term. Unless terminated earlier by the Company
and Stockholders owning the percentage of shares set forth in Section 7.10
hereof, the term of this Agreement shall begin as of the date first written
above and terminate on the earlier of (i) the tenth anniversary of such date and
(ii) a Change in Control of the Company; provided, however, that the provisions
of Article V shall survive any termination of this Agreement pursuant to clause
(i) above so long as there are any Registrable Securities.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the undersigned hereby agree to be bound
by the terms and provisions of this Stockholders Agreement as of the date first
above written.
IASIS HEALTHCARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary and General Counsel
JLL HEALTHCARE, LLC
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Person
▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
42
OUTSIDE INVESTORS:
TRIUMPH PARTNERS III, L.P.
By: Triumph III Advisors, L.P.
its general partner
By: Triumph III Advisors, Inc.
its general partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Title: President
TRIUMPH III INVESTORS, L.P.
By: Triumph III Investors, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Title: President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: SVP as Duly
Authorized Signatory
---------------------------
43
ANNEX I
STOCKHOLDERS FOLLOWING THE
RECAPITALIZATION TRANSACTION
Number of Shares of
Name Common Stock
---- ------------
JLL Healthcare 1,162,281
▇▇▇▇▇▇▇▇▇▇ 80,000
Triumph Partners 65,000
Triumph Investors 789
GECC 21,930
I-1
44
ANNEX II
STOCKHOLDERS FOLLOWING THE
TRANSACTIONS
Number of Shares Number of Shares of Preferred Stock
Name of Common Stock Series A Series B
---- --------------- -------- --------
JLL Healthcare 1,162,281 148,772 --
▇▇▇▇▇▇▇▇▇▇ 80,000 -- --
Triumph Partners 65,000 8,320 --
Triumph Investors 789 101.1 --
GECC 21,930 2,807 --
IHC Investors 41,490 -- 5,311
II-1
