Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and executed to be effective as of the
consummation of the Merger, by and between Symbion, Inc. (the “Company”), and Richard E. Francis, Jr., an individual
and resident of Nashville, Tennessee (“Executive”).  Defined terms used herein have the meaning
attributed thereto in the text hereof or if not so defined, as set forth in Section 18.

 

RECITALS:

 

WHEREAS, the Company, Symbol Acquisition,
L.L.C., a Delaware limited liability company, and Symbol Merger Sub, Inc.,
a Delaware corporation entered into an Agreement and Plan of Merger, dated as
of April 24, 2007, (the “Merger Agreement”)
upon the consummation of which Symbol Merger Sub, Inc. will be merged with
and into the Company, with the Company as the surviving corporation;

 

WHEREAS, prior to but in connection with the
Merger, Symbol Acquisition, L.L.C. will be converted into Symbion Holdings
Corporation (the “Parent”), which
will become the parent holding company of the Company by virtue of the Merger;
and

 

WHEREAS, the Company and Executive desire to
memorialize in this Agreement the terms of Executive’s employment with the
Company effective as of the consummation of such Merger, with the understanding
that this Agreement shall supersede any and all prior agreements relating to
Executive’s employment with the Company or any Company Subsidiary in all
respects;

 

NOW, THEREFORE, in consideration of the
mutual undertakings of the parties set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive hereby agree as follows:

 

1.          Employment.  The
Company hereby employs Executive, and Executive hereby accepts employment with
the Company, on the terms and conditions hereinafter set forth.

 

2.          Term.  The
initial term of this Agreement shall commence and shall be effective as of the
consummation of the Merger, (the “Effective Date”)
and shall extend from that date for a period of three (3) years, unless
earlier terminated as provided in Section 8 of this Agreement.  At the beginning of each month after the
Effective Date in which Executive is employed by the Company, the term of this
Agreement shall automatically be extended for an additional 

 

 

month so that
the Employment Term on such date is a period of three (3) years (the
initial term and any such extensions, the “Employment Term”).

 

3.     Nature of
Duties and Responsibilities.  (a) During the
Employment Term, Executive shall be employed by the Company as its Chairman and
Chief Executive Officer and shall have such duties, powers and authority as
generally inure to those offices. 
Executive shall have the full authority and responsibility for formulating
the essential strategic plans and policies of the Company and for administering
the same.  Executive shall report to only
to the Board or any designated committee thereof, and shall not be subordinate
to any officer or employee of the Company.

 

(b)   The Company shall use its best
efforts to cause Executive to be elected to the Board of the Company and the
Parent and to be elected Chairman of the Board of the Company and the Parent,
such membership and service as Chairman to continue for so long as Executive
holds the offices set forth in Section 3(a).

 

4.     Extent of
Services.  (a) Executive shall devote his full time,
attention, skills and energies during the Employment Term to the business of
the Company.  During the Employment Term,
Executive shall not be engaged in any other business activity that conflicts
with or detracts from his duty to the Company or with the business of the
Company, whether or not such business activity is pursued for gain, profit or
other pecuniary advantage.  Notwithstanding
the foregoing, Executive may, at his option, devote reasonable time and
attention to personal investments and to civic, charitable or social
organizations as he deems appropriate. 
With the Board’s prior written consent, Executive may devote a
reasonable amount of his time to serve on the board of directors of one or more
public or private corporations, provided that such service will not interfere
with the performance of Executive’s duties hereunder and, provided further,
that the business activities of any such corporation are not competitive with
those of the Company.

 

(b)   For the avoidance of doubt,
neither the existence nor terms of this Agreement shall be deemed to preclude
Executive from performing such duties to the Company as may be required for the
Company to satisfy its obligations under the Merger Agreement.

 

5.     Location.  The
permanent place of employment of Executive shall be the corporate headquarters
of the Company located in Nashville, Tennessee. 
Executive shall not be required to relocate his place of employment more
than 35 miles from such location at any time during the Employment Term without
his prior consent, which consent may be withheld by Executive for any reason he
deems appropriate.  Executive may be
required to conduct reasonable travel in the course of the performance of his
duties on behalf of the Company.

 

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6.     Compensation.

 

(a)   For all services rendered by
Executive under this Agreement, the Company shall compensate Executive at
Executive’s current annual base rate as in effect on the date hereof; provided,
however, that effective January 1, 2008, Executive’s annual base rate
shall be increased to $525,000.

 

(b)   The annual rate of compensation
provided in Section 6(a) may be adjusted upward effective on January 1
for each year beginning after January 1, 2008 during the Employment Term
by an amount determined by the Compensation Committee of Parent’s Board of
Directors (the “Board”) in its sole
discretion.  Executive is not entitled to
any guaranteed annual increase in his rate of compensation.

 

(c)   During the Employment Term,
Executive shall be eligible to receive a bonus payment each year that is equal
to a percentage of the amount of compensation that is in effect under Section 6(a).  The percentage shall be determined by
reference to the level of achievement by Executive of the annual performance
goals that are established by the compensation committee of the Board so that
the target bonus opportunity is 100% of the amount specified in Section 6(a) if
Executive achieves at least 100% of the performance goals.  The percentage shall be reduced to correspond
to achievement that is less than 100%, provided that no bonus shall be payable
under this provision if achievement is at a level of less than 80% of the
performance goals.  The Executive shall
be eligible for additional bonus payments upon achievement of such other
performance targets that are specified by the compensation committee of the
Board.

 

(d)   The Company shall be entitled
to withhold such amounts on account of employment and payroll taxes and similar
matters required by applicable law, rule or regulation of any appropriate
governmental authority.

 

(e)   The Company shall continue to
pay Executive his compensation during any period of physical or mental incapacity
or disability, but shall not be obligated to pay Executive any compensation for
any continuous period of physical or mental incapacity or disability after
Executive is determined to be disabled by the Board, as provided in Section 8(g).

 

(f)    During the Employment Term,
the Company shall pay the reasonable expenses incurred by Executive (based on
business development objectives and within limits that may be established by
the Board) in the performance of his duties under this Agreement (or shall reimburse
Executive on account of such expenses paid directly by Executive) in accordance
with the Company’s policies and procedures promptly upon the submission to the
Company by Executive of documentation reasonably satisfactory to the Company.

 

7.     Other Benefits.

 

(a)   Executive shall be entitled to
and eligible for group health, life and disability insurance coverage,
vacation, and any other fringe benefits that 

 

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may from time
to time be available to other salaried employees of the Company. Executive may
participate in any other pension, profit sharing or other employee benefit plan
of the Company or in which the Company participates.  Any and all such benefits provided in this Section 7(a) shall
terminate on the expiration or earlier termination of this Agreement, except as
otherwise required by law or as otherwise provided herein.

 

(b)   (i)            The Company shall recommend to the Board
that, and shall use its best efforts to cause, the grant to Executive at the
Effective Date, of non-qualified options to purchase Parent common stock under
a Parent plan, with customary terms and conditions, the material terms of which
such grant are set forth on Schedule A hereto.

 

           (ii)           All
shares of common stock of the Parent and all awards convertible or exercisable
into such shares, whether acquired pursuant to Section 7(b)(i) or
otherwise, shall be subject to the terms and conditions set forth in the
Shareholders Agreement.

 

7.A. Purchased
Equity.   Executive shall invest at the Effective Time
$4,700,000 in Parent in connection with the Merger.

 

8.     Termination.

 

(a)   Termination for Cause.  Prior to the end of the Employment Term, the
Company may terminate this Agreement for Cause, without any further liability
hereunder to Executive; provided that
the Company shall pay all accrued but unpaid compensation earned to the date of
termination.

 

(b)   Termination Without Cause.  Prior to the end of the Employment Term, the
Company may terminate this Agreement other than as provided in Section 8(a),
upon thirty (30) days prior written notice to Executive.  In such event, the Company shall pay to
Executive the amounts required under Section 8(h).

 

(c)   Death of Executive.  In the event Executive’s death occurs during
the Employment Term, the Company shall pay to the estate of Executive all
accrued but unpaid compensation earned to the date of death.  This Agreement otherwise shall terminate in
all respects upon Executive’s death.

 

(d)   Voluntary Resignation.  Executive may, upon thirty (30) days prior
written notice to the Company, voluntarily resign and thereby terminate this
Agreement at any time prior to the expiration of the Employment Term.  In such event, the Company shall pay to
Executive all accrued but unpaid compensation earned to the effective date of
resignation.  Executive shall not be
entitled to any benefits under this Agreement after the effective date of
resignation.

 

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(e)   Good Reason.  Executive may resign and thereby terminate this
Agreement for Good Reason upon prior written notice from Executive (as provided
in the definition of Good Reason).  In
such event, the Company shall pay to Executive the amounts required under Section 8(h).

 

(f)    [RESERVED]

 

(g)   Disability.  In the event that Executive is unable to
perform his services under this Agreement for a  continuous
period of one hundred eighty (180) days during the term of this Agreement and
Executive is determined to be disabled under the Company’s long-term disability
plan, the Company may terminate Executive’s employment and the Board may remove
Executive from his position on the Board without further liability to
Executive, except as specified in Section 8(h).

 

(h)   Severance Benefits.  Except for a termination of employment as provided
in Sections 8(a), (c), (d) or (g), if (i) the Company terminates the
employment of Executive without Cause or (ii) Executive elects to resign
and terminate this Agreement for Good Reason, then, in addition to all accrued
but unpaid compensation earned to the effective date of such termination,
subject to Executive’s and the Company’s execution and delivery of mutual
releases of claims reasonably satisfactory to the Company and Executive, the
Company shall pay to Executive a severance benefit in an amount equal to (1) three
times the Executive’s rate of annual base compensation determined by reference
to the highest base salary rate in effect at any time during the 12-month
period prior to the effective date of such termination; (2) three times an
amount equal to the 100% target bonus opportunity provided under Section 6
(c) in respect of the year in which such termination occurs, as if the
performance goals set by the Board had been fully achieved without regard to
actual achievement; and (3) continuation of benefits at no cost under the
benefit programs specified in Section 7(a) for the period of time
that he is eligible for continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”).  Upon a termination of employment due to
Executive’s disability pursuant to Section 8(g), Company shall pay
Executive 75% of the base salary then in effect as set forth in Section 6(a) (reduced
by any Company-provided disability insurance benefits), commencing upon the
determination of Employee’s disability by the Board and continuing until the
first to occur of (i) 36 months or (ii) the death of Executive, and
Executive shall receive benefits at no cost under the benefit programs
specified in Section 7(a) for the period of time that he is eligible
for continuation coverage under COBRA. 
Nothing in this Section 8(h) is intended to affect any vesting
provisions applicable to any stock option or stock award of Executive in effect
as of the date his employment is terminated.

 

9.     Gross-Up Payment.

 

(a)   Gross Up Payment.  Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or 

 

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distribution
by or on behalf of the Company to or for the benefit of Executive as a result
of a change in control of the Company (within the meaning of section 280G of
the Code (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9 (a “Payment”))
would be subject to the excise tax imposed by Section 4999 of the Code, or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”),
then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

 

(i)     Tax Opinion.  Subject to the provisions of Sections 9(a) and
(b), all determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized accounting firm or law
firm selected by the Executive (subject to the reasonable consent of the
Company) (the “Tax Firm”) provided, however, that
the Tax Firm shall not determine that no Excise Tax is payable by Executive
unless it delivers to Executive a written opinion (the “Tax Opinion”)
that failure to pay the Excise Tax and to report the Excise Tax and the
payments potentially subject thereto on or with Executive’s applicable federal
income tax return will not result in the imposition of an accuracy-related or
other penalty on Executive.  All fees and
expenses of the Tax Firm shall be borne solely by the Company.  Within 15 business days of the receipt of
notice from Executive that there has been a Payment, or such earlier time as is
requested by the Executive or the Company, the Tax Firm shall make all
determinations required under this Section 9, shall provide to the Company
and Executive a written report setting forth such determinations, together with
detailed supporting calculations, and, if the Tax Firm determines that no
Excise Tax is payable, shall deliver the Tax Opinion to Executive.  Any Gross-Up Payment, as determined pursuant
to this Section 9, shall be paid by the Company to Executive within
fifteen days of the receipt of the Tax Firm’s determination.  Subject to the remainder of this Section 9,
any determination by the Tax Firm shall be binding upon the Company and
Executive; provided, however, that Executive shall only be bound to the extent
that the determinations of the Tax Firm hereunder, including the determinations
made in the Tax Opinion, are reasonable and reasonably supported by applicable
law.  As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Tax Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to
be made hereunder.  In the event that 

 

6

 

it is
ultimately determined in accordance with the procedures set forth in Section 9(c)(ii) that
Executive is required to make a payment of any Excise Tax, the Tax Firm shall
reasonably determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit,
of Executive.  In determining the
reasonableness of Tax Firm’s determinations hereunder, and the effect thereof,
Executive shall be provided a reasonable opportunity to review such
determinations with Tax Firm and Executive’s tax counsel.  Tax Firm’s determinations hereunder, and the
Tax Opinion, shall not be deemed reasonable until Executive’s reasonable
objections and comments thereto have been satisfactorily accommodated by Tax
Firm.

 

(b)   Notice of IRS Claim.  Executive shall notify the Company in writing
of any claims by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as
practicable but no later than 30 calendar days after Executive actually receives
notice in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid; provided,
however, that the failure of Executive to notify the Company of such claim (or
to provide any required information with respect thereto) shall not affect any
rights granted to Executive under this Section 9(c) except to the
extent that the Company is materially prejudiced in the defense of such claim
as a direct result of such failure.  Executive shall not pay such claim prior to
the expiration of the 30-day period following the date on which he gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall do all of the following:

 

(i)     give the Company any
information reasonably requested by the Company relating to such claim;

 

(ii)    take such action in connection
with contesting such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by the
Company and reasonably acceptable to Executive;

 

(iii)   cooperate with the Company in
good faith in order effectively to contest such claim;

 

(iv)   if the Company elects not to
assume and control the defense of such claim, permit the Company to participate
in any proceedings relating to such claim;

 

provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties with 

 

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respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limiting the foregoing
provisions of this Section 9, the Company shall have the right, at its
sole option, to assume the defense of and control all proceedings in connection
with such contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may either direct Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to Executive, on
an interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s right to assume
the defense of and control the contest shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.

 

(c)   Right to Tax Refund.  If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 9 Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to the Company’s complying with the requirements of Section 9(b))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 9(b), a determination
is made that Executive is not entitled to a refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall, to the extent of such denial, be forgiven
and shall not be required to be repaid and the amount of forgiven advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

 

10.   Time for
Payment; Interest.  The severance payment described in Section 8
shall be paid to Executive in a single lump sum within 15 days following the
date of termination, provided that the Gross-Up Payment described in Section 9
shall be payable in accordance with the procedures described therein.  The Company’s obligation to pay to Executive
any amounts under this Agreement will bear interest at the prime rate as quoted
in The Wall Street Journal plus 2%, and all accrued and unpaid interest will
bear interest at the same rate, all of which interest will be compounded
annually.

 

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11.   Restrictive
Covenant.  Executive hereby covenants and agrees that
during the Employment Term and for a period of one (1) year thereafter,
Executive shall not, directly or indirectly: (a) own, manage, operate,
control, be employed by, consult with, participate in or be connected in any
manner with, the operation, ownership, management or control of any enterprise
predominantly engaged in the management of physician practices or the ownership
and management of outpatient surgery centers (other than the Company or its
affiliates); (b) be employed by or consult with any organization in which
Executive is primarily engaged in maintaining the operation, ownership,
management or control of a business unit that is predominantly engaged in the
management of physician practices or the ownership and management of outpatient
surgery centers that is competitive with the Company; or (c) induce any
employee of the Company to leave the employ of the Company or solicit the business
of any client or customer of the Company (other than on behalf of the
Company).  Notwithstanding the foregoing,
Executive may own, directly or indirectly, solely as an investment, securities
of any publicly-traded corporation or other business entity, provided that
Executive does not own, directly or indirectly, more than one percent (1%) of
any class of voting securities of any such corporation or other business
entity.  The foregoing covenants and
agreements of Executive are referred to herein as the “Restrictive
Covenant.”

 

(a)   Executive has carefully read
and considered the provisions of the Restrictive Covenant and, having done so,
agrees that the restrictions set forth in this Section 11, including
without limitation the time period of restriction and the geographic areas of
restriction set forth above, are fair and reasonable and are reasonably
required for the protection of the legitimate business interests of the
Company.

 

(b)   Executive acknowledges that the
Company’s business is and will be built upon the confidence of those with whom
it conducts business and that Executive will gain acquaintances and develop
relationships by using the good will of the Company.  Executive also acknowledges that the Company’s
business is and will be built upon the success of the Company in research,
development and marketing, and through the development of certain business
methods and trade secrets, and that Executive’s position will give him
confidential knowledge of all aspects of the Company’s business and internal
operations.  In addition, Executive
acknowledges that the Company’s dealings through Executive will give Executive
confidential knowledge that should not be divulged or used for his own
benefit.  Executive recognizes and agrees
that his violation of any provision of the Restrictive Covenant will cause
irreparable harm to the Company.

 

(c)   In the event that,
notwithstanding the foregoing, any of the provisions of this Section 11 or
any parts hereof shall be held to be invalid or unenforceable, the remaining
provisions or parts hereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable 

 

9

 

portions or
parts had not been included herein.  In
the event that any provision of this Section 11 relating to the time
period and/or the areas of restriction and/or related aspects shall be declared
by a court of competent jurisdiction to exceed the maximum restrictiveness such
court deems reasonable and enforceable, the time period and/or areas of
restriction and/or related aspects deemed reasonable and enforceable by such
court shall become and thereafter be the maximum restrictions in such regard,
and the provisions of the Restrictive Covenant shall remain enforceable to the
fullest extent deemed reasonable by such court.

 

12.   Remedies.  Executive
agrees that in the event of any conduct by Executive violating any provision of
Section 11, the Company shall be entitled, if it so elects, to institute
and prosecute proceedings in any court of competent jurisdiction, either at law
or in equity, to obtain damages for such conduct, to enforce specific
performance of such provision, to enjoin Executive from such conduct, to obtain
an accounting and repayment of all profits, compensation, commissions,
remuneration or other benefits that Executive directly or indirectly has
realized and/or may realize as a result of, growing out of, or in connection
with any such violation, or to obtain any other relief, or any combination of
the foregoing, that the Company may elect to pursue.

 

13.   Waiver of
Breach.  The waiver by either party of a breach of any
provisions of this Agreement by either party shall not operate or be construed
as a waiver of any subsequent breach by either party.

 

14.   Successors.  This
Agreement shall be binding upon and accrue to the benefit of any successors and
assigns of the Company.  This Agreement
is not assignable by Executive or by the Company, except upon the agreement of both
parties.

 

15.   Construction.  This
Agreement shall be construed under and enforced in accordance with the laws of
the State of Tennessee.

 

16.   Entire
Agreement; Termination.  (a) This Agreement is the
entire agreement of the parties and supersedes all prior agreements and
understandings, written or oral, including, without limitation, the Prior
Agreement.  This Agreement shall not be
amended or modified except in writing executed by both parties; provided,
however, that prior to the Effective Date no such amendment or modification, or
termination other than pursuant to Section 16(b), shall be effective
without the prior written consent of the Crestview Shareholder.

 

(b)   In the event the Merger is not
consummated prior to the date set forth in Section 7.1 of the Merger
Agreement, or the Merger Agreement is otherwise terminated by the parties
thereto pursuant to the terms thereof, this Agreement shall immediately
terminate and be of no force or effect, and the Prior Agreement shall be in
full force and effect.

 

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17.         Notice.  For
the purposes of this Agreement, notices shall be deemed given when mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed in the case of the Company to its principal executive
office; or in the case of Executive to the address shown on the signature page of
this Agreement.  Either party may change
such address by giving the other party notice of such change in the aforesaid
manner, except that notices of changes of address shall only be effective upon
receipt.

 

18.         Defined
Terms.

 

“Agreement”
has the meaning set forth in the introductory paragraph hereof.

 

“Board”
has the meaning set forth in Section 6.

 

“Cause”
means:

 

(a)  the
conviction of Executive of (including Executive’s plea of guilty or nolo
contendere to) a felony (other than a violation of a motor vehicle or
moving violation law) which in the reasonable judgment of the Board materially
affects Executive’s ability to perform his duties under this Agreement; or

 

(b)  voluntary
engagement by Executive in conduct constituting larceny, embezzlement,
conversion or any other act involving the misappropriation of any funds of any
of the Companies or a Company Subsidiary in the course of Executive’s
employment; or

 

(c)  the
willful refusal (following written notice) by Executive to carry out specific
directions of (A) the Board or (B) the Board of Directors of any
Company Subsidiary with which Executive is employed or of which Executive is an
officer, which directions are consistent with Executive’s duties to the Company
or any Company Subsidiary, as the case may be; or

 

(d)  violation
by Executive of any provision of the Restrictive Covenant or a significant
violation of the written material Company policies applicable to Executive; or

 

(e)  the
commission by Executive of any act of gross negligence or intentional
misconduct in the performance of Executive’s duties as an employee of the
Company or any Company Subsidiary to the extent it causes demonstrable harm to
the Company.

 

For purposes of this
definition, no act or failure to act on Executive’s part shall be considered to
be Cause if done, or omitted to be done, by Executive in good faith and with
the reasonable belief that the action or omission was in the best interest of
the Company or a Company Subsidiary.  The
decision to terminate Executive’s employment for Cause, to take other action or
to take no action in response to 

 

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such occurrence shall be in the
sole and exclusive discretion of the Board. 
If the Board terminates Executive’s employment for Cause, the Company
shall deliver written notice of such termination to Executive within three
months after the initial occurrence of the event constituting Cause, setting
forth in reasonable detail the conduct of Executive that constitutes Cause, and
such termination shall be effective immediately upon service of such written
notice.  Notwithstanding the foregoing,
the Company shall be entitled to terminate Executive for Cause pursuant to
clause (c) only if each of the following conditions is satisfied:  (i) any determination to terminate
Executive must be made upon the affirmative vote of two-thirds of the
non-management directors of the Company; (ii) the Company must provide to
Executive at least ten (10) days prior written notice of the termination
date determined by such directors, which notice must contain a reasonably
specific explanation of the reasons for termination determined by such
directors, and (iii) Executive shall have the opportunity during such
notice period to cure the deficiencies or failures cited as the basis for his
termination.

 

“Change in Control”
means the first to occur of the following events:

 

(i)                                     a Person or group
(within the meaning of Section 13(d)(3) of the Exchange Act), other
than the Crestview Shareholder or its Permitted Transferee(s), becoming the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 50% of the combined voting power of the Parent’s outstanding
securities ordinarily having the right to vote at elections of directors; or

 

(ii)                                  the consummation of
the sale, exchange or other disposition of all or substantially all of the
assets, or the liquidation or dissolution of, the Parent followed by the
distribution of the proceeds thereof.

 

“COBRA” has the
meaning set forth in Section 8.

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Company” has
the meaning set forth in the introductory paragraph.

 

“Company Subsidiary”
means any entity directly or indirectly, through one or more intermediaries,
controlled by the Company.  For these
purposes “control” means the power to exercise a controlling influence over the
management or policies of the relevant entity.

 

“Crestview Shareholder”
shall have the meaning assigned to such term in the Shareholders Agreement.

 

“Effective Date”
has the meaning set forth in Section 2.

 

“Employment Term”
has the meaning set forth in Section 2.

 

12

 

“Exchange Act”
has the meaning assigned to such term in the Shareholders Agreement.

 

“Excise Tax” has
the meaning set forth in Section 9.

 

“Executive” has
the meaning set forth in the introductory paragraph.

 

“Good Reason”
means (a) any material breach by the Company of any material provision of
this Agreement (including failure by the Company or Parent to effect the terms
and conditions contemplated in Schedule A or Schedule B upon consummation of
the Merger); (b) a reduction in Executive’s base salary or target bonus
opportunity (as set forth in Section 6(a), (b) and (c),
respectively); (c) a material diminution in Executive’s title or level of
responsibility, or change in office or reporting relationship, in each case
from the standard described in Section 3 of this Agreement; or (d) a
transfer of Executive’s primary workplace by more than thirty-five (35) miles
from Executive’s place of employment on the Effective Date; (e) the
failure of Executive to receive as soon as reasonably practicable after the
Effective Date the grant of options to purchase shares of Parent common stock
on the terms and conditions as described in Section 7(b) and Schedule
A; (f) Executive fails to be elected or ceases be a member and Chairman of
the Board  of the Company or the Parent for any reason
other than resignation or removal by the Board for Cause; (g) Executive’s
resignation for any reason within the 120-day period beginning on the effective
date of a Change in Control; provided
however, that any isolated,
insubstantial or inadvertent change, condition, failure or breach described
under clause (a), (b) or (c) above which is not taken in bad faith
and is remedied by the Company promptly after the Company’s actual receipt of
Good Reason Notice (defined below) from Executive shall not constitute Good
Reason. A termination of employment by Executive for Good Reason shall be
effectuated by Executive giving the Company written notice (“Good Reason Notice”), within three (3) months after the
initial occurrence of the event constituting Good Reason, setting forth in
reasonable detail the specific conduct of the Company that constitutes Good
Reason. A termination of employment by Executive for Good Reason shall be
effective on the fifth business day following the Company’s receipt of the Good
Reason Notice, absent remediation by the Company (as described above).

 

“Gross-Up Payment”
has the meaning set forth in Section 9.

 

 “Merger” means the  consummation
of the transactions contemplated by the Merger Agreement.

 

“Merger Agreement”
has the meaning set forth in the recitals.

 

“Parent” has the
meaning set forth in the recitals.

 

“Payment” has
the meaning set forth in Section 9.

 

13

 

“Permitted Transferee”
has the meaning assigned to such term in the Shareholders Agreement.

 

“Person” has the
meaning assigned to such term in the Shareholders Agreement.

 

“Prior Agreement”
means the Amended and Restated Executive Employment Agreement dated as of May 16,
2002.

 

“Restrictive Covenant”
has the meaning set forth in Section 11.

 

“Shareholders Agreement”
means the Shareholders Agreement of the Company dated as of [August 15],
2007 entered into by and among the Company, the Crestview Shareholder, The
Northwestern Mutual Life Insurance Company, certain management stockholders of
the Company, and certain other parties listed on the signature pages thereof,
as the same may be from time to time amended, supplemented or modified.  The Shareholders Agreement to be executed and
delivered by the Parent shall include terms and conditions set forth on
Schedule B.

 

“Tax Firm” has
the meaning set forth in Section 9.

 

“Tax Opinion”
has the meaning set forth in Section 9.

 

“Underpayment”
has the meaning set forth in Section 9.

 

19.                       Legal Fees.  The
Company shall reimburse Executive for all reasonable legal and expenses
incurred by him in connection with the negotiation and execution of this
Agreement in an amount not to exceed $50,000.

 

20.                       Section 409A.  In
the event that any payments in respect of the execution of this Agreement and
the supercission of the Prior Agreement, or the contribution by Executive of
equity or equity rights into Parent as described in Section 7A hereof
would be subject to excise tax under Section 409A of the Code, Executive
shall be entitled to additional payments in respect of such excise tax,
generally determined as provided in Section 9, with the Company and
Executive each having comparable rights and duties to those provided in Section 9.

 

14

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

	
   

  	
  SYMBION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Clifford G. Adlerz

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard E. Francis, Jr.

  
	
   

  	
  Richard E. Francis, Jr.

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  537 Jackson Boulevard

  
	
   

  	
  Nashville, Tennessee 37025

  

 

15

 

Schedule A

 

Terms and
Conditions of Stock Options/Purchased Equity

 

	
  Number of Shares:

  	
  •

  	
  892,497

  
	
   

  	
   

  	
   

  
	
  Exercise Price:

  	
  •

  	
  $10.00, which such amount shall be at the fair value of the equity
  purchased by the Crestview Shareholder.

  
	
   

  	
   

  	
   

  
	
  Vesting:

  	
  •

  	
  A portion of option grant 5% portion of 11.25% to vest in 20%
  increments beginning on 12/31/07

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  5% portion of 11.25% to vest 50% on 12.5% IRR and 50% on 17.5% IRR

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  1.25% portion of 11.25% to be vested on the Crestview Shareholder
  realizing either 2x return on invested capital or 20% IRR

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  Accelerate in the event any persons or entity unrelated to the
  Crestview Shareholder holds, other than pursuant to registered public
  offering, Parent stock representing at least 50% of the combined voting power
  of all outstanding Parent equity securities

  
	
   

  	
   

  	
   

  
	
  Term:

  	
  •

  	
  10 years

  
	
   

  	
   

  	
   

  
	
  Termination of Employment:(1)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •    Without
  Cause/Good Reason:

  	
  •

  	
  No repurchase right

  
	
   

  	
   

  	
   

  
	
  •    For Cause:

  	
  •

  	
  All options terminate

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  Shares acquired on option exercise/initial purchased equity  subject to call at lower of FMV or price paid(2)

  

 

 

	
  •    Death,
  Disability or Voluntary Quit:

  	
  •

  	
  Shares acquired on exercise/initial purchased equity  subject to call at FMV

  

 

(1)          Contained in Shareholder Agreement (which shall provide that in the
event any holder exercises their right to demand a 1933 Act registration, Management
Shareholder shall have customary “piggyback” rights, subject to any
underwriter-required lock up).

 

(2)          Shareholder Agreement to provide that Board determines FMV, with any
objecting shareholder having the right to demand binding arbitration.

 

16

 

Schedule B

 

PROJECT SYMBOL

SUMMARY OF TERMS AND CONDITIONS

OF COMMON STOCK

 

It is expected that Messrs. Francis and Adlerz will enter into a
shareholders agreement at Closing with the other shareholders of the Parent
containing customary terms and conditions for private equity transactions of
this nature, including, but not limited to, the following:

 

	
  Board of Directors

  	
   

  	
  Each of Messrs. Francis and Adlerz will be on the Board of
  Directors of the Company and the Parent (the “Board”)
  for so long as that individual remains the CEO or COO and President,
  respectively, of the Company. Board number shall not exceed 7 and
  Mr. Francis will be consulted on board composition.

   

  Mr. Francis will be the Chairman of the Board of the Company and
  Parent for so long as he remains the CEO of the Company.

  
	
   

  	
   

  	
   

  
	
  Tag Along Rights

  	
   

  	
  Subject to the Rights of First Refusal, if any party to the
  Shareholders Agreement sells more than a de minimis
  amount of equity to an unaffiliated 3rd party in a private sale
  prior to an initial public offering (an “IPO”),
  Messrs. Francis and Adlerz will have the right to sell a pro rata number of shares on the same terms and
  conditions.

  
	
   

  	
   

  	
   

  
	
  Right of First Refusal

  	
   

  	
  Subject to Crestview’s Drag-Along Rights, if any party to the
  Shareholders Agreement elects to sells any equity of the Parent to an
  unaffiliated 3rd party, the other parties to the Shareholders
  Agreement will have the right to sell purchase shares on the same terms and
  conditions.

  
	
   

  	
   

  	
   

  
	
  Drag Along Rights

  	
   

  	
  If Crestview sells all or substantially all of the equity of the
  Parent to an unaffiliated 3rd party, then Crestview will have the
  right to require the other parties to the Shareholders Agreement to sell
  their equity pro rata on the same terms and
  conditions (but without prejudice to any matters to which
  Messrs. Francis and Adlerz may be reasonably asked to agree in their
  capacity as officers of the Company).

  

 

 

	
  Preemptive Rights

  	
   

  	
  Messrs. Francis and Adlerz will have
  the right, prior to an IPO, to purchase his pro rata
  share of all future equity issued by the Parent, subject to certain
  exceptions (i.e., for employees,
  acquisition consideration, etc.)

  
	
   

  	
   

  	
   

  
	
  Underwriter Lock-Ups

  	
   

  	
  Messrs. Francis and Adlerz will both be obligated to enter into
  customary underwriter lock-ups in connection with an IPO and any other public
  offerings of equity securities of the Parent.

  
	
   

  	
   

  	
   

  
	
  Repurchase Rights

  	
   

  	
  See Schedule A to Form of Employment Agreement.

  
	
   

  	
   

  	
   

  
	
  Piggyback Registration Rights

  	
   

  	
  Messrs. Francis and Adlerz will each have customary piggyback
  registration rights on all offerings (other than the IPO), subject to pro rata cut-back among all shareholders, but only if the
  investment bank underwriting the offering determines that such person’s participation
  therein would not reasonably be expected to have an adverse effect on that
  offering.

  

 

2Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and executed to be effective as of the
consummation of the Merger, by and between Symbion, Inc. (the “Company”), and Clifford G. Adlerz, an individual and
resident of Franklin, Tennessee (“Executive”).  Defined terms used herein have the meaning
attributed thereto in the text hereof or if not so defined, as set forth in Section 18.

 

RECITALS:

 

WHEREAS, the Company, Symbol Acquisition,
L.L.C., a Delaware limited liability company, and Symbol Merger Sub, Inc.,
a Delaware corporation entered into an Agreement and Plan of Merger, dated as
of April 24, 2007, (the “Merger Agreement”)
upon the consummation of which Symbol Merger Sub, Inc. will be merged with
and into the Company, with the Company as the surviving corporation;

 

WHEREAS, prior to but in connection with the
Merger, Symbol Acquisition, L.L.C. will be converted into Symbion Holdings
Corporation (the “Parent”), which
will become the parent holding company of the Company by virtue of the Merger;
and

 

WHEREAS, the Company and Executive desire to
memorialize in this Agreement the terms of Executive’s employment with the
Company effective as of the consummation of such Merger, with the understanding
that this Agreement shall supersede any and all prior agreements relating to
Executive’s employment with the Company or any Company Subsidiary in all
respects;

 

NOW, THEREFORE, in consideration of the
mutual undertakings of the parties set forth in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive hereby agree as follows:

 

1.                             Employment.  The Company hereby employs Executive,
and Executive hereby accepts employment with the Company, on the terms and
conditions hereinafter set forth.

 

2.                             Term.  The initial term of this Agreement shall
commence and shall be effective as of the consummation of the Merger, (the “Effective Date”) and shall extend from that date for a
period of three (3) years, unless earlier terminated as provided in Section 8
of this Agreement.  At the beginning of
each month after the Effective Date in which Executive is employed by the
Company, the term of this Agreement shall automatically be extended for an
additional 

 

 

month so that
the Employment Term on such date is a period of three (3) years (the
initial term and any such extensions, the “Employment Term”).

 

3.               Nature of Duties and Responsibilities.  (a) During
the Employment Term, Executive shall be employed by the Company as its
President and Chief Operating Officer and shall have such duties, powers and
authority as generally inure to those offices. 
Executive shall have the full authority and responsibility for managing
the day to day business and operation of the Company.  Executive shall report to the Company’s Chief
Executive Officer, and shall not be subordinate to any officer or employee of
the Company other than its Chief Executive Officer.

 

(b)         The Company shall use its
best efforts to cause Executive to be elected to the Board of the Company and
the Parent, such membership to continue for so long as Executive holds the
offices set forth in Section 3(a).

 

4.               Extent of Services.  (a) Executive shall
devote his full time, attention, skills and energies during the Employment Term
to the business of the Company.  During
the Employment Term, Executive shall not be engaged in any other business
activity that conflicts with or detracts from his duty to the Company or with
the business of the Company, whether or not such business activity is pursued
for gain, profit or other pecuniary advantage. 
Notwithstanding the foregoing, Executive may, at his option, devote
reasonable time and attention to personal investments and to civic, charitable
or social organizations as he deems appropriate.  With the Board’s prior written consent,
Executive may devote a reasonable amount of his time to serve on the board of
directors of one or more public or private corporations, provided that such
service will not interfere with the performance of Executive’s duties hereunder
and, provided further, that the business activities of any such corporation are
not competitive with those of the Company.

 

(b)         For the avoidance of
doubt, neither the existence nor terms of this Agreement shall be deemed to
preclude Executive from performing such duties to the Company as may be
required for the Company to satisfy its obligations under the Merger Agreement.

 

5.               Location.  The permanent place of employment of
Executive shall be the corporate headquarters of the Company located in
Nashville, Tennessee.  Executive shall
not be required to relocate his place of employment more than 35 miles from
such location at any time during the Employment Term without his prior consent,
which consent may be withheld by Executive for any reason he deems
appropriate.  Executive may be required
to conduct reasonable travel in the course of the performance of his duties on
behalf of the Company.

 

2

 

6.               Compensation.

 

(a)          For all services
rendered by Executive under this Agreement, the Company shall compensate
Executive at Executive’s current annual base rate as in effect on the date
hereof; provided, however, that effective January 1, 2008, Executive’s
annual base rate shall be increased to $375,000.

 

(b)         The annual rate of
compensation provided in Section 6(a) may be adjusted upward
effective on January 1 for each year beginning after January 1, 2008
during the Employment Term by an amount determined by the Compensation
Committee of Parent’s  Board of
Directors (the “Board”) in its sole
discretion.  Executive is not entitled to
any guaranteed annual increase in his rate of compensation.

 

(c)          During the Employment
Term, Executive shall be eligible to receive a bonus payment each year that is
equal to a percentage of the amount of compensation that is in effect under Section 6(a).  The percentage shall be determined by
reference to the level of achievement by Executive of the annual performance
goals that are established by the compensation committee of the Board so that
the target bonus opportunity is 100% of the amount specified in Section 6(a) if
Executive achieves at least 100% of the performance goals.  The percentage shall be reduced to correspond
to achievement that is less than 100%, provided that no bonus shall be payable
under this provision if achievement is at a level of less than 80% of the
performance goals.  The Executive shall
be eligible for additional bonus payments upon achievement of such other
performance targets that are specified by the compensation committee of the
Board.

 

(d)         The Company shall be
entitled to withhold such amounts on account of employment and payroll taxes
and similar matters required by applicable law, rule or regulation of any
appropriate governmental authority.

 

(e)          The Company shall
continue to pay Executive his compensation during any period of physical or
mental incapacity or disability, but shall not be obligated to pay Executive
any compensation for any continuous period of physical or mental incapacity or
disability after Executive is determined to be disabled by the Board, as
provided in Section 8(g).

 

(f)            During the Employment
Term, the Company shall pay the reasonable expenses incurred by Executive
(based on business development objectives and within limits that may be
established by the Board) in the performance of his duties under this Agreement
(or shall reimburse Executive on account of such expenses paid directly by
Executive) in accordance with the Company’s policies and procedures promptly
upon the submission to the Company by Executive of documentation reasonably
satisfactory to the Company.

 

7.               Other Benefits.

 

(a)          Executive shall be
entitled to and eligible for group health, life and disability insurance
coverage, vacation, and any other fringe benefits that 

 

3

 

may from time
to time be available to other salaried employees of the Company. Executive may
participate in any other pension, profit sharing or other employee benefit plan
of the Company or in which the Company participates.  Any and all such benefits provided in this Section 7(a) shall
terminate on the expiration or earlier termination of this Agreement, except as
otherwise required by law or as otherwise provided herein.

 

(b)         (i)                                     The Company shall
recommend to the Board that, and shall use its best efforts to cause, the grant
to Executive at the Effective Date, of non-qualified options to purchase Parent
common stock under a Parent plan, with customary terms and conditions, the
material terms of which such grant are set forth on Schedule A hereto.

 

                                (ii)                                  All
shares of common stock of the Parent and all awards convertible or exercisable
into such shares, whether acquired pursuant to Section 7(b)(i) or
otherwise, shall be subject to the terms and conditions set forth in the
Shareholders Agreement.

 

7.A.               Purchased Equity.   Executive shall invest at the
Effective Time $2,750,000 in Parent in connection with the Merger.

 

8.                          Termination.

 

(a)          Termination for
Cause.  Prior to the end of the
Employment Term, the Company may terminate this Agreement for Cause, without
any further liability hereunder to Executive; provided
that the Company shall pay all accrued but unpaid compensation earned to the
date of termination.

 

(b)         Termination Without
Cause.  Prior to the end of the
Employment Term, the Company may terminate this Agreement other than as
provided in Section 8(a), upon thirty (30) days prior written notice to
Executive.  In such event, the Company
shall pay to Executive the amounts required under Section 8(h).

 

(c)          Death of Executive.  In the event Executive’s death occurs during
the Employment Term, the Company shall pay to the estate of Executive all
accrued but unpaid compensation earned to the date of death.  This Agreement otherwise shall terminate in
all respects upon Executive’s death.

 

(d)         Voluntary
Resignation.  Executive may, upon thirty
(30) days prior written notice to the Company, voluntarily resign and thereby
terminate this Agreement at any time prior to the expiration of the Employment
Term.  In such event, the Company shall
pay to Executive all accrued but unpaid compensation earned to the effective
date of resignation.  Executive shall not
be entitled to any benefits under this Agreement after the effective date of
resignation.

 

4

 

(e)          Good Reason.  Executive may resign and thereby terminate
this Agreement for Good Reason upon prior written notice from Executive (as
provided in the definition of Good Reason). 
In such event, the Company shall pay to Executive the amounts required
under Section 8(h).

 

(f)            [RESERVED]

 

(g)         Disability.  In the event that Executive is unable to
perform his services under this Agreement for a  continuous
period of one hundred eighty (180) days during the term of this Agreement and
Executive is determined to be disabled under the Company’s long-term disability
plan, the Company may terminate Executive’s employment and the Board may remove
Executive from his position on the Board without further liability to
Executive, except as specified in Section 8(h).

 

(h)         Severance Benefits.  Except for a termination of employment as
provided in Sections 8(a), (c), (d) or (g), if (i) the Company
terminates the employment of Executive without Cause or (ii) Executive
elects to resign and terminate this Agreement for Good Reason, then, in
addition to all accrued but unpaid compensation earned to the effective date of
such termination, subject to Executive’s and the Company’s execution and
delivery of mutual releases of claims reasonably satisfactory to the Company
and Executive, the Company shall pay to Executive a severance benefit in an
amount equal to (1) three times the Executive’s rate of annual base
compensation determined by reference to the highest base salary rate in effect
at any time during the 12-month period prior to the effective date of such
termination; (2) three times an amount equal to the 100% target bonus
opportunity provided under Section 6 (c) in respect of the year in
which such termination occurs, as if the performance goals set by the Board had
been fully achieved without regard to actual achievement; and (3) continuation
of benefits at no cost under the benefit programs specified in Section 7(a) for
the period of time that he is eligible for continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).  Upon a termination of employment due to
Executive’s disability pursuant to Section 8(g), Company shall pay
Executive 75% of the base salary then in effect as set forth in Section 6(a) (reduced
by any Company-provided disability insurance benefits), commencing upon the
determination of Employee’s disability by the Board and continuing until the
first to occur of (i) 36 months or (ii) the death of Executive, and
Executive shall receive benefits at no cost under the benefit programs
specified in Section 7(a) for the period of time that he is eligible
for continuation coverage under COBRA. 
Nothing in this Section 8(h) is intended to affect any vesting
provisions applicable to any stock option or stock award of Executive in effect
as of the date his employment is terminated.

 

9.              Gross-Up Payment.

 

(a)          Gross Up Payment.  Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or 

 

5

 

distribution
by or on behalf of the Company to or for the benefit of Executive as a result
of a change in control of the Company (within the meaning of section 280G of the
Code (whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9 (a “Payment”))
would be subject to the excise tax imposed by Section 4999 of the Code, or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”),
then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

 

(i)                Tax Opinion.  Subject to the provisions of Sections 9(a) and
(b), all determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized accounting firm or law
firm selected by the Executive (subject to the reasonable consent of the
Company) (the “Tax Firm”) provided, however, that
the Tax Firm shall not determine that no Excise Tax is payable by Executive
unless it delivers to Executive a written opinion (the “Tax Opinion”)
that failure to pay the Excise Tax and to report the Excise Tax and the
payments potentially subject thereto on or with Executive’s applicable federal
income tax return will not result in the imposition of an accuracy-related or
other penalty on Executive.  All fees and
expenses of the Tax Firm shall be borne solely by the Company.  Within 15 business days of the receipt of
notice from Executive that there has been a Payment, or such earlier time as is
requested by the Executive or the Company, the Tax Firm shall make all
determinations required under this Section 9, shall provide to the Company
and Executive a written report setting forth such determinations, together with
detailed supporting calculations, and, if the Tax Firm determines that no
Excise Tax is payable, shall deliver the Tax Opinion to Executive.  Any Gross-Up Payment, as determined pursuant
to this Section 9, shall be paid by the Company to Executive within
fifteen days of the receipt of the Tax Firm’s determination.  Subject to the remainder of this Section 9,
any determination by the Tax Firm shall be binding upon the Company and
Executive; provided, however, that Executive shall only be bound to the extent
that the determinations of the Tax Firm hereunder, including the determinations
made in the Tax Opinion, are reasonable and reasonably supported by applicable
law.  As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Tax Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to
be made hereunder.  In the event that 

 

6

 

it is
ultimately determined in accordance with the procedures set forth in Section 9(c)(ii) that
Executive is required to make a payment of any Excise Tax, the Tax Firm shall
reasonably determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit,
of Executive.  In determining the
reasonableness of Tax Firm’s determinations hereunder, and the effect thereof,
Executive shall be provided a reasonable opportunity to review such
determinations with Tax Firm and Executive’s tax counsel.  Tax Firm’s determinations hereunder, and the
Tax Opinion, shall not be deemed reasonable until Executive’s reasonable
objections and comments thereto have been satisfactorily accommodated by Tax
Firm.

 

(b)         Notice of IRS Claim.  Executive shall notify the Company in writing
of any claims by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as
practicable but no later than 30 calendar days after Executive actually
receives notice in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid;
provided, however, that the failure of Executive to notify the Company of such
claim (or to provide any required information with respect thereto) shall not
affect any rights granted to Executive under this Section 9(c) except
to the extent that the Company is materially prejudiced in the defense of such
claim as a direct result of such failure.  Executive shall not pay such claim prior to
the expiration of the 30-day period following the date on which he gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall do all of the following:

 

(i)                give the Company
any information reasonably requested by the Company relating to such claim;

 

(ii)             take such action in
connection with contesting such claim as the Company shall reasonably request
in writing from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by the
Company and reasonably acceptable to Executive;

 

(iii)          cooperate with the
Company in good faith in order effectively to contest such claim;

 

(iv)         if the Company elects not
to assume and control the defense of such claim, permit the Company to
participate in any proceedings relating to such claim;

 

provided, however, that the
Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with 

 

7

 

respect thereto) imposed as a
result of such representation and payment of costs and expenses.  Without limiting the foregoing provisions of
this Section 9, the Company shall have the right, at its sole option, to
assume the defense of and control all proceedings in connection with such
contest, in which case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may either direct Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if
the Company directs Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to Executive, on an
interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s right to assume
the defense of and control the contest shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.

 

(c)          Right to Tax
Refund.  If, after the receipt by
Executive of an amount advanced by the Company pursuant to Section 9
Executive becomes entitled to receive any refund with respect to such claim,
Executive shall (subject to the Company’s complying with the requirements of Section 9(b))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 9(b), a determination
is made that Executive is not entitled to a refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall, to the extent of such denial, be
forgiven and shall not be required to be repaid and the amount of forgiven
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

 

10.         Time for
Payment; Interest.  The severance payment described in Section 8
shall be paid to Executive in a single lump sum within 15 days following the
date of termination, provided that the Gross-Up Payment described in Section 9
shall be payable in accordance with the procedures described therein.  The Company’s obligation to pay to Executive
any amounts under this Agreement will bear interest at the prime rate as quoted
in The Wall Street Journal plus 2%, and all accrued and unpaid interest will
bear interest at the same rate, all of which interest will be compounded
annually.

 

8

 

11.         Restrictive
Covenant.  Executive hereby covenants and agrees that during
the Employment Term and for a period of one (1) year thereafter, Executive
shall not, directly or indirectly: (a) own, manage, operate, control, be
employed by, consult with, participate in or be connected in any manner with,
the operation, ownership, management or control of any enterprise predominantly
engaged in the management of physician practices or the ownership and
management of outpatient surgery centers (other than the Company or its
affiliates); (b) be employed by or consult with any organization in which
Executive is primarily engaged in maintaining the operation, ownership,
management or control of a business unit that is predominantly engaged in the
management of physician practices or the ownership and management of outpatient
surgery centers that is competitive with the Company; or (c) induce any
employee of the Company to leave the employ of the Company or solicit the
business of any client or customer of the Company (other than on behalf of the
Company).  Notwithstanding the foregoing,
Executive may own, directly or indirectly, solely as an investment, securities
of any publicly-traded corporation or other business entity, provided that
Executive does not own, directly or indirectly, more than one percent (1%) of
any class of voting securities of any such corporation or other business
entity.  The foregoing covenants and
agreements of Executive are referred to herein as the “Restrictive
Covenant.”

 

(a)          Executive has carefully
read and considered the provisions of the Restrictive Covenant and, having done
so, agrees that the restrictions set forth in this Section 11, including
without limitation the time period of restriction and the geographic areas of
restriction set forth above, are fair and reasonable and are reasonably
required for the protection of the legitimate business interests of the
Company.

 

(b)         Executive acknowledges
that the Company’s business is and will be built upon the confidence of those
with whom it conducts business and that Executive will gain acquaintances and
develop relationships by using the good will of the Company.  Executive also acknowledges that the Company’s
business is and will be built upon the success of the Company in research,
development and marketing, and through the development of certain business methods
and trade secrets, and that Executive’s position will give him confidential
knowledge of all aspects of the Company’s business and internal
operations.  In addition, Executive
acknowledges that the Company’s dealings through Executive will give Executive
confidential knowledge that should not be divulged or used for his own
benefit.  Executive recognizes and agrees
that his violation of any provision of the Restrictive Covenant will cause
irreparable harm to the Company.

 

(c)          In the event that,
notwithstanding the foregoing, any of the provisions of this Section 11 or
any parts hereof shall be held to be invalid or unenforceable, the remaining
provisions or parts hereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable 

 

9

 

portions or
parts had not been included herein.  In
the event that any provision of this Section 11 relating to the time
period and/or the areas of restriction and/or related aspects shall be declared
by a court of competent jurisdiction to exceed the maximum restrictiveness such
court deems reasonable and enforceable, the time period and/or areas of
restriction and/or related aspects deemed reasonable and enforceable by such
court shall become and thereafter be the maximum restrictions in such regard,
and the provisions of the Restrictive Covenant shall remain enforceable to the
fullest extent deemed reasonable by such court.

 

12.         Remedies.  Executive
agrees that in the event of any conduct by Executive violating any provision of
Section 11, the Company shall be entitled, if it so elects, to institute
and prosecute proceedings in any court of competent jurisdiction, either at law
or in equity, to obtain damages for such conduct, to enforce specific
performance of such provision, to enjoin Executive from such conduct, to obtain
an accounting and repayment of all profits, compensation, commissions,
remuneration or other benefits that Executive directly or indirectly has
realized and/or may realize as a result of, growing out of, or in connection
with any such violation, or to obtain any other relief, or any combination of
the foregoing, that the Company may elect to pursue.

 

13.         Waiver of
Breach.  The waiver by either party of a breach of any
provisions of this Agreement by either party shall not operate or be construed
as a waiver of any subsequent breach by either party.

 

14.         Successors.  This
Agreement shall be binding upon and accrue to the benefit of any successors and
assigns of the Company.  This Agreement
is not assignable by Executive or by the Company, except upon the agreement of
both parties.

 

15.         Construction.  This
Agreement shall be construed under and enforced in accordance with the laws of
the State of Tennessee.

 

16.         Entire
Agreement; Termination.  (a) This Agreement is the
entire agreement of the parties and supersedes all prior agreements and
understandings, written or oral, including, without limitation, the Prior
Agreement.  This Agreement shall not be
amended or modified except in writing executed by both parties; provided,
however, that prior to the Effective Date no such amendment or modification, or
termination other than pursuant to Section 16(b), shall be effective
without the prior written consent of the Crestview Shareholder.

 

(b)         In the event the Merger
is not consummated prior to the date set forth in Section 7.1 of the
Merger Agreement, or the Merger Agreement is otherwise terminated by the
parties thereto pursuant to the terms thereof, this Agreement shall immediately
terminate and be of no force or effect, and the Prior Agreement shall be in
full force and effect.

 

10

 

17.         Notice.  For
the purposes of this Agreement, notices shall be deemed given when mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed in the case of the Company to its principal executive
office; or in the case of Executive to the address shown on the signature page of
this Agreement.  Either party may change
such address by giving the other party notice of such change in the aforesaid
manner, except that notices of changes of address shall only be effective upon
receipt.

 

18.         Defined
Terms.

 

“Agreement”
has the meaning set forth in the introductory paragraph hereof.

 

“Board”
has the meaning set forth in Section 6.

 

“Cause”
means:

 

(a)      the
conviction of Executive of (including Executive’s plea of guilty or nolo contendere
to) a felony (other than a violation of a motor vehicle or moving violation
law) which in the reasonable judgment of the Board materially affects Executive’s
ability to perform his duties under this Agreement; or

 

(b)      voluntary
engagement by Executive in conduct constituting larceny, embezzlement,
conversion or any other act involving the misappropriation of any funds of any
of the Companies or a Company Subsidiary in the course of Executive’s
employment; or

 

(c)      the
willful refusal (following written notice) by Executive to carry out specific
directions of (A) the Board or (B) the Board of Directors of any
Company Subsidiary with which Executive is employed or of which Executive is an
officer, which directions are consistent with Executive’s duties to the Company
or any Company Subsidiary, as the case may be; or

 

(d)      violation
by Executive of any provision of the Restrictive Covenant or a significant
violation of the written material Company policies applicable to Executive; or

 

(e)      the
commission by Executive of any act of gross negligence or intentional
misconduct in the performance of Executive’s duties as an employee of the
Company or any Company Subsidiary to the extent it causes demonstrable harm to
the Company.

 

For purposes of this
definition, no act or failure to act on Executive’s part shall be considered to
be Cause if done, or omitted to be done, by Executive in good faith and with
the reasonable belief that the action or omission was in the best interest of
the Company or a Company Subsidiary.  The
decision to terminate Executive’s employment for Cause, to take other action or
to take no action in response to 

 

11

 

such occurrence shall be in the
sole and exclusive discretion of the Board. 
If the Board terminates Executive’s employment for Cause, the Company
shall deliver written notice of such termination to Executive within three
months after the initial occurrence of the event constituting Cause, setting
forth in reasonable detail the conduct of Executive that constitutes Cause, and
such termination shall be effective immediately upon service of such written
notice.  Notwithstanding the foregoing,
the Company shall be entitled to terminate Executive for Cause pursuant to
clause (c) only if each of the following conditions is satisfied:  (i) any determination to terminate
Executive must be made upon the affirmative vote of two-thirds of the
non-management directors of the Company; (ii) the Company must provide to
Executive at least ten (10) days prior written notice of the termination
date determined by such directors, which notice must contain a reasonably
specific explanation of the reasons for termination determined by such
directors, and (iii) Executive shall have the opportunity during such
notice period to cure the deficiencies or failures cited as the basis for his
termination.

 

“Change in Control”
means the first to occur of the following events:

 

(i)                                     a Person or group
(within the meaning of Section 13(d)(3) of the Exchange Act), other
than the Crestview Shareholder or its Permitted Transferee(s), becoming the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 50% of the combined voting power of the Parent’s
outstanding securities ordinarily having the right to vote at elections of
directors; or

 

(ii)                                  the consummation of
the sale, exchange or other disposition of all or substantially all of the
assets, or the liquidation or dissolution of, the Parent followed by the
distribution of the proceeds thereof.

 

“COBRA” has the
meaning set forth in Section 8.

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Company” has
the meaning set forth in the introductory paragraph.

 

“Company Subsidiary”
means any entity directly or indirectly, through one or more intermediaries,
controlled by the Company.  For these
purposes “control” means the power to exercise a controlling influence over the
management or policies of the relevant entity.

 

“Crestview Shareholder”
shall have the meaning assigned to such term in the Shareholders Agreement.

 

“Effective Date”
has the meaning set forth in Section 2.

 

“Employment Term”
has the meaning set forth in Section 2.

 

12

 

“Exchange Act”
has the meaning assigned to such term in the Shareholders Agreement.

 

“Excise Tax” has
the meaning set forth in Section 9.

 

“Executive” has
the meaning set forth in the introductory paragraph.

 

“Good Reason”
means (a) any material breach by the Company of any material provision of
this Agreement (including failure by the Company or Parent to effect the terms
and conditions contemplated in Schedule A or Schedule B upon consummation of
the Merger); (b) a reduction in Executive’s base salary or target bonus
opportunity (as set forth in Section 6(a), (b) and (c),
respectively); (c) a material diminution in Executive’s title or level of
responsibility, or change in office or reporting relationship, in each case
from the standard described in Section 3 of this Agreement; or (d) a
transfer of Executive’s primary workplace by more than thirty-five (35) miles
from Executive’s place of employment on the Effective Date; (e) the
failure of Executive to receive as soon as reasonably practicable after the
Effective Date the grant of options to purchase shares of Parent common stock
on the terms and conditions as described in Section 7(b) and Schedule
A; (f) Executive fails to be elected or ceases be a member of the Board of
the Company or the Parent for any reason other than resignation or removal by
the Board for Cause; (g) Executive’s resignation for any reason within the
120-day period beginning on the effective date of a Change in Control; provided  however,
that any isolated, insubstantial or inadvertent change, condition, failure or
breach described under clause (a), (b) or (c) above which is not
taken in bad faith and is remedied by the Company promptly after the Company’s
actual receipt of Good Reason Notice (defined below) from Executive shall not
constitute Good Reason. A termination of employment by Executive for Good
Reason shall be effectuated by Executive giving the Company written notice (“Good Reason Notice”), within three (3) months after the
initial occurrence of the event constituting Good Reason, setting forth in
reasonable detail the specific conduct of the Company that constitutes Good
Reason. A termination of employment by Executive for Good Reason shall be
effective on the fifth business day following the Company’s receipt of the Good
Reason Notice, absent remediation by the Company (as described above).

 

“Gross-Up Payment”
has the meaning set forth in Section 9.

 

 “Merger” means the  consummation
of the transactions contemplated by the Merger Agreement.

 

“Merger Agreement”
has the meaning set forth in the recitals.

 

“Parent” has the
meaning set forth in the recitals.

 

“Payment” has
the meaning set forth in Section 9.

 

13

 

“Permitted Transferee”
has the meaning assigned to such term in the Shareholders Agreement.

 

“Person” has the
meaning assigned to such term in the Shareholders Agreement.

 

“Prior Agreement”
means the Amended and Restated Executive Employment Agreement dated as of May 16,
2002.

 

“Restrictive Covenant”
has the meaning set forth in Section 11.

 

“Shareholders Agreement”
means the Shareholders Agreement of the Company dated as of [August 15],
2007 entered into by and among the Company, the Crestview Shareholder, The
Northwestern Mutual Life Insurance Company, certain management stockholders of
the Company, and certain other parties listed on the signature pages thereof,
as the same may be from time to time amended, supplemented or modified.  The Shareholders Agreement to be executed and
delivered by the Parent shall include terms and conditions set forth on
Schedule B.

 

“Tax Firm” has
the meaning set forth in Section 9.

 

“Tax Opinion” has
the meaning set forth in Section 9.

 

“Underpayment”
has the meaning set forth in Section 9.

 

19.                                     Legal Fees.  The
Company shall reimburse Executive for all reasonable legal and expenses
incurred by him in connection with the negotiation and execution of this
Agreement in an amount not to exceed $50,000.

 

20.                                     Section 409A.  In
the event that any payments in respect of the execution of this Agreement and
the supercission of the Prior Agreement, or the contribution by Executive of
equity or equity rights into Parent as described in Section 7A hereof
would be subject to excise tax under Section 409A of the Code, Executive
shall be entitled to additional payments in respect of such excise tax,
generally determined as provided in Section 9, with the Company and
Executive each having comparable rights and duties to those provided in Section 9.

 

14

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

	
   

  	
  SYMBION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Richard E. Francis, Jr.

  
	
   

  	
  Name:   Richard E. Francis, Jr.

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Clifford G. Adlerz

  
	
   

  	
  Clifford G. Adlerz

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  320 Sandcastle Road

  
	
   

  	
  Franklin, Tennessee 37069

  

 

15

 

Schedule A

 

Terms and Conditions of Stock Options/Purchased Equity

 

	
  Number of Shares:

  	
  •

  	
  605,630

  
	
   

  	
   

  	
   

  
	
  Exercise Price:

  	
  •

  	
  $10.00, which such amount shall be at the fair value of the equity
  purchased by the Crestview Shareholder.

  
	
   

  	
   

  	
   

  
	
  Vesting:

  	
  •

  	
  A portion of option grant 5% portion of 11.25% to vest in 20%
  increments beginning on 12/31/07

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  5% portion of 11.25% to vest 50% on 12.5% IRR and 50% on 17.5% IRR

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  1.25% portion of 11.25% to be vested on the Crestview Shareholder
  realizing either 2x return on invested capital or 20% IRR

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  Accelerate in the event any persons or entity unrelated to the
  Crestview Shareholder holds, other than pursuant to registered public
  offering, Parent stock representing at least 50% of the combined voting power
  of all outstanding Parent equity securities

  
	
   

  	
   

  	
   

  
	
  Term:

  	
  •

  	
  10 years

  
	
   

  	
   

  	
   

  
	
  Termination of Employment:(1)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •   Without Cause/Good
  Reason:

  	
  •

  	
  No repurchase right

  
	
   

  	
   

  	
   

  
	
  •   For Cause:

  	
  •

  	
  All options terminate

  
	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  Shares acquired on option exercise/initial purchased equity  subject to call at lower of FMV or price paid(2)

  

 

 

	
  •   Death, Disability
  or Voluntary Quit:

  	
  •

  	
  Shares acquired on exercise/initial purchased equity  subject to call at FMV

  

 

(1)          Contained in Shareholder Agreement (which shall provide that in the
event any holder exercises their right to demand a 1933 Act registration,
Management Shareholder shall have customary “piggyback” rights, subject to any
underwriter-required lock up).

 

(2)          Shareholder Agreement to provide that Board determines FMV, with any
objecting shareholder having the right to demand binding arbitration.

 

16

 

Schedule B

 

PROJECT SYMBOL

SUMMARY OF TERMS AND CONDITIONS

OF COMMON STOCK

 

It is expected that Messrs. Francis and Adlerz will enter into a
shareholders agreement at Closing with the other shareholders of the Parent
containing customary terms and conditions for private equity transactions of
this nature, including, but not limited to, the following:

 

	
  Board of Directors

  	
   

  	
  Each of Messrs. Francis and Adlerz will be on the Board of
  Directors of the Company and the Parent (the “Board”)
  for so long as that individual remains the CEO or COO and President,
  respectively, of the Company. Board number shall not exceed 7 and
  Mr. Francis will be consulted on board composition.

   

  Mr. Francis will be the Chairman of the Board of the Company and
  Parent for so long as he remains the CEO of the Company.

  
	
   

  	
   

  	
   

  
	
  Tag Along Rights

  	
   

  	
  Subject to the Rights of First Refusal, if any party to the
  Shareholders Agreement sells more than a de minimis
  amount of equity to an unaffiliated 3rd party in a private sale
  prior to an initial public offering (an “IPO”),
  Messrs. Francis and Adlerz will have the right to sell a pro rata number of shares on the same terms and
  conditions.

  
	
   

  	
   

  	
   

  
	
  Right of First Refusal

  	
   

  	
  Subject to Crestview’s Drag-Along Rights, if any party to the
  Shareholders Agreement elects to sells any equity of the Parent to an
  unaffiliated 3rd party, the other parties to the Shareholders
  Agreement will have the right to sell purchase shares on the same terms and
  conditions.

  
	
   

  	
   

  	
   

  
	
  Drag Along Rights

  	
   

  	
  If Crestview sells all or substantially all of the equity of the
  Parent to an unaffiliated 3rd party, then Crestview will have the
  right to require the other parties to the Shareholders Agreement to sell
  their equity pro rata on the same terms and
  conditions (but without prejudice to any matters to which
  Messrs. Francis and Adlerz may be reasonably asked to agree in their
  capacity as officers of the Company).

  

 

 

	
  Preemptive Rights

  	
   

  	
  Messrs. Francis and Adlerz will have the right, prior to an IPO,
  to purchase his pro rata share of all future
  equity issued by the Parent, subject to certain exceptions (i.e., for employees, acquisition consideration, etc.)

  
	
   

  	
   

  	
   

  
	
  Underwriter Lock-Ups

  	
   

  	
  Messrs. Francis and Adlerz will both be obligated to enter into
  customary underwriter lock-ups in connection with an IPO and any other public
  offerings of equity securities of the Parent.

  
	
   

  	
   

  	
   

  
	
  Repurchase Rights

  	
   

  	
  See Schedule A to Form of Employment Agreement.

  
	
   

  	
   

  	
   

  
	
  Piggyback Registration Rights

  	
   

  	
  Messrs. Francis and Adlerz will each have customary piggyback
  registration rights on all offerings (other than the IPO), subject to pro rata cut-back among all shareholders, but only if the
  investment bank underwriting the offering determines that such person’s
  participation therein would not reasonably be expected to have an adverse
  effect on that offering.

  

 

2

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