Exhibit 3.2
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of August 3, 2001
THE LIMITED LIABILITY COMPANY INTERESTS OF ARDENT HEALTH SERVICES LLC HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE
ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE
WITH SUCH SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND THE TERMS
AND CONDITIONS OF THIS AGREEMENT.
TABLE OF CONTENTS
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ARDENT HEALTH SERVICES LLC..................................................................... 1
RECITALS....................................................................................... 1
ARTICLE I Definitions.......................................................................... 1
SECTION 1.01 Definitions................................................................ 1
SECTION 1.02 Terms Generally............................................................ 1
ARTICLE II General Provisions.................................................................. 1
SECTION 2.01 Formation.................................................................. 1
SECTION 2.02 Name....................................................................... 2
SECTION 2.03 Term....................................................................... 2
SECTION 2.04 Purpose; Power............................................................. 2
SECTION 2.05 Registered and Principal Offices; Registered Agent......................... 2
ARTICLE III Members and Interests; Capital Contributions....................................... 2
SECTION 3.01 Members.................................................................... 2
SECTION 3.02 Rights and Privileges of Initial Classes of Units.......................... 2
SECTION 3.03 Capital Contributions...................................................... 3
SECTION 3.04 Additional Issuance of Units, New Class of Units and Securities............ 3
SECTION 3.05 Admission of Additional Members............................................ 5
SECTION 3.06 Effect of this Agreement on Non-Signatories................................ 5
SECTION 3.07 Cancellation of Units...................................................... 5
SECTION 3.08 Meetings of Members; Manner of Acting...................................... 5
ARTICLE IV Management and Operation of the LLC; Indemnification................................ 7
SECTION 4.01 Board of Managers.......................................................... 7
SECTION 4.02 Officers................................................................... 9
SECTION 4.03 Limitation on Liability.................................................... 10
SECTION 4.04 Indemnification of the Indemnitees......................................... 11
SECTION 4.05 Certain Restrictions on Activities......................................... 12
ARTICLE V Distributions........................................................................ 12
SECTION 5.01 Distributions.............................................................. 12
SECTION 5.02 Limitations on Distributions............................................... 12
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SECTION 5.03 Amounts and Priority of Distributions...................................... 12
SECTION 5.04 Valuation.................................................................. 13
ARTICLE VI Books and Reports; Tax Matters; Capital Accounts; Allocations....................... 13
SECTION 6.01 General Accounting Matters................................................. 13
SECTION 6.02 Certain Tax Matters........................................................ 14
SECTION 6.03 Capital Accounts........................................................... 14
SECTION 6.04 Allocations................................................................ 14
SECTION 6.05 Tax Advances............................................................... 16
ARTICLE VII Dissolution........................................................................ 17
SECTION 7.01 Dissolution................................................................ 17
SECTION 7.02 Winding-up................................................................. 17
SECTION 7.03 Final Distribution......................................................... 17
ARTICLE VIII Transfer of Member's Units........................................................ 18
SECTION 8.01 Transfers to be Made Only as Permitted or Required by
this Agreement............................................................. 18
SECTION 8.02 Drag-Along Right........................................................... 18
SECTION 8.03 Conversion to Corporate Form, Merger, Consolidation or
Reorganization............................................................. 19
ARTICLE IX Certain Representations, Warranties and Agreements.................................. 19
SECTION 9.01 Representations and Warranties....... ..................................... 19
SECTION 9.02 Other Activities Permitted........... ..................................... 21
ARTICLE X Miscellaneous........................................................................ 21
SECTION 10.01 Equitable Relief........................................................... 21
SECTION 10.02 Governing Law.............................................................. 21
SECTION 10.03 Successors and Assigns; No Third Party Beneficiaries....................... 21
SECTION 10.04 Notices.................................................................... 22
SECTION 10.05 Counterparts............................................................... 22
SECTION 10.06 Entire Agreement........................................................... 22
SECTION 10.07 Amendments................................................................. 22
SECTION 10.08 Headings................................................................... 22
SECTION 10.09 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL........................... 22
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ANNEXES AND EXHIBITS
Annex A Members of the LLC
Annex B Certain Definitions
Annex C Special Terms of Redeemable Preferred Units
Annex D Original Capital Contributions of the Initial Members
Exhibit A Form of Registration Rights Agreement
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ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT of ARDENT HEALTH SERVICES
LLC. a Delaware limited liability company (the "LLC"), dated as of August 3,
2001, among the Members set forth on Annex A and such other Persons as shall
hereafter become Members as provided herein.
RECITALS
A. The LLC was formed pursuant to a Certificate of
Formation (the "Certificate") filed for recordation in the office of the
Secretary of State of the State of Delaware in accordance with the LLC Act.
B. The Members desire to set forth their agreements and
understandings regarding the management and operation of, and their respective
rights and obligations with respect to, the LLC.
NOW THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Definitions. Unless the context otherwise
requires, certain terms used herein have the meanings given such terms on Annex
B.
SECTION 1.02 Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. Unless the context requires otherwise, the
words "include," "includes" and "including" shall be deemed to be followed by
the phrase "without limitation." The term "hereunder" shall mean this entire
Agreement as a whole unless reference to a specific section of this Agreement is
made.
ARTICLE II
General Provisions
SECTION 2.01 Formation. The Members hereby confirm and ratify
the formation of the LLC by the filing and recordation of the Certificate with
the Delaware Secretary of State in accordance with the LLC Act. The LLC and the
Members hereby forever discharge the organizer of the LLC, and the organizer
shall be indemnified by the LLC from and against, any expense or liability
actually incurred by the organizer by reason of having been the organizer of the
LLC.
SECTION 2.02 Name. The LLC shall conduct its activities under
the name of Ardent Health Services LLC or such other name as the Board
determines; provided. that its name for corporate purposes shall always contain
the words "Limited Liability Company" or the letters "L.L.C." or "LLC." Prompt
notice of any such change shall be given to each Member.
SECTION 2.03 Term. The term of the LLC commenced on the date
of the filing of the Certificate and shall be perpetual, unless sooner dissolved
in accordance with Article VII; provided, that this Agreement shall remain in
full force and effect notwithstanding the dissolution of the LLC.
SECTION 2.04 Purpose; Power. The purpose of the LLC is to
engage in any lawful business or activity. The LLC shall possess and may
exercise all powers and privileges necessary, suitable or convenient to the
conduct, promotion or attainment of its purpose.
SECTION 2.05 Registered and Principal Offices; Registered
Agent. The LLC shall maintain a registered office at Corporation Service
Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle/County,
Delaware 19808, or such other office within the State of Delaware as the Board
determines. The LLC shall maintain an office and principal place of business at
such place as the Board may determine. The name and address of the LLC's
registered agent as of the date of this Agreement is Corporation Service
Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County,
Delaware 19808. Prompt notice of any change in the registered office, principal
place of business or registered agent shall be given to each Member.
ARTICLE III
Members and Interests; Capital Contributions
SECTION 3.01 Members. Annex A contains the name, address and
facsimile number of each Member, the aggregate Capital Contribution actually
made by each Member as of any date and the Class and number of Units of each
Class held by each Member as of any date. Annex A shall be revised by the Board
from time to time to reflect the admission or withdrawal of a Member or the
issuance, transfer, assignment, redemption, forfeiture or relinquishment to the
LLC or other cancellation of Units in the LLC in accordance with the terms of
this Agreement and other modifications to or changes in the information set
forth therein.
SECTION 3.02 Rights and Privileges of Initial Classes of
Units. (a) There is hereby created a class of Units designated as "8% Cumulative
Redeemable Preferred Units." Each Redeemable Preferred Unit shall be identical
in all respects and shall entitle the holders thereof to the same rights,
interests, preferences and privileges of the Redeemable Preferred Units as set
forth herein and on Annex C. To the extent that the provisions of Annex C
conflict with the provisions contained in the body of this Agreement, Annex C
shall control. Ownership of a Redeemable Preferred Unit shall not entitle the
Member holding such Unit to vote on matters to be voted on by Members generally,
except as otherwise provided by applicable law.
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(b) There is hereby created a class of Units designated
as "Common Units." Each Common Unit shall be identical in all respects and shall
entitle the holders thereof to the same rights, interests, preferences and
privileges of the Common Units as set forth herein. Ownership of a Common Unit
shall entitle the Member holding such Unit to one vote on matters to be voted on
by Members generally.
(c) All Redeemable Preferred Units and Common Units
issued hereunder shall be issued in the form of certificated Units unless
otherwise determined by the Board.
SECTION 3.03 Capital Contributions. (a) This Agreement is
being executed and delivered concurrently with each of the Initial Members
making a Capital Contribution to the LLC consisting of shares of BHC Common
Stock (having a fair market value of $3.43 per share), in exchange for 0.5 of a
Common Unit and 0.5 of a Redeemable Preferred Unit for each share of BHC Common
Stock so contributed, in each case in the aggregate amounts set forth opposite
the name of each such Initial Member on Annex D.
The proceeds of such Capital Contributions and any subsequent
Capital Contributions by Members shall be used to fund the LLC's expenses
associated with the expansion of its business, general working capital purposes
and as otherwise specified by the Board.
(b) Other than as expressly set forth in Article V or
Section 7.3, no Member (in such capacity) shall be (i) entitled to any interest
or compensation by reason of being a Member or (ii) required to lend any funds
to the LLC or required to make any additional Capital Contribution.
(c) Except as required by applicable law, no Member shall
have any obligation to restore any negative balance in the Member's Capital
Account upon liquidation of the LLC. No Member shall be entitled to withdraw all
or any part of its Capital Contributions except as expressly provided in this
Agreement.
SECTION 3.04 Additional Issuance of Units, New Class of Units
and Securities. (a) Subject to the provisions herein, the Board is authorized in
its discretion to cause the LLC to issue, on such terms as the Board shall
determine, additional Units representing additional Interests, which Units may
be of a same or different Class from those Units which are outstanding prior to
such issuance, at any time or from time to time to existing Members or to other
Persons and to admit such other Persons to the LLC as Additional Members subject
to the terms and conditions of this Agreement. Subject to the provisions herein,
the Board shall have sole and complete discretion to determine whether to cause
the LLC to issue a new Class or Classes of Units and in determining the
consideration and terms and conditions with respect to any future issuance of a
new Class of Units. Subject to the provisions herein, the Board may, in its sole
and complete discretion, provide that such new Class or Classes of Units are to
be entitled to receive distributions from the LLC other than as currently
specified in Article V and Section 7.03 (in which event Article V and Section
7.03 shall be modified by the Board in order to reflect such terms). Subject to
the provisions herein, the Board shall have sole and complete discretion to
cause the LLC to issue one or more new Classes of Units (in addition to the
existing Classes of Units), from time to time in one or more Classes or one or
more series of such
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Classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, as shall be fixed by the
Board in the exercise of its sole and complete discretion, including (i) the
allocation of items of LLC income, gain, loss, deduction and credit to each such
Class or series of Units; (ii) the rights of each such Class or series of Units
upon dissolution and liquidation of the LLC; (iii) the price at which and the
terms and conditions, if any, upon which each such Class or series of Units of
the LLC may be redeemed by the LLC; (iv) the rate at which and the terms and
conditions upon which each such Class or series of Units may be converted into
another Class or series of Units of the LLC; (v) the terms and conditions upon
which each such Class or series of Units shall be issued, subject to repurchase,
and assigned or transferred; and (vi) the right of each such Class or series of
Units to vote on LLC matters, including matters relating to the relative rights,
preferences and privileges of each such Class or series. Subject to the
provisions herein, upon or prior to the issuance of any Class or series of Units
which shall not be identical to any Class or series of Units issued to the
Members as of the date of this Agreement, the Board may amend any provision of
this Agreement and any person authorized by the Board (an "Authorized Person")
may execute, swear to, acknowledge, deliver, file, publish and/or record such
amendments and other documents as the Board may in its reasonable discretion
determine to be necessary in connection therewith in order to reflect the
authorization and issuance of each such Class or series of Units and the
relative rights and preferences as to the matters set forth in the preceding and
succeeding sentences; provided, that with respect to any such issuance of any
Class or series of Units not identical to any Class or series of Units issued to
Members as of the date of this Agreement, the Board shall take such actions and
make such amendments or modifications hereto and to any other necessary
agreement so as to preserve the rights, preferences and privileges of the
Members provided for hereunder. Subject to the provisions herein, the Board is
also authorized to cause the LLC to issue any other type of security that is not
an equity interest in the LLC from time to time to existing Members or to other
Persons on terms and conditions established in the sole and complete discretion
of the Board. The Board shall do (or cause the LLC to do) all things it deems to
be appropriate or necessary to comply with the LLC Act in connection with any
future issuance and is authorized and directed to do all things it deems to be
necessary or advisable in connection with any future issuance, including
compliance with any statute, rule, regulation or guidelines of any federal,
state or other governmental entity or agency. Upon the issuance of any
additional Units pursuant to this Section, the Board shall amend Annex A to
reflect such issuance. Notwithstanding the foregoing, the Board shall not amend
this Agreement in any way that adversely affects, in any material respect, any
Class or series of Units in any manner differently than another Class or series
of Units without first obtaining the consent of a majority in interest of the
holders of the Class or series of Units so adversely affected. All additional
Units issued hereunder shall be issued in the form of certificated Units unless
otherwise determined by the Board.
(b) Without limiting the generality of paragraph (a)
above, it is the expectation that the Board shall establish and implement an
employee incentive program under which Units or options to acquire Units
representing 12% in the aggregate of the Common Unit Interests in the LLC may be
issued or granted to employees of the LLC or its controlled Affiliates.
Notwithstanding anything to the contrary contained herein, in addition to any
conditions or restrictions on any Class or series of Units contained in this
Agreement, any such Units or options to acquire Units may also be subject to
such other conditions and restrictions
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(including vesting) as determined by the Board and set fourth in an ancillary
instrument or agreement executed and delivered in connection with any such
issuance or grant.
SECTION 3.05 Admission of Additional Members. Any issuance or
transfer of Units to a Person who is not a Member shall be conditioned on such
Person executing and delivering to the LLC (a) a written agreement in form and
substance satisfactory to the Board whereby such Person agrees to be bound by
the terms of this Agreement and (b) such other documents or instruments as may
be required in the discretion of the Board in order to effect such Person's
admission as an Additional Member. Notwithstanding anything to the contrary in
this Section, no Person shall be admitted as an Additional Member pursuant to
this Section without the consent of the Board, which consent of the Board shall
be deemed to have been given with respect to any transferee to whom Units are
transferred in compliance with this Agreement following the receipt of the
agreement specified in clause (a) above if such transferee is not then a Member.
The admission of any Person as an Additional Member shall become effective on
the date upon which the requirements of this Section are satisfied or such other
date as may be agreed upon by the Additional Member and the LLC, in each case,
following the consent (or deemed consent) of the Board to such admission (or an
Authorized Person's receipt of notice of a permitted transfer of a Unit pursuant
to Article VIII). The Board shall cause the name of the Person to be admitted
as an Additional Member to be recorded on the books and records of the LLC,
promptly following the consent (or deemed consent) of the Board to such
admission (or an Authorized Person's receipt of notice of a permitted transfer
of a Unit pursuant to Article VIII). For purposes of the foregoing, deemed
consent shall be effective upon completion of the transfer or exercise giving
rise to such deemed consent.
SECTION 3.06 Effect of this Agreement on Non-Signatories. This
Agreement shall be binding on and inure to the benefit of all holders of Units
whether or not such holders are signatories to this Agreement and regardless of
when or how such holders acquired their Units.
SECTION 3.07 Cancellation of Units. Any Units that are (a)
exchanged for assets distributed or otherwise transferred by the LLC, or (b)
forfeited or relinquished to, or repurchased by, the LLC shall in each case be
deemed to be canceled and no longer outstanding.
SECTION 3.08 Meetings of Members; Manner of Acting. (a) The
Members may, but shall not be required to, hold annual, periodic or other formal
meetings. However, meetings of the Members for any purpose with respect to which
the Members are entitled to act may be called by the Board or any Member or
group of Members holding greater than a 15% Interest in our Common Units at any
time, and notice of a meeting shall be issued by the Board within 10 days after
receipt of a written request for such meeting. Any such request shall state the
purpose of the proposed meeting and the matters proposed to be acted upon at
that meeting. Meetings shall be held not less than 10 days nor more than 60 days
after receipt of the notice thereof and shall be held at the principal office of
the Company. In addition, the Board may, and, upon receipt of a request by a
Member in writing shall, submit any matter upon which the Members are entitled
to vote to the Members for a vote by written consent without a meeting. Except
as otherwise expressly provided herein, a majority in interest of the Members
holding Common Units shall be required and shall be sufficient for the approval
of any matter submitted for a vote of Members.
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(b) Notification of any meeting to be held pursuant to
paragraph (a) above shall be given to each Member at its record address or fax
number for such Member listed on Annex A (as such address or fax number may be
revised from time to time in accordance with Section 10.04). Such notice shall
state the place, date and hour of the meeting, and shall indicate that the
notice is being issued at or by the direction of the Member or Managers calling
the meeting. The notice shall state the purpose or purposes of the meeting. If a
meeting is adjourned to another time or place, and if an announcement of the
adjournment of time or place is made at the meeting, it shall not be necessary
to give notice of the adjourned meeting. The presence in person or by proxy of a
majority in interest of the Members holding Common Units shall constitute a
quorum at all meetings of the Members; provided, however, that if there be no
such quorum, holders of a majority in interest of the Members holding Common
Units so present or so represented may adjourn the meeting from time to time
without further notice, until a quorum shall have been obtained. Any Member that
attends a meeting or is represented by proxy shall be deemed to have waived
notification of the time, place and purpose of the meeting, except that a Member
shall not be deemed to have waived such notification if it appears for the
express purpose of challenging the transaction of business on the grounds that
the meeting is not lawfully convened and states its challenge for the record. No
notice of the time, place or purpose of any meeting of Members need be given to
any Member entitled to such notice that, in a writing executed an filed with the
records of the meeting, either before or after the time thereof, waives such
notice.
(c) For the purposes of determining the Members entitled
to vote at any meeting of the Members or any adjournment thereof, or to vote by
written consent without a meeting, and the extent of such Member's Percentage
Interest, the Board or the Members requesting such meeting or vote may fix, in
advance, a date as the record date for such determination. Such date shall not
be more than 60 days nor less than 10 days before any such meeting or submission
of a matter to the Members for a vote by written consent.
(d) Each Member shall be entitled to vote: (i) at a
meeting, in person, by written proxy or by a signed writing directing the manner
in which it desires that its votes be cast, which writing must be received by
the Board prior to such meeting, or (ii) without a meeting, by a signed writing
directing the manner in which it desires that its votes be cast, which writing
must be received by the Board prior to the date upon which the votes of the
Members are to be counted. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Member or its attorney-in-fact
executing it. Only the votes of Members of record on the notice date or such
other record date as may be set pursuant to paragraph (c) above, whether at a
meeting or otherwise, shall be counted. In connection with any such vote, the
Board shall be empowered to establish reasonable rules pertaining to the
validity and use of proxies by Members.
(e) At each meeting of Members, the Members present or
represented by proxy shall appoint such officers and adopt such rules for the
conduct of such meeting as they shall deem appropriate.
(f) Any Member may participate in a meeting of the
Members by means of a conference telephone or similar communications equipment
allowing all persons participating in
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the meeting to hear each other at the same time. Participation by such means
shall constitute presence in person at a meeting.
ARTICLE IV
Management and Operation of the LLC; Indemnification
SECTION 4.01 Board of Managers. (a) Except as otherwise
provided herein, the management, control and operation of the LLC shall be
vested exclusively in the Board, and no Member shall have any right to
participate in or exercise control or management power over the business and
affairs of the LLC.
(b) The Board has, subject to the terms of this
Agreement, general supervision, direction and control of the business of the
LLC. The Board shall have, subject to the terms of this Agreement, the general
powers and duties (including fiduciary duties) typically applicable to the board
of directors of a corporation and all other powers and duties over the LLC and
its business. Except as otherwise provided herein, the Board shall have full
power and authority and absolute discretion to do all things deemed necessary or
desirable by it to conduct the business of the LLC on behalf and in the name of
the LLC, including, without limitation, with respect to the management of, and
the exercise of, all voting rights associated with the LLC's ownership of
securities (including, without limitation, the nomination, voting and
appointment of directors and officers) and other investments in and/or loans to
the LLC and its controlled Affiliates or employees of the LLC and its controlled
Affiliates (including, without limitation, determining the timing and terms of
the disposition of any securities, other investment or loan).
(c) Except as expressly provided otherwise in this
Agreement or the LLC Act, the Board shall have sole power and authority to act
on all matters that require the approval of the Members (so that the approval of
the Board shall constitute all required Member approval) and no Member shall
have any right to vote on such matter and such acts shall be subject only to the
approval of the Board (and such approval shall be valid for all purposes of the
LLC Act). Any merger or consolidation of the LLC with or into any other Person
or the sale of all or substantially all the assets of the LLC shall be subject
to the approval of the Board and the approval of a majority in interest of the
Members holding Common Units (and such approval shall be valid for all purposes
of the LLC Act). Each Authorized Person has the power and authority to bind the
LLC with respect to any matter that has been authorized in accordance with this
Agreement and no Member (other than the Member in its capacity as an Authorized
Person) shall have the power or authority to bind the LLC on any matter.
(d) The authorized number of individuals on the Board
shall be such number as determined from time to time by the Board in accordance
with this paragraph (d) and shall initially be six. Each individual on the Board
is referred to herein as a "Manager". The Board may from time to time determine
to increase its size for the purpose of adding additional independent Managers
(in addition to the one specified in paragraph (e) below); provided, that WCAS
IX shall have the right to designate one additional Manager (in addition to the
three specified in paragraph (e) below) for each additional independent Manager
added as aforesaid.
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(e) The Board shall be comprised of (i) three Managers
(or such greater number as determined in accordance with paragraph (d) above)
designated by WCAS IX, who shall initially be Russell L. Carson, D. Scott
Mackesy and Ken Melkus, (ii) one Manager designated by FFT, who shall initially
be Carlos Ferrer, (iii) the President and Chief Executive Officer and (iv) one
independent Manager (or such greater number as shall have been determined by the
Board pursuant to paragraph (d) above) designated by a majority in interest of
the Members holding Common Units. The right of each of WCAS IX and FFT to
designate Manager(s) as aforesaid shall continue for so long as each such party
or any of its Affiliate Transferees, respectively, continues to be a Member.
(f) If a Member is no longer entitled to designate a
Manager(s) pursuant to clauses (i) or (ii) of paragraph (e) above, then the
Manager(s) designated by such Member shall immediately resign or otherwise be
removed by the Board and a majority in interest of the Members holding Common
Units shall be entitled to designate such Manager(s).
(g) The Board shall have the authority to designate
members to the boards of directors or other governing bodies of any entity for
which the Company shall have the right to do so.
(h) Committees of the Board shall be created only upon
the approval of a majority of the members of the Board; provided, that subject
to paragraph (e) above, a minimum of one Manager designated by WCAS IX shall be
entitled to serve on each such committee (unless the Managers designated by WCAS
IX waive such requirement).
(i) Any Manager designated by a Member as set forth above
may be removed from the Board with or without cause only by such designating
Member and replaced by the Member so removing its designee.
(j) Meetings of the Board and any committee thereof shall
be held at the principal office of the LLC or at such other place as may be
determined by the Board or such committee. Regular meetings of the Board shall
be held on such dates and at such times as shall be determined by the Board.
Special meetings of the Board or any committee thereof may be called by a
majority of the Managers on the Board or such committee on at least five days'
prior written notice to the other Managers, which notice shall state the purpose
or purposes for which such meeting is being called. The actions taken by the
Board or any committee at any meeting (as opposed to by written consent),
however called and noticed, shall be as valid as though taken at a meeting duly
held after regular call and notice if, either before, at or after the meeting,
any Manager as to whom notice was improperly provided signs a written waiver of
notice or a consent to the holding of such meeting or an approval of the minutes
thereof. The actions taken by the Board or any committee thereof may be taken by
vote of the Board or of such committee at a meeting of the Managers (or, in the
case of a committee, the Managers that are members thereof) or by written
consent so long as such consent is signed by all the Managers (or, in the case
of a committee, all the Managers that are members thereof). A meeting of the
Board or any committee thereof may be held by conference telephone or similar
communications equipment by means of which all individuals participating in the
meeting can be heard.
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(k) Each Manager shall have one vote on all matters
submitted to the Board or any committee thereof on which such Manager serves
(whether the consideration of such matter is taken at a meeting or by written
consent). Except as otherwise provided herein, the affirmative vote (whether by
proxy or otherwise) of Managers holding a majority of the votes of all Managers
shall constitute the act of the Board if taken-at a meeting. Except as otherwise
provided by the Board when establishing any committee, the affirmative vote
(whether by proxy or otherwise) of members of such committee holding a majority
of the votes of all members of such committee shall constitute the act of such
committee if taken at a meeting.
SECTION 4.02 Officers. (a) The officers of the LLC shall
include (i) a Chairman, who shall initially be Russell L. Carson, (ii) a
President and Chief Executive Officer, who shall initially be David T.
Vandewater and (iii) a Secretary/Treasurer (or a Secretary and a Treasurer), and
such other officers with powers and duties consistent with this Agreement as the
Board shall determine. Any two or more offices may be held by the same
individual.
(b) Each officer shall hold office for a term fixed by
the Board or until his or her successor is duly elected and qualified, or until
his or her earlier death, resignation or removal. The Board may adopt additional
eligibility requirements for the officers of the LLC.
(c) In addition to the officers, the LLC may have other
subordinate agents and employees as the Board may deem advisable, each of whom
shall hold office for such period and have such authority and perform such
duties as the Board, the President and Chief Executive Officer or any other
officer designated by the Board, may from time to time determine. The Board at
any time may appoint and remove, or may delegate to any officer, the power to
appoint and to remove, any officer, agent or employee of the LLC.
(d) The Board may delegate the duties and powers of any
officer of the LLC to any other officer or to any Manager for a specified period
of time for any reason that the Board may deem sufficient.
(e) Any officer of the LLC may be removed with or without
cause by the Board. A vacancy arising at any time in the office of an elected
officer may be filled for the unexpired term of that office by the Board.
(f) Any officer may resign at any time by giving written
notice of resignation to the Board or to the President and Chief Executive
Officer. Any such resignation shall take effect upon receipt of such notice or
at any later time specified therein. Unless otherwise specified in the notice,
the acceptance of a resignation shall not be necessary to make the resignation
effective.
(g) The Chairman (or his designee) shall preside at all
meetings of the Board.
(h) The President and Chief Executive Officer shall have
and exercise general charge and supervision of the affairs of the LLC and shall
have and exercise such authority and responsibility as is customarily associated
with the position of President and Chief Executive Officer, subject to the
ultimate control and authority of the Board and the Chairman, and shall do and
perform such other duties as may be assigned by the Board and the Chairman.
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(i) At the request of the President and Chief Executive
Officer or in the event of the President and Chief Executive Officer's absence
or disability, the vice president, if any, shall perform the duties and exercise
the powers of the President and Chief Executive Officer. The vice president
shall have such other powers and perform such other duties as the Board may
determine.
(j) The Secretary/Treasurer shall have charge of such
books, documents and papers as the Board may determine. The Secretary/Treasurer
shall keep the minutes of the meetings of the Board. The Secretary/Treasurer
shall have authority to certify the operating agreement, resolutions and other
documents of the LLC as true and correct copies thereof. The Secretary/Treasurer
shall have the custody of all funds, property and securities of the LLC which
may come into his hands. The Secretary/Treasurer shall keep or cause to be kept
complete and accurate accounts of receipts and disbursements of the LLC and
shall deposit all monies and other valuable effects of the LLC in the name and
to the credit of the LLC in such banks or depositories as the Board may
designate. Whenever required by the Board or the President and Chief Executive
Officer, the, Secretary/Treasurer shall render a statement of the accounts. The
Secretary/Treasurer may sign or countersign all contracts, agreements,
instruments and checks authorized by the Board. He shall perform all duties
incident to the office of Secretary/Treasurer, subject to the control of the
Board, and shall perform such other duties as may be assigned by the Board. In
its discretion, the Board may separate the responsibilities of the
Secretary/Treasurer into two independent offices.
(k) It is the intention of the Members that, except as
may be otherwise expressly provided in this Agreement, the officers of the LLC
shall stand in the same relation to the Board that the officers of a corporation
stand to its board of directors under the General Corporation Law of the State
of Delaware insofar as matters of authority and reporting are concerned.
SECTION 4.03 Limitation on Liability. (a) No Member nor any of
their respective members, partners or Affiliates nor any of their respective
officers, directors, employees or agents or any of the heirs, executors,
successors and assigns of any of the foregoing nor any Manager, Authorized
Person or officer of the LLC (each, an "Indemnitee") shall be liable to the LLC
or any Member for (i) any act or omission by such Indemnitee in connection with
the conduct of affairs of the LLC or otherwise incurred in connection with the
LLC or this Agreement or the matters contemplated herein, in each case unless
such act or omission resulted from gross negligence or willful misconduct of
such Indemnitee, or (ii) any mistake, negligence, dishonesty or bad faith of any
broker or other agent of the LLC unless such Indemnitee was responsible for the
selection or monitoring of such broker or agent and acted in such capacity with
gross negligence or willful misconduct in selecting or monitoring such broker or
other agent; provided, however, that nothing in this Section shall be deemed to
limit or impair any Member's ability to enforce its rights under this Agreement.
(b) To the extent that, at law or in equity, an
Indemnitee has duties (including fiduciary duties) and liabilities relating
thereto to the LLC or to any Member, such Indemnitee acting under this Agreement
shall not be liable to the LLC or to any such Member for its reasonable good
faith reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they expand or restrict the duties and liabilities
of an Indemnitee
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otherwise existing at law or in equity, are agreed by each of the Members to
modify to that extent such duties and liabilities of such Indemnitee.
SECTION 4.04 Indemnification of the Indemnitees. (a) The LLC
shall indemnify and hold harmless each Indemnitee from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including reasonable attorneys' fees and disbursements),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative,
arbitral or investigative, in which the Indemnitee was involved or may be
involved, or threatened to be involved, as a party or otherwise, arising out of
any action or inaction on the part of (i) the LLC or (ii) the Indemnitee (acting
on behalf of the LLC), in each case in connection with the business of the LLC,
this Agreement, any Member's status as a Member, any Manager's status as
Manager, any Authorized Person's status as an Authorized Person, any officer's
status as an officer of the LLC or any action taken by any Member, Manager,
Authorized Person or officer of the LLC under this Agreement or otherwise on
behalf of the LLC (collectively, "Liabilities"), regardless of whether the
Indemnitee continues to be a Member, a Manager, an Authorized Person or an
officer of the LLC, an Affiliate, or an officer, director, employee or agent of
such Member, to the fullest extent permitted by the LLC Act and all other
applicable laws; provided, that an Indemnitee shall be entitled to
indemnification hereunder only to the extent that such Indemnitee's conduct did
not constitute gross negligence or willful misconduct. The termination of any
proceeding by settlement, judgment, order, conviction, or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a presumption that
such Indemnitee's conduct constituted gross negligence or willful misconduct.
(b) Expenses incurred by an Indemnitee in defending any
claim, demand, action, suit or proceeding subject to paragraph (a) above shall,
from time to time, be advanced by the LLC prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the LLC of an
undertaking reasonably acceptable in form and substance to the Board by or on
behalf of the Indemnitee to repay such amount if it shall be determined that
such Person is not entitled to be indemnified as authorized in this Section.
(c) The indemnification provided by this Section shall be
in addition to any other rights to which an Indemnitee may be entitled under any
agreement, as a matter of law or equity or otherwise, both as to action in the
Indemnitee's capacity as a Member, as an Affiliate or as an officer, director,
employee or agent of a Member, as a Manager, as an Authorized Person or as an
officer of the LLC and as to any action in another capacity, and shall continue
as to an Indemnitee who has ceased to serve in such capacity and shall inure to
the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.
(d) At the discretion of the Board, the LLC or its
Affiliates may purchase and maintain insurance, at the LLC's or an Affiliate's
expense, on behalf of the Members, Managers, Authorized Persons and officers of
the LLC and such other Persons as the Board shall determine, against any
liability that may be asserted against, or any expense that may be incurred by,
such Person in connection with the activities of the LLC and/or the Member's,
Manager's, Authorized Person's or officer's acts or omissions as a Member, a
Manager, an Authorized Person or officer of the LLC regardless of whether the
LLC would have the power to indemnify such Person against such liability under
the provisions of this Agreement.
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(e) Any indemnification under this Section shall be
satisfied solely out of the assets of the LLC. No Member shall be subject to
personal liability or required to fund or cause to be funded any obligation by
reason of these indemnification provisions.
SECTION 4.05 Certain Restrictions on Activities. The LLC shall
use its reasonable efforts not to take any action or otherwise operate in a
manner that would cause WCAS or FFT (or any partners thereof) to recognize
"unrelated business taxable income," within the meaning of Sections 511 and 514
of the Code; provided, however, that the foregoing restriction shall not apply
to any action if (i) the Board determines that it is necessary to take such
action in the best interests of the LLC and (ii) the LLC advises each of WCAS
and FFT of any such impending action at least 20 Business Days in advance and
consults with them as to possible alternative measures, if any.
ARTICLE V
Distributions
SECTION 5.01 Distributions. Generally. (a) Subject to the
provisions of this Article V, distributions shall be made in such amounts and at
such times as the Board shall determine from time to time. Distributions of LLC
Assets that are provided for in this Article V or in Article VII shall be made
only to Persons or their designated custodians who were Members of record of
Interests in the LLC on the date determined by the Board as of which the Members
are entitled to any such distribution.
(b) Distributions in Kind.
(i) In addition to cash distributions, distributions with
respect to any Units pursuant to this Article V may be made all or in
part in distributions in kind of the assets or properties of the LLC in
the discretion of the Board and in compliance with the provisions of
this Article V.
(ii) Distributions consisting of both cash and assets in
kind shall be made, to the extent practicable, in equal proportions of
cash and assets in kind as to each Member receiving such distributions.
(iii) Except as otherwise provided in this Agreement,
assets distributed in kind shall be deemed to have been sold for their
valuation determined in accordance with Section 5.04. Upon the making
of a distribution in kind, the Capital Accounts of the Members
receiving such distribution shall be reduced by the amount of such
valuation and the Capital Accounts of the Members shall be adjusted to
reflect gain or loss deemed to have been realized in respect of the
deemed sale.
SECTION 5.02 Limitations on Distributions. The LLC shall not
make a distribution to a Member if such distribution would violate the LLC Act.
SECTION 5.03 Amounts and Priority of Distributions.
Distributions shall be made as follows:
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(a) First 100% to the holders of Redeemable Preferred
Units in accordance with the provisions of Annex C, including in the form of
preferred yield and redemption payments, pro rata to such holders in accordance
with the number of Redeemable Preferred Units held by each holder, until all the
Redeemable Preferred Units have been redeemed; and
(b) Second, thereafter, 100% to holders of Common Units,
pro rata, to such holders in accordance with the number of Common Units held by
each holder, except as otherwise required by Annex C with respect to
distributions in connection with the dissolution and winding up of the LLC.
SECTION 5.04 Valuation. All valuation determinations to be
made hereunder shall be made using a method of valuation determined by the
Board, which may (but need not) include independent appraisal, Board estimate or
other reasonable method of valuation; provided, however, that any determination
of valuation by the Board shall be made in good faith after the exercise of
reasonable business judgment. All valuation determinations which have been made
in accordance with the terms of this Section shall be final and conclusive on
the LLC, all Members and their respective successors and assigns.
ARTICLE VI
Books and Reports; Tax Matters; Capital Accounts; Allocations
SECTION 6.01 General Accounting Matters. (a) Allocations of
Net Income (Loss) pursuant to Section 6.04 shall be made by or under the
direction of the Board at the end of each Fiscal Period.
(b) In addition to any other requirements of this Article
VI, each Member shall be supplied with the LLC information necessary to enable
such Member to prepare in a timely manner its Federal, state and local income
tax returns and such other financial or other statements and reports that any
Member reasonably requests.
(c) The LLC shall keep or cause to be kept books and
records pertaining to the LLC's business showing all of its assets and
liabilities, receipts and disbursements, realized profits and losses, Members'
Capital Accounts and all transactions entered into by the LLC. Such books and
records of the LLC shall be kept at the office of the LLC and the Members and
their Managers shall at all reasonable times have free access thereto for the
purpose of inspecting or copying the same.
(d) The LLC's books of account shall be kept on an
accrual basis or as otherwise determined by the Board and in each case in
accordance with GAAP, except that for income tax purposes such books shall be
kept in accordance with applicable tax accounting principles.
(e) All determinations, valuations (subject to Section
5.04) and other matters of judgment required to be made for accounting and tax
purposes under this Agreement shall be made by or under the direction of the
Board and shall be conclusive and binding on all Members,
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former Members, their successors or legal Managers and any other Person except
for computational errors or fraud.
SECTION 6.02 Certain Tax Matters. The taxable year of the LLC
shall be the same as its Fiscal Year. The Tax Matters Member shall cause to be
prepared all federal, state and local tax returns of the LLC for each year for
which such returns are required to be filed and shall cause such returns to be
timely filed. The Tax Matters Member shall determine the appropriate treatment
of each item of income, gain, loss, deduction and credit of the LLC and the
accounting methods and conventions under the tax laws of the United States, the
several States and other relevant jurisdictions as to the treatment of any such
item or any other method or procedure related to the preparation of such tax
returns. The Tax Matters Member shall make the election to amortize
Organizational and Operating Expenses pursuant to section 709 of the Code and
the regulation promulgated thereunder. In addition, the Board in its sole and
absolute discretion, may cause the LLC to make or refrain from making any and
all other elections permitted by the tax laws of the United States, the several
states and other relevant jurisdictions (including, but not limited to, the
election provided for in section 754 of the Code). The "tax matters partner" for
purposes of section 6231(a)(7) of the Code (the "Tax Matters Member") shall be
WCAS IX. The Tax Matters Member shall have all of the rights, duties, powers and
obligations provided for in sections 6221 through 6232 of the Code with respect
to the LLC; provided, however, that the Tax Matters Member shall not settle any
tax controversy or compromise any tax liability without the prior consent of the
Board.
SECTION 6.03 Capital Accounts. There shall be established for
each Member on the books of the LLC as of the date hereof, or such later date on
which such Member is admitted to the LLC, a capital account (each being a
"Capital Account"). The LLC shall maintain records to enable separate
identification of capital contributions, allocations, revaluation events and
distributions to the extent related to separate Units. Each capital contribution
to the LLC shall be credited to the Capital Account of such Member on the date
such contribution of capital is paid to the LLC. In addition, each Member's
appropriate Capital Account shall be (a) credited with such Member's allocable
share of any Net Income of the LLC (pursuant to Section 6.04(a)) and all items
of income and gain specially allocated to such Member pursuant to Section
6.04(b), (b) debited with (i) distributions to such Member of cash or the fair
market value of other property and (ii) such Member's allocable share of Net
Loss of the LLC (pursuant to Section 6.04(a)), including expenditures of the LLC
described or treated under section 704(b) of the Code as described in section
705(a)(2)(B) of the Code, and all items of loss and deduction specially
allocated to such Member pursuant to Section 6.04(b), and (c) otherwise
maintained in accordance with the provisions of the Code. Any other item which
is required to be reflected in a Member's Capital Account under section 704(b)
of the Code or otherwise under this Agreement shall be so reflected. Capital
Accounts shall be appropriately adjusted to reflect transfers of part (but not
all) of any Class of a Member's Interest. Interest shall not be payable on
Capital Account balances. Notwithstanding anything to the contrary contained in
this Agreement, the LLC shall maintain the Capital Accounts of the Members in
accordance with the principles and requirements set forth in section 704(b) of
the Code and Regulations section 1.704-1(b)(2)(iv).
SECTION 6.04 Allocations. (a) All allocations of Net Income
(Losses) of the LLC shall be allocated under this Section among the Members,
with respect to each separate
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Class of Units held by each such Member. Except as otherwise provided in this
Section, Net Income (Losses) of the LLC shall be allocated among the Members in
a manner such that each Capital Account of each Member, immediately after making
such allocation is, as nearly as possible, equal to (i) the distributions that
would be made to such Member if the LLC were dissolved, its affairs wound up and
its assets sold for cash equal to their Carrying Value, all LLC liabilities were
satisfied (limited with respect to each nonrecourse liability to the Carrying
Value of the assets securing such liability), and the net assets of the LLC were
distributed pursuant to Section 5.03 of this Agreement to the Members
immediately after making such allocation, minus (ii) such Member's share of
Partnership Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed
immediately prior to the hypothetical sale of assets. Notwithstanding anything
to the contrary contained in this Section, to the extent that the allocations
described in the preceding sentence are insufficient to achieve the equality
contemplated by such sentence, any allocations under this Section shall be made
in the order of priority set forth in Section 5.03.
(b) Notwithstanding the provisions of this Section, net
income, net gain, and net loss of the LLC (or items of income, gain, loss,
deduction, or credit, as the case may be) shall be allocated in accordance with
the following provisions of this Section to the extent such provisions shall be
applicable.
(i) If there is a net decrease in Partnership Minimum
Gain or Member Nonrecourse Debt Minimum Gain during any Fiscal Year,
each Member that has a share of such Partnership Minimum Gain or Member
Nonrecourse Debt Minimum Gain, determined in accordance with
Regulations sections 1.704-2(g) and 1.704-2(i)(5), as of the beginning
of such year shall be specially allocated items of LLC income and gain
for such year (and, if necessary, for succeeding years) equal to such
Member's share of the net decrease in Partnership Minimum Gain or
Member Nonrecourse Debt Minimum Gain determined in accordance with such
Regulations sections. The provisions of this subparagraph (i) are
intended to comply with the minimum gain chargeback requirements of
Regulations sections 1.704-2(f) and 1.704-2(i)(4) and shall be
interpreted in accordance therewith for all purposes under this
Agreement.
(ii) Notwithstanding anything herein to the contrary, in
the event any Member unexpectedly receives any adjustments, allocations
or distributions described in paragraphs (b)(2)(ii)(d)(4), (5) or (6)
of section 1.704-1 of the Regulations, there shall be specially
allocated to such Member such items of LLC income and gain, at such
times and in such amounts as shall eliminate as quickly as possible
that portion of any deficit in its applicable Capital Account caused or
increased by such adjustments, allocations or distributions; provided,
that an allocation pursuant to this subparagraph (ii) shall be made
only if and to the extent that such Member would have a deficit Capital
Account after all other allocations provided for in this Section have
been tentatively made as if this subparagraph (ii) were not in the
Agreement.
(iii) In the event any Member has a deficit in its
applicable Capital Account at the end of any Fiscal Year which is in
excess of the sum of (A) the amount such Member is obligated to
restore, if any, pursuant to any provision of this Agreement, and (B)
the amount such Member is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations sections 1.704-2(g)(l) and
1.704-2(i)(5), each such Member
15
shall be specially allocated items of LLC income and gain in the amount
of such excess as quickly as possible; provided, that an allocation
pursuant to this subparagraph (iii) shall be made only if and to the
extent that a Member would have a deficit in its applicable Capital
Account in excess of such sum after all other allocations provided for
in this Section have been tentatively made as if subparagraph (ii)
above and this subparagraph (iii) were not in this Agreement.
(iv) Nonrecourse Deductions for any taxable period shall
be specially allocated among the Members in proportion to their
economic interests in the LLC determined pursuant to Section 5.03.
(v) Member Nonrecourse Deductions for any taxable period
shall be allocated to the Member who bears the economic risk of loss
with respect to the liability to which such Member Nonrecourse
Deductions are attributable in accordance with Regulations section
1.704-2(j).
(c) For income tax purposes only, each item of income,
gain, loss and deduction of the LLC shall be allocated among the Members in the
same manner as the corresponding items of Net Income (Loss) and specially
allocated items are allocated for Capital Account purposes; provided, that in
the case of any asset of the LLC the Carrying Value of which differs from its
adjusted tax basis for U.S. federal income tax purposes, income, gain, loss and
deduction with respect to such asset shall be allocated solely for income tax
purposes in accordance with the principles of sections 704(b) and (c) of the
Code (in any manner determined by the Board) so as to take account of the
difference between Carrying Value and adjusted tax basis of such asset.
SECTION 6.05 Tax Advances. To the extent the Board or any
Authorized Person reasonably determines that the LLC is required by law to
withhold or to make tax payments on behalf of or with respect to any Member
(e.g., backup withholding taxes) ("Tax Advances"), the LLC may withhold such
amounts and make such tax payments as so required. All Tax Advances made on
behalf of a Member shall, at the option of the Board, (i) be paid promptly to
the LLC by the Member on whose behalf such Tax Advances were made or (ii) be
repaid by reducing the amount of the current or next succeeding distribution or
distributions which would otherwise have been made to such Member or, if such
distributions are not sufficient for that purpose, by so reducing the proceeds
of liquidation otherwise payable to such Member. Whenever the Board selects
option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by
a Member, for all other purposes of this Agreement such Member shall be treated
as having received all distributions (whether before or upon liquidation)
unreduced by the amount of such Tax Advance. Each Member hereby agrees to
indemnify and hold harmless the LLC and the other Members from and against any
liability (including, without limitation, any liability for taxes, penalties,
additions to tax, interest or failure to withhold taxes) with respect to income
attributable to or distributions or other payments to such Member.
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ARTICLE VII
Dissolution
SECTION 7.01 Dissolution. The LLC shall be dissolved and
subsequently terminated upon the occurrence of the first of the following
events:
(a) determination by the Board with the approval of a
majority in interest of the holders of each Class of Units then outstanding; or
(b) the occurrence of a Dissolution Event, except the LLC
shall not be dissolved upon the occurrence of a Dissolution Event due to the
termination of the continued membership of the last Member in the LLC if within
90 days after the occurrence of such event, the Board determines to continue the
business of the LLC and consents to the admission, effective as of the date of
such event, of one or more additional Members.
SECTION 7.02 Winding-up. When the LLC is dissolved in
accordance with Section 7.01, the business and property of the LLC shall be
wound up and liquidated by the Board or, by such liquidating trustee as may be
appointed by the Board (the Board or such liquidating trustee, as the case may
be, being herein referred to as the "Liquidator"). The Liquidator shall use its
best efforts to reduce to cash and cash equivalent items such assets of the LLC
as the Liquidator shall deem it advisable to sell, subject to obtaining fair
value for such assets and any tax or other legal considerations.
SECTION 7.03 Final Distribution. Within 90 calendar days after
the effective date of dissolution of the LLC, the assets of the LLC shall be
distributed in the following manner and order:
(a) to the payment of the expenses of the winding-up,
liquidation and dissolution of the LLC; and
(b) to pay all creditors of the LLC, either by the
payment thereof or the making of reasonable provision therefor.
The remaining assets of the LLC shall be paid to the Members in proportion to
the positive balances in their respective Capital Accounts as determined in
accordance with Article VI; provided, however, that if distributions pursuant to
this Section would result in the Members receiving cumulative distributions from
the LLC that differ from the distributions that would be required under Section
5.03, then the liquidation proceeds shall be distributed in the manner
prescribed in Section 5.03. For purposes of the application of this Section and
determining Capital Accounts on liquidation, all unrealized gains, losses and
accrued income of the LLC shall be treated as realized and recognized
immediately before the date of distribution (with any valuation determinations
to be made pursuant to the terms of Section 5.04).
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ARTICLE VIII
Transfer of Member's Units
SECTION 8.01 Transfers to be Made Only as Permitted or
Required by this Agreement. (a) Without the prior written approval of the Board,
each holder of Units (other than WCAS IX) agrees that it shall not, directly or
indirectly, Transfer any Units except (i) to an Affiliate of such Member in
compliance with paragraph (b) below and Section 9.01 or (ii) pursuant to Section
8.02 or 8.03. No transfer of any such Securities owned by a Member in violation
hereof shall be made or recorded on the books of the LLC and any such transfer
shall be void and of no effect. For purposes of this Section, the term "control"
for purposes of the definition of "Affiliate" shall be deemed to require the
ownership of voting securities representing a majority of the voting power of
all outstanding voting securities of the "controlled" Person or being the
controlling investment manager, investment advisor, general partner or managing
member of such Person. Notwithstanding the foregoing, no party hereto shall
avoid the provisions of this Agreement by making one or more transfers to an
Affiliate or Affiliates and then directly or indirectly disposing of all or any
portion of such party's interest in the transferred Units or such Affiliate or
Affiliates in any subsequent transaction or by issuing or permitting the
transfer of its own equity interests to a transferee.
(b) No Member shall transfer any Securities to any Person
unless either (i) such Person is already a party to this Agreement or (ii) such
Person agrees to be bound by all of the terms and provisions of this Agreement
in accordance with Section 3.05(a).
(c) In addition to any other restrictions in this
Section, Securities may only be transferred in compliance with the rules and
regulations promulgated under the Securities Act.
SECTION 8.02 Drag-Along Right. In the event that WCAS IX and
its Affiliate Transferees propose to transfer in any single or series of related
transactions all of the Securities that they then hold in an arm's length
transaction for cash or Marketable Securities (a "Qualified Sale"). WCAS IX
shall have the right, exercisable upon not less than 20 days' prior written
notice to require that all other Members transfer all Securities held by them.
Any transfer by such other Members pursuant to this Section 8.02 shall be on the
same terms and conditions as the transfer of Securities proposed to be made by
WCAS IX and its Affiliate Transferees. Such terms and conditions shall include:
the sales price paid or deemed paid; the form of consideration; the payment of
fees, commissions and expenses; and the provision of representations, warranties
and indemnifications; provided, however, that the representations, warranties,
indemnity and expense obligations shall be provided by each Member on a pro rata
basis and each Member shall be severally and not jointly liable in connection
with the sale transaction. The only representations and warranties that the
other Members shall be required to make in such sale transaction shall be
representations and warranties with respect to title, authority, no conflicts
and any other similar customary "housekeeping" matters to the extent required by
the applicable purchaser. Each of the other Member's obligations with respect to
the indemnities and expense reimbursement shall not exceed the proceeds received
by such Member in connection with such sale transaction.
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SECTION 8.03 Conversion to Corporate Form, Merger,
Consolidation or Reorganization. In the event that the Board shall determine in
its discretion that the business of the LLC should be conducted in the form of
a corporation rather than a limited liability company, the Board shall have the
power to merge the LLC into a corporation pursuant to Section 265 of the
Delaware General Corporation Law, or effect such merger, consolidation or
reorganization, or take such other action as it may deem advisable in light of
such changed conditions, including, without limitation, requiring each Member to
transfer its Interests and related Units to a newly formed corporation or
creating one or more subsidiaries of the LLC and contributing to such
subsidiaries any or all of the assets and liabilities of the LLC and
distributing the capital stock of such subsidiary or subsidiaries pro rata to
the Members in accordance with and in exchange for their respective Percentage
Interests of each Class of Units; provided, that the Members shall receive, in
exchange for their Interests and related Units, shares of capital stock of such
corporation or other entity or its subsidiaries (x) in proportion to their
Percentage Interests of each Class of Units, subject in each case to
modifications to the provisions of Section 4.01 to conform to the provisions
relating to actions of stockholders and a board of directors set forth in the
Delaware General Corporation Law and (y) having substantially the same rights,
preferences and privileges as set forth herein (except, (1) in the case of
Redeemable Preferred Units, as otherwise set forth on Annex C, and (2) with
respect to modifications adversely affecting a particular Class of Units, for
such modifications thereto that shall have been consented to by a majority in
interest of the holders of such Class so affected). In the event of a conversion
to a corporation or other entity, upon the request of the Board, the Members
shall (i) enter into a stockholders agreement containing terms comparable to the
terms contained in the Agreement (provided, that the provisions of Sections 8.01
and 8.02 shall terminate upon the consummation of an initial public offering of
equity securities of such successor entity) and (ii) enter into a registration
rights agreement substantially in the form of Exhibit A.
ARTICLE IX
Certain Representations, Warranties and Agreements
SECTION 9.01 Representations and Warranties. Each Member
(except for a Member who receives his or her Interest pursuant to Section
3.04(b)) hereby represents, warrants and agrees as follows:
(a) If other than a natural Person, (i) such Member is
validly existing and in good standing under the laws of its jurisdiction of
organization, and has all corporate, limited liability company or partnership
power, as the case may be, and authority to enter into, deliver and perform this
Agreement and (ii) the execution and delivery of this Agreement and the
performance by such Member of its obligations hereunder have been duly and
validly authorized by all requisite corporate, limited liability company or
partnership action, as the case may be, on the part of such Member. If a natural
Person, such Member has full legal capacity and authority to execute and deliver
this Agreement and perform his or her obligations hereunder. This Agreement
constitutes the legal, valid and binding obligation of such Member, enforceable
19
against such Member in accordance with its terms, except as such enforceability
may be qualified by equitable principles and pursuant to laws enacted for the
protection of creditors.
(b) The execution, delivery and performance of this
Agreement by such Member will not violate any provision of law, any order of
any court or other agency of government, the charter and other organizational
documents of such Member, if other than a natural Person, or any provision of
any indenture, agreement or other instrument to which such Member is a party or
by which such Member or its properties or assets are bound or affected, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever (collectively, "Liens") upon any of the properties or
assets of such Member. No governmental license, consent, permit or
authorization, and no registration, declaration or filing with any governmental
authority or regulatory agency is required on the part of such Member in
connection with such Member's execution, delivery and performance of this
Agreement.
(c) If such Member is an Initial Member making an
original Capital Contribution of BHC Common Stock on the date hereof, then (i)
such Member is the lawful holder of record and beneficial owner of the number of
shares of BHC Common Stock set forth opposite such Member's name on Annex D and
(ii) the delivery by such Member of certificates evidencing such shares of BHC
Common Stock, duly endorsed for transfer or accompanied by stock transfer powers
duly endorsed in blank, to the LLC, against the issuance by the LLC of the
Redeemable Preferred Units and Common Units set forth opposite such Member's
name on Annex D, will transfer valid title to such shares to the LLC free and
clear of any and all Liens.
(d) Such Member is acquiring the Units for investment for
its own account and not with a view to, or for resale in connection with, the
distribution or other disposition thereof in violation of Federal or state
securities laws. Such Member agrees and acknowledges that it shall not, directly
or indirectly, transfer any Securities unless such transfer complies with
Section 8.01 of this Agreement and (i) the transfer is pursuant to an effective
registration statement under the Securities Act, and in compliance with
applicable provisions of state securities laws or (ii) such transfer is exempt
from registration under the Securities Act and, if reasonably requested by the
Board, counsel for such Member (which counsel shall be reasonably acceptable to
the Board) shall have furnished the LLC with an opinion, reasonably satisfactory
in form and substance to the Board, that no such registration is required
because of the availability of an exemption from such registration.
(e) Such Member acknowledges that it has been advised
that (i) the Units have not been registered under the Securities Act, (ii) the
Units must be held indefinitely and such Member must continue to bear the
economic risk of its investment in the Units unless subsequently registered
under the Securities Act or an exemption from such registration is available,
(iii) it is not anticipated that there shall be any public market for the Units,
(iv) Rule 144 promulgated under the Securities Act is not currently available
with respect to the sales of any securities of the LLC, and the LLC has not made
a covenant to make such Rule available, (v) when and if Units may be disposed of
without registration in reliance on Rule 144, any such disposition may be
limited in amount in accordance with the terms and conditions of such Rule, (vi)
if the Rule 144 exemption is not available, public sale without registration
shall require
20
compliance with Regulation D or some other exemption under the Securities Act,
and (vii) a notation shall be made in the appropriate records of the LLC
indicating that Units are subject to restriction on transfer.
(f) Such Member has been given the opportunity to obtain
all information and to ask questions and receive answers about the LLC and its
business and prospects which it deems necessary to evaluate the merits and risks
related to its investment in the Units.
(g) (i) Such Member's financial condition is such that it
can afford to bear the economic risk of holding the Units for an indefinite
period of time and has adequate means for providing for its current needs and
contingencies, (ii) such Member can afford to suffer a complete loss of its
investment in the Units, (iii) such Member's knowledge and experience in
financial and business matters are such that it is capable of evaluating the
merits and risks of its investment, either direct or indirect, in the Units as
contemplated by this Agreement and (iv) such Member is an "accredited investor"
within the meaning of Rule 501 of Regulation D under the Securities Act.
SECTION 9.02 Other Activities Permitted. Except as otherwise
provided herein, this Agreement shall not be construed in any manner to preclude
any Member or any of its Affiliates from engaging in any activity whatsoever
permitted by applicable law (whether or not such activity might compete, or
constitute a conflict of interest, with the LLC or its subsidiaries). No Member
or any of its Affiliates shall have any obligation to present or otherwise make
available to the LLC any business opportunity that such Member or any of its
Affiliates may become aware of.
ARTICLE X
Miscellaneous
SECTION 10.01 Equitable Relief. The Members hereby confirm
that damages at law would be an inadequate remedy for a breach or threatened
breach of this Agreement and agree that, in the event of a breach or threatened
breach of any provision hereof, the respective rights and obligations hereunder
shall be enforceable by specific performance, injunction or other equitable
remedy, but, nothing herein contained is intended to, nor shall it, limit or
affect any right or rights at law or by statute or otherwise of a Member
aggrieved as against another Member for a breach or threatened breach of any
provision hereof, it being the intention by this Section to make clear the
agreement of the Members that the respective rights and obligations of the
Members hereunder shall be enforceable in equity as well as at law or otherwise
and that the mention herein of any particular remedy shall not preclude a Member
from any other remedy it might have, either in law or in equity.
SECTION 10.02 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof.
SECTION 10.03 Successors and Assigns; No Third Party
Beneficiaries. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their
21
respective successors and permitted assigns. Except with respect to the rights
of Indemnities hereunder, none of the provisions of this Agreement shall be for
the benefit of, enforceable by, or confer any rights or remedies to, any
creditor or any other Person other than the parties hereto and their respective
successors and permitted assigns.
SECTION 10.04 Notices. Any notice or other communication to be
given hereunder shall be in writing and shall be (a) delivered personally, (b)
mailed by certified or registered mail, postage prepaid, return receipt
requested, (c) sent via a nationally recognized overnight courier service or (d)
sent via facsimile (followed by a copy of such notice or other communication
sent in a manner described in any of (a) through (c) above), to the address or
facsimile number of a Member set forth on Annex A (or, in the case of the LLC,
to the address or facsimile number of its principal place of business as
notified to the Members by the LLC from time to time) or to such other address
or facsimile number as any Member may provide in a written notice to the LLC, a
copy of which written notice shall be maintained on file with the LLC. All such
notices or other communications shall be deemed received (i) in the case of
personal delivery, on the date of delivery, (ii) in the case of mailing, on the
fifth business day following the date of such mailing, (iii) in the case of
overnight courier service, on the first business day following delivery to such
service and (iv) m the case of facsimile, on the day of transmission, if on a
Business Day and during business hours at the time transmitted, or on the next
Business Day, if transmitted after hours or not on a Business Day.
SECTION 10.05 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original and all of
which together shall constitute a single instrument.
SECTION 10.06 Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supercedes all prior agreements and understandings, oral and
written, among the parties, but only with respect to the subject matter
addressed herein.
SECTION 10.07 Amendments. Except as otherwise expressly
provided for herein, any amendment to this Agreement shall be effective only if
such amendment is evidenced by a written instrument duly executed and delivered
by a majority in interest of the holders of each Class of Units then
outstanding.
SECTION 10.08 Headings. The headings and captions in this
Agreement are for descriptive purposes only and shall not control or alter the
meaning of this Agreement as set forth in the text.
SECTION 10.09 SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. Each Member hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement, to the non-exclusive general
jurisdiction of the courts of the United States of America for the Southern
District of New York in New York County or, if not available, the courts of the
State of New York in New York County, and appellate courts from any thereof;
22
(b) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same to the extent permitted by applicable law;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the party,
as the case may be, at its address set forth on Annex A or at such other address
of which the other party shall have been notified pursuant hereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction for recognition and enforcement of
any judgment or if jurisdiction in the courts referenced in paragraph (a) hereof
is not available despite the intentions of the parties; and
(e) waives trial by jury in any litigation in any court
with respect to, in connection with, or arising out of this Agreement or any
other instrument or document delivered pursuant hereto, or any other claim or
dispute howsoever arising, to which the parties are party. This waiver is
informed and freely made.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
[MEMBER SIGNATURE PAGES FOLLOW]
23
MEMBER SIGNATURE PAGE TO
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
The undersigned hereby executes the Ardent Health Services LLC
Limited Liability Company Agreement (the "Agreement") dated as of August 3,
2001, authorizes this signature page to be attached as a counterpart signature
page to the Agreement and agrees to be bound thereby as a Member.
Date: August 3, 2001
WELSH, CARSON, ANDERSON & STOWE IX, L.P.
By WCAS IX Associates, L.L.C., General Partner
By /s/ Jonathan M. Rather
-----------------------------------------
Managing Member
MEMBER SIGNATURE PAGE TO
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
Each of the undersigned hereby executes the Ardent Health
Services LLC Limited Liability Company Agreement (the "Agreement") dated as of
August 3, 2001, authorizes this signature page to be attached as a counterpart
signature page to the Agreement and agrees to be bound thereby as a Member.
Date: August 3, 2001
John Almeida
Bruce K. Anderson
Russell L. Carson
John Clark
Anthony J. de Nicola
Michael Donovan
Michael Gerstner
Eric J. Lee
D. Scott Mackesy
IRA - f/b/o James R. Matthews
Thomas E. McInerney
Scott McLellan
Robert A. Minicucci
Paul B. Queally
IRA - f/b/o Jonathan M. Rather
Lawrence B. Sorrel
Sanjay Swani
Sean Traynor
Patrick J. Welsh
James B. Hoover
Andrew M. Paul
Richard H. Stowe
Laura VanBuren
By /s/ Jonathan M. Rather
------------------------------------
Jonathan M. Rather,
Individually and as Attorney-in-Fact
MEMBER SIGNATURE PAGE TO
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
The undersigned hereby executes the Ardent Health Services LLC
Limited Liability Company Agreement (the "Agreement") dated as of August 3,
2001, authorizes this signature page to be attached as a counterpart signature
page to the Agreement and agrees to be bound thereby as a Member.
Date: August 3, 2001
DE CHARTER TRUST CO., AS TRUSTEE FBO
THE IRA/ROLLOVER OF RICHARD H. STOWE
By /s/ Richard H. Stowe
--------------------------------------
Name: Richard H. Stowe
Title:
MEMBER SIGNATURE PAGE TO
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
The undersigned hereby executes the Ardent Health Services LLC
Limited Liability Company Agreement (the "Agreement") dated as of August 3,
2001, authorizes this signature page to be attached as a counterpart signature
page to the Agreement and agrees to be bound thereby as a Member.
Date: Sept. 26, 2001
FFT Partners II, L.P.
-----------------------------------
Name of Member
/s/ Carlos A. Ferrer
-----------------------------------
Signature of Authorized Signatory
Carlos A. Ferrer
-----------------------------------
Name of Authorized Signatory
Member of FFT GP II, LLC, General
Partner of FFT Partners II, L.P.
-----------------------------------
Title of Authorized Signatory
MEMBER SIGNATURE PAGE TO
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
The undersigned hereby executes the Ardent Health Services LLC
Limited Liability Company Agreement (the "Agreement") dated as of August 3,
2001, authorizes this signature page to be attached as a counterpart signature
page to the Agreement and agrees to be bound thereby as a Member.
Date: October 5, 2001
BANC AMERICA CAPITAL INVESTORS I, L.P.
--------------------------------------
Name of Member
/s/ Edward A. Balogh, Jr.
--------------------------------------
Signature of Authorized Signatory
Edward A. Balogh, Jr.
--------------------------------------
Name of Authorized Signatory
Treasurer & Vice President
--------------------------------------
Title of Authorized Signatory
MEMBER SIGNATURE PAGE TO
ARDENT HEALTH SERVICES LLC
LIMITED LIABILITY COMPANY AGREEMENT
The undersigned hereby executes the Ardent Health Services LLC
Limited Liability Company Agreement (the "Agreement") dated as of August 3,
2001, authorizes this signature page to be attached as a counterpart signature
page to the Agreement and agrees to be bound thereby as a Member.
Date: August 3, 2001
WCAS HEALTHCARE PARTNERS, L.P.
By WCAS HP Partners, General Partner
By /s/ Jonathan M. Rather
---------------------------------
Managing Member
JONATHAN M. RATHER
ATTORNEY-IN-FACT
"(Intentionally Omitted)"
A-1
"(Intentionally Omitted)"
A-2
"(Intentionally Omitted)"
A-3
"(Intentionally Omitted)"
A-4
"(Intentionally Omitted)"
A-5
"(Intentionally Omitted)"
A-6
"(Intentionally Omitted)"
A-7
"(Intentionally Omitted)"
A-8
ANNEX B
CERTAIN DEFINITIONS
"Active Trading Market" means, with respect to any security,
that such security is traded on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market, and that 20% or more of the issued and
outstanding units, shares or other equity interests of such class of security as
of such date of determination are so publicly traded.
"Additional Member" means a Person admitted as a Member
pursuant to Section 3.05 and shown as a Member on the books and records of the
LLC.
"Affiliate" means, with respect to any Person, (a) any other
Person who controls, is controlled by or is under common control with such
Person, (b) any director, officer or employee of such Person or any Person
specified in clause (a) above or (c) the spouse or lineal descendants (including
adoptees) of any such natural Person or a trust the beneficiaries of which,
or a corporation or partnership or limited liability company, the stockholders
or limited or general partners or members of which, include only such Person
and/or one or more of such Person's spouse and/or lineal descendants. As used in
this definition, the term "control" means the possession, directly or
indirectly, or as trustee or executor, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, as trustee or executor, by contract or credit arrangement
or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the
LLC shall not be deemed to be an Affiliate of any Member (or the other
Affiliates of such Member).
"Affiliate Transferee" means, with respect to any Member, such
Member and any transferee pursuant to Section 8.01(a)(i).
"Agreement" means this Agreement, including its Annexes and
Exhibits, as amended, supplemented, modified or restated in accordance with the
terms hereof.
"Authorized Person" has the meaning given such term in Section
3.04.
"BHC" means Behavioral Healthcare Corporation, a Delaware
corporation.
"BHC Common Stock" means the Common Stock, $.01 par value, of
BHC.
"Board" means the LLC's Board of Managers.
"Business Day" means a day which is not a Saturday, Sunday or
other day on which banks in New York, New York are authorized or required to be
closed.
"Capital Account" has the meaning given such term in Section
6.03.
"Capital Contribution" means the total amount of cash and the
fair market value (net of liabilities), as agreed by the Board and such Member,
of all other assets contributed to the LLC by a Member.
"Carrying Value" means, with respect to any asset of the LLC,
the asset's adjusted basis for federal income tax purposes, except that the
Carrying Values of all assets of the LLC shall be adjusted to equal their
respective fair market values, in accordance with the rules set forth in
Regulations section 1.704-l(b)(2)(iv)(f), except as otherwise provided herein,
as of: (a) the date of the acquisition of any additional Interest by any new or
existing Member in exchange for more than a de minims capital contribution or
(b) the date an Interest is relinquished to the LLC; provided, however, that
adjustments pursuant to clauses (a) and (b) above shall be made only if the
Board reasonably determines that such adjustments are necessary or appropriate
to reflect the relative economic interests of the Members. The Carrying Value of
any asset of the LLC distributed to any Member shall be adjusted immediately
prior to such distribution to equal its fair market value. The Carrying Value of
any asset contributed (or deemed contributed under Regulations section 1.704-1
(b)(2)(iv)) by a Member to the LLC shall be the fair market value of the asset
at the date of its contribution thereto.
"Certificate" has the meaning given such term in Recital A.
"Class" means the classes of Units into which the membership
interests in the LLC may be classified or divided from time to time pursuant to
the provisions of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute. Any reference herein to a
particular provision of the Code shall mean, where appropriate, the
corresponding provision in any successor statute.
"Common Units" means the Common Units having the
characteristics of Common Units set forth herein.
"Dissolution Event" means any event which would cause a
dissolution of the LLC pursuant to Section 18-801 (a)(4) or 18-801 (a)(5) of the
LLC Act.
"FFT" means FFT Partners II, L.P. and its respective
successors.
"Fiscal Period" means a Fiscal Year or other fiscal period, as
applicable.
"Fiscal Year" means the calendar year ending on December 31 of
each year, or such other fiscal year as may be designated by the Board from time
to time.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"Indemnitee" has the meaning given such term in Section 4.03.
"Initial Member" means a Person set forth on Annex D.
B-2
"Interest" means a limited liability company interest in the
LLC as provided in this Agreement and under the LLC Act and includes any and all
rights and benefits to which the holder of such Interest may be provided under
this Agreement, together with all obligations of such Person to comply with the
terms and provisions of this Agreement. Interests shall be expressed as a number
of the applicable Class of Units,
"Liabilities" has the meaning given such term in Section 4.04.
"Liquidator" has the meaning given such term in Section 7.02.
"LLC" has the meaning given such term in the preamble to this
Agreement.
"LLC Act" means the Delaware Limited Liability Company Act, 6
Del. C. Sections 18-101, et seq., as it may be amended from time to time, and
any successor to such statute.
"LLC Assets" means all right, title and interest of the LLC in
and to all or any portion of the assets and other rights and any property (real
or personal) or estate acquired in any transaction.
"Marketable Securities" means securities that are traded in an
Active Trading Market; provided, that any such securities shall be deemed
Marketable Securities only if they are freely tradable. Freely tradable for this
purpose shall mean securities that either are (a) transferable by a Member
pursuant to Section 4(1) of the Securities Act or a then effective registration
statement under the Securities Act (or similar applicable statutory provision in
the case of non-U.S. securities) or (b) transferable by the Members who are not
Affiliates of the LLC pursuant to Rule 144(k) under the Securities Act or any
successor rule thereto (or similar applicable rule in the case of non-U.S.
securities).
"Member" means a Person (a) (i) who is an Initial Member, (ii)
who is a transferee of an Interest in accordance with the provisions of Article
VIII or (iii) to whom a new Interest is issued pursuant to Sections 3.04 and, if
applicable, Section 3.05; and (b) who owns any Units of the LLC. Reference to a
"Member" shall be to any one of the Members.
"Member Nonrecourse Debt Minimum Gain" has the meaning
ascribed to "partner nonrecourse debt minimum gain" in Regulations Section
1.704-2(i)(2).
"Member Nonrecourse Deductions" has the meaning given to
"partner nonrecourse deductions" in Regulations Section 1.704-2(i)(2).
"Net Income (Loss)" for any Fiscal Period means the taxable
income or loss of the LLC for such period as determined in accordance with the
accounting method used by the LLC for federal income tax purposes with the
following adjustments: (a) all items of income, gain, loss or deduction
allocated pursuant to Section 6.04(b) shall not be taken into account in
computing such taxable income or loss; (b) any income of the LLC that is exempt
from federal income taxation and not otherwise taken into account in computing
Net Income (Loss) shall be [ILLEGIBLE] to such taxable income or loss; (c) if
the Carrying Value of any asset differs from its
B-3
adjusted tax basis for federal income tax purposes, any depreciation,
amortization or gain resulting from a disposition of such asset shall be
calculated with reference to such Carrying Value; (d) upon an adjustment to the
Carrying Value of any asset, pursuant to the definition of Carrying Value, the
amount of the adjustment shall be included as gain or loss in computing Net
Income (Loss); and (e) except for items in (a) above, any expenditures of the
LLC not deductible in computing taxable income or loss, not properly
capitalizable and not otherwise taken into account in computing Net Income
(Loss) pursuant to this definition shall be treated as deductible items.
"Nonrecourse Deductions" has the meaning given such term in
Regulations section 1.704-2(b). The amount of LLC Nonrecourse Deductions for a
Fiscal Year equals the net increase, if any, in the amount of Partnership
Minimum Gain during that Fiscal Year, determined according to the provisions of
Regulations section 1.704-2(c).
"Organizational and Operating Expenses" means all costs and
expenses of the LLC arising out of or relating to this Agreement, the
transactions contemplated hereby and the operation of the LLC, including all
fees and expenses of counsel to the LLC and the Board.
"Partnership Minimum Gain" has the meaning given such term in
Regulations section 1.704-2(b)(2) and 1.704-2(d).
"Percentage Interest" means, with respect to any Member, at
any time, such Member's Interest in the applicable Class of Units expressed as a
percentage of all Interests of all Members who hold such Class of Units,
determined by dividing the number of the applicable Class of Units owned by such
Member by the total number of such Class of Units then outstanding. The
Percentage Interests of the Members at any time with respect to each Class of
Units shall be determined by reference to Annex A (as amended from time to time
pursuant to this Agreement).
"Person" means any individual, corporation, partnership,
association, limited liability company, trust or other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
"Qualified Sale" has the meaning given such term in Section
8.02.
"Redeemable Preferred Units" means the 8% Cumulative
Redeemable Preferred Units having the characteristics of Redeemable Preferred
Units set forth herein.
"Securities" means (a) Units or (b) shares of common stock or
other equity securities of a corporation that directly or indirectly (through a
direct or indirect subsidiary) (i) merges with the LLC, (ii) succeeds to all or
substantially all of the assets of the LLC (including without limitation, via a
conversion authorized by the laws of Delaware) or (iii) whose shares are issued
to the Members of the LLC in exchange for Units.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of such similar federal statute.
B-4
"Tax Advances" has the meaning given such term in Section
6.05.
"Tax Matters Member" has the meaning given such term in
Section 6.02.
"Transfer" or "transfer" means any transfer, sale, assignment,
distribution, exchange, mortgage, pledge, hypothecation or other disposition of
any Securities or any interest therein, including transfers by operation of law
in connection with a merger transaction or otherwise.
"Unit" means a fractional share of the Interests of all
Members. Units shall be classified or divided by Class. The number and Class of
Units outstanding and the holders thereof are set forth on Annex A (as amended
from time to time pursuant to this Agreement).
"WCAS IX" means Welsh, Carson, Anderson & Stowe IX, L.P., a
Delaware limited partnership, and its successors.
B-5
ANNEX C
TERMS OF THE 8% CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
ARDENT HEALTH SERVICES LLC
These Terms of the 8% Cumulative Redeemable Preferred Units
(these "Terms") supplement the Limited Liability Company Agreement of Ardent
Health Services, LLC (the "LLC") dated as of August 3, 2001, as the same may be
amended, further supplemented, modified or restated from time to time, and
including its Annexes and Exhibits (the "LLC Agreement"). To the extent that
these Terms conflict with the terms of the LLC Agreement, these Terms shall
control. The LLC Agreement as supplemented hereby shall be read, taken and
constructed as one and the same instrument. All references to sections in these
Terms mean the sections of these Terms, except where otherwise stated.
Capitalized terms used but not defined herein have the respective meanings given
such terms in the LLC Agreement.
The designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations and restrictions thereof in respect of the 8% Cumulative Redeemable
Preferred Units are as follows:
SECTION 1. DESIGNATION.
The Units of such Class shall be designated "8% Cumulative
Redeemable Preferred Units" (the "Redeemable Preferred Units").
SECTION 2. DISTRIBUTIONS.
(a) The LLC shall accrue an amount (the "Preferred Yield") on
each Redeemable Preferred Unit with respect to each fiscal year (or portion
thereof) equal to the greater of (i) 8.0% per annum of the Redemption Price (as
defined below) and (ii) the amount of cash actually distributed with respect to
a Common Unit during such fiscal year (or portion thereof). The Preferred Yield
on each Redeemable Preferred Unit shall be cumulative (meaning that in
subsequent years the LLC shall accrue an amount equal to the greater of (x) 8.0%
of the Base Redemption Price plus the aggregate amount of the accrued and unpaid
Preferred Yield and (y) the amount of cash actually distributed with respect to
a Common Unit during such fiscal year (or portion thereof)) and shall accrue (on
the basis of a 360-day year consisting of 12 30-day months) from and after the
date such Unit is issued whether or not there are any funds of the LLC legally
available for the payment of distributions. The Preferred Yield shall cease to
accrue upon redemption of the Redeemable Preferred Units pursuant to Section 3.
The Board may fix a
record date for the determination of holders of Redeemable Preferred Units
entitled to receive payment of the Preferred Yield, which record date shall be
no more than 60 days prior to the date fixed for the payment thereof.
(b) So long as any Redeemable Preferred Units remain
outstanding, (i) without the prior written consent of a Majority in Interest of
the holders of Redeemable Preferred Units, the LLC shall not, directly or
indirectly, and whether in cash, securities or other property, pay or declare or
set apart for payment any distribution or other payment on or with respect to
any Junior Security (other than distributions payable solely in additional Units
or shares of such Junior Security) and (ii) without the prior written consent of
two-thirds in interest of the holders of Redeemable Preferred Units, pay any
moneys or make moneys available for a sinking fund for the purchase or
redemption of any Junior Securities (except for the repurchase of Units or other
equity securities from employees under an equity incentive plan approved by a
Majority in Interest of the holders of Redeemable Preferred Units), unless (A)
the total accrued Preferred Yield on all outstanding Redeemable Preferred Units
for all prior Preferred Yield periods shall have been paid in full and the total
Preferred Yield on all outstanding Redeemable Preferred Units for the
then-current Preferred Yield period shall have been paid or sufficient funds for
the payment thereof set apart, and (B) any arrears or defaults in any redemption
of Redeemable Preferred Units pursuant to Section 3 shall have been cured. For
purposes of these Terms, the term "Junior Security" means any Class or series of
Units or other equity securities of, or other equity interests in, the LLC now
existing or hereinafter created, other than any Class or series of Units or
other equity securities of the LLC created in accordance with the LLC Agreement
and these Terms and ranking pari passu with or senior to the Redeemable
Preferred Units with respect to distribution rights, rights of redemption and
rights upon liquidation.
SECTION 3. REDEMPTION.
The Redeemable Preferred Units shall not be redeemable except
as follows:
(a) Mandatory Redemption. Except in connection with the
conversion of the LLC to a corporate form pursuant to Section 8.04 of the LLC
Agreement, the LLC shall redeem (in the manner and with the effect provided in
this Section 3) all then outstanding Redeemable Preferred Units (for purposes of
this Section 3, any date on which any Redeemable Preferred Units are to be
redeemed (which date must be a Business Day) as herein provided is called a
"Redemption Date"): (i) upon the closing of a merger or consolidation of the LLC
with or into another entity in which the "beneficial ownership" of the "persons"
or "groups" currently owning a majority of the LLC's Common Units or other
common equity interests of the LLC do not continue to represent more than 50% of
the voting power of all outstanding equity securities in the surviving entity,
in substantially the same proportions, immediately after such merger or
consolidation; (ii) upon the closing of a sale or other disposition of all or
substantially all of the assets and properties of the LLC; (iii) upon an initial
public offering of the LLC registered under the Securities Act of 1933, as
amended, with gross proceeds of at least $50 million; or (iv) September 4, 2011.
The LLC shall, at least 30 days prior to the closing of any transaction
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described in clauses (i) through (iii) above, provide notice thereof to the
holders of record of Redeemable Preferred Units.
As used herein, (i) the terms "person" and "group" have the
meanings set forth in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), whether or not applicable, (ii) the term
"beneficial owner" has the meaning set forth in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable, except that a person shall be deemed to
have "beneficial ownership" of all shares or units that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time or upon the occurrence of certain events, and (iii) any
"person" or "group" will be deemed to beneficially own any voting securities of
the LLC so long as such person or group beneficially owns, directly or
indirectly, in the aggregate a majority of the voting securities of a registered
holder of the voting securities of the LLC.
(b) LLC's Right of Redemption. The LLC may, in its sole
discretion, redeem at any time and from time to time (in the manner and with the
effect provided in this Section 3), any whole number of Redeemable Preferred
Units. Not less than 30 days prior to the applicable Redemption Date, the LLC
shall provide written notice to the holders of record of the Redeemable
Preferred Units, specifying the total number of Redeemable Preferred Units to be
redeemed, the number of Redeemable Preferred Units to be redeemed from each
holder and the Redemption Date.
(c) Redemption Price. The Redeemable Preferred Units to
be redeemed on a Redemption Date shall be redeemed by paying for each Redeemable
Preferred Unit the sum of $3.43 (adjusted for any splits, dividends,
recapitalizations and the like with respect to such Units, the "Base Redemption
Price") plus the aggregate amount of the accrued and unpaid Preferred Yield
thereon to such Redemption Date, such aggregate amount, as of any date, being
herein sometimes referred to as the "Redemption Price." On and after the
Redemption Date (or, if default shall be made by the LLC in the payment of the
applicable Redemption Price, on and after the date such default is cured), the
Redeemable Preferred Units so required to be or called for redemption shall no
longer be deemed outstanding, the Preferred Yield thereon shall cease to accrue,
and all rights with respect to such Redeemable Preferred Units shall forthwith
cease.
(d) Partial Redemptions by the LLC. If the funds of the
LLC legally available for redemption of Redeemable Preferred Units on any
Redemption Date are insufficient to redeem the full number of such Units
required by this Section 3 to be redeemed on such date, those funds which are
legally available shall be used to redeem the maximum possible number of
Redeemable Preferred Units ratably from each holder whose Redeemable Preferred
Units are otherwise required to be redeemed. At any time thereafter when
additional funds of the LLC become legally available for the redemption of
Redeemable Preferred Units, such funds will be used to redeem the balance of
such Units which the LLC was theretofore obligated to redeem, ratably on the
basis set forth in the preceding sentence.
(e) Redeemed or Otherwise Acquired Redeemable Preferred
Units to Be Retired. Any Redeemable Preferred Units redeemed pursuant to this
Section 3 or otherwise
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acquired by the LLC in any manner whatsoever shall be permanently retired and
shall not under any circumstances be reissued and the number of designated
Redeemable Preferred Units shall be reduced accordingly.
SECTION 4. LIQUIDATION.
Upon any liquidation, dissolution or winding up of the LLC,
whether voluntary or involuntary, the holders of the Redeemable Preferred Units
shall be entitled, before any distribution or payment is made upon any Junior
Security, to be paid an amount equal to $3.43 per unit (adjusted for any splits,
dividends, recapitalizations and the like with respect to such Units) plus the
aggregate amount of the accrued and unpaid Preferred Yield thereon through the
date of such payment (such amounts being herein sometimes referred to as the
"Liquidation Payments"). Upon such liquidation, dissolution or winding up of the
LLC, after the holders of Redeemable Preferred Units shall have been paid in
full the amounts to which they shall be entitled the remaining net assets of the
LLC shall be distributed 90% to the holders of Junior Securities and 10% to the
holders of Redeemable Preferred Units. If upon such liquidation, dissolution or
winding up of the LLC, whether voluntary or involuntary, the assets to be
distributed among the holders of Redeemable Preferred Units shall be
insufficient to permit payment in full to such holders of the Liquidation
Payments as aforesaid, then the entire assets of the LLC to be distributed shall
be distributed ratably among the holders of the Redeemable Preferred Units.
Neither (i) the merger or consolidation of the LLC with or into any other
Person, (ii) the sale of all or substantially all of the assets of the LLC nor
(iii) the conversion of the LLC to a corporate form pursuant to Section 8.04 of
the LLC Agreement, shall be deemed to be a liquidation, dissolution or winding
up the LLC for purposes of this Section 4.
*******
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"(Intentionally Omitted)"
EXHIBIT A
FORM OF
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of [____________] among
[_______], a Delaware corporation (the "Company"), and the Persons set forth on
Annex A (the "Holders"). (1) Capitalized terms used but not defined herein have
the respective meanings given such terms in the Ardent Health Services LLC,
Limited Liability Company Agreement dated as August 3, 2001, as heretofore
amended, supplemented or modified (the "LLC Agreement").
WHEREAS, pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") dated [_________________] between Ardent Health Services
LLC, a Delaware limited liability company (the "LLC"), and the Company, the LLC
was merged with and into the Company with the Company as the surviving entity
(the "Merger"); and
WHEREAS, prior to the Merger, the Holders owned certain Units
in the LLC that were converted into shares of common stock, par value
$ [________] per share (together with any successor common equity shares, the
"Common Stock"), of the Company or Common Stock Equivalents.
NOW THEREFORE, the Company and the Holders hereby agree as
follows:
1. Definitions. The following terms have the following
meanings for purposes of this Agreement:
"Business Day" means a day which is not a Saturday, Sunday or
other day on which banks in New York, New York are authorized or
required to be closed.
"Common Stock Equivalents" means any stock, warrants, rights,
calls, options, debt or other securities exchangeable or exercisable
for or convertible into Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference
to a particular section thereof shall be deemed to include a reference
to the comparable section, if any, of any such similar federal statute.
"Governmental Authority" means any nation or government, any
state or other subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or relating to government.
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(1) Annex A to include all Members of the LLC immediately prior to the
Merger who exchanged Units in the LLC for Common Stock or Common Stock
Equivalents in the Company.
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"Initial Public Offering" means the initial underwritten
public offering of Common Stock for the account of the Company pursuant
to a registration statement declared effective under the Securities
Act.
"Registrable Securities" means any Common Stock owned by any
Holder and any Common Stock which may be issued or distributed in
respect thereof by way of stock dividend or stock split or other
distribution, recapitalization or reclassification or upon the
exchange, exercise or conversion of any Common Stock Equivalent.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation, all SEC and stock exchange or National Association
of Securities Dealers, Inc. registration and filing fees and expenses,
fees and expenses of compliance with securities or blue sky laws
(including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications
of the Registrable Securities), rating agency fees, printing expenses,
messenger, telephone and delivery expenses, the fees and expenses
incurred in connection with the listing of the securities to be
registered on each securities exchange or national market system on
which similar securities issued by the Company are then listed, fees
and disbursements of counsel for the Company and all independent
certified public accountants (including, without limitation, the
expenses of any annual audit, special audit and "cold comfort" letters
required by or incident to such performance and compliance), securities
laws liability insurance (if the Company so desires), the fees and
disbursements of underwriters (including, without limitation, all fees
and expenses of any "qualified independent underwriter" required by the
rules of the NASD) customarily paid by issuers or sellers of
securities, the Company's own internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the reasonable fees and
expenses of counsel selected pursuant to Section 7 to represent the
Holders of Registrable Securities being registered in connection with
each such registration, the reasonable fees and expenses of any special
experts retained by the Company in connection with such registration,
fees and expenses of other Persons retained by the Company (but not
including any underwriting discounts or commissions or transfer taxes,
if any, attributable to the sale of Registrable Securities by Holders
of such Registrable Securities) and other reasonable out-of-pocket
expenses of the Holders.
"SEC" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act or
the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to
the comparable section, if any, of any such similar federal statute.
"WCAS IX" means Welsh, Carson, Anderson & Stowe IX, L.P. and
its Affiliates.
2. Registration on Request.
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(a) Request by WCAS IX. Upon the written request of WCAS
IX requesting that the Company effect the registration under the Securities Act
of all or part of WCAS IX's Registrable Securities, and specifying the intended
method of disposition thereof, the Company If shall promptly give written notice
of such requested registration to all other Holders of Registrable Securities,
and thereupon shall use its best efforts to effect, as expeditiously as
possible, the registration under the Securities Act of:
(i) the Registrable Securities which the Company
has been so requested to register by WCAS IX;
(ii) all other Registrable Securities which the
Company has been requested to register by any other Holders thereof by
written request received by the Company within 20 days after the giving
of such written notice by the Company in accordance with the provisions
of Section 3(a) below; and
(iii) shares of Common Stock requested to be
registered by the Company;
all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities so to be
registered.
(b) Revocation of Registration Requests. WCAS IX may, at
any time prior to the effective date of the registration statement relating to
such registration, revoke the request for Registration pursuant to Section 2(a)
by providing a written notice to the Company revoking such request and such
revocation shall be binding on all other Holders who have requested to be
included in such registration.
(c) Expenses. The Company shall pay all Registration
Expenses in connection with all registrations requested pursuant to Section
2(a). Each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a registration statement requested pursuant
to Section 2(a).
(d) Effective Registration Statement. A registration
requested pursuant to Section 2(a) shall not be deemed to have been effected
unless the registration statement relating thereto has become effective under
the Securities Act and all the Registrable Securities included in such
registration pursuant to Section 2(a) have actually been sold thereunder;
provided, further, that if, after such registration statement has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court and no shares are actually sold
thereunder, such registration shall be deemed not to have been effected.
(e) Priority in Requested Registrations Pursuant to this
Section 2. If a requested registration pursuant to Section 2(a) involves an
underwritten offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of Securities (including securities of
the Company which are not Registrable Securities) requested to be included in
such registration exceeds the number which can be sold without having an adverse
effect on the price at which such securities can be sold, the number of such
Registrable Securities
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to be included in such registration shall be included in the following order:
(i) first, the Registrable Securities owned by the Holders requesting to be
included in such registration, pro rata on the basis of the relative number of
shares of Registrable Securities owned by each such Holder at the time of such
registration, and (ii) second, the securities, if any, proposed to be sold by
the Company.
(f) Selection of Underwriters. If, in any requested
registration pursuant to Section 2(a), WCAS IX requests that such registration
shall be in the form of an underwritten offering, such offering shall be an
underwritten offering and WCAS IX shall have the right to select any nationally
recognized investment bank and manager or co-managers to administer the
offering; provided, that such banker and managers are reasonably acceptable to
the Company.
3. Piggyback Registration.
(a) Rights to Include Registrable Securities. If the
Company at any time (other than pursuant to Section 2(a)) proposes to register
any of its equity securities under the Securities Act (other than a registration
on Form S-8, Form S-4 or any successor or similar forms), whether or not for
sale for its own account or the account of any other Person, it shall each such
time, subject to the provisions of Section 3(b), give prompt written notice to
all Holders of record of Registrable Securities of its intention to do so and of
such Holders' rights under this Section 3, at least 20 days prior to the
anticipated filing date of the registration statement relating to such
registration. Such notice shall offer all such Holders the opportunity to
include in such registration statement such number of Registrable Securities as
each such Holder may request. Upon the written request of any such Holder made
within 15 days after the receipt of the Company's notice (which request shall
specify the number of Registrable Securities intended to be disposed of by such
Holder), the Company shall use its best efforts to effect the registration under
the Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holders thereof, to the extent requisite to permit
the disposition of the Registrable Securities so to be registered; provided,
that (i) if such registration involves an underwritten offering, all Holders of
Registrable Securities requesting to be included in the Company's registration
must sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to the Company (except that
indemnification obligations of the Holders shall be limited to those obligations
set forth in Section 6); and (ii) if, at any time after giving written notice of
its intention to register any securities pursuant to this Section 3(a) and prior
to the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to register
such securities, the Company shall give written notice to all Holders of
Registrable Securities and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration. No
registration effected under this Section 3 shall relieve the Company of its
obligations to effect registrations upon request under Section 2. The Company
shall pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 3, and each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to a registration statement effected pursuant to this Section 3.
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(b) Priority in Piggyback Registrations. If a
registration pursuant to Section 3(a) involves an underwritten offering by the
Company and the managing underwriter advises the Company in writing that, in its
opinion, the number of equity securities (including the Registrable Securities)
which the Company, the Holders and any other Persons intend to include in such
registration exceeds the number which can be sold without having an adverse
effect on the price at which such securities can be sold, the number of such
securities (including the Registrable Securities) to be included in such
registration shall be included in the following order: (i) first, the equity
securities the Company proposes to sell for its own account, (ii) second, the
Registrable Securities owned by the Holders requesting to be included in such
registration, pro rata on the basis of the relative number of shares of
Registrable Securities owned by each such Holder at the time of such
registration and (iii) third, the equity securities owned by any other Persons
requesting to be included in such registration, pro rata on the basis of the
relative number of securities each other Person has requested be included in
such registration or in such other manner as may be provided in the agreement
relating to such rights of such other Persons.
4. Restrictions on Public Sale by the Company and
Others. If any requested registration of Registrable Securities shall be made in
connection with an underwritten public offering, the Company agrees (i) not to
effect any public sale or distribution of any of its equity securities or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any subsidiary of
the Company or the acquisition by the Company or a subsidiary of the Company of
the capital stock or substantially all the assets of any other Person or in
connection with an employee stock option or other benefit plan) during the 15
days prior to, and during the 180-day period beginning on, the effective date of
such registration statement (except as part of such registration) and (ii) that
any agreement entered into after the date of this Agreement pursuant to which
the Company issues or agrees to issue any privately placed equity securities
shall contain a provision under which holders of such securities agree not to
effect any public sale or distribution of any such securities during the period
referred to in the foregoing clause (i), including any sale pursuant to Rule 144
under the Securities Act (except as part of such registration, if permitted).
5. Registration Procedures. If and whenever the Company
is required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company will, as expeditiously as possible:
(a) use its best efforts to prepare and file
with the SEC within 60 days (or, for registration on a Form S-3 or any
similar short-form registration statement, 30 days), after receipt of a
request for registration with respect to such Registrable Securities, a
registration statement on any form for which the Company then qualifies
or which counsel for the Company shall deem appropriate, and which form
shall be available for the sale of the Registrable Securities in
accordance with the intended methods of distribution thereof, and use
its best efforts to cause such registration statement to become and
remain effective as promptly as practicable; provided, that before
filing with the SEC a registration statement or prospectus or any
amendments or supplements thereto, the Company shall (i) furnish to
Holders of Registrable Securities to be covered by such registration
statement copies of the form of preliminary prospectus
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proposed to be filed and furnish to counsel selected pursuant to
Section 7 copies of all such documents proposed to be filed, which
documents shall be subject to the review of such counsel and shall not
be filed without the approval of such counsel and (ii) notify each
Holder of Registrable Securities covered by such registration statement
of any stop order issued or threatened by the SEC and take all
reasonable actions required to prevent the entry of such stop order or
to remove it if entered;
(b) prepare and file with the SEC 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 period of not less than 180
days or such shorter period which shall terminate when all Registrable
Securities covered by such registration statement have been sold (but
not before the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder (or any successor
provision), if applicable), 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 set forth in such registration statement;
(c) furnish to each Holder and each underwriter,
if any, of Registrable Securities covered by such registration
statement such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as such
Holder or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder;
(d) use its best efforts to register or qualify
such Registrable Securities under such other securities or blue sky
laws of such jurisdictions as any Holder, or underwriter if any, of
Registrable Securities covered by such registration statement
reasonably requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable such Holder and each
underwriter, if any, to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder,
provided, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(e) use its best efforts to cause the
Registrable Securities covered by such registration statement to be
registered with or approved by such other Governmental Authorities as
may be necessary by virtue of the business and operations of the
Company to enable the Holder or Holders thereof to consummate the
disposition of such Registrable Securities;
(f) immediately notify each Holder of such
Registrable Securities at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening
of any event which comes to the Company's attention if as a result of
such event the prospectus included in such registration statement
contains
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an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and the Company shall promptly prepare and
furnish to such Holder a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(g) use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement relating to the Registrable Securities at the earliest
possible moment;
(h) if requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in
connection with an underwritten offering, immediately incorporate in a
prospectus supplement or post-effective amendment such information as
the managing underwriters and the Holders of a majority of the
Registrable Securities being sold agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to
the principal amount of Registrable Securities being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten
(or best efforts 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 notified
of the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(i) if requested by the selling Holders,
cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
and not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such names as
the managing underwriters may request at least three business days
prior to any sale of the Registrable Securities to the underwriters;
(j) use its best efforts to cause all such
Registrable Securities to be listed on a national securities exchange,
and on each securities exchange on which similar securities issued by
the Company are then listed, and enter into such customary agreements
including a listing application and indemnification agreement in
customary form; provided, that the applicable listing requirements are
satisfied, and to provide a transfer agent and registrar for such
Registrable Securities covered by such registration statement no later
than the effective date of such registration statement;
(k) enter into such customary agreements
(including an underwriting agreement in customary form) and take all
such other actions as the Holders of a majority of the Registrable
Securities being sold or the underwriters retained by such Holders, if
any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities, including customary
indemnification;
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(l) make available for inspection by any Holder
of Registrable Securities covered by such registration statement, any
underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such Holder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, if any,
as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's and its subsidiaries'
officers, directors and employees to supply all information and respond
to all inquiries reasonably requested by any such Inspector in
connection with such registration statement;
(m) use its best efforts to obtain (i) an
opinion or opinions of counsel to the Company and (ii) a "cold comfort"
letter or letters from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by opinions and "cold comfort" letters as the Holders of a
majority of the Registrable Securities being sold reasonably request;
(n) otherwise comply with all applicable rules
and regulations of the SEC, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering a
period of at least twelve months, beginning with the first month after
the effective date of the registration statement (as the term
"effective date" is defined in Rule 158(c) under the Securities Act),
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder or any successor
provisions thereto; and
(o) promptly prior to the filing of any document
which is to be incorporated by reference into the registration
statement or the prospectus (after initial filing of the registration
statement), provide copies of such document to counsel to the selling
Holders of Registrable Securities and to the managing underwriters, if
any, make the Company's representatives available for discussion of
such document and make such changes in such document prior to the
filing thereof as counsel for such selling Holders or underwriters may
reasonably request.
It shall be a condition precedent to the obligation of the
Company to take any action pursuant to this Agreement in respect of the
securities which are to be registered at the request of any Holder of
Registrable Securities that such Holder shall furnish to the Company such
information regarding the securities held by such Holder and the intended method
of disposition thereof as the Company shall reasonably request in connection
with such registration.
Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(f), such Holder shall forthwith discontinue disposition
of Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder receives the copies of the prospectus
supplement or amendment contemplated by Section 5(f), and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession, of
the prospectus covering [ILLEGIBLE] Registrable Securities current at the time
of receipt of such notice. In the event the Company shall give any such notice,
the period mentioned in Section 5(b) shall be extended by
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the greater of (i) three months or (ii) me number of days during the period from
and including the date of the giving of such notice pursuant to Section 5(f) to
and including the date when each Holder of Registrable Securities covered by
such registration statement shall have received the copies of the prospectus
supplement or amendment contemplated by Section 5(f).
6. Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act pursuant
to Section 2 or 3, the Company shall, and it hereby does, indemnify and hold
harmless, to the full extent permitted by law, each of the Holders of any
Registrable Securities covered by such registration statement, its directors and
officers, employees, general partners, limited partners, members, managing
members, advisory directors and managing directors (and directors, managers,
managing members, members, officers, partners, advisory directors and managing
directors thereof), each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls,
is controlled by or is under common control with such Holder or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the Company's
consent) to which such Holder, any such director, officer, general or limited
partner, manager, managing member, member, advisory director or managing
director or any such underwriter or controlling Person may become subject under
the Securities Act, state securities or blue sky laws, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) or expenses arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained,
on the effective date thereof, in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto,
(ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or (iii) any violation by the Company of any federal or state rule or regulation
applicable to the Company and relating to action required of or inaction by the
Company in connection with any such registration, and the Company shall
reimburse such Holder and each such director, officer, employee, general
partner, limited partner, manager, managing member, member, advisory director,
managing director or underwriter and controlling Person for any legal or any
other expenses reasonably incurred by them as such expenses are incurred in
connection with investigating or defending such loss, claim, liability, action
or proceeding; provided, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or omission made in such registration statement or amendment or
supplement thereto or in any such preliminary, final or summary prospectus in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such Holder or any such director,
officer, employee, general or limited partner, manager, managing member, member,
advisory director, managing director or underwriter specifically stating that it
is for use in the preparation thereof. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such Holder
or any such director, officer, employee, general partner, limited partner,
manager, managing member, member, advisory director, managing director,
underwriter or controlling Person and shall survive the transfer of such
securities by such Holder.
A-9
(b) lndemnification by the Holders and Underwriters. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed in accordance with Section 2 or 3, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Registrable Securities or any underwriter, to indemnify and
hold harmless, severally and not jointly, (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 6) the Company and its
directors, officers, employees, controlling Persons and all other prospective
sellers and their respective directors, officers, general and limited partners,
managers, managing members, managing directors, and their respective controlling
Persons with respect to any statement in or omission from such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement, if such statement or omission was made in reliance
upon and in conformity with written information provided to the Company or its
representatives through an instrument duly executed by or on behalf of such
Holder or underwriter specifically stating that it is for use in the preparation
of such registration statement, preliminary, final or summary prospectus or
amendment or supplement, or a document incorporated by reference into any of the
foregoing. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any of the Holders,
underwriters or any of their respective directors, officers, employees, general
or limited partners, managers, managing members, members, advisory directors,
managing directors or controlling Persons and shall survive the transfer of such
securities by such Holder; provided, however, that no such Holder shall be
liable under this Section 6 for any amount in excess of the net proceeds
actually received by such Holder from the sale of Registrable Securities
effected pursuant to such registration statement or prospectus.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, promptly give written
notice to the latter of the commencement of such action; provided, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subsections of this Section 6, except to the extent that the indemnifying party
is actually materially prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, to the extent that it
may wish, 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 shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties arises in respect of such claim after the
assumption of the defense thereof, and the indemnifying party shall not be
subject to any liability for any settlement made without its consent (which
consent shall not be unreasonably withheld). No indemnifying party shall consent
to entry of any judgment or enter into any settlement of any pending or
threatened proceeding which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to all indemnified parties of a release
from all liability in respect to such
A-10
[?] or litigation. Notwithstanding anything to the contrary contained
herein, an indemnifying party shall not be obligated to pay the fees and
expenses of more than one counsel (together with appropriate local counsel) for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional counsel
or counsels (together with the fees of appropriate local counsel).
(d) Contribution. If the indemnification provided for in
this Section 6 is unavailable to an indemnified party under Section 6(a) or
Section 6(b) (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other, and the relative fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party on the one hand and of the indemnified party on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or [?]
omission to state a material fact relates to information supplied by the
indemnifying party [?] the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, for purposes of this Section 6(d), any legal
or other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim.
The Company and each Holder of Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this Section
6(d) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
6(d), an indemnifying Holder shall not be required to contribute any amount in
excess of the amount by which the net proceeds actually received by such Holder
from the sale of Registrable Securities sold by such indemnifying Holder exceeds
the amount of any damages which such indemnifying Holder has otherwise been
required to pay by reason of such untrue statement or omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
7. Selection of Counsel. In connection with any
registration of Registrable Securities pursuant to Section 2(a) or 3, WCAS IX
shall select one counsel to represent all Holders of Registrable Securities
covered by such registration; provided, however, that if the [?] selected as
provided above is also acting as counsel to the Company in connection with
A-11
such registration, the other Holders shall be entitled to select one additional
counsel to represent all such other Holders.
8. Termination. The right of any Holder to request
registration of Registrable Securities under Section 3 shall terminate on the
date on which all Registrable Securities beneficially owned by such Holder may
thereafter be sold under Rule 144(k) under the Securities Act.
9. Miscellaneous.
(a) Remedies. The Company and the Holders acknowledge and
agree that in the event of any breach of this Agreement by any of them, the
Holders and the Company would not be made whole by monetary damages. Each party
accordingly agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate and that the parties, in addition to any
other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
(b) Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof.
This Agreement supersedes all prior agreements and understanding among the
parties with respect to the subject matter hereof.
(c) Notices. Any notice or other communication to be
given hereunder shall be in writing and shall be (i) delivered personally, (ii)
mailed by certified or registered mail, postage prepaid, return receipt
requested, (iii) sent via a nationally recognized overnight courier service or
(iv) sent via facsimile (followed by a copy of such notice or other
communication sent in a manner described in any of (i) through (iii) above), to
the address or facsimile number of the receiving party set forth on Annex A (or,
in the case of the Company, to the address or facsimile number of its principal
place of business as notified to the other parties by the Company from time to
time) or to such other address or facsimile number as the receiving party may
provide in a written notice to the Company, a copy of which written notice shall
be maintained on file with the Company. All such notices or other communications
shall be deemed received (A) in the case of personal delivery, on the date of
delivery, (B) in the case of mailing, on the fifth business day following the
date of such mailing, (C) in the case of overnight courier service, on the first
business day following delivery to such service and (D) in the case of
facsimile, on the day of transmission, if on a Business Day and during business
hours at the time transmitted, or on the next Business Day, if transmitted after
hours or not on a Business Day.
(d) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to the conflict of law rules of such state.
(e) 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 any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
shall be enforceable to the fullest extent permitted by law.
A-12
(f) Other Agreements. Nothing contained in this Agreement
shall be deemed to be a waiver of, or release from, any obligations any party
may have under, or any restrictions on the transfer of Registrable Securities or
other securities of the Company imposed by, any other agreement.
(g) Successors; Assigns; Transferees. The provisions of
this Agreement shall be binding upon and accrue to the benefit of the parties
and their respective heirs, successors and permitted assigns. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Agreement which are for the benefit of the parties (other than the Company)
shall also be for the benefit of and enforceable by any Person acquiring
Registrable Securities from a Holder, subject to the provisions contained
herein.
(h) Amendments, Waivers. This Agreement may not be
amended, modified or supplemented and no waivers of or consents to departures
from the provisions hereof may be given unless consented to in writing by the
Company, WCAS IX and the Holders of a majority of the Registrable Securities
then outstanding; provided, however, that no amendment, modification, supplement
or waiver that would adversely affect the rights of any Holder, in its capacity
as a Holder, without similarly affecting the rights hereunder of all Holders in
their capacities as Holders (other than with respect to the percentage of
Registrable Securities owned by such holder), shall be effective as to such
Holder without its prior written consent. Notwithstanding the foregoing, a
waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a registration statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by the Holders of a majority of the principal amount of the Registrable
Securities being sold.
(i) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same Agreement.
(j) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to occur, with respect
to the Registrable Securities which would (i) adversely affect the ability of
the Holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement or (ii) adversely affect
the marketability of such Registrable Securities in any such registration.
(k) Rule 144. If the Company is subject to the
requirements of Section 13, 14 or 15(d) of the Exchange Act, the Company
covenants that it shall file all reports required to be filed by it under the
Securities Act and the Exchange Act so as to enable Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as Rule 144
may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Holder, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements. Anything to the contrary contained in this Section 9(1)
notwithstanding, the Company may de-register any of its securities under the
Exchange Act if it is then permitted to do so pursuant to the Exchange Act.
A-13
(l) Registration Rights. The Company covenants that it
shall not grant any right of registration under the Securities Act relating to
any of its shares of capital stock or other securities to any Person other than
pursuant to the terms of this Agreement unless Holders of Registrable Securities
shall be entitled to have included in any registration effected by such Person
or Persons all Registrable Securities requested by the Holders to be so included
prior to the inclusion of any securities requested to be registered by such
Person or Persons.
(m) Cancellation of Pre-Existing Registration Rights.
Each party agrees that any registration rights granted to such party prior to
the date hereof regarding the securities covered by this Agreement are hereby
canceled.
(n) Headings. The headings and captions in this Agreement
are for descriptive purposes only and shall not control or alter the meaning of
this Agreement as set forth in the text.
A-14
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
[NAME OF COMPANY]
By _____________________________________
Name:
Title:
[INSERT SIGNATURE BLOCKS FOR EACH HOLDER]
A-15
ANNEX A
HOLDERS
Number and Type of
Holder Address/Facsimile Number Registrable Securities
- ------------------ ------------------------ ----------------------
- ------------------ ------------------------ ----------------------
- ------------------ ------------------------ ----------------------
- ------------------ ------------------------ ----------------------
- ------------------ ------------------------ ----------------------
A-16
ARDENT HEALTH SERVICES LLC
AMENDMENT NO. 1
TO
LIMITED LIABILITY COMPANY AGREEMENT
We, the undersigned, representing a Majority in Interest of the holders
of each of the Common Units and Redeemable Preferred Units outstanding, hereby
agree as follows:
1. Reference to the Limited Liability Company Agreement: Definitions.
Reference is made to the Limited Liability Company Agreement of Ardent Health
Services LLC, dated as of August 3, 2001 (the "LLC Agreement'"). Capitalized
terms contained herein and not otherwise defined herein shall have meanings
given to them in the LLC Agreement.
2. Amendment to LLC Agreement. Pursuant to Article X, Section 10.07 of the
LLC Agreement, the LLC Agreement is hereby amended so that the first paragraph
of Section 3(a) of Annex C of the LLC Agreement is deleted in its entirety and
replaced with the following text:
(a) Mandatory Redemption. Except in connection with the
conversion of the LLC to a corporate form pursuant to Section 8.04 of
the LLC Agreement, the LLC shall redeem (in the manner and with the
effect provided in this Section 3) all then outstanding Redeemable
Preferred Units (for purposes of this Section 3, any date on which any
Redeemable Preferred Units are to be redeemed (which date must be a
Business Day) as herein provided is called a "Redemption Date"): (i)
upon the closing of a merger or consolidation of the LLC with or into
another entity in which the "beneficial ownership" of the "persons" or
"groups" currently owning a majority of the LLC's Common Units or other
common equity interests of the LLC do not continue to represent more
than 50% of the voting power of all outstanding equity securities in
the surviving entity, in substantially the same proportions,
immediately after such merger or consolidation; (ii) upon the closing
of a sale or other disposition of all or substantially all of the
assets and properties of the LLC; (iii) upon an initial public offering
of the LLC registered under the Securities Act of 1933, as amended,
with gross proceeds of at least $50 million; or (iv) August 19, 2014.
The LLC shall, at least 30 days prior to the closing of any transaction
described in clauses (i) through (iii) above, provide notice thereof to
the holders of record of Redeemable Preferred Units.
3. Governing Law. The rights of all the parties to this Amendment and the
construction and effect of each provision hereof shall be subject to the
jurisdiction of and construed according to the laws of the State of New York.
4. Counterparts: Originals. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Amendment may be
executed and delivered by telecopy or facsimile and execution in such manner
shall constitute an original.
5. Miscellaneous. Except to the extent specifically amended hereby, the
provisions of the LLC Agreement shall remain unmodified, and, subject to the
conditions contained in this Amendment, the Agreement is hereby confirmed as
being in full force and effect.
[Remainder of page intentionally left blank.]
-2-
IN WITNESS WHEREOF, the undersigned have executed this Amendment to the
LLC Agreement as of August 6th, 2003.
WELSH, CARSON, ANDERSON & STOWE IX, L.P.
By: WCAS IX Associates, L.L.C., General Partner
By: /s/ Jonathan M. Rather
--------------------------------------------
Managing Member
WCAS HEALTHCARE PARTNERS, L.P.
By: WCAS HP Partners, General Partner
By: /s/ Jonathan M. Rather
--------------------------------------------
Managing Member
John Almeida Robert A. Minicucci
Bruce K. Anderson Paul B. Queally
Russell L. Carson IRA- f/b/o Jonathan M.
John Clark Rather
Anthony J. de Nicola Lawrence B. Sorrel
Michael Donovan Sanjay Swani
Michael Gerstner Sean Traynor
Eric J. Lee Patrick J. Welsh
D. Scott Mackesy James B. Hoover
IRA - f/b/o James R. Andrew M. Paul
Matthews Richard H. Stowe
Thomas E. McInerney Laura VanBuren
Scott McLellan
By: /s/ Jonathan M. Rather
--------------------------------------------
Jonathan M. Rather,
Individually and as Attorney-in-Fact
FFC PARTNERS II, L.P.
By: FFC GP II, LLC, as General Partner
By: /s/ Carlos A. Ferrer
--------------------------------------------
Carlos A. Ferrer
Member
FFC EXECUTIVE PARTNERS II, L.P.
By: FFC EXECUTIVE GP II, LLC, as General Partner
BY: /s/ Carlos A. Ferrer
--------------------------------------------
Carlos A. Ferrer
Member
BANC OF AMERICA CAPITAL INVESTORS, L.P.
By: Banc of America Capital Management, L.P.,
as General Partner
By: BACM I GP, LLC, as General Partner
By: ____________________________________________
Walker L. Poole
Managing Director
FFC PARTNERS II, L.P.
By: FFC GP II, LLC, as General Partner
By: ____________________________________________
Carlos A. Ferrer
Member
FFC EXECUTIVE PARTNERS II, L.P.
By: FFC EXECUTIVE GP II, LLC, as General Partner
By: ____________________________________________
Carlos A. Ferrer
Member
BANC OF AMERICA CAPITAL INVESTORS, L.P.
By: Banc of America Capital Management, L.P.,
as General Partner
By: BACM I GP, LLC, as General Partner
By: /s/ Walker L. Poole
--------------------------------------------
Walker L. Poole
Managing Director