Document:

Exhibit 10.9

 

SHAREHOLDERS AGREEMENT

 

dated as of

 

August 23, 2007

 

among

 

SYMBION HOLDINGS CORPORATION,

 

CRESTVIEW SYMBION HOLDINGS, L.L.C.,

 

THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY,

 

THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY

(FOR ITS GROUP ANNUITY SEPARATE ACCOUNT),

 

TRIDENT IV, L.P.,

 

TRIDENT IV PROFESSIONALS FUND, L.P.,

 

BANC OF AMERICA CAPITAL INVESTORS V, L.P.,

 

R6 OVERSEAS OPPORTUNITY FUND, LTD.,

 

R6 OPPORTUNITY FUND, L.P.

 

and

 

CERTAIN OTHER PERSONS NAMED HEREIN

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
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  ARTICLE 1

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01 . Definitions. (a) As
  used herein, the following terms have the following meanings:

  	
   

  	
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  Section 1.02 . Other
  Definitional and Interpretative Provisions. The words “hereof”, “herein”
  and “hereunder” and words of like import used in this Agreement shall refer
  to this Agreement as a whole and not to any particular provision of this
  Agreement. The captions herein are included for convenience of reference only
  and shall be ignored in the construction or interpretation hereof. References
  to Articles, Sections, Exhibits and Schedules are to Articles, Sections,
  Exhibits and Schedules of this Agreement, unless otherwise specified. All
  Exhibits and Schedules annexed hereto or referred to herein are hereby
  incorporated in and made a part of this Agreement as if set forth in full
  herein. Any capitalized terms used in any Exhibit or Schedule but not
  otherwise defined therein, shall have the meaning as defined in this
  Agreement. Any singular term in this Agreement shall be deemed to include the
  plural, and any plural term the singular. Whenever the words “include”, “includes”
  or “including” are used in this Agreement, they shall be deemed to be
  followed by the words “, but not limited to,”, whether or not they are in
  fact followed by those words or words of like import. “Writing”, “written”
  and comparable terms refer to printing, typing and other means of reproducing
  words (including electronic media) in a visible form. References to any
  agreement or contract are to that agreement or contract as amended, modified
  or supplemented from time to time in accordance with the terms hereof and
  thereof. References from or through any date mean, unless otherwise
  specified, from and including or through and including, respectively.

  	
   

  	
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  ARTICLE 2

  	
   

  	
   

  
	
  CORPORATE GOVERNANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01 .
  Composition of the Board. (a) The Board shall consist of up
  to seven directors for so long as Mr. Richard E. Francis, Jr.
  remains the Chief Executive Officer of the Company (and thereafter shall be
  such size as the Board may determine). One of the directors shall be
  Mr. Richard E. Francis, Jr. for so long as he remains the Chief
  Executive Officer of the Company, one of the directors shall be 

  	
   

  	
   

  

 

 

	
   

  	
   

  	
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  Mr. Clifford G. Adlerz for so
  long as he remains the Chief Operating Officer and President of the Company,
  one director shall be designated by Trident IV for so long as Trident IV owns
  at least 50% of the Common Stock acquired by it on the Closing Date and the remaining
  directors shall be designated by Crestview Partners (ERISA), L.P. for so long
  as the Crestview Shareholder owns at least 50% of the Common Stock acquired
  by it on the Closing Date. Mr. Francis shall be the Chairman of the
  Board for so long as he remains the Chief Executive Officer of the Company.
  Crestview Partners (ERISA), L.P. and Trident IV shall consult with
  Mr. Francis on the identity of their respective designees to the Board before
  making such designations

  	
   

  	
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  Section 2.02 . Removal. Each Shareholder agrees that,
  if at any time it is then entitled to vote for the removal of directors from
  the Board, it shall not vote any of its Shares in favor of the removal of any
  director who shall have been designated pursuant to Section 2.01 or
  Section 2.03, unless such removal shall be for Cause or the Person or
  Persons entitled to designate or nominate such director shall have consented
  to such removal in writing; provided
  that, if the Person or Persons entitled to designate any director pursuant to
  Section 2.01 shall request in writing the removal, with or without
  cause, of such director, such Shareholder shall vote its Shares in favor of
  such removal

  	
   

  	
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  Section 2.03 . Vacancies. If, as a result of death,
  disability, retirement, resignation, removal (with or without cause) or
  otherwise, there shall exist or occur any vacancy on the Board:

  	
   

  	
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  Section 2.04 . Meetings. The Board shall hold a
  regularly scheduled meeting at least once every calendar quarter. The Company
  shall pay all reasonable out-of-pocket expenses incurred by each director in
  connection with attending regular and special meetings of the Board and any
  committee thereof, and any such meetings of the board of directors of any
  Subsidiary of the Company and any committee thereof

  	
   

  	
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  Section 2.05 . Action by the Board. (a) A quorum
  of the Board shall consist of a majority of the directors which includes all
  of the designees of the Crestview Shareholder who are employees, officers or
  partners of a Crestview Fund itself (each such designee, a “Crestview Fund Designee”) unless otherwise waived in
  writing by the Crestview Shareholder; provided
  that the Crestview Shareholder shall have the right at any time to increase
  the number of directors necessary to constitute such quorum

  	
   

  	
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  Section 2.06 . Actions
  Requiring Consent. Subject to the provisos set forth at the end of
  this Section, for so long as the Crestview Shareholder (together with any
  Permitted Transferees thereof) shall own at least

  	
   

  	
   

  

 

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  50% of the Shares held by the
  Crestview Shareholder on the Closing Date, the Company shall not, shall not
  permit any of its wholly owned Subsidiaries to, and shall use all
  commercially reasonable efforts to cause its less than wholly owned
  Subsidiaries and joint ventures (whether majority or minority owned by the
  Company) not to, take any of the following actions (or agree or commit to
  take any of the following actions) without (x) the approval of a
  majority of the Board and (y) the prior written consent of the Crestview
  Shareholder, acting in its capacity as a stockholder of the Company:

  	
   

  	
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  Section 2.07 . Charter or Bylaw Provisions. Each
  Shareholder agrees to vote its Shares or execute proxies or written consents,
  as the case may be, and to take all other actions necessary, to ensure that
  the Charter and Bylaws (i) facilitate, and do not at any time conflict
  with, any provision of this Agreement and (ii) permit each Shareholder
  to receive the benefits to which each such Shareholder is entitled under this
  Agreement. The Charter and Bylaws shall provide for (x) the elimination
  of the liability of each director on the Board to the maximum extent
  permitted by applicable law and (y) indemnification of each director on
  the Board for acts on behalf of the Company to the maximum extent permitted
  by applicable law

  	
   

  	
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  Section 2.08 . Notice of Meeting. The Company shall
  give each director notice and the agenda for each meeting of the Board or any
  committee thereof a reasonable period of time before such meeting in light of
  the circumstances thereof

  	
   

  	
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  Section 2.09 . Subsidiary Governance. The Company
  agrees that it will vote (or cause the voting of) the shares of the capital
  stock of its Subsidiaries, including shares of its less than wholly owned
  Subsidiaries or its minority joint ventures, and each Shareholder agrees to
  vote its Shares and to cause its representatives on the Board, subject to
  their fiduciary duties, to vote and take other appropriate action, in each case
  to give effect to the agreements in this Article 2 in respect of any
  Subsidiary of the Company (including Section 2.06 hereof)

  	
   

  	
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  Section 2.10 . Rights
  to Appoint Board Observers. NW Mutual shall have the right to
  appoint two individuals to attend each meeting of the Board and each meeting
  of the board of directors of Symbion, Inc. (the “Symbion, Inc. Board”), BACI shall
  have the right to appoint one individual to attend each meeting of the Board
  and the Symbion, Inc. Board, and Trident IV shall have the right to
  appoint one individual to attend each meeting of the Symbion, Inc.
  Board, in each case as non-voting observers (the “Board
  Observers”) and whether such meeting is conducted in person or by
  teleconference. The Board Observers shall be entitled to receive notices of
  all meetings of the Board and the Symbion, Inc. Board and to obtain
  copies of all

  	
   

  	
   

  

 

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  materials provided to the Board
  or the Symbion, Inc. Board; provided
  that, for the sake of clarity, the Board Observers shall have no voting
  rights whatsoever with respect to actions taken by the Board or the
  Symbion, Inc. Board. The Company shall provide to R6, at substantially
  the same time as such materials are provided to members of the Board or the
  Symbion, Inc. Board, as applicable, copies of all materials formally
  provided to such members in connection with meetings of the Board or the
  Symbion, Inc. Board (including board meeting minutes and resolutions
  that are formally adopted). The Board Observers will be asked to leave all or
  a portion of a meeting of the Board or the Symbion, Inc. Board to the
  extent such board of directors is discussing (and will not be entitled to
  receive any) information that is subject to any legal privilege. The Company
  shall pay all reasonable out-of-pocket expenses incurred by each Board
  Observer in connection with attending regular and special meetings of the Board
  and the Symbion, Inc. Board

  	
   

  	
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  ARTICLE 3

  	
   

  	
   

  
	
  RESTRICTIONS ON TRANSFER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01 . General Restrictions on Transfer.
  (a) Each Shareholder understands and agrees that the Company Securities
  have not been registered under the Securities Act and are restricted
  securities under such act. Each Shareholder agrees that it shall not Transfer
  any Company Securities (or solicit any offers in respect of any Transfer of
  any Company Securities), except in compliance with the Securities Act, any
  other applicable securities or “blue sky” laws, and the terms and conditions
  of this Agreement

  	
   

  	
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  Section 3.02 . Legends. (a) In addition to any
  other legend that may be required, each certificate for Company Securities
  issued to any Shareholder shall bear a legend in substantially the following
  form:

  	
   

  	
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  Section 3.03 . Permitted
  Transferees. Notwithstanding anything in this Agreement to the
  contrary, any Shareholder may at any time Transfer any or all of its Company
  Securities to one or more of its Permitted Transferees without the consent of
  the Board or any other Shareholder or group of Shareholders and without
  compliance with Sections 3.04, 3.05, 4.01, 4.02 and 4.04 so long as
  (i) such Permitted Transferee shall have agreed in writing to be bound
  by the terms of this Agreement in the form of Exhibit A attached hereto
  and (ii) the Transfer to such Permitted Transferee is in compliance with
  the Securities Act and any other applicable securities or “blue sky” laws

  	
   

  	
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  Section 3.04 . Restrictions on Transfers by Institutional
  Shareholders. (a) Except as otherwise waived in any instance
  by the Company, the Company’s Chief Executive Officer and the Crestview
  Shareholder

  	
   

  	
   

  

 

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  (who may each grant or withhold
  such waiver in their sole discretion) in the case of a Transfer by any
  Institutional Shareholder (other than the Crestview Shareholder), no
  Institutional Shareholder shall Transfer any of its Company Securities,
  except to one or more of its Permitted Transferees in accordance with
  Section 3.03 or as follows:

  	
   

  	
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  Section 3.05 . Restrictions on Transfers by Management
  Shareholders. (a) Except as otherwise waived in any instance
  by the Company, the Company’s Chief Executive Officer and the Crestview
  Shareholder (who may each grant or withhold such waiver in their sole
  discretion), no Management Shareholder shall Transfer any of its Company
  Securities, except to one or more of its Permitted Transferees in accordance
  with Section 3.03 or as follows:

  	
   

  	
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  ARTICLE 4

  	
   

  	
   

  
	
  TAG-ALONG RIGHTS;
  DRAG-ALONG RIGHTS; RIGHTS OF FIRST REFUSAL;

  PREEMPTIVE RIGHTS; REPURCHASE RIGHTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01 . Tag-Along Rights. (a) Subject to
  Sections 4.01(g) and (h), 4.03 and 4.04, if any Shareholder (the “Tag-Along
  Seller”) proposes to Transfer to a Third Party, in a
  transaction otherwise permitted by Article 3, in a single transaction or
  in a series of related transactions a number of Company Securities held by
  the Tag-Along Seller that exceeds 2% of the aggregate number of any
  outstanding Company Securities (a “Tag-Along Sale”):

  	
   

  	
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  Section 4.02 . Drag-Along Rights. (a) Subject to
  Sections 4.02(e), 4.02(f), 4.03 and 4.04, if the Crestview Shareholder (the “Drag-Along
  Seller”) enters into an agreement to sell all or
  substantially all of its Company Securities to a Third Party (whether
  pursuant to a merger acting through Parent, stock sale or otherwise) (a “Drag-Along Sale”), the Drag-Along Seller may at its option
  require all Other Shareholders to, and the Other Shareholders shall,
  (i) Transfer the Drag-Along Portion of Company Securities (“Drag-Along
  Rights”) then held by every Other Shareholder (and shall
  not exercise any appraisal or dissenter’s rights that may otherwise be
  available to any such Other Shareholder under applicable law), and
  (ii) subject to and at the closing of the Drag-Along Sale, exercise such
  number of options or warrants for Shares held by every Other Shareholder as
  is required in order that a sufficient number of Shares are available to
  Transfer the relevant Drag-Along Portion of Company Securities of each such
  Other Shareholder, in each case for the same consideration per Share as the
  Drag-Along Seller and otherwise on the same terms and conditions as the
  Drag-Along Seller; provided
  that any Other Shareholder that holds options the exercise price per share of
  which is greater than the per share price at which the Shares are to be

  	
   

  	
   

  

 

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  Transferred to the Drag-Along
  Transferee, if required by the Drag-Along Seller to exercise such options,
  may, in lieu of such exercise, submit to irrevocable cancellation thereof
  without any liability for payment of any exercise price with respect thereto.
  If the Drag-Along Sale is not consummated with respect to any Shares acquired
  upon exercise of any options or warrants, or the Drag-Along Sale is not
  consummated, any options or warrants exercised or canceled in contemplation
  of such Drag-Along Sale shall be deemed not to have been exercised or
  canceled, as applicable

  	
   

  	
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  Section 4.03 . Additional Conditions to Tag-Along Sales and
  Drag-Along Sales. Notwithstanding anything contained in
  Section 4.01 or 4.02, the rights and obligations of the Shareholders to
  participate in a Tag-Along Sale under Section 4.01 or a Drag-Along Sale
  under Section 4.02 are subject to the following conditions:

  	
   

  	
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  Section 4.04 . Rights
  of First Refusal. (a) If, at any time, any Shareholder
  receives from or otherwise negotiates with a Third Party an offer to purchase
  any or all of the Company Securities owned or held by that Shareholder (an “Offer”), and that Shareholder (the “ROFR Seller”) intends to pursue the
  Transfer of such Company Securities to that Third Party, then the ROFR Seller
  shall give notice (an “Offer Notice”)
  to the other Shareholders (the “ROFR
  Offerees”) and to the Company that the ROFR Seller desires to
  accept the Offer, which notice shall also set forth the number and kind of
  Company Securities proposed to be sold (the “Offered Securities”), the price per share that the ROFR
  Seller proposes to be paid for those Offered Securities (the “Offer Price”) and all other material terms
  and conditions of the Offer

  	
   

  	
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  Section 4.05 .
  Preemptive Rights. (a) The Company shall give each
  Shareholder notice (an “Issuance Notice”) of any proposed
  issuance by the Company of any Company Securities at least 20 Business Days
  prior to the proposed issuance date. The Issuance Notice shall specify the
  price at which such Company Securities are to be issued and the other
  material terms of the issuance. Subject to Section 4.05(f) below,
  each Shareholder shall be entitled to purchase up to such Shareholder’s
  Preemptive Rights Share of the Company Securities proposed to be issued, at
  the price and on the terms specified in the Issuance Notice. For purposes of
  this Agreement, the term “Preemptive Rights
  Share” shall mean, with respect to any Holder, the percentage that
  results from dividing (i) that Shareholder’s Aggregate Ownership
  (immediately before giving effect to the issuance) of Common Stock by
  (ii) the Aggregate Ownership (immediately before giving effect to the
  issuance) of the Common Stock held by all Shareholders

  	
   

  	
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  Section 4.06 .
  Purchase Option. (a) In the event that any Management
  Shareholder shall cease to be employed by or in the service of the Company or
  any of its Subsidiaries due to (i) death, disability, retirement, or
  voluntary resignation or (ii) termination with Cause, the Company shall
  have the right and option, at any time within the 90-day period (the “Option Period”) after the effective date of such
  termination of employment (the “Termination Date”)
  or, if later, the exercise date for the options under which such Option
  Shares are acquired (which Option Period shall be extended if such
  transaction is subject to regulatory approval until the expiration of five
  Business Days after all such approvals have been received, but in no event
  later than 180 days after the commencement of the Option Period), to purchase
  from such Management Shareholder all of the Option Shares then owned by such
  Management Shareholder (and his or her Permitted Transferees) at a purchase
  price equal to the Option Purchase Price (as defined below). The Company
  shall give notice to the Management Shareholder of its intention to purchase
  the Option Shares at any time not later than the end of the Option Period
  (which period shall be extended if such transaction is subject to regulatory
  approval until the expiration of five Business Days after all such approvals
  have been received, but in no event later than 180 days after the
  commencement of the Option Period). The right of the Company set forth in
  this Section 4.06 to purchase a Management Shareholder’s Option Shares
  is hereinafter referred to as the “Purchase Option”.
  For the avoidance of doubt, the Purchase Option shall
  not apply to the termination of a Management Shareholder’s employment with
  the Company or any Subsidiary (x) by the Company other than for Cause or
  (y) by either Mr. Francis or Mr. Adlerz, or any other
  Management Shareholder with an employment agreement or option award agreement
  that defines “good reason”, for Good Reason

  	
   

  	
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  Article 5

  
	
  REGISTRATION RIGHTS

  
	
   

  	
   

  	
   

  
	
  Section 5.01 . Demand Registration. (a) If at any
  time following the Closing Date, the Company shall receive a written request
  from the Crestview Shareholder (the “Requesting Shareholder”) that the
  Company effect the registration under the Securities Act of all or any
  portion (so long as the value of such portion shall be equal to a minimum of
  $5 million for a S-1 registration and $1 million for a S-3 registration) of
  such Requesting Shareholder’s Registrable Securities, and specifying the
  intended method of disposition thereof and the number of Registrable
  Securities for which the Requesting

  	
   

  	
   

  

 

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  Shareholder has requested
  registration under this Section 5.01 (the “Crestview
  Request Amount”), then the Company shall promptly give notice of
  such requested registration (a “Demand Registration”) at least 20
  Business Days prior to the anticipated filing date of the registration
  statement relating to such Demand Registration to the Other Shareholders and
  thereupon shall use its reasonable best efforts to effect, as expeditiously
  as reasonably practicable, the registration under the Securities Act, but
  subject to the restrictions set forth in Sections 5.01(e) and 5.02, of:

  	
   

  	
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  Section 5.02 . Piggyback Registration. (a) Subject
  to Section 5.02(c), if the Company proposes to register any Company
  Securities under the Securities Act after the IPO, including a Demand
  Registration (other than a registration on Form S-8, S-4 or F-4, or any
  successor forms, relating to Shares issuable upon exercise of employee stock
  options or in connection with any employee benefit or similar plan of the
  Company or in connection with a direct or indirect acquisition by the Company
  of another Person), whether or not for sale for its own account or for other
  Persons (e.g., the Requesting Holder), the
  Company shall each such time give prompt notice at least 20 Business Days
  prior to the anticipated filing date of the registration statement relating
  to such registration to each Shareholder (the “Piggyback Notice”), which notice shall set forth such
  Shareholder’s rights under this Section 5.02 and the Crestview Request
  Amount (if such Public Offering is pursuant to a Demand Registration) and
  shall offer such Shareholder the opportunity to include in such registration
  statement the number of Registrable Securities of the same class or series as
  those proposed to be registered as each such Shareholder may request (a “Piggyback
  Registration”), subject to the provisions of Section 5.02(b).
  Subject to Section 5.02(c), upon the request of any such Other
  Shareholder made within 10 Business Days after the receipt of the Piggyback
  Notice from the Company (which request shall specify the number of
  Registrable Securities intended to be registered by such Shareholder), the
  Company shall use its reasonable best efforts to effect the registration
  under the Securities Act of all Registrable Securities that the Company has
  been so requested to register by all Shareholders, to the extent necessary to
  permit the disposition of the Registrable Securities so to be registered; provided that (i) if such
  registration involves an underwritten Public Offering, all such Shareholders
  requesting to be included in the Company’s registration must sell their
  Registrable Securities to the underwriters selected as provided in
  Section 5.04(f) on the same terms and conditions as apply to the
  Company or the Requesting Shareholder, as applicable, and (ii) if, at
  any time after giving notice of its intention to register any Company
  Securities for

  	
   

  	
   

  

 

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  the Company’s own account
  pursuant to this Section 5.02(a) and prior to the effective date of
  the registration statement filed in connection with such registration, the
  Company shall determine for any reason not to register such securities, the
  Company shall give notice to all such Shareholders and, thereupon, shall be
  relieved of its obligation to register any Registrable Securities in
  connection with such registration. No registration effected under this
  Section 5.02 shall relieve the Company of its obligations to effect a
  Demand Registration to the extent required by Section 5.01. The Company
  shall pay all Registration Expenses in connection with each Piggyback
  Registration

  	
   

  	
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  Section 5.03 . Lock-Up Agreements. If any registration
  of Registrable Securities shall be effected in connection with a Public
  Offering, neither the Company nor any Shareholder shall effect any public
  sale or distribution, including any sale pursuant to Rule 144, of any
  Company Securities or other security of the Company (except as part of such
  Public Offering) during the period beginning 14 days prior to the effective
  date of the applicable registration statement until the earlier of
  (i) such time as the Company and the lead managing underwriter shall
  agree and (ii) 180 days following the effective date (such period, the “Lock-Up
  Period” for the applicable registration statement); provided that in the case of any
  post-IPO Public Offering, such lock-up restriction shall apply (x) only
  to any Registering Shareholder(s) and the Company and (y) to all
  Shareholders who beneficially own (as defined in the Exchange Act) more than
  1% of the aggregate number of then outstanding Company Securities; and provided further that no such lock-up
  restriction may be waived by the underwriter(s) for any Institutional
  Shareholder unless such restriction shall simultaneously be waived for all
  Institutional Shareholders

  	
   

  	
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  Section 5.04 . Registration Procedures. Whenever
  Shareholders request that any Registrable Securities be registered pursuant
  to Section 5.01 or 5.02, subject to the provisions of such Sections, the
  Company shall use its reasonable best efforts to effect the registration and
  the sale of such Registrable Securities in accordance with the intended
  method of disposition thereof as quickly as reasonably practicable. In
  connection with any such request, the following shall occur:

  	
   

  	
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  Section 5.05 . Indemnification by the Company. The
  Company agrees to indemnify and hold harmless each Registering Shareholder
  beneficially owning any Registrable Securities covered by a registration
  statement, its officers, directors, employees, partners and agents, and each
  Person, if any, who controls such Shareholder within the meaning of
  Section 15 of the Securities Act or Section 20 of the Exchange Act
  from and against any and all losses, claims,

  	
   

  	
   

  
				

 

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  damages, liabilities and
  expenses (including reasonable expenses of investigation and reasonable
  attorneys’ fees and expenses) (“Damages”) caused by or relating to
  any untrue statement or alleged untrue statement of a material fact contained
  in any registration statement or prospectus relating to the Registrable
  Securities (as amended or supplemented if the Company shall have furnished
  any amendments or supplements thereto) or any preliminary prospectus, or
  caused by or relating to any omission or alleged omission to state therein a
  material fact required to be stated therein or necessary to make the
  statements therein not misleading, except insofar as such Damages are caused
  by or related to any such untrue statement or omission or alleged untrue
  statement or omission so made based upon information furnished in writing to
  the Company by such Shareholder or on such Shareholder’s behalf expressly for
  use therein. The Company also agrees to indemnify any underwriters of the
  Registrable Securities, their officers and directors and each Person who controls
  such underwriters within the meaning of Section 15 of the Securities Act
  or Section 20 of the Exchange Act on substantially the same basis as
  that of the indemnification of the Shareholders provided in this
  Section 5.05

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 5.06 . Indemnification by Registering Shareholders.
  Each Registering Shareholder holding Registrable Securities included in any
  registration statement agrees, severally but not jointly, to indemnify and
  hold harmless the Company, its officers, directors and agents and each
  Person, if any, who controls the Company within the meaning of either
  Section 15 of the Securities Act or Section 20 of the Exchange Act
  to the same extent as the foregoing indemnity from the Company to such
  Shareholder, but only with respect to information furnished in writing by
  such Shareholder or by an authorized representative of such Shareholder on
  such Shareholder’s behalf expressly for use in any registration statement or
  prospectus relating to the Registrable Securities, or any amendment or supplement
  thereto, or any preliminary prospectus. Each such Shareholder also agrees to
  indemnify and hold harmless underwriters of the Registrable Securities, their
  officers and directors and each Person who controls such underwriters within
  the meaning of either Section 15 of the Securities Act or
  Section 20 of the Exchange Act on substantially the same basis as that
  of the indemnification of the Company provided in this Section 5.06. As
  a condition to including Registrable Securities in any registration statement
  filed in accordance with Article 5, the Company may require that it
  shall have received an undertaking reasonably satisfactory to it from any
  underwriter to indemnify and hold it harmless to the extent customarily
  provided by underwriters with respect to similar

  	
   

  	
   

  

 

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  securities. No Registering
  Shareholder shall be liable under this Section 5.06 for any Damages in
  excess of the net proceeds realized by such Shareholder in the sale of Registrable
  Securities of such Shareholder to which such Damages relate

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 5.07 . Conduct of Indemnification Proceedings.
  If any proceeding (including any governmental investigation) shall be
  instituted involving any Person in respect of which indemnity may be sought
  pursuant to this Article 5, such Person (an “Indemnified Party”)
  shall promptly notify the Person against whom such indemnity may be sought
  (the “Indemnifying Party”) in writing and the Indemnifying
  Party shall assume the defense thereof, including the employment of counsel
  reasonably satisfactory to such Indemnified Party, and shall assume the
  payment of all fees and expenses; provided
  that the failure of any Indemnified Party so to notify the Indemnifying Party
  shall not relieve the Indemnifying Party of its obligations hereunder except
  to the extent that the Indemnifying Party is materially prejudiced by such
  failure to notify. In any such proceeding, any Indemnified Party shall have
  the right to retain its own counsel, but the fees and expenses of such
  counsel shall be at the expense of such Indemnified Party unless (i) the
  Indemnifying Party and the Indemnified Party shall have mutually agreed to
  the retention of such counsel or (ii) in the reasonable judgment of such
  Indemnified Party representation of both parties by the same counsel would be
  inappropriate due to actual or potential differing interests between them. It
  is understood that, in connection with any proceeding or related proceedings
  in the same jurisdiction, the Indemnifying Party shall not be liable for the
  reasonable fees and expenses of more than one separate firm of attorneys (in
  addition to any local counsel) at any time for all such Indemnified Parties,
  and that all such fees and expenses shall be reimbursed as they are incurred.
  In the case of any such separate firm for the Indemnified Parties, such firm
  shall be designated in writing by the Indemnified Parties. The Indemnifying
  Party shall not be liable for any settlement of any proceeding effected
  without its written consent, but if settled with such consent, or if there be
  a final judgment for the plaintiff, the Indemnifying Party shall indemnify
  and hold harmless such Indemnified Parties from and against any loss or
  liability (to the extent stated above) by reason of such settlement or
  judgment. Without the prior written consent of the Indemnified Party, no
  Indemnifying Party shall effect any settlement of any pending or threatened
  proceeding in respect of which any Indemnified Party is or could have been a
  party and indemnity could have been sought hereunder by such Indemnified
  Party, unless such settlement includes

  	
   

  	
   

  

 

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  an unconditional release of such
  Indemnified Party from all liability arising out of such proceeding

  	
   

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 5.08 . Contribution. If the indemnification
  provided for in this Article 5 is unavailable to the Indemnified Parties
  in respect of any Damages, then each such Indemnifying Party, in lieu of
  indemnifying such Indemnified Party, shall contribute to the amount paid or
  payable by such Indemnified Party as a result of such Damages (i) as
  between the Company and the Registering Shareholders holding Registrable
  Securities covered by a registration statement on the one hand and the underwriters
  on the other, in such proportion as is appropriate to reflect the relative
  benefits received by the Company and such Shareholders on the one hand and
  the underwriters on the other, from the offering of the Registrable
  Securities, or if such allocation is not permitted by applicable law, in such
  proportion as is appropriate to reflect not only the relative benefits but
  also the relative fault of the Company and such Shareholders on the one hand
  and of such underwriters on the other in connection with the statements or
  omissions that resulted in such Damages, as well as any other relevant
  equitable considerations and (ii) as between the Company on the one hand
  and each such Shareholder on the other, in such proportion as is appropriate
  to reflect the relative fault of the Company and of each such Shareholder in
  connection with such statements or omissions, as well as any other relevant
  equitable considerations. The relative benefits received by the Company and
  such Shareholders on the one hand and such underwriters on the other shall be
  deemed to be in the same proportion as the total proceeds from the offering
  (net of underwriting discounts and commissions but before deducting expenses)
  received by the Company and such Shareholders bear to the total underwriting
  discounts and commissions received by such underwriters, in each case as set
  forth in the table on the cover page of the prospectus. The relative
  fault of the Company and such Shareholders on the one hand and of such
  underwriters on the other shall be determined by reference to, among other
  things, whether the untrue or alleged untrue statement of a material fact or
  the omission or alleged omission to state a material fact relates to
  information supplied by the Company and such Shareholders or by such
  underwriters. The relative fault of the Company on the one hand and of each
  such Shareholder on the other shall be determined by reference to, among
  other things, whether the untrue or alleged untrue statement of a material
  fact or the omission or alleged omission to state a material fact relates to
  information supplied by such party, and the parties’ relative intent,
  knowledge, access to

  	
   

  	
   

  

 

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  information and opportunity to
  correct or prevent such statement or omission

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 5.09 . Participation in Public Offering. No
  Shareholder may participate in any Public Offering hereunder unless such
  Shareholder (i) agrees to sell such Shareholder’s Registrable Securities
  on the basis provided in any underwriting arrangements approved by the
  Persons entitled hereunder to approve such arrangements and
  (ii) completes and executes all questionnaires, powers of attorney,
  indemnities, underwriting agreements and other documents reasonably required
  under the terms of such underwriting arrangements and the provisions of this
  Agreement in respect of registration rights

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 5.10 . Other Indemnification. Indemnification
  similar to that specified herein (with appropriate modifications) shall be
  given by the Company and each Registering Shareholder participating therein
  with respect to any required registration or other qualification of
  securities under any federal or state law or regulation or governmental
  authority other than the Securities Act

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 5.11 . Cooperation by the Company. If any
  Shareholder shall transfer any Registrable Securities pursuant to
  Rule 144, the Company shall cooperate, to the extent commercially
  reasonable, with such Shareholder and shall provide to such Shareholder such
  information as such Shareholder shall reasonably request

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 5.12 . No Transfer of Registration Rights. None
  of the rights of Shareholders under this Article 5 shall be assignable
  by any Shareholder to any Person acquiring Securities in any Public Offering
  or pursuant to Rule 144. The Demand Registration rights are not
  assignable or transferable by the Crestview Shareholder

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  
	
  CERTAIN COVENANTS AND AGREEMENTS

  
	
   

  	
   

  	
   

  
	
  Section 6.01 . Confidentiality. (a)  Each Shareholder
  agrees that Confidential Information furnished and to be furnished to it has
  been and may in the future be made available in connection with such
  Shareholder’s investment in the Company. Each Shareholder agrees that it
  shall use, and that it shall cause any Person to whom Confidential
  Information is disclosed pursuant to clause (i) below to use, the
  Confidential Information only in connection with its investment in the
  Company and not for any other purpose. Each Shareholder further acknowledges
  and agrees that it shall not disclose any Confidential Information to any
  Person, except that Confidential Information may be disclosed:

  	
   

  	
  46

  
					

 

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  Section 6.02 . Reports. The Company agrees to furnish
  each Institutional Shareholder, for so long as such Shareholder owns at least
  3% of the Common Stock or 50% of the Common Stock held by such Institutional
  Shareholder on the Closing Date:

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 6.03 . Limitations on Subsequent Registration Rights.
  The Company agrees that it shall not enter into any agreement with any holder
  or prospective holder of any securities of the Company (i) that would
  allow such holder or prospective holder to include such securities in any
  Demand Registration or Piggyback Registration unless, under the terms of such
  agreement, such holder or prospective holder may include such securities in
  any such registration only to the extent that their inclusion would not
  reduce the amount of the Registrable Securities of the Shareholders included
  therein or (ii) on terms otherwise more favorable than this Agreement

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 6.04 . Affiliate Transactions. The Company
  shall not, and shall not permit any of its Subsidiaries or Affiliates to,
  make any payment to, or sell, lease, transfer or otherwise dispose of any of
  its properties or assets to, or purchase, lease or otherwise acquire any
  property or assets from, or enter into or make or amend any transaction,
  contract, agreement, understanding, loan, advance or guarantee with or for
  the benefit of, any Institutional Shareholder or any Affiliate or “Associate”
  of any Institutional Shareholder (within the meaning of Rule 12b-2 under
  the Exchange Act), unless such transaction is on terms that are disclosed to
  the Board and each Board Observer and are no less favorable to the Company or
  such Subsidiary than those that would have been obtained in a comparable
  transaction by the Company or such Subsidiary with an unrelated Person; provided that the parties understand and agree that entry
  into, the performance of, and payment under, the Advisory Fee and Monitoring
  Agreement dated as of the date hereof between the Company and Crestview
  Advisor shall be deemed for all purposes to be consistent with this
  Section 6.04

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 6.05 . Conflicting Agreements. The Company and
  each Shareholder represents and agrees that it shall not (i) grant any
  proxy or enter into or agree to be bound by any voting trust or agreement
  with respect to the Company Securities, except as expressly contemplated by
  this Agreement, (ii) enter into any agreement or arrangement of any kind
  with any Person with respect to any Company Securities that is inconsistent
  with the provisions of this Agreement or for the purpose or with the effect
  of denying or reducing the rights of any other Shareholder under this
  Agreement, including agreements or arrangements with respect to the Transfer
  or voting of its Company Securities or (iii) act, for any reason, as a
  member of a group or in concert with any other Person in connection with the
  Transfer or

  	
   

  	
   

  

 

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  voting of its Company Securities
  in any manner that is inconsistent with the provisions of this Agreement

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 7.01 . Binding
  Effect; Assignability; Benefit. (a) This Agreement shall
  inure to the benefit of and be binding upon the parties hereto and their
  respective heirs, successors, legal representatives and permitted assigns.
  Any Shareholder that ceases to own beneficially any Company Securities shall
  cease to be bound by the terms hereof (other than (i) the provisions of
  Sections 5.05, 5.06, 5.07, 5.08 and 5.10 applicable to such Shareholder with
  respect to any offering of Registrable Securities completed before the date
  such Shareholder ceased to own any Company Securities and (ii) Sections
  6.01 (which shall survive as against such Shareholder for two years after
  such Shareholder ceases to beneficially own any Company Securities), 7.02,
  7.05, 7.06, 7.07 and 7.08)

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 7.02 . Notices. All notices, requests and other
  communications to any party shall be in writing and shall be delivered in
  person, mailed by certified or registered mail, return receipt requested, or
  sent by facsimile transmission,

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 7.03 . Waiver; Amendment; Termination.
  (a) No provision of this Agreement may be waived except by an instrument
  in writing executed by the party against whom the waiver is to be effective.
  No provision of this Agreement may be amended or otherwise modified, except
  by an instrument in writing executed by the Company with the approval of the
  Board, the Crestview Shareholder (for so long as it holds at least 50% of the
  Common Stock it acquired on the Closing Date) and Other Shareholders owning a
  majority of the outstanding Common Stock held by all Other Shareholders at
  that time; provided that (u) no
  amendment or modification that by its terms (as opposed to its effect) would
  adversely and disparately affect any Shareholder under the terms of this
  Agreement (relative to other Shareholders) shall be effective without the
  prior written consent of that Shareholder, (v) no amendment or
  modification of this Section 7.03 shall be effective without the prior
  written consent of the Company (with Board approval) and each Shareholder,
  (w) no amendment or modification of Section 3.05 or
  Section 4.06 shall be effective without the prior written consent of
  Management Shareholders owning a majority of the Company Securities held by
  the Management Shareholders on a Fully Diluted basis at that time,
  (x) no amendment or modification of Section 3.04 or
  Section 3.05 (as such Sections speak of the Chief Executive Officer of
  the Company)

  	
   

  	
   

  
					

 

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  shall be effective without the
  consent of Mr. Francis, but only for so long as Mr. Francis remains
  CEO of the Company, and only as relates to the language in such Sections
  addressing the rights of the Chief Executive Officer of the Company
  thereunder, (y) no amendment or modification of
  Section 2.01(a) (as such Section speaks of Mr. Francis or
  Mr. Adlerz) shall be effective without the consent of Mr. Francis
  or Mr. Adlerz, as applicable, but only for so long as such Person
  remains CEO or COO of the Company, respectively, and only as relates to the
  language in such Section addressing his personal rights thereunder and
  (z) no amendment or modification of Section 2.01(a) (as such
  Section speaks of Trident IV) or Section 2.10 (as such
  Section speaks of NW Mutual, BACI or R6) shall be effective without the
  consent of Trident IV, NW Mutual, BACI or R6, as applicable

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 7.04 . Fees and Expenses. (a) Unless
  otherwise provided herein or in any other written agreements between the
  parties hereto, all costs and expenses incurred in connection with the
  transactions contemplated by this Agreement, the Merger Agreement, the
  Subscription Agreement and all related transactions shall be paid by the
  party incurring such costs and expenses

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 7.05 . Governing Law. This Agreement shall be
  governed by, and construed in accordance with, the laws of the State of
  Delaware, without regard to the conflicts of laws rules of such state

  	
   

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 7.06 . Jurisdiction. Except for any
  determination of Fair Market Values for purposes of this Agreement (which
  shall be determined in accordance with the definition thereof), the parties
  hereby agree that any suit, action or proceeding seeking to enforce any
  provision of, or based on any matter arising out of or in connection with,
  this Agreement or the transactions contemplated hereby shall be brought in
  the United States District Court for the Southern District of New York or any
  New York State court sitting in New York County, so long as one of such
  courts shall have subject matter jurisdiction over such suit, action or
  proceeding, and that any case of action arising out of this Agreement shall
  be deemed to have arisen from a transaction of business in the State of New
  York, and each of the parties hereby irrevocably consents to the jurisdiction
  of such courts (and of the appropriate appellate courts therefrom) in any
  such suit, action or proceeding and irrevocably waives, to the fullest extent
  permitted by law, any objection that it may now or hereafter have to the
  laying of the venue of any such suit, action or proceeding in any such court
  or that any such suit, action or proceeding which is brought in any such
  court has been brought in an inconvenient form. Process in any such suit,
  action or proceeding may be served on any party anywhere in the world,
  whether within or without the jurisdiction of any such

  	
   

  	
   

  

 

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  court. Without limiting the
  foregoing, each party agrees that service of process on such party as
  provided in Section 7.02 shall be deemed effective service of process on
  such party

  	
   

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 7.07 . WAIVER OF JURY TRIAL. EACH OF THE
  PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
  IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
  CONTEMPLATED HEREBY

  	
   

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 7.08 . Specific Enforcement. Each party hereto
  acknowledges that the remedies at law of the other parties for a breach or
  threatened breach of this Agreement would be inadequate and, in recognition
  of this fact, any party to this Agreement, without posting any bond, and in
  addition to all other remedies that may be available, shall be entitled to
  obtain equitable relief in the form of specific performance, a temporary
  restraining order, a temporary or permanent injunction or any other equitable
  remedy that may then be available

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 7.09 . Counterparts; Effectiveness. This
  Agreement may be executed in any number of counterparts, each of which shall
  be deemed to be an original, with the same effect as if the signatures
  thereto and hereto were upon the same instrument. This Agreement shall become
  effective when each party hereto shall have received counterparts hereof
  signed by all of the other parties hereto. Until and unless each party has
  received a counterpart hereof signed by the other party hereto, this
  Agreement shall have no effect and no party shall have any right or
  obligation hereunder (whether by virtue of any other oral or written
  agreement or other communication)

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 7.10 . Entire Agreement. This Agreement, the
  Subscription Agreement and the Employee Contribution Agreements constitute
  the entire agreement among the parties hereto and thereto and supersede all
  prior and contemporaneous agreements and understandings, both oral and
  written, among the parties hereto with respect to the subject matter hereof
  and thereof

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 7.11 . Severability. If any term, provision,
  covenant or restriction of this Agreement is held by a court of competent
  jurisdiction or other authority to be invalid, void or unenforceable, the
  remainder of the terms, provisions, covenants and restrictions of this
  Agreement shall remain in full force and effect and shall in no way be
  affected, impaired or invalidated so long as the economic or legal substance
  of the transactions contemplated hereby is not affected in any manner materially
  adverse to any party

  	
   

  	
  54

  
					

 

Exhibit A
           Joinder
Agreement

 

Exhibit B
           Contact
Information

 

xvii

 

SHAREHOLDERS AGREEMENT

 

AGREEMENT (as the
same may be amended from time to time, this “Agreement”)
dated as of August     , 2007 among the following
parties:

 

(i)            Symbion
Holdings Corporation, a Delaware corporation (the “Company”);

 

(ii)           Crestview
Symbion Holdings, L.L.C., a Delaware limited liability company (the “Crestview
Shareholder”);

 

(iii)          The
Northwestern Mutual Life Insurance Company, a Wisconsin corporation, on behalf
of itself and on behalf of its Group Annuity Separate Account (“NW Mutual”);

 

(iv)          Trident
IV, L.P. a Cayman Islands exempted limited partnership (“Trident IV”);

 

(v)           Trident
IV Professionals Fund, L.P., a Cayman Islands exempted limited partnership (“Trident IV PF”, and each of Trident IV and
Trident IV PF, a “Trident Fund”
and collectively, the “Trident Funds”);

 

(vi)          Banc
of America Capital Investors V, L.P., a Delaware limited partnership (“BACI”);

 

(vii)         R6
Opportunity Fund, L.P., a Delaware limited partnership, and R6 Overseas
Opportunity Fund, Ltd., a Cayman Islands exempted company, (collectively, “R6”) (each of the Crestview Shareholders, NW Mutual, Trident
IV, Trident IV PF, BACI and R6, an “Institutional Shareholder”, and
collectively, the “Institutional Shareholders”);
and

 

(viii)        Mr. Richard
E. Francis, Jr., Mr. Clifford G. Adlerz and any other individual (or
Person controlled by an individual) (A) who is or becomes a holder of
capital stock of the Company and (B) who is or was in the employ of, or a
consultant to, the Company or any Subsidiary (each such individual or Person, a
“Management Shareholder” and
collectively, the “Management Shareholders”).

 

Each of the Crestview Shareholder, NW Mutual,
Trident IV, Trident IV PF, BACI, R6, the Institutional Shareholders and the
Management Shareholders shall each also mean, if such Persons shall have
Transferred any of their Company Securities to any of their respective
Permitted Transferees, such Person and its, his or her Permitted Transferees,
taken together, and any right, obligation or action that may be exercised or
taken at the election of such Person may be taken at the election of such
Persons and its, his or her Permitted Transferees.

 

 

W I T N E S S E T H :

 

WHEREAS, pursuant to the terms of the
Agreement and Plan of Merger dated as of April 24, 2007 (the “Merger Agreement”) by and among Symbion, Inc., a
Delaware corporation, Symbol Acquisition, L.L.C., a Delaware limited liability
company, and Symbol Merger Sub, Inc., a Delaware corporation, Symbol
Merger Sub, Inc. will be merged with and into Symbion, Inc., with
Symbion, Inc. as the surviving corporation (the “Merger”);

 

WHEREAS, prior to but in connection with the
Merger, Symbol Acquisition, L.L.C. will be converted into the Company, which
will become the parent holding company of Symbion, Inc. by virtue of the
Merger;

 

WHEREAS, in connection with the Merger, (i) the
Institutional Shareholders and the Company have entered into a Subscription
Agreement (the “Subscription Agreement”) dated as
of August 17, 2007 pursuant to which each such Institutional Shareholder
has agreed to make an equity investment in the Company and will become a
stockholder of the Company on the Closing Date, and (ii) each of Mr. Richard
E. Francis, Jr. and Mr. Clifford G. Adlerz have entered into an
Employee Contribution Agreement with the Company (collectively, the “Employee Contribution Agreements”) each dated as of August     ,
2007 pursuant to which (A) each of Mr. Richard E. Francis, Jr.
and Mr. Clifford G. Adlerz has agreed to contribute to the Company the
number of shares of common stock of Symbion, Inc. that is held by him on
the Closing Date and specified therein to be contributed by such Management
Shareholder, and (B) in consideration of such contribution, the Company
will issue the number of Shares to such Management Shareholder that is similarly
specified therein;

 

WHEREAS, the parties hereto desire to enter
into this Agreement to govern certain of their rights, duties and obligations
after consummation of the transactions contemplated by the Merger Agreement and
the Subscription Agreement;

 

NOW, THEREFORE, in consideration of the
covenants and agreements contained herein, and for other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged),
the parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.  Definitions.  (a) As used herein, the following terms
have the following meanings:

 

2

 

“Affiliate” means, with
respect to any Person, any other Person directly or indirectly controlling, controlled
by or under common control with such Person; provided
that no Shareholder shall be deemed an Affiliate of the Company or any other
Shareholder solely by reason of any investment in the Company, the existence or
exercise of any rights or obligations under this Agreement or the Company
Securities held by that Shareholder.  For
the purpose of this definition, the term “control” (including,
with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Aggregate Ownership” means,
with respect to any Shareholder or group of Shareholders, and with respect to
any class of Company Securities, the total amount of Company Securities “beneficially
owned” (as such term is defined in Rule 13d-3 of the Exchange Act) (without
duplication) by such Shareholder or group of Shareholders as of the date of
such calculation, calculated on a Fully Diluted basis.

 

“Board” means the board of
directors of the Company.

 

“Business Day” means any day
except a Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required by law to close.

 

“Bylaws” means the bylaws of
the Company, as the same may be amended from time to time.

 

“Cause” means,
with respect to a Management Shareholder, the meaning assigned to such term in
such Management Shareholder’s employment agreement, if any; provided, however, that if “Cause”
is not defined in such employment agreement or such employment agreement does
not exist, “Cause” means: (i) the
conviction of such Management Shareholder of (including such Management
Shareholder’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 such
Management Shareholder’s ability to perform his duties to Symbion, Inc.
(or any of its Subsidiaries); (ii) voluntary engagement by such Management
Shareholder in conduct constituting larceny, embezzlement, conversion or any
other act involving the misappropriation of any funds of Symbion, Inc. (or
any of its Subsidiaries) in the course of such Management Shareholder’s
employment; (iii) the willful refusal (following written notice) by such
Management Shareholder to carry out specific directions of (A) the Board, (B) the
Chief Executive Officer or Chief Operating Officer of Symbion, Inc. or (C) the
board of directors of any Subsidiary of Symbion, Inc. with which such
Management Shareholder is employed or of which such Management Shareholder

 

3

 

is an officer, which directions
are consistent with his duties to Symbion, Inc. (or any of its
Subsidiaries), as the case may be; (iv) violation by such Management
Shareholder of any provision of any written restrictive covenants of Symbion, Inc.
applicable to such Management Shareholder or a significant violation of the
written material policies of Symbion, Inc. applicable to such Management
Shareholder; or (v) the commission by such Management Shareholder of any
act of gross negligence or intentional misconduct in the performance of his
duties as an officer or employee of Symbion, Inc. or any of its
Subsidiaries.

 

“Charter” means the
Certificate of Incorporation of the Company, as the same may be amended from
time to time.

 

“Closing Date” means August     ,
2007.

 

“Common Stock” means the
common stock, par value $0.01 per share, of the Company and any stock into
which such Common Stock may thereafter be converted or changed.

 

“Company Securities” means (i) the
Common Stock, (ii) securities convertible into or exchangeable for Common
Stock, (iii) any other equity or equity-linked security issued by the
Company and (iv) options, warrants or other rights to acquire Common Stock
(including the Option Shares), or any other equity or equity-linked security
issued by the Company; and, to the extent applicable, the number of Company
Securities described in clause (ii), (iii) or (iv) being the number
of shares of Common Stock into which such Company Securities are convertible,
exchangeable or exercisable or to which such Company Securities are linked.

 

“Cost” means (i) $10
per Share with respect to Rollover Option Shares in respect of which options
have been exercised and (ii) the price paid per Share by a Management
Shareholder in connection with the exercise of any other option to acquire
Common Stock.

 

“Crestview Fund” means each of the
following: (i) Crestview Partners, L.P., a Delaware limited partnership, (ii) Crestview
Partners (PF), L.P., a Delaware limited partnership, (iii) Crestview
Holdings (TE), L.P., a Delaware limited partnership, (iv) Crestview
Partners (ERISA), L.P., a Delaware limited partnership and (v) Crestview
Offshore Holdings (Cayman), L.P., a Cayman Islands limited partnership.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

“Fair Market Value”
means with respect to any Option Share owned by a Management Shareholder (i) if
the Shares are listed on a national securities 

 

4

 

exchange or quotation system on
the relevant determination date of such Management Shareholder, the average
reported closing price of a Share on such national securities exchange or
quotation system that is the principal trading market for such Shares for the
three trading days immediately preceding such date in accordance with Treasury
Regulation 1.409A-1(b)(5)(iv)(A) or (ii) if the Shares are not listed
on a national securities exchange or quotation system on the relevant
determination date of such Management Shareholder, the fair market value of a
Share on such date as determined by the Board in good faith based on the
reasonable application of a reasonable valuation method in accordance with
Treasury Regulation 1.409A-1(b)(5)(iv)(B).  The determination of Fair Market Value by the
Board under clause (ii) shall be final and binding, unless such
determination is challenged by (1) a Management Shareholder who is a
senior executive of the Company at the relevant determination date with the title
of senior vice president or above, which dispute shall be resolved by a binding
appraisal process conducted by a mutually acceptable appraisal firm of
nationally recognized standing, and that is in compliance with the requirements
of Treasury Regulation 1.409A-1(b)(5)(iv)(B)(2)(i) or (2) any other
Management Shareholder, which will nevertheless remain final and binding on
such other Management Shareholders unless the Board elects, in its sole
discretion, to submit any such dispute to a binding appraisal process conducted
by a mutually acceptable appraisal firm of nationally recognized standing, and
that is in compliance with the requirements of Treasury Regulation
1.409A-1(b)(5)(iv)(B)(2)(i); provided that
in all circumstances the Board shall exercise its discretion in determining
Fair Market Value and hereunder in a manner that complies with the valuation
requirements of Treasury Regulation 1.409A-1(b)(5)(iv)(B)(3).  The costs of any binding appraisal process
conducted pursuant to clause (1) or (2) above shall be borne by the
Company.

 

“Fully Diluted” means, with
respect to any class of Company Securities, all outstanding shares and all
shares issuable in respect of securities convertible into or exchangeable for
such shares, all stock appreciation rights, options, warrants and other rights
to purchase or subscribe for such Company Securities or securities convertible
into or exchangeable for such Company Securities; provided that, if any of the foregoing stock appreciation
rights, options, warrants or other rights to purchase or subscribe for such
Company Securities are subject to vesting (whether time-vested or
performance-vested), the Company Securities subject to vesting shall be
included in the definition of “Fully Diluted”
only upon and to the extent of such vesting (after giving effect to any then
pending transaction).

 

“GAAP” means generally accepted accounting
principles in the United States.

 

“Good
Reason” shall exist with respect to a Management Shareholder and
shall have the meaning assigned to such term in such Management Shareholder’s 

 

5

 

Employment Agreement or option
award agreement; provided, however,
that to the extent “Good Reason”
is not defined in such Employment Agreement or option award agreement, or such
employment agreement or option award agreement does not exist, then all
references herein shall be disregarded for all purposes.

 

“IPO” means the first Public
Offering after the date hereof that results in gross proceeds to the Company and
any Registering Shareholders of not less than $40 million.

 

“NASD” means the National
Association of Securities Dealers, Inc.

 

“Option Plan”
means the Symbion Holdings Corporation 2007 Equity Incentive Plan, as the same
may be amended from time to time.

 

“Option Shares”
means any Shares issued to a Management Shareholder upon the exercise of any
options to purchase Shares granted to such Management Shareholder pursuant to
the Option Plan.

 

“Other Shareholders” means all
Shareholders, other than the Crestview Shareholder.

 

“Permitted Transferee” means

 

(i)            in
the case of any Institutional Shareholder, (A) any Affiliate of such
Institutional Shareholder, (B) any of its affiliated investment funds (“Affiliated Fund”) or any general or limited
partner of, or Affiliate of, such Affiliated Fund, (C) any equity holder
in any general partner of any Affiliated Fund, or any Affiliate of any such
equity holder (an “Institutional  Shareholder Associate”) or (D) with respect to any
Institutional Shareholder Associate, (x) the lineal descendants, heirs,
executors, administrators, testamentary trustees, legatees, equity holders or
beneficiaries of any such Institutional Shareholder Associate and (y) any
trust or similar entity, the beneficiaries of which, or a corporation, limited
liability company or partnership, the shareholders, members or general or
limited partners of which, include only such Institutional Shareholder
Associate, its equity holders or beneficiaries or, in the case of a
Institutional Shareholder Associate that is an individual, his or her spouse,
members of his or her immediate family or household or his or her lineal
descendants; provided that in no
event shall any direct or indirect portfolio company of such Institutional
Shareholder or any of its Affiliated Funds be deemed to be a Permitted
Transferee of such Institutional Shareholder, any of its Affiliated Funds or
any other Permitted Transferee thereof; and

 

6

 

(ii)           in
the case of any Management Shareholder, (A) a Person to whom Company
Securities are Transferred from such Management Shareholder (1) by will or
the laws of descent and distribution or (2) by gift without consideration
of any kind; provided that, in the case of clause
(2), such transferee is the spouse or the lineal descendant, sibling or parent
of such Management Shareholder, or (B) a trust that is for the exclusive
benefit of such Management Shareholder or its Permitted Transferees under (A) above.

 

“Person” means an individual,
corporation, limited liability company, partnership, association, trust or
other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.

 

“Public Offering” means an
underwritten public offering of Registrable Securities of the Company pursuant
to an effective registration statement under the Securities Act, other than
pursuant to a registration statement on Form S-4 or Form S-8 or any
similar or successor form.

 

“Registrable Securities”
means, at any time, any Shares and any securities issued or issuable in respect
of such Shares by way of conversion, exchange, stock dividend, split or
combination, recapitalization, merger, consolidation, other reorganization or
otherwise until (i) a registration statement covering such Shares has been
declared effective by the SEC and such Shares have been disposed of pursuant to
such effective registration statement, (ii) such Shares are sold under
circumstances in which all of the applicable conditions of Rule 144 (or
any similar provisions then in force) under the Securities Act are met or such
securities may be sold in a single transaction pursuant to Rule 144(k) and
are permitted to then be sold under Section 3.04(iii) or Section 3.05(iii) and
Error! Reference source not found.
of this Agreement without restriction or (iii) such Shares are otherwise
Transferred, the Company has delivered a new certificate or other evidence of
ownership for such Shares not bearing the legend required pursuant to this
Agreement and such Shares may be resold without subsequent registration under
the Securities Act.

 

“Registration Expenses” means
any and all expenses incident to the performance of or compliance with any
registration or marketing of securities, including all (i) registration
and filing fees, and all other fees and expenses payable in connection with the
listing of securities on any securities exchange or automated interdealer
quotation system, (ii) fees and expenses of compliance with any securities
or “blue sky” laws (including reasonable fees and disbursements of counsel in
connection with “blue sky” qualifications of the securities registered), (iii) expenses
in connection with the preparation, printing, mailing and delivery of any
registration statements, prospectuses and other documents in connection
therewith and any amendments or supplements thereto, (iv) security
engraving and printing expenses, (v) internal expenses of the Company
(including all 

 

7

 

salaries and expenses of its
officers and employees performing legal or accounting duties), (vi) reasonable
fees and disbursements of counsel for the Company and customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses relating to any comfort letters or costs associated
with the delivery by independent certified public accountants of any comfort
letters requested pursuant to Section 5.04(h)), (vii) reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration, (viii) reasonable fees, out-of-pocket costs and expenses of
the Shareholders, including one counsel for all of the Shareholders
participating in the offering selected by the Crestview Shareholder if the
Crestview Shareholder is exercising either a Demand Registration or a Piggyback
Registration in connection with the relevant Public Offering (and in all other
cases, by the holders of a majority of the Registrable Securities held by the
Shareholders participating therein), (ix) fees and expenses in connection
with any review by the NASD of the underwriting arrangements or other terms of
the offering, and all fees and expenses of any “qualified independent
underwriter,” including the fees and expenses of any counsel thereto, (x) fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities, (xi) costs of printing and
producing any agreements among underwriters, underwriting agreements, any “blue
sky” or legal investment memoranda and any selling agreements and other
documents in connection with the offering, sale or delivery of the Registrable
Securities, (xii) transfer agents’ and registrars’ fees and expenses and the
fees and expenses of any other agent or trustee appointed in connection with
such offering, (xiii) expenses relating to any analyst or investor
presentations or any “road shows” undertaken in connection with the registration,
marketing or selling of the Registrable Securities, (xiv) fees and expenses
payable in connection with any ratings of the Registrable Securities, including
expenses relating to any presentations to rating agencies and (xv) all out-of
pocket costs and expenses incurred by the Company or its appropriate officers
in connection with their compliance with Section 5.04(m).

 

“Rollover Option Shares” means (i) the
Option Shares issued to a Management Shareholder upon the exercise of any
options to purchase Shares granted to such Management Shareholder pursuant to
any 2007 Substitute Option Award Document under the Option Plan and (ii) the
Shares issued to a Management Shareholder (if any) pursuant to the Employee
Contribution Agreement to which such Management Shareholder is a party.

 

“Rule 144” means Rule 144
(or any successor provisions) under the Securities Act.

 

“SEC” means the Securities and
Exchange Commission.

 

8

 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

“Shareholder” means at any
time, any Person (other than the Company) who shall then be a party to or bound
by this Agreement, so long as such Person shall “beneficially own” (as such
term is defined in Rule 13d-3 of the Exchange Act) any Company Securities.

 

“Shares” means shares of
Common Stock.

 

“Subsidiary” means, with
respect to any Person, any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.

 

“Third Party” means a
prospective purchaser(s) of Company Securities in an arm’s-length
transaction from a Shareholder, other than a Permitted Transferee.

 

“Transfer” means, with respect
to any Company Securities, to sell, assign, dispose of, exchange, pledge,
encumber, hypothecate or otherwise transfer such Company Securities or any
participation or interest therein, whether directly or indirectly  (including via any derivative transaction),
or agree or commit to do any of the foregoing. 
When the term “Transfer” is
used as a noun, that term shall have the correlative meaning.

 

(b)                       Each of the
following terms is defined in the Section set forth opposite such term:

 

	
  Term

  	
   

  	
  Section

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  BACI

  	
   

  	
  Preamble

  
	
  Board of Observers

  	
   

  	
  2.10

  
	
  Business Plan

  	
   

  	
  2.06(b)

  
	
  Company

  	
   

  	
  Preamble

  
	
  Confidential Information

  	
   

  	
  6.01(b)

  
	
  Crestview Fund Designee

  	
   

  	
  2.05(a)

  
	
  Crestview Request Amount

  	
   

  	
  5.01(a)

  
	
  Crestview Shareholder

  	
   

  	
  Preamble

  
	
  Damages

  	
   

  	
  5.05

  
	
  Demand Registration

  	
   

  	
  5.01(a)

  
	
  Drag-Along Portion

  	
   

  	
  4.02(a)

  
	
  Drag-Along Rights

  	
   

  	
  4.02(a)

  
	
  Drag-Along Sale

  	
   

  	
  4.02(a)

  
	
  Drag-Along Sale Notice

  	
   

  	
  4.02(a)

  

 

9

 

	
  Term

  	
   

  	
  Section

  
	
  Drag-Along Sale Notice
  Period

  	
   

  	
  4.02(a)

  
	
  Drag-Along Sale Price

  	
   

  	
  4.02(a)

  
	
  Drag-Along Seller

  	
   

  	
  4.02(a)

  
	
  Drag-Along Transferee

  	
   

  	
  4.02(a)

  
	
  Employee Contribution
  Agreements

  	
   

  	
  Recitals

  
	
  Exercise Notice

  	
   

  	
  4.05(b)

  
	
  Indemnified Party

  	
   

  	
  5.07

  
	
  Indemnifying Party

  	
   

  	
  5.07

  
	
  Inspectors

  	
   

  	
  5.04(g)

  
	
  Institutional Shareholders

  	
   

  	
  Preamble

  
	
  Issuance Notice

  	
   

  	
  4.05(a)

  
	
  Lock-Up Period

  	
   

  	
  5.03

  
	
  Management Shareholders

  	
   

  	
  Preamble

  
	
  Maximum Offering Size

  	
   

  	
  5.01(e)

  
	
  Merger

  	
   

  	
  Recitals

  
	
  Merger Agreement

  	
   

  	
  Recitals

  
	
  NW Mutual

  	
   

  	
  Preamble

  
	
  Offer

  	
   

  	
  4.04(a)

  
	
  Offered Securities

  	
   

  	
  4.04(a)

  
	
  Offer Notice

  	
   

  	
  4.04(a)

  
	
  Offer Price

  	
   

  	
  4.04(a)

  
	
  Option Period

  	
   

  	
  4.06(a)

  
	
  Option Purchase Price

  	
   

  	
  4.06(d)

  
	
  Piggyback Notice

  	
   

  	
  5.02(a)

  
	
  Piggyback Registration

  	
   

  	
  5.02(a)

  
	
  Preemptive Rights Share

  	
   

  	
  4.05(a)

  
	
  Purchase Option

  	
   

  	
  4.06(a)

  
	
  R6

  	
   

  	
  Preamble

  
	
  Records

  	
   

  	
  5.04(g)

  
	
  Registering Shareholders

  	
   

  	
  5.01(a)

  
	
  Replacement Nominee

  	
   

  	
  2.03(a)

  
	
  Representatives

  	
   

  	
  6.01(b)

  
	
  Requesting Shareholder

  	
   

  	
  5.01(a)

  
	
  ROFR Offerees

  	
   

  	
  4.04(a)

  
	
  ROFR Portion

  	
   

  	
  4.04(b)

  
	
  ROFR Seller

  	
   

  	
  4.04(a)

  
	
  Shareholder

  	
   

  	
  7.01(b)

  
	
  Subscription Agreement

  	
   

  	
  Recitals

  
	
  Symbion, Inc. Board

  	
   

  	
  2.10

  
	
  Tag-Along Notice

  	
   

  	
  4.01(a)

  
	
  Tag-Along Notice Period

  	
   

  	
  4.01(a)

  
	
  Tag-Along Offer

  	
   

  	
  4.01(a)

  
	
  Tag-Along Portion

  	
   

  	
  4.01(a)

  

 

10

 

	
  Term

  	
   

  	
  Section

  
	
  Tag-Along Response Notice

  	
   

  	
  4.01(a)

  
	
  Tag-Along Right

  	
   

  	
  4.01(a)

  
	
  Tag-Along Sale

  	
   

  	
  4.01(a)

  
	
  Tag-Along Seller

  	
   

  	
  4.01(a)

  
	
  Tagging Person

  	
   

  	
  4.01(a)

  
	
  Termination Date

  	
   

  	
  4.06(a)

  
	
  Trident IV

  	
   

  	
  Preamble

  
	
  Trident IV PF

  	
   

  	
  Preamble

  
	
  Trident Funds

  	
   

  	
  Preamble

  

 

Section 1.02.  Other Definitional and
Interpretative Provisions. 
The words “hereof”, “herein” and “hereunder” and words of like import
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.  References to Articles, Sections, Exhibits
and Schedules are to Articles, Sections, Exhibits and Schedules of this
Agreement, unless otherwise specified. 
All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein.  Any capitalized terms used in
any Exhibit or Schedule but not otherwise defined therein, shall have the
meaning as defined in this Agreement. 
Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. 
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “, but not limited
to,”, whether or not they are in fact followed by those words or words of like
import.  “Writing”, “written” and
comparable terms refer to printing, typing and other means of reproducing words
(including electronic media) in a visible form. 
References to any agreement or contract are to that agreement or
contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. 
References from or through any date mean, unless otherwise specified,
from and including or through and including, respectively.

 

ARTICLE
2

CORPORATE GOVERNANCE

 

Section 2.01.  Composition of the Board.  (a) The Board shall consist
of up to seven directors for so long as Mr. Richard E. Francis, Jr.
remains the Chief Executive Officer of the Company (and thereafter shall be
such size as the Board may determine). 
One of the directors shall be Mr. Richard E. Francis, Jr. for
so long as he remains the Chief Executive Officer of the Company, one of the
directors shall be Mr. Clifford G. Adlerz for so long as he remains the
Chief Operating Officer and President of the Company, one director shall be
designated 

 

11

 

by Trident IV for so long as
Trident IV owns at least 50% of the Common Stock acquired by it on the Closing
Date and the remaining directors shall be designated by Crestview Partners
(ERISA), L.P. for so long as the Crestview Shareholder owns at least 50% of the
Common Stock acquired by it on the Closing Date.  Mr. Francis shall be the Chairman of the
Board for so long as he remains the Chief Executive Officer of the
Company.  Crestview Partners (ERISA),
L.P. and Trident IV shall consult with Mr. Francis on the identity of
their respective designees to the Board before making such designations.

 

(b)           Each Shareholder agrees that, if at any time it is then
entitled to vote for the election of directors to the Board, it shall vote its
Shares or execute proxies or written consents, as the case may be, and take all
other necessary action (including causing the Company to call a special meeting
of shareholders) in order to ensure that the composition of the Board is as set
forth in this Section 2.01.

 

(c)           The Company agrees to cause each individual designated
pursuant to Section 2.01 or 2.03 to be nominated to serve as a director on
the Board, and to take all other necessary actions (including calling a special
meeting of the Board and/or shareholders) to ensure that the composition of the
Board is as set forth in this Section 2.01.

 

Section 2.02.  Removal.  Each Shareholder agrees that, if
at any time it is then entitled to vote for the removal of directors from the
Board, it shall not vote any of its Shares in favor of the removal of any
director who shall have been designated pursuant to Section 2.01 or Section 2.03,
unless such removal shall be for Cause or the Person or Persons entitled to
designate or nominate such director shall have consented to such removal in
writing; provided that, if the
Person or Persons entitled to designate any director pursuant to Section 2.01
shall request in writing the removal, with or without cause, of such director,
such Shareholder shall vote its Shares in favor of such removal.

 

Section 2.03.  Vacancies.  If, as a result of death, disability,
retirement, resignation, removal (with or without cause) or otherwise, there
shall exist or occur any vacancy on the Board:

 

(a)           the Person or Persons entitled under Section 2.01 to
designate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy, subject to the provisions of Section 2.01,
may designate another individual (the “Replacement Nominee”)
to fill such vacancy and serve as a director on the Board; provided,
however, Crestview Partners (ERISA),
L.P. shall have the right to designate the Replacement Nominee to fill the
vacancy resulting from the departure of either Mr. Francis or Mr. Adlerz
from his respective employment as the Chief Executive Officer or the Chief
Operating Officer and President of the Company, as the case may be; and

 

12

 

(b)           subject to Section 2.01, each Shareholder agrees that
if it is then entitled to vote for the election of directors to the Board, it
shall vote its Shares, or execute proxies or written consents, as the case may
be, in order to ensure that the Replacement Nominee is elected to the Board.

 

Section 2.04.  Meetings.  The Board shall hold a regularly
scheduled meeting at least once every calendar quarter.  The Company shall pay all reasonable
out-of-pocket expenses incurred by each director in connection with attending
regular and special meetings of the Board and any committee thereof, and any
such meetings of the board of directors of any Subsidiary of the Company and
any committee thereof.

 

Section 2.05.  Action by
the Board.  (a) A quorum of the Board
shall consist of a majority of the directors which includes all of the
designees of the Crestview Shareholder who are employees, officers or partners
of a Crestview Fund itself (each such designee, a “Crestview
Fund Designee”) unless otherwise waived in writing by the Crestview
Shareholder; provided that the
Crestview Shareholder shall have the right at any time to increase the number
of directors necessary to constitute such quorum.

 

(b)           Subject to Section 2.06, all actions of the Board
shall require (i) the affirmative vote of at least a majority of the votes
of the directors present at a duly convened meeting of the Board at which a
quorum is present or (ii) the unanimous written consent of the Board; provided that, if there is a vacancy on the Board and an
individual has been nominated to fill such vacancy, the first order of business
shall be to fill such vacancy.

 

(c)           The Board may create executive, compensation, audit and
such other committees as it may determine. 
The Crestview Shareholder shall be entitled to majority representation
on any committee created by the Board.

 

Section 2.06.  Actions Requiring
Consent.  Subject to the
provisos set forth at the end of this Section, for so long as the Crestview
Shareholder (together with any Permitted Transferees thereof) shall own at
least 50% of the Shares held by the Crestview Shareholder on the Closing Date,
the Company shall not, shall not permit any of its wholly owned Subsidiaries
to, and shall use all commercially reasonable efforts to cause its less than
wholly owned Subsidiaries and joint ventures (whether majority or minority owned
by the Company) not to, take any of the following actions (or agree or commit
to take any of the following actions) without (x) the approval of a
majority of the Board and (y) the prior written consent of the Crestview
Shareholder, acting in its capacity as a stockholder of the Company:

 

13

 

(a)           Constitutional Documents.  Alter, repeal, amend or adopt (whether by
merger, consolidation or otherwise) any provision of the organizational or
constitutional documents of the Company;

 

(b)           Debt.  (i) Incur, assume or guarantee any
indebtedness for borrowed money in any one or series of related transactions,
except (A) as contemplated by the then current fiscal year’s business plan
and budget that was most recently approved by the Board (the “Business Plan”) and (B) for indebtedness for borrowed
money from a third party or from the Company or any of its Subsidiaries in any
fiscal year outside of the Business Plan not in excess of (1) $15 million
in such fiscal year or (2) $1 million in respect of any facility in a
single transaction for equipment, working capital or facility improvement or
expansion, (ii) refinance or renew any indebtedness for borrowed money,
other than refinancings or renewals of indebtedness for borrowed money that are
not material in amount or that are between the Company and any of its
Subsidiaries or other joint ventures, or between two or more Subsidiaries or
other joint ventures of the Company, or (iii) enter into any new material
credit facilities, promissory notes or other material financing arrangements,
other than those existing at the Closing Date.

 

(c)           Business Combinations.  Effect any merger, consolidation or any other
business combination, or any reorganization, recapitalization, reclassification,
spin-off, partial or complete liquidation or any restructuring or similar
transaction involving the capital stock of or equity interests in the Company;

 

(d)           Sale or Encumbrance of
Assets.  Sell, assign, lease,
exchange, transfer, dispose of, encumber or grant a lien or security interest
in (or, in the case of clause (ii), close) (whether structured as a sale,
merger, joint venture, other business combination or otherwise), (i) any
material assets of the Company or its Subsidiaries (including any capital stock
of any Subsidiary, except as provided in Section 2.06(g)) outside of the
ordinary course of business consistent with past practice, except as
contemplated by the Business Plan and transactions outside of the Business Plan
involving assets with a fair market value not exceeding $5 million in any one
transaction in a given fiscal year or $10 million in any series of transactions
in a given fiscal year or (ii) any ambulatory surgical center or other
medical facility or any interest in any Person owning any of the foregoing  with a fair market value in each case in
excess of $5 million in any one transaction in any given fiscal year or $10
million in any series of transactions in a given fiscal year.

 

(e)           Acquisitions; Investments.  Purchase or acquire (whether structured as a
sale, merger, joint venture, other business combination or otherwise) any
assets (including equity interests or other securities in any Person), make any
investment (whether equity, debt or otherwise) in any Person, make any capital 

 

14

 

expenditures or purchase, acquire or open any
ambulatory surgical center or other medical facility (or any interest in any
Person owning any of the foregoing), except (i) as contemplated by the Business
Plan, (ii) in any one transaction outside of the Business Plan that does
not have a fair market value in excess of $5 million in a given fiscal year or
any series of transactions that does not have a fair market value in excess of
$10 million in the aggregate in any fiscal year, (iii) supplies in the
ordinary course of business and (iv) any ownership interest in any of its
Subsidiaries or joint ventures.

 

(f)            Transactions with Senior
Management.  Except as
expressly contemplated by this Agreement or as per ordinary course of business
operations, directly or indirectly, do any of the following: Transfer any
property or services to or lease or purchase any property or services from,
make any investment in, make any material loan or advance to, or receive any
loan, advance or investment from, incur or suffer any lien, liability, or
obligation to, or guaranty, extend credit for, or suffer any liability for any
obligation of, or modify the terms of any existing transaction or arrangement
with, or engage in any other transaction or arrangement with, (i) any
officer or senior manager of the Company or of any of its Subsidiaries or (ii) any
Affiliate of any such officer or senior manager;

 

(g)           Equity and Equity-Linked
Issuances.  (i) Issue,
sell, dividend, distribute or otherwise Transfer any Company Securities or any
rights or interests in those securities or any similar securities of any of the
Company’s Subsidiaries, except (A) securities issued by a Subsidiary to
the Company or by one Subsidiary to another Subsidiary, (B) securities
issued by a Subsidiary or joint venture of the Company to a doctor or other
health care provider in the ordinary course of business consistent with past
practice, or (C) Common Stock issued pursuant to the exercise or receipt
of any options, equity-based awards or other incentives issued under the Option
Plan, the grant of which has been previously approved by the Board, (ii) adopt
or establish any new equity incentive or similar plan or materially amend, or
waive any material rights and obligations under, the Option Plan (or, in each
case, any award document to any officer or senior manager of the Company or any
Subsidiary under the Option Plan) or (iii) effect an IPO;

 

(h)           Management.  (i) Appoint or remove the CEO, the COO
or the CFO of the Company, (ii) authorize material changes to the
compensation or other benefits of any such individual, (iii) enter into
any employment, compensatory, change of control or severance agreement with any
senior manager of the Company or (iv) except in the ordinary course of
business, consistent with past practices, adopt or amend in a material manner
any compensation or severance plan or arrangements for the senior managers of
the Company;

 

(i)            Dividends.  Pay or declare dividends or distributions on,
or make any share repurchase or redemption of, the capital stock of the Company
or any of its Subsidiaries, other than any dividends or distributions on, share
repurchases or 

 

15

 

redemptions of, the capital stock of any such
Subsidiary on a pro rata basis to all of its
equity owners or, in the case of share repurchases or redemptions of equity
interests in less than wholly owned Subsidiaries or joint ventures from doctors
of or other medical service providers who are owners of such Subsidiary or
joint venture, in the ordinary course of business consistent with past
practice;

 

(j)            Business Plans; New
Markets.  (i) Adopt the
Business Plan, (ii) with respect to the Company, materially modify or
materially depart from the Business Plan, (iii) enter into a materially
different product or service market or enter a market outside of the United
States, except any such entry within the healthcare industry by a joint venture
or Subsidiary in the limited geographic area in which it operates;

 

(k)           Dissolution.  With respect to the Company and its active
Subsidiaries, (i) dissolve or liquidate, or adopt any plan of dissolution
or liquidation, (ii) consent to or commence any suit, proceeding or other
action or file a petition or consent to a petition under any existing or future
law of any jurisdiction relating to bankruptcy, insolvency, reorganization of
relief of debtors or other similar matters, (iii) make any assignment for
the benefit of creditors or (iv) admit in writing its inability to pay its
debts generally as they become due;

 

(l)            Litigation.  Institute, terminate or settle any
litigation, arbitration, proceeding, dispute or claim asserting claims for
damages in excess of $5,000,000; or

 

(m)          Retention of Certain
Professionals; Accounting and Tax. 
(i) Employ or retain on behalf of the Company or any of its wholly
owned Subsidiaries any investment banker, financial advisor, underwriter, or
Person serving in a similar capacity, (ii) make any change in the auditors
of the Company or any of its wholly owned Subsidiaries or (iii) with respect to the Company
and any of its wholly owned Subsidiaries, make any material change in the
financial accounting principles or the accounting or tax policies (including
changing any annual tax accounting period, except for changes required by
generally accepted accounting principles or applicable law or regulation;

 

provided
that the parties understand and agree that, (x) the consent of the
Crestview Shareholder shall be deemed to have been received in respect of any
action or matter if any Crestview Fund Designee shall have voted to approve
such action or matter as a Board member, (y) the limitations set forth in
this Section 2.06 shall not apply to any action or matter occurring exclusively
between the Company and any of its wholly owned Subsidiaries or between any of
its wholly owned Subsidiaries and (z) the Crestview Shareholder
understands and agrees in connection with the drafting and observance of this Section 2.06
that (1) the Company may not be able to exercise control (as defined in
the definition of “Affiliate” that is contained herein) of its less than wholly
owned Subsidiaries or 

 

16

 

its minority joint ventures
(whether by virtue of contractual limitations, voting rights and/or certain
factors such as market conditions and/or the leverage that a joint venture
partner or minority shareholder may have over such Subsidiary or joint venture
by virtue of his or her being a service provider thereto or otherwise) and that
(2) the Company is not required to expend funds in the exercise of “all
commercially reasonable efforts” contemplated by this Section 2.06.

 

Section 2.07.  Charter or
Bylaw Provisions.  Each
Shareholder agrees to vote its Shares or execute proxies or written consents,
as the case may be, and to take all other actions necessary, to ensure that the
Charter and Bylaws (i) facilitate, and do not at any time conflict with,
any provision of this Agreement and (ii) permit each Shareholder to
receive the benefits to which each such Shareholder is entitled under this
Agreement.  The Charter and Bylaws shall
provide for (x) the elimination of the liability of each director on the
Board to the maximum extent permitted by applicable law and (y) indemnification
of each director on the Board for acts on behalf of the Company to the maximum
extent permitted by applicable law.

 

Section 2.08.  Notice of
Meeting.  The Company shall
give each director notice and the agenda for each meeting of the Board or any
committee thereof a reasonable period of time before such meeting in light of
the circumstances thereof.

 

Section 2.09.  Subsidiary
Governance.  The Company
agrees that it will vote (or cause the voting of) the shares of the capital stock
of its Subsidiaries, including shares of its less than wholly owned
Subsidiaries or its minority joint ventures, and each Shareholder agrees to
vote its Shares and to cause its representatives on the Board, subject to their
fiduciary duties, to vote and take other appropriate action, in each case to
give effect to the agreements in this Article 2 in respect of any
Subsidiary of the Company (including Section 2.06 hereof).

 

Section 2.10.  Rights to Appoint Board
Observers.  NW Mutual shall
have the right to appoint two individuals to attend each meeting of the Board
and each meeting of the board of directors of Symbion, Inc. (the “Symbion, Inc. Board”), BACI shall have
the right to appoint one individual to attend each meeting of the Board and the
Symbion, Inc. Board, and Trident IV shall have the right to appoint one
individual to attend each meeting of the Symbion, Inc. Board, in each case
as non-voting observers (the “Board Observers”)
and whether such meeting is conducted in person or by teleconference.  The Board Observers shall be entitled to
receive notices of all meetings of the Board and the Symbion, Inc. Board
and to obtain copies of all materials provided to the Board or the Symbion, Inc.
Board; provided that, for the sake of clarity,
the Board Observers shall have no voting rights whatsoever with respect to
actions taken by the Board or the Symbion, Inc. Board.  The Company shall provide to R6, at
substantially the same time as such 

 

17

 

materials are provided to
members of the Board or the Symbion, Inc. Board, as applicable, copies of
all materials formally provided to such members in connection with meetings of
the Board or the Symbion, Inc. Board (including board meeting minutes and
resolutions that are formally adopted). 
The Board Observers will be asked to leave all or a portion of a meeting
of the Board or the Symbion, Inc. Board to the extent such board of
directors is discussing (and will not be entitled to receive any) information
that is subject to any legal privilege. 
The Company shall pay all reasonable out-of-pocket expenses incurred by
each Board Observer in connection with attending regular and special meetings
of the Board and the Symbion, Inc. Board.

 

ARTICLE
3

RESTRICTIONS ON TRANSFER

 

Section 3.01.  General
Restrictions on Transfer.  (a) Each
Shareholder understands and agrees that the Company Securities have not been
registered under the Securities Act and are restricted securities under such
act.  Each Shareholder agrees that it
shall not Transfer any Company Securities (or solicit any offers in respect of
any Transfer of any Company Securities), except in compliance with the
Securities Act, any other applicable securities or “blue sky” laws, and the
terms and conditions of this Agreement.

 

(b)           Any attempt to Transfer any Company Securities not in
compliance with this Agreement shall be null and void, and the Company shall
not, and shall cause any transfer agent not to, give any effect in the
Company’s stock records to such attempted Transfer.

 

Section 3.02.  Legends.  (a) In addition
to any other legend that may be required, each certificate for Company
Securities issued to any Shareholder shall bear a legend in substantially the
following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED, OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
THEREWITH.  THIS SECURITY IS ALSO SUBJECT
TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SHAREHOLDERS
AGREEMENT DATED AS OF AUGUST 23, 2007, COPIES OF WHICH MAY BE OBTAINED
UPON REQUEST FROM SYMBION HOLDINGS 

 

18

 

CORPORATION OR ANY SUCCESSOR THERETO.

 

(b)                                 If
any Company Securities shall cease to be Registrable Securities under clause (i) or
clause (ii) of the definition thereof, the Company, upon the written
request of the holder thereof, shall issue to such holder a new certificate
evidencing such Company Securities without the first sentence of the legend
required by Section 3.02(a) endorsed thereon.  If any Company Securities cease to be subject
to any and all restrictions on Transfer set forth in this Agreement, the
Company, upon the written request of the holder thereof, shall issue to such
holder a new certificate evidencing such Company Securities without the second
sentence of the legend required by Section 3.02(a) endorsed thereon.

 

Section 3.03.  Permitted
Transferees.  Notwithstanding
anything in this Agreement to the contrary, any Shareholder may at any time
Transfer any or all of its Company Securities to one or more of its Permitted
Transferees without the consent of the Board or any other Shareholder or group
of Shareholders and without compliance with Sections 3.04, 3.05, 4.01, 4.02 and
4.04 so long as (i) such Permitted Transferee shall have agreed in writing
to be bound by the terms of this Agreement in the form of Exhibit A
attached hereto and (ii) the Transfer to such Permitted Transferee is in
compliance with the Securities Act and any other applicable securities or “blue
sky” laws.

 

Section 3.04.  Restrictions
on Transfers by Institutional Shareholders.  (a) Except as otherwise waived
in any instance by the Company, the Company’s Chief Executive Officer and the
Crestview Shareholder (who may each grant or withhold such waiver in their sole
discretion) in the case of a Transfer by any Institutional Shareholder (other
than the Crestview Shareholder), no Institutional Shareholder shall Transfer
any of its Company Securities, except to one or more of its Permitted
Transferees in accordance with Section 3.03 or as follows:

 

(i)            in a Transfer made in compliance with Section 4.01
and 4.04 or 4.02;

 

(ii)           in a Public Offering in connection with the proper
exercise of its rights under Article 5; or

 

(iii)          in a Transfer in compliance with Rule 144 following
the IPO;

 

provided that, prior to the IPO, in no event
shall any Institutional Shareholder Transfer any of its Company Securities
(other than to a Permitted Transferee or pursuant to Section 4.02 or
pursuant to Section 4.01 in the case of any Institutional Shareholder
(other than the Crestview Shareholder) as a Tagging Person) prior to the 3rd anniversary of
the Closing Date.

 

19

 

Section 3.05. Restrictions on Transfers by Management Shareholders. (a) Except
as otherwise waived in any instance by the Company, the Company’s Chief
Executive Officer and the Crestview Shareholder (who may each grant or withhold
such waiver in their sole discretion), no Management Shareholder shall Transfer
any of its Company Securities, except to one or more of its Permitted
Transferees in accordance with Section 3.03 or as follows:

 

(i)    in a Transfer made in
compliance with Section 4.01 and 4.04 or 4.02 or 4.06;

 

(ii)   in a Public Offering in
connection with the proper exercise of its rights under Article 5; or

 

(iii)  in a Transfer in compliance
with Rule 144 following the IPO;

 

provided
that, prior to the IPO, in no event shall any Management Shareholder Transfer
any of his or her Company Securities (other than to a Permitted Transferee or
pursuant to Section 4.02 or pursuant to Section 4.01 as a Tagging
Person) prior to the 3rd anniversary of the Closing Date.

 

ARTICLE 4

TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; RIGHTS OF FIRST REFUSAL; PREEMPTIVE
RIGHTS; REPURCHASE RIGHTS

 

Section 4.01. Tag-Along Rights. (a) Subject to Sections 4.01(g) and
(h), 4.03 and 4.04, if any Shareholder (the “Tag-Along Seller”)
proposes to Transfer to a Third Party, in a transaction otherwise permitted by Article 3,
in a single transaction or in a series of related transactions a number of
Company Securities held by the Tag-Along Seller that exceeds 2% of the
aggregate number of any outstanding Company Securities (a “Tag-Along
Sale”):

 

(i)    the Tag-Along Seller shall
(after the conclusion of the relevant periods referred to in Section 4.04(d),
if applicable) provide each other Shareholder notice of the terms and
conditions of such proposed Transfer (“Tag-Along Notice”) and offer each Tagging
Person the opportunity to participate in such Transfer in accordance with this Section 4.01;
and

 

(ii)   each Shareholder may elect,
at its option, to participate in the proposed Transfer in accordance with this Section 4.01
(each such electing Shareholder, a “Tagging Person”).

 

20

 

The Tag-Along
Notice shall identify the number of Company Securities proposed to be sold by
the Tag-Along Seller (“Tag-Along Offer”), the consideration
for which the Transfer is proposed to be made, and all other material terms and
conditions of the Tag-Along Offer, including the form of the proposed
agreement, if any, and a firm offer by the proposed transferee to purchase
Company Securities from the Shareholders in accordance with this Section 4.01.

 

From the date
of its receipt of the Tag-Along Notice, each Tagging Person shall have the
right (a “Tag-Along Right”), exercisable by notice (“Tag-Along
Response Notice”) given to the Tag-Along Seller within 5
Business Days after its receipt of the Tag-Along Notice (the “Tag-Along
Notice Period”), to request that the Tag-Along Seller include
in the proposed Transfer the number of Company Securities representing such
Tagging Person’s Tag-Along Portion; provided that
each Tagging Person shall be entitled to include in the Tag-Along Sale no more
than its Tag-Along Portion of Company Securities and the Tag-Along Seller shall
be entitled to include the number of Company Securities proposed to be
Transferred by the Tag-Along Seller as set forth in the Tag-Along Notice
(reduced, to the extent necessary, so that each Tagging Person shall be able to
include its Tag-Along Portion). Each Tag-Along Response Notice shall include
wire transfer or other instructions for payment or delivery of the purchase
price for the Company Securities to be sold in such Tag-Along Sale. Each
Tagging Person that exercises its Tag-Along Rights hereunder shall deliver to
the Tag-Along Seller, with its Tag-Along Response Notice, the certificates
representing the Company Securities of such Tagging Person to be included in
the Tag-Along Sale, together with a limited power-of-attorney authorizing the
Tag-Along Seller to Transfer such Company Securities on the terms set forth in
the Tag-Along Notice or, if such delivery is not permitted by applicable law,
an unconditional agreement to deliver such Company Securities pursuant to this Section 4.01(a) at
the closing for such Tag-Along Sale against delivery to such Tagging Person of
the consideration therefor. Delivery of the Tag-Along Response Notice with such
certificates and limited power-of-attorney (or the agreement referred to in the
preceding sentence) shall constitute an irrevocable acceptance of the Tag-Along
Offer by such Tagging Persons, subject to the provisions of this Section 4.01
and Section 4.03.

 

For purposes
of this Agreement, the term “Tag-Along Portion”
means, for each Tagging Person in respect of a Tag Along Sale of Company
Securities: the sum of (i) the number of shares of Company Securities that
is equal to the product of the Aggregate Ownership of Company Securities held
by such Tagging Person immediately before such Transfer multiplied
by a fraction, the numerator of which is the maximum number of shares of
Company Securities proposed to be Transferred by the Tag-Along Seller in such
Tag-Along Sale (determined before application of Section 4.01(d) hereof),
and the denominator of which is the 

 

21

 

Aggregate
Ownership of Company Securities held by the Tag-Along Seller immediately before
such Transfer; plus (ii) such
additional Company Securities as permitted by Section 4.01(d), if
applicable.

 

If any Tagging
Person holds Company Securities that are convertible into Common Stock, then
the Tag-Along Seller may require (i) such Tagging Person(s) to
convert or exchange those Company Securities to be sold pursuant to this Section 4.01
into or for the relevant number of shares of Common Stock in order to exercise
such Tagging Person’s rights under this Section 4.01 or (ii) for such
Tag-Along Sale to be structured in such a way so that vested but unexercised
options shall be sold on a net basis with each relevant option holder to
receive the per share purchase price for each option minus the exercise price for such vested option.

 

If, at the end
of a 90-day period after delivery of such Tag-Along Notice (which 90-day period
shall be extended if any of the transactions contemplated by the Tag-Along
Offer are subject to regulatory approval until the expiration of five Business
Days after all such approvals have been received, but in no event later than
180 days following delivery of the Tag-Along Notice by the Tag-Along Seller),
the Tag-Along Seller has not completed the Transfer of all Company Securities
proposed to be sold by the Tag-Along Seller and all Tagging Persons on
substantially the same terms and conditions set forth in the Tag-Along Notice,
the Tag-Along Seller shall (i) return to each Tagging Person the limited
power-of-attorney together with all certificates representing the Company
Securities that such Tagging Person delivered for Transfer pursuant to this Section 4.01(a) and
any other documents in the possession of the Tag-Along Seller executed by the
Tagging Persons in connection with the proposed Tag-Along Sale, and (ii) all
the restrictions on Transfer contained in this Agreement or otherwise
applicable at such time with respect to such Company Securities shall continue
in effect, and no Transfer of such Company Securities may be made without
delivery of a new Tag-Along Notice with respect thereto.

 

(b)           Concurrently
with the consummation of the Tag-Along Sale, the Tag-Along Seller shall (i) notify
the Tagging Persons thereof, (ii) remit to the Tagging Persons the total
consideration for the Company Securities of the Tagging Persons Transferred
pursuant thereto, with the cash portion of the purchase price paid by wire
transfer of immediately available funds in accordance with the wire transfer
instructions in the applicable Tag-Along Response Notices and (iii) promptly
after the consummation of such Tag-Along Sale, furnish such other evidence of
the completion and the date of completion of such transfer and the terms
thereof as may be reasonably requested by the Tagging Persons.

 

(c)           If
at the termination of the Tag-Along Notice Period any Shareholder shall not
have elected to participate in the Tag-Along Sale, such Shareholder shall be
deemed to have waived its rights under Section 4.01(a) with 

 

22

 

respect to the Transfer of its Company Securities pursuant to such
Tag-Along Sale.

 

(d)           If
(i) any Shareholder declines to exercise its Tag-Along Rights and/or (ii) any
Tagging Person elects to exercise its Tag-Along Rights with respect to less
than such Tagging Person’s Tag-Along Portion, then the Tag-Along Seller and the
Tagging Persons shall each be entitled to additionally Transfer, pursuant to
the Tag-Along Offer, its pro rata
portion (based on the number of Company Securities each Shareholder has elected
to Transfer in such Tag-Along Offer) of any such declined Tag-Along Portion in
accordance with the terms and conditions hereof.

 

(e)           The
Tag-Along Seller shall Transfer, on behalf of itself and each Tagging Person,
the Company Securities subject to the Tag-Along Offer and elected to be
Transferred on the terms and conditions set forth in the Tag-Along Notice
within 90 days (or such longer period as extended under Section 4.01(a))
of delivery of the Tag-Along Notice; provided
that the price payable in any such Transfer may exceed the price specified in
the Tag-Along Notice by up to 5%.

 

(f)            Notwithstanding
anything contained in this Section 4.01, there shall be no liability on
the part of the Tag-Along Seller to the Tagging Persons (other than the
obligation to return any certificates evidencing Company Securities and limited
powers-of-attorney received by the Tag-Along Seller) or any other Person if the
Transfer of Company Securities pursuant to Section 4.01 is not consummated
for whatever reason. The decision of whether to effect a Transfer of Company
Securities pursuant to this Section 4.01 by the Tag-Along Seller is in the
sole and absolute discretion of the Tag-Along Seller.

 

(g)           The
provisions of this Section 4.01 shall not apply to any proposed Transfer
of any Company Securities by the Tag-Along Seller (i) in a Public Offering
or pursuant to Rule 144 (if such sale is permitted by Section 3.04(iii) or
Section 3.05(iii), as applicable) or (ii) pursuant to Section 4.02
or Section 4.04.

 

(h)           This Section 4.01 shall terminate
upon the consummation of the IPO.

 

Section 4.02. Drag-Along Rights. (a) Subject to Sections 4.02(e),
4.02(f), 4.03 and 4.04, if the Crestview Shareholder (the “Drag-Along
Seller”) enters into an agreement to sell all or
substantially all of its Company Securities to a Third Party (whether pursuant
to a merger acting through Parent, stock sale or otherwise) (a “Drag-Along Sale”), the Drag-Along Seller may at its option
require all Other Shareholders to, and the Other Shareholders shall, (i) Transfer
the Drag-Along Portion of Company Securities (“Drag-Along Rights”)
then held by every Other Shareholder (and shall not exercise any appraisal or
dissenter’s rights that may otherwise be available to any such Other
Shareholder under 

 

23

 

applicable law), and (ii) subject to and
at the closing of the Drag-Along Sale, exercise such number of options or
warrants for Shares held by every Other Shareholder as is required in order
that a sufficient number of Shares are available to Transfer the relevant
Drag-Along Portion of Company Securities of each such Other Shareholder, in
each case for the same consideration per Share as the Drag-Along Seller and
otherwise on the same terms and conditions as the Drag-Along Seller; provided that any Other Shareholder that
holds options the exercise price per share of which is greater than the per
share price at which the Shares are to be Transferred to the Drag-Along
Transferee, if required by the Drag-Along Seller to exercise such options, may,
in lieu of such exercise, submit to irrevocable cancellation thereof without
any liability for payment of any exercise price with respect thereto. If the
Drag-Along Sale is not consummated with respect to any Shares acquired upon
exercise of any options or warrants, or the Drag-Along Sale is not consummated,
any options or warrants exercised or canceled in contemplation of such
Drag-Along Sale shall be deemed not to have been exercised or canceled, as
applicable.

 

For purposes
of this Agreement, the term “Drag-Along Portion” means, with
respect to each Other Shareholder and shares of Company Securities, the product
of (i) the Aggregate Ownership of Company Securities held by such Other
Shareholder multiplied by (ii) a
fraction, the numerator of which is the number of shares of Company Securities
proposed to be sold by the Drag-Along Seller in the applicable Drag-Along Sale
under Section 4.02 and the denominator of which is the Aggregate Ownership
of Company Securities held by the Drag-Along Seller immediately before such
Transfer.

 

If any Other
Shareholder that is required to participate in the Drag-Along Sale pursuant to
this Section 4.02 holds Company Securities that are convertible into
Common Stock, then the Drag-Along Seller may require (i) such Other
Shareholder(s) to convert or exchange those Company Securities to be sold
pursuant to this Section 4.02 into or for the relevant number of shares of
Common Stock in order for the Drag-Along Seller to exercise its rights under
this Section 4.02 or (ii) for such Drag-Along Sale to be structured
in such a way so that vested options shall be sold on a net basis with each
relevant option holder to receive the per share purchase price for each vested
but unexercised option minus the
exercise price for such option.

 

The Drag-Along
Seller shall provide notice of such Drag-Along Sale to the Other Shareholders
(a “Drag-Along
Sale Notice”) not later than 20 Business Days prior to the
consummation of the proposed Drag-Along Sale. The Drag-Along Sale Notice shall
identify the transferee, the number of Company Securities subject to the
Drag-Along Sale, the consideration for which a Transfer is proposed to be made
(the “Drag-Along
Sale Price”) and all other material terms and conditions of
the Drag-Along Sale. The number of Company Securities to be sold by each Other
Shareholder shall be the Drag-Along Portion of the Company 

 

24

 

Securities
that such Other Shareholder owns. Each Other Shareholder shall be required to
participate in the Drag-Along Sale on the terms and conditions set forth in the
Drag-Along Sale Notice and to tender all its Company Securities as set forth
below and to vote or consent in favor of such transaction (to the extent a vote
or consent is required) and take any other reasonably necessary action in
furtherance thereof. The price payable in such Transfer shall be the Drag-Along
Sale Price. Not later than 10 Business Days after the date of the Drag-Along
Sale Notice (the “Drag-Along Sale Notice Period”),
each of the Other Shareholders shall deliver to a representative of the
Drag-Along Seller designated in the Drag-Along Sale Notice the certificates
representing the Company Securities of such Other Shareholder to be included in
the Drag-Along Sale, together with a limited power-of-attorney authorizing on
reasonably acceptable terms the Drag-Along Seller or its representative to
Transfer such Company Securities on the terms set forth in the Drag-Along
Notice and wire transfer or other instructions for payment or delivery of the
consideration to be received in such Drag-Along Sale, or, if such delivery is
not permitted by applicable law, an unconditional agreement to deliver such
Company Securities pursuant to this Section 4.02(a) at the closing for
such Drag-Along Sale against delivery to such Other Shareholder of the
consideration therefor. If an Other Shareholder should fail to deliver such
certificates to the Drag-Along Seller, the Company (subject to reversal under Section 4.02(b))
shall cause the books and records of the Company to show that such Company
Securities are bound by the provisions of this Section 4.02(a) and
that such Company Securities shall be Transferred to the Drag-Along Transferee
immediately upon surrender for Transfer by the holder thereof.

 

(b)           The
Drag-Along Seller shall have a period of 90 days from the date of delivery of
the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and
conditions set forth in such Drag-Along Sale Notice; provided that, if such Drag-Along Sale is subject to
regulatory approval, such 90-day period shall be extended until the expiration
of five Business Days after all such approvals have been received, but in no
event later than 180 days following the date of delivery of the Drag-Along Sale
Notice. If the Drag-Along Sale shall not have been consummated during such
period, the Drag-Along Seller shall return to each of the Other Shareholders
the limited power-of-attorney and all certificates representing Company
Securities that such Other Shareholders delivered for Transfer pursuant hereto,
together with any other documents in the possession of the Drag-Along Seller
executed by the Other Shareholders in connection with such proposed Transfer,
and all the restrictions on Transfer contained in this Agreement or otherwise
applicable at such time with respect to such Company Securities owned by the
Other Shareholders shall again be in effect.

 

(c)           Concurrently
with the consummation of the Transfer of Company Securities pursuant to this Section 4.02,
the Drag-Along Seller shall give notice thereof to the Other Shareholders,
shall remit to each of the Other Shareholders 

 

25

 

that have surrendered their certificates and other applicable instruments
the total consideration (the cash portion of which is to be paid by wire
transfer in accordance with such Other Shareholder’s wire transfer
instructions) for the Company Securities Transferred pursuant hereto and shall
furnish such other evidence of the completion and time of completion of such
Transfer and the terms thereof as may be reasonably requested by such Other
Shareholders.

 

(d)           Notwithstanding
anything contained in this Section 4.02, there shall be no liability on
the part of the Drag-Along Seller to the Other Shareholders (other than the
obligation to return the limited power-of-attorney and the certificates and
other applicable instruments representing Company Securities received by the
Drag-Along Seller) or any other Person if the Transfer of Company Securities
pursuant to this Section 4.02 is not consummated for whatever reason,
regardless of whether the Drag-Along Seller has delivered a Drag-Along Sale
Notice. The decision of whether to effect a Transfer of Company Securities
pursuant to this Section 4.02 by the Drag-Along Seller is in the sole and
absolute discretion of the Drag-Along Seller.

 

(e)           The
provisions of this Section 4.02 shall not apply to any proposed Transfer
of any Company Securities by the Drag-Along Seller in a Public Offering or
pursuant to Rule 144.

 

(f)            This
Section 4.02 shall terminate upon the consummation of the IPO.

 

Section 4.03. Additional Conditions to Tag-Along Sales and Drag-Along Sales.
Notwithstanding anything contained in Section 4.01 or 4.02, the rights and
obligations of the Shareholders to participate in a Tag-Along Sale under Section 4.01
or a Drag-Along Sale under Section 4.02 are subject to the following
conditions:

 

(a)           upon
the consummation of such Tag-Along Sale or Drag-Along Sale, all of the
Shareholders participating therein will receive the same terms and conditions
of sale in all material respects and the same form and amount of consideration
per share, or, if any Shareholders are given an option as to the form and
amount of consideration to be received, all Shareholders participating therein
will be given the same option; provided, however, that in the event the proceeds of a Drag-Along Sale
received by the Drag-Along Seller are not cash or marketable securities, the
Institutional Shareholders and Management Shareholders shall have the same exit
and sale rights as the Drag-Along Seller;

 

(b)           each Shareholder that sells Company
Securities in a Tag-Along Sale or Drag-Along Sale shall be obligated to pay its
pro rata share (based on the number of
Company Securities Transferred) of expenses incurred in connection with such
Tag-Along Sale or Drag-Along Sale to the extent such expenses are 

 

26

 

incurred for
the benefit of all Shareholders and are not otherwise paid by the Company or
another Person; and

 

(c)           each Shareholder participating in any
such transaction shall (i) make such representations, warranties and
covenants and enter into such definitive agreements as are customary for
transactions of the nature of the proposed Transfer; provided that, no participating Shareholder shall be
required to provide any representations in connection with such Transfer (other
than representations concerning each such Shareholder’s title to the Company
Securities and authority, power and right to enter into and consummate the
Transfer without contravention of any law or agreement); provided that each participating
Shareholder may be required to provide indemnification for representations
concerning the Company to the extent that all liability for misrepresentation
or indemnity shall (as to those participating Shareholders) be expressly stated
to be several but not joint and each such Shareholder shall not be liable for
more than its pro rata share
(based on the number of Company Securities Transferred) of any liability for
misrepresentation or indemnity; provided
that in no event shall any participating Shareholder’s total liability for all
claims arising out of such transaction exceed the net proceeds received by it
in connection therewith, (ii) benefit from all of the same provisions of
the definitive agreements as the Tag-Along Seller or Drag-Along Seller, as the
case may be, and (iii) be required to bear up to their proportionate share
of any escrows, holdbacks or adjustments in purchase price.

 

Section 4.04. Rights of First Refusal.
(a) If, at any time, any Shareholder receives from or otherwise
negotiates with a Third Party an offer to purchase any or all of the Company
Securities owned or held by that Shareholder (an “Offer”), and that Shareholder (the “ROFR Seller”) intends to pursue the Transfer of such Company
Securities to that Third Party, then the ROFR Seller shall give notice (an “Offer Notice”) to the other Shareholders
(the “ROFR Offerees”) and to the
Company that the ROFR Seller desires to accept the Offer, which notice shall
also set forth the number and kind of Company Securities proposed to be sold
(the “Offered Securities”), the
price per share that the ROFR Seller proposes to be paid for those Offered
Securities (the “Offer Price”) and
all other material terms and conditions of the Offer.

 

(b)           The
giving of an Offer Notice to the Company and the ROFR Offerees shall constitute
an offer by that ROFR Seller to Transfer the Offered Securities, in whole and
not in part, to the Company and those ROFR Offerees, with the Company having
priority with respect to the acceptance of the Offer by giving an irrevocable
notice of acceptance to the ROFR Seller before the expiration of 5 Business
Days after receipt of that Offer Notice by the Company, at the Offer Price and
on the other terms set forth in the Offer Notice; provided, however, that:

 

27

 

(i)    If the Offer Notice
specifies a form of consideration other than cash, a cash equivalent or a
promissory note, the Offer may be accepted by the Company or any of the ROFR
Offerees for a payment, in lieu of such form of consideration, of cash in an
amount equal to the fair market value of such consideration; and

 

(ii)   If the Offer Notice
specifies consideration consisting of a promissory note, the promissory note of
Parent or any of the ROFR Offerees shall be deemed the equivalent of the
promissory note specified in the Offer Notice.

 

If the Company
does not accept the offer in whole in accordance with this Section 4.04
within that 5-Business Day period, then that offer may be accepted at the Offer
Price by the ROFR Offerees on a pro rata
basis based on each such Shareholder’s ROFR Portion, unless the accepting ROFR
Offerees shall agree to another allocation resulting in acceptance of the Offer
with respect to all of the Offered Securities. Such offer shall be irrevocable
for 10 Business Days after receipt of that Offer Notice by the Company and each
ROFR Offeree. Subject to the Company’s priority right of exercise as set forth
above, each ROFR Offeree shall have the right to accept that offer (as provided
above) within that 10-Business Day period. The offer may be accepted by giving
an irrevocable notice of acceptance to the ROFR Seller before the expiration of
that 10-Business Day period.

 

If any ROFR
Offeree receiving the Offer Notice elects not to purchase the Offered
Securities, then the ROFR Seller shall not be required to sell any Offered
Securities accepted pursuant to the offer, but shall, within five Business Days
after the expiration of the initial 10-Business-Day period, give notice to all
ROFR Offerees that did accept the initial offer, informing them that they have
the right to increase the number of Offered Securities that they accepted
pursuant to the initial offer. Each such ROFR Offeree shall then have 5
Business Days in which to accept that second offer, by giving notice of
acceptance to the ROFR Seller before the expiration of that 5-Business Day
period, as to all of that Shareholder’s portion of the Offered Securities not
accepted pursuant to the initial offer (on the basis of that Shareholder’s ROFR
Portion compared to the ROFR Portions of all other ROFR Offerees receiving the
second offer) plus any additional portion not
accepted by any other ROFR Offeree during that 5-Business Day period, unless
the accepting ROFR Offerees shall unanimously agree to another allocation
resulting in acceptance of the Offer with respect to all of the Offered
Securities.

 

If any ROFR Offeree
fails to notify the ROFR Seller before the expiration of the initial
10-Business Day periods or the second 5-Business Day period, as applicable,
referred to above, it shall be deemed to have declined the initial offer or
second offer, as applicable.

 

28

 

For purposes
of this Section 4.04, “ROFR Portion”
means, in respect of any ROFR Offeree, the percentage that results from
dividing (i) the Aggregate Ownership of Company Securities of that ROFR
Offeree by (ii) the Aggregate Ownership of Company Securities for all ROFR
Offerees who received the first offer or the second offer (or those accepting
during the second offer period), as applicable.

 

(c)           If
the Company or the ROFR Offerees elect to purchase all of the Offered
Securities, then the Company or the ROFR Offerees, as the case may be, that
have accepted the initial offer or second offer, as the case may be, shall
purchase and pay, by wire transfer or bank or certified check (in immediately
available funds) or delivery of a promissory note pursuant to Section 4.04(b)(ii),
for all Offered Securities within 20 Business Days after the date on which all
of those Offered Securities have been accepted; provided that, if the Transfer of those Offered Securities is
subject to (i) any prior regulatory approval, subject to Section 4.04(d)(iii),
the time period during which that Transfer may be consummated shall be extended
until the expiration of five Business Days after all of those approvals shall
have been received, but in no event later than 180 days after the ROFR Notice
or (ii) Section 4.01, subject to the expiration of the relevant
periods referred to in such Section, if applicable.

 

(d)           Upon
the earliest to occur of (i) full rejection of the first offer by all
recipients thereof, (ii) the expiration of the initial 10 Business-Day
period and the second 5 Business-Day period without the ROFR Offerees electing
to purchase all of the Offered Securities, (iii) the failure to obtain any
required consent or regulatory approval for the purchase of all the Offered
Securities by the Company and/or the ROFR Offerees within 180 days of full
acceptance of the offer, ROFR Seller shall have a 90-day period during which to
effect a Transfer to the Third Party making the Offer of any or all of the
Offered Securities on substantially the same or more favorable (as to the ROFR
Seller) terms and conditions as were set forth in the Offer Notice at a price
that is not less than the Offer Price; provided
that (x) such Third Party shall have agreed in writing to be bound by the
terms of this Agreement and (y) the Transfer to that Third Party is not in
violation of applicable federal, state or foreign securities laws; and provided, further,
that, if the Transfer is subject to regulatory approval, that 90-day period
shall be extended until the expiration of five Business Days after all those
approvals shall have been received, but in no event shall that period be
extended for more than 180 days from the date of the ROFR Notice without the consent
of the Company. If the ROFR Seller does not consummate the Transfer of the
Offered Securities in accordance with the foregoing time limitations, then the
right of the ROFR Seller to Transfer those Offered Securities shall terminate,
and the ROFR Seller shall again comply with the procedures set forth in this Section 4.04
with respect to any proposed Transfer of Company Securities to a Third Party.

 

29

 

(e)        A ROFR Seller may Transfer Offered
Securities in accordance with this Section 4.04 for non-cash consideration only
if that ROFR Seller has first obtained and delivered to Parent an opinion of a
mutually agreed upon investment banking firm of national standing indicating
that the fair market value of the non-cash consideration that such ROFR Seller
proposes to accept as consideration for those Offered Securities, together with
any cash consideration, is at least equal to 100% of the Offer Price.

 

(f)         The provisions of this Section 4.04
shall terminate and be of no further force or effect upon and after the
IPO.  Furthermore, the provisions of this
Section 4.04 shall not apply to any Drag-Along Sale pursuant to Section 4.02.

 

Section 4.05.  Preemptive Rights.  (a) The Company shall give
each Shareholder notice (an “Issuance Notice”) of any proposed
issuance by the Company of any Company Securities at least 20 Business Days
prior to the proposed issuance date.  The
Issuance Notice shall specify the price at which such Company Securities are to
be issued and the other material terms of the issuance.  Subject to Section 4.05(f) below, each
Shareholder shall be entitled to purchase up to such Shareholder’s Preemptive
Rights Share of the Company Securities proposed to be issued, at the price and
on the terms specified in the Issuance Notice. 
For purposes of this Agreement, the term “Preemptive Rights Share” shall mean, with respect to any
Holder, the percentage that results from dividing (i) that Shareholder’s Aggregate
Ownership (immediately before giving effect to the issuance) of Common Stock by
(ii) the Aggregate Ownership (immediately before giving effect to the
issuance) of the Common Stock held by all Shareholders.

 

(b)        Each Shareholder who desires to purchase
any or all of its Preemptive Rights Share of the Company Securities specified
in the Issuance Notice shall deliver notice to the Company (each an “Exercise Notice”) of its election to purchase such Company
Securities within ten Business Days of receipt of the Issuance Notice.  The Exercise Notice shall specify the number
(or amount) of Company Securities to be purchased by such Shareholder and shall
constitute exercise by such Shareholder of its rights under this Section 4.05
and a binding agreement of such Shareholder to purchase, at the price and on
the terms specified in the Issuance Notice, the number of shares (or amount) of
Company Securities specified in the Exercise Notice.  If, at the termination of such ten-Business-Day
period, any Shareholder shall not have delivered an Exercise Notice to the
Company, such Shareholder shall be deemed to have waived all of its rights
under this Section 4.05 with respect to the purchase of such Company Securities
in connection with such sale.  Promptly
following the termination of such ten-Business Day period, the Company shall
deliver to each Shareholder a copy of all Exercise Notices it received.

 

30

 

(c)        If any Shareholder fails to exercise its
preemptive rights under this Section 4.05 or elects to exercise such rights
with respect to less than such Shareholder’s Preemptive Rights Share, the
Company shall notify each other Shareholder who has delivered an Exercise
Notice to exercise its rights to purchase its entire Preemptive Rights Share,
that such Shareholder shall be entitled to purchase from the Company its pro rata portion (which means the fraction that results from
dividing (i) such Shareholder’s Aggregate Ownership (immediately before
giving effect to the issuance) of Common Stock by (ii) the Aggregate
Ownership (immediately before giving effect to the issuance) of Common Stock of
all Shareholders exercising in full their preemptive rights with respect to
their respective Preemptive Rights Shares) of such Common Stock with respect to
which a Shareholder shall not have exercised its preemptive rights.  The Company shall continue to offer
additional pro rata portions to Shareholders choosing to purchase their full
pro rata portion of such Company Securities pursuant to this Section 4.05(c)
until (i) all Company Securities proposed to be issued by the Company and
with respect to which Shareholders were entitled to exercise their rights under
this Section 4.05 have been purchased by Shareholders or (ii) all Shareholders
have purchased the maximum number of Company Securities indicated in their
respective Issuance Notice, whichever is earlier.

 

(d)        The Company shall have 90 days from the
date of the Issuance Notice to consummate the proposed issuance of any or all
of such Company Securities that the Shareholders have not elected to purchase
at the price and upon terms that are not materially less favorable to the
Company than those specified in the Issuance Notice; provided that, if such issuance is subject to regulatory
approval, such 90-day period shall be extended until the expiration of five
Business Days after all such approvals have been received, but in no event
later than 180 days from the date of the Issuance Notice.  If the Company proposes to issue any such
Company Securities after such 90-day (or 180-day) period, it shall again comply
with the procedures set forth in this Section 4.05.

 

(e)        At the consummation of the issuance of
such Company Securities, the Company shall issue certificates representing the
Company Securities to be purchased by each Shareholder exercising preemptive
rights pursuant to this Section 4.05 registered in the name of such
Shareholder, against payment by such Shareholder of the purchase price for such
Company Securities in accordance with the terms and conditions as specified in
the Issuance Notice.

 

(f)         Notwithstanding the foregoing, no
Shareholder shall be entitled to purchase Company Securities as contemplated by
this Section 4.05 in connection with issuances of Company Securities (i) to
employees or consultants of the Company or any Subsidiary pursuant to employee
benefit plans or arrangements, or to other holders of ownership interests in
the Company’s facilities, in each case approved by the Board (including upon
the exercise of employee stock options granted pursuant to any such plans or
arrangements), (ii) in connection with any 

 

31

 

bona fide,
arm’s-length restructuring of outstanding debt of the Company or any
Subsidiary, (iii) in connection with any bona fide,
arm’s-length direct or indirect merger, acquisition, joint venture, strategic
transaction or any similar transaction or (iv) pursuant to a Public
Offering.  The Company shall not be
obligated to consummate any proposed issuance of Company Securities, nor be
liable to any Shareholder if the Company has not consummated any proposed
issuance of Company Securities pursuant to this Section 4.05 for whatever
reason, regardless of whether it shall have delivered an Issuance Notice or
received any Exercise Notices in respect of such proposed issuance.

 

(g)        The provisions of this Section 4.05
shall terminate upon the consummation of the IPO.

 

Section 4.06.  Purchase Option.  (a) In the event that any
Management Shareholder shall cease to be employed by or in the service of the
Company or any of its Subsidiaries due to (i) death, disability,
retirement, or voluntary resignation or (ii) termination with Cause, the
Company shall have the right and option, at any time within the 90-day period
(the “Option Period”) after the effective
date of such termination of employment (the “Termination
Date”) or, if later, the exercise date for the options under which
such Option Shares are acquired (which Option Period shall be extended if such
transaction is subject to regulatory approval until the expiration of five
Business Days after all such approvals have been received, but in no event
later than 180 days after the commencement of the Option Period), to purchase
from such Management Shareholder all of the Option Shares then owned by such
Management Shareholder (and his or her Permitted Transferees) at a purchase
price equal to the Option Purchase Price (as defined below).  The Company shall give notice to the
Management Shareholder of its intention to purchase the Option Shares at any
time not later than the end of the Option Period (which period shall be
extended if such transaction is subject to regulatory approval until the
expiration of five Business Days after all such approvals have been received,
but in no event later than 180 days after the commencement of the Option
Period).  The right of the Company set
forth in this Section 4.06 to purchase a Management Shareholder’s Option
Shares is hereinafter referred to as the “Purchase Option”.
 For the
avoidance of doubt, the Purchase Option shall not apply to the termination of a
Management Shareholder’s employment with the Company or any Subsidiary (x) by
the Company other than for Cause or (y) by either Mr. Francis or Mr. Adlerz,
or any other Management Shareholder with an employment agreement or option
award agreement that defines “good reason”, for Good Reason.

 

(b)        The Purchase Option shall be exercised
by written notice to the applicable Management Shareholder signed by an officer
of the Company on behalf of the Company. 
Such notice shall set forth the number of Option Shares desired to be
purchased and shall set forth a time and place of closing, subject to the above
time periods.

 

32

 

(c)        At such closing, the selling Management
Shareholder shall deliver the certificates evidencing the number of Option
Shares to be purchased by the Company and/or its designee(s), accompanied by
stock powers duly endorsed in blank or duly executed instruments of transfer,
and any other documents that are necessary to transfer to the Company good
title to such of the Option Shares to be transferred, free and clear of all
pledges, security interests, liens, charges, encumbrances, equities, claims and
options of whatever nature other than those imposed under this Agreement, and
concurrently with such delivery, the Company shall deliver to the seller the
full amount of the Option Purchase Price for such Option Shares in cash by
certified or bank cashier’s check.  Notwithstanding
anything to the contrary contained herein, in connection with the exercise of
any Purchase Option pursuant to Section 4.06, the Company may offset from
the Option Purchase Price paid to any Management Shareholder the aggregate
amount of any outstanding principal and accrued but unpaid interest due on any
indebtedness of such Management Shareholder to the Company.

 

(d)        The “Option
Purchase Price” for the Option Shares to be purchased from such
Management Shareholder pursuant to the Purchase Option shall equal the price
calculated as set forth below:

 

	
  Event Giving Rise to the

  Purchase Option

  	
   

  	
  Option Shares

  
	
  Death,
  disability, retirement or voluntary resignation

  	
   

  	
  Fair Market
  Value

  
	
  Termination
  for Cause

  	
   

  	
  Lesser of
  (i) the Fair Market Value and (ii) Cost

  

 

ARTICLE
5

REGISTRATION RIGHTS

 

Section 5.01.  Demand
Registration.  (a) If at
any time following the Closing Date, the Company shall receive a written
request from the Crestview Shareholder (the “Requesting Shareholder”)
that the Company effect the registration under the Securities Act of all or any
portion (so long as the value of such portion shall be equal to a minimum of $5
million for a S-1 registration and $1 million for a S-3 registration) of such
Requesting Shareholder’s Registrable Securities, and specifying the intended
method of disposition thereof and the number of Registrable Securities for
which the Requesting Shareholder has requested registration under this Section
5.01 (the “Crestview Request Amount”), then
the Company shall promptly give notice of such requested registration (a “Demand
Registration”) at least 20 Business Days prior to the
anticipated filing date of the registration statement relating to such Demand 

 

33

 

Registration to
the Other Shareholders and thereupon shall use its reasonable best efforts to
effect, as expeditiously as reasonably practicable, the registration under the
Securities Act, but subject to the restrictions set forth in Sections 5.01(e)
and 5.02, of:

 

(i)    all Registrable Securities for which the Requesting Shareholder
has requested registration under this Section 5.01, and

 

(ii)   all other Registrable Securities requested to be registered by the
Requesting Shareholder and those that any Shareholders with rights to request
registration under Section 5.02 (the Requesting Shareholder, together with any
Shareholders participating in a Piggyback Registration pursuant to this Section 5.01(a)(ii) and
Section 5.02, the “Registering Shareholders”) have
requested the Company to register by request received by the Company within 10
Business Days after such Shareholders receive the Company’s notice of the
Demand Registration,

 

all to the extent necessary to
permit the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Securities so to be registered; provided that, subject to Section 5.01(d),
the Company shall not be obligated to effect more than four (4) Demand
Registrations for the Crestview Shareholder, other than Demand Registrations to
be effected pursuant to a Registration Statement on Form S-3 (or any
successor thereto), for which an unlimited number of Demand Registrations shall
be permitted.  In no event shall the
Company be required to effect more than one Demand Registration hereunder
within any six-month period.

 

(b)        Promptly after the expiration of the
10-Business Day-period referred to in Section 5.01(a)(ii), the Company will
notify all Registering Shareholders of the identities of the other Registering
Shareholders and the number of shares of Registrable Securities requested to be
included therein.  At any time prior to
the effective date of the registration statement relating to such registration,
the Requesting Shareholder may revoke such request, without liability to any of
the other Registering Shareholders, by providing a notice to the Company
revoking such request.

 

(c)        The Company shall be liable for and pay
all Registration Expenses in connection with any Demand Registration,
regardless of whether such Registration is effected.

 

(d)        A Demand Registration shall not be
deemed to have occurred:

 

(i)    unless the registration statement relating thereto (A) has
become effective under the Securities Act and (B) has remained effective
for a period of at least 120 days (or such shorter period in which all 

 

34

 

Registrable Securities of the Registering
Shareholders included in such registration have actually been sold thereunder);
provided that such registration
statement shall not be considered a Demand Registration if, after such
registration statement becomes effective, (1) such registration statement
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court and (2) less than 75% of
the Registrable Securities included in such registration statement have been
sold thereunder; or

 

(ii)   if the Maximum Offering Size is reduced in accordance with Section
5.01(e) such that less than 662/3%
of the Registrable Securities of the Requesting Shareholders sought to be
included in such registration are included.

 

(e)        If a Demand Registration involves an
underwritten Public Offering and the managing underwriter advises the Company
and the Requesting Shareholders that, in its view, the number of shares of
Registrable Securities requested to be included in such registration (including
any securities that the Company proposes to be included that are not
Registrable Securities) exceeds the largest number of shares that can be sold
without having an adverse effect on such offering, including the price at which
such shares can be sold (the “Maximum Offering Size”), then the
Company shall include in such registration, in the priority listed below, up to
the Maximum Offering Size:

 

(i)    first, all Registrable Securities
requested to be registered by the Registering Shareholders (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro rata
among such entities on the basis of the relative number of Registrable
Securities so requested to be included in such registration by each); and

 

(ii)   second, any securities proposed
to be registered by the Company.

 

(f)         Upon notice to each Registering
Shareholder, the Company may postpone effecting a registration pursuant to this
Section 5.01 on one occasion during any period of six consecutive months for a
reasonable time specified in the notice but not exceeding 90 days (which period
may not be extended or renewed), if (i) an investment banking firm of
recognized national standing shall advise the Company and the Requesting
Shareholders in writing that effecting the registration would materially and
adversely affect an offering of securities of such Company the preparation of
which had then been commenced or is contemplated in the near term or (ii) the
Company is in possession of material non-public information the disclosure of
which during the period specified in such notice the Company reasonably
believes would not be in the best interests of the Company.

 

35

 

Section 5.02.  Piggyback
Registration.  (a) Subject
to Section 5.02(c), if the Company proposes to register any Company
Securities under the Securities Act after the IPO, including a Demand
Registration (other than a registration on Form S-8, S-4 or F-4, or any
successor forms, relating to Shares issuable upon exercise of employee stock
options or in connection with any employee benefit or similar plan of the
Company or in connection with a direct or indirect acquisition by the Company
of another Person), whether or not for sale for its own account or for other
Persons (e.g., the Requesting Holder), the
Company shall each such time give prompt notice at least 20 Business Days prior
to the anticipated filing date of the registration statement relating to such
registration to each Shareholder (the “Piggyback
Notice”), which notice shall set forth such Shareholder’s rights
under this Section 5.02 and the Crestview Request Amount (if such Public
Offering is pursuant to a Demand Registration) and shall offer such Shareholder
the opportunity to include in such registration statement the number of
Registrable Securities of the same class or series as those proposed to be
registered as each such Shareholder may request (a “Piggyback Registration”),
subject to the provisions of Section 5.02(b). 
Subject to Section 5.02(c), upon the request of any such Other
Shareholder made within 10 Business Days after the receipt of the Piggyback
Notice from the Company (which request shall specify the number of Registrable
Securities intended to be registered by such Shareholder), the Company shall
use its reasonable best efforts to effect the registration under the Securities
Act of all Registrable Securities that the Company has been so requested to
register by all Shareholders, to the extent necessary to permit the disposition
of the Registrable Securities so to be registered; provided that (i) if such registration involves an
underwritten Public Offering, all such Shareholders requesting to be included
in the Company’s registration must sell their Registrable Securities to the
underwriters selected as provided in Section 5.04(f) on the same terms and
conditions as apply to the Company or the Requesting Shareholder, as
applicable, and (ii) if, at any time after giving notice of its intention
to register any Company Securities for the Company’s own account pursuant to
this Section 5.02(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company shall
give notice to all such Shareholders and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration.  No registration effected
under this Section 5.02 shall relieve the Company of its obligations to effect
a Demand Registration to the extent required by Section 5.01.  The Company shall pay all Registration
Expenses in connection with each Piggyback Registration.

 

In the case of any Registrable Securities of
a Shareholder registered in a shelf registration statement pursuant to Section 5.01
or 5.02, such Shareholder shall have no obligation to provide notice to any
other Shareholder of any 

 

36

 

subsequent shelf take-down of such securities
that is effected by such Shareholder.

 

Subject to Section 5.02(c), but
notwithstanding anything else in this Agreement that may be deemed to the
contrary, if the Crestview Shareholder is Transferring Common Stock in the IPO,
the Other Shareholders shall also be entitled to Transfer a number of shares of
Common Stock in the IPO as if those Other Shareholders were effecting a
Piggyback Registration in accordance with this Section 5.02.

 

(b)        If a Piggyback Registration involves an
underwritten Public Offering (other than any Demand Registration, in which case
the provisions with respect to priority of inclusion in such offering set forth
in Section 5.01(e) shall apply) and the managing underwriter advises the
Company that, in its view, the number of Shares that the Company and such
Shareholders intend to include in such registration exceeds the Maximum
Offering Size, the Company shall include in such registration, in the following
priority, up to the Maximum Offering Size:

 

(i)    first, so much of the Company
Securities proposed to be registered for the account of the Company as would
not cause the offering to exceed the Maximum Offering Size;

 

(ii)   second, all Registrable Securities
requested to be included in such registration by any Shareholders entitled to
so request pursuant to this Section 5.02 (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata
among such Shareholders on the basis of the relative number of shares of
Registrable Securities so requested to be included in such registration by
each); and

 

(iii)  third, any securities proposed to be
registered for the account of any other Persons with such priorities among them
as the Company shall determine.

 

(c)        Notwithstanding anything in this
Agreement that may be deemed to the contrary (including the last paragraph of Section
5.02(a), a Management Shareholder shall not be entitled to participate in any
Piggyback Registration if the managing underwriter of such offering (whether
effected for the account of the Company or pursuant to a Demand Registration)
determines that such Management Shareholder’s participation in that Public
Offering would reasonably be expected to have a material adverse effect on that
Public Offering, including the price at which such shares can be sold.

 

Section 5.03.  Lock-Up
Agreements.  If any
registration of Registrable Securities shall be effected in connection with a
Public Offering, neither the Company nor any Shareholder shall effect any
public sale or distribution, 

 

37

 

including any
sale pursuant to Rule 144, of any Company Securities or other security of
the Company (except as part of such Public Offering) during the period
beginning 14 days prior to the effective date of the applicable registration
statement until the earlier of (i) such time as the Company and the lead
managing underwriter shall agree and (ii) 180 days following the effective
date (such period, the “Lock-Up Period” for the applicable
registration statement); provided
that in the case of any post-IPO Public Offering, such lock-up restriction
shall apply (x) only to any Registering Shareholder(s) and the
Company and (y) to all Shareholders who beneficially own (as defined in
the Exchange Act) more than 1% of the aggregate number of then outstanding
Company Securities; and provided further
that no such lock-up restriction may be waived by the underwriter(s) for
any Institutional Shareholder unless such restriction shall simultaneously be
waived for all Institutional Shareholders.

 

Section 5.04.  Registration
Procedures.  Whenever
Shareholders request that any Registrable Securities be registered pursuant to Section 
5.01 or 5.02, subject to the provisions of such Sections, the Company shall use
its reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as quickly as reasonably practicable. 
In connection with any such request, the following shall occur:

 

(a)        The Company shall as expeditiously as
reasonably practicable prepare and file with the SEC a registration statement
on any form for which the Company then qualifies or that counsel for the
Company shall deem appropriate and which form shall be available for the sale
of the Registrable Securities to be registered thereunder in accordance with
the intended method of distribution thereof, and use its best efforts to cause
such filed registration statement to become and remain effective for a period
of not less than 180 days, or in the case of a shelf registration statement,
one year (or such shorter period in which all of the Registrable Securities of
the Registering Shareholders included in such registration statement shall have
actually been sold thereunder).

 

(b)        A reasonable time prior to filing a
registration statement or prospectus or any amendment or supplement thereto,
the Company shall, if requested, furnish to each participating Shareholder and
each underwriter, if any, of the Registrable Securities covered by such
registration statement copies of such registration statement as proposed to be
filed, and thereafter the Company shall furnish to such Shareholder and
underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424, Rule 430A,
Rule 430B or Rule 430C under the Securities Act and such other
documents as such Shareholder or underwriter may reasonably request in 

 

38

 

order to
facilitate the disposition of the Registrable Securities owned by such
Shareholder.  Each Shareholder shall have
the right to request on a timely basis that the Company modify any information
contained in such registration statement, amendment and supplement thereto
pertaining to such Shareholder and the Company shall use all reasonable efforts
to comply with such request; provided, however, that the Company shall
not have any obligation to so modify any information if the Company reasonably
expects that so doing would cause the prospectus to contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.

 

(c)        After the filing of the registration
statement, the Company shall (i) cause the related prospectus to be
supplemented by any required prospectus supplement, and, as so supplemented, to
be filed pursuant to Rule 424 under the Securities Act, (ii) comply
with the provisions of the Securities Act with respect to the disposition of
all Registrable Securities covered by such registration statement during the
applicable period in accordance with the intended methods of disposition by the
Registering Shareholders thereof set forth in such registration statement or
supplement to such prospectus and (iii) promptly notify each Registering
Shareholder holding Registrable Securities covered by such registration
statement of any stop order issued or threatened by the SEC or any state
securities commission and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.

 

(d)        The Company shall use its reasonable
best efforts to (i) register or qualify the Registrable Securities covered
by such registration statement under such other securities or “blue sky” laws
of such jurisdictions in the United States as any Registering Shareholder
holding such Registrable Securities reasonably requests (in light of such
Shareholder’s intended plan of distribution) and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder; provided that the
Company shall not be required to (x) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 5.04(d), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction.

 

(e)        The Company shall immediately notify
each Registering Shareholder holding such Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an
event requiring the preparation of a supplement or amendment to such prospectus
so that, as 

 

39

 

thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and promptly prepare and make available to each such
Shareholder and file with the SEC any such supplement or amendment.

 

(f)         (i) The Crestview Shareholder
shall have the right, in its sole discretion, to select an underwriter or
underwriters in connection with the IPO or any other Public Offering resulting
from the exercise by any such Crestview Shareholder of a Demand Registration
and (ii) other than the IPO, the Company shall select an underwriter or
underwriters reasonably acceptable to the Crestview Shareholder in connection
with any other Public Offering.  In
connection with any Public Offering, the Company shall enter into customary
agreements (including an underwriting agreement in customary form with any
indemnities in favor of the underwriters as the managing underwriter may
reasonably request) and take such all other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities
in any such Public Offering, including the engagement of a “qualified
independent underwriter” in connection with the qualification of the
underwriting arrangements with the NASD.

 

(g)        Upon execution of confidentiality
agreements in form and substance reasonably satisfactory to the Company, the
Company shall make available for inspection by any Registering Shareholder and
any underwriter participating in any disposition pursuant to a registration
statement being filed by the Company pursuant to this Section 5.04 and any
attorney, accountant or other professional retained by any such Shareholder or
underwriter (collectively, the “Inspectors”), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably
necessary or desirable to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to supply
all information reasonably requested by any Inspectors in connection with such
registration statement.  Records that the
Company determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such registration statement or (ii) the release of such
Records is required by law or court order. 
Each Registering Shareholder agrees that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be used
by it or its Affiliates as the basis for any market transactions in the Company
Securities or in any other manner prohibited by Section 6.01 unless and
until such information is made generally available to the public.  Each Registering Shareholder further agrees
that, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, it shall give notice to the Company and allow the
Company, at its 

 

40

 

expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential.

 

(h)        The Company shall furnish to each
Registering Shareholder and to each such underwriter, if any, a signed
counterpart, addressed to such Shareholder or underwriter, of (i) an
opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company’s independent public accountants, each in
customary form and covering such matters of the kind customarily covered by
opinions or comfort letters, as the case may be, as a majority of such
Shareholders or the managing underwriter therefor reasonably requests.

 

(i)         The Company shall otherwise use its
reasonable best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, an earnings statement or such other document that shall
satisfy the requirements of the Securities Act.

 

(j)         The Company may require each such
Registering Shareholder promptly to furnish in writing to the Company such
information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration.

 

(k)        Each such Registering Shareholder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5.04(e), such Shareholder shall forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Shareholder’s receipt
of the copies of the supplemented or amended prospectus contemplated by Section
5.04(e), and, if so directed by the Company, such Shareholder shall deliver to
the Company all copies, other than any permanent file copies then in such
Shareholder’s possession, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice.  If the Company shall give such notice, the
Company shall extend the period during which such registration statement shall
be maintained effective (including the period referred to in Section 5.04(a))
by the number of days during the period from and including the date of the
giving of notice pursuant to Section 5.04(e) to the date when the Company
shall make available to such Shareholder a prospectus supplemented or amended
to conform with the requirements of Section 5.04(e).

 

(l)         The Company shall use its reasonable
best efforts to list all Registrable Securities covered by such registration
statement on any securities exchange or quotation system on which any of the
Registrable Securities are then listed or traded.

 

41

 

(m)       The Company shall cause the appropriate
officers of the Company to (and each Management Shareholder who is an officer
or senior manager of the Company or any Subsidiary shall) (i) prepare and
make presentations at any “road shows” and before analysts and rating agencies,
as the case may be, (ii) take other actions to obtain ratings for any
Registrable Securities and (iii) otherwise use their reasonable best
efforts to cooperate as reasonably requested by the underwriters in the
offering, marketing or selling of the Registrable Securities.

 

Section 5.05.  Indemnification
by the Company.  The Company
agrees to indemnify and hold harmless each Registering Shareholder beneficially
owning any Registrable Securities covered by a registration statement, its
officers, directors, employees, partners and agents, and each Person, if any,
who controls such Shareholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages, liabilities and expenses (including reasonable
expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”)
caused by or relating to any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by or relating to any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such Damages are
caused by or related to any such untrue statement or omission or alleged untrue
statement or omission so made based upon information furnished in writing to
the Company by such Shareholder or on such Shareholder’s behalf expressly for
use therein.  The Company also agrees to
indemnify any underwriters of the Registrable Securities, their officers and
directors and each Person who controls such underwriters within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act on substantially
the same basis as that of the indemnification of the Shareholders provided in
this Section 5.05.

 

Section 5.06.  Indemnification
by Registering Shareholders. 
Each Registering Shareholder holding Registrable Securities included in
any registration statement agrees, severally but not jointly, to indemnify and
hold harmless the Company, its officers, directors and agents and each Person,
if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to such Shareholder, but only with
respect to information furnished in writing by such Shareholder or by an
authorized representative of such Shareholder on such Shareholder’s behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus.  Each such
Shareholder also agrees to indemnify and hold 

 

42

 

harmless underwriters
of the Registrable Securities, their officers and directors and each Person who
controls such underwriters within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act on substantially the same
basis as that of the indemnification of the Company provided in this Section
5.06.  As a condition to including
Registrable Securities in any registration statement filed in accordance with Article 5, the Company may
require that it shall have received an undertaking reasonably satisfactory to
it from any underwriter to indemnify and hold it harmless to the extent
customarily provided by underwriters with respect to similar securities.  No Registering Shareholder shall be liable
under this Section 5.06 for any Damages in excess of the net proceeds realized
by such Shareholder in the sale of Registrable Securities of such Shareholder
to which such Damages relate.

 

Section 5.07.  Conduct of
Indemnification Proceedings. 
If any proceeding (including any governmental investigation) shall be
instituted involving any Person in respect of which indemnity may be sought
pursuant to this Article 5, such Person (an “Indemnified Party”)
shall promptly notify the Person against whom such indemnity may be sought (the
“Indemnifying
Party”) in writing and the Indemnifying Party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all
fees and expenses; provided that the failure of any
Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) in the reasonable judgment of such
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.  It is understood that, in connection with any
proceeding or related proceedings in the same jurisdiction, the Indemnifying
Party shall not be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred.  In the
case of any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties.  The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the
plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent
stated above) by reason of such settlement or judgment.  Without the prior written consent of the
Indemnified Party, no Indemnifying Party shall effect any settlement of any
pending or threatened proceeding in respect of which any 

 

43

 

Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.

 

Section 5.08.  Contribution.  If the indemnification provided for in this Article 5
is unavailable to the Indemnified Parties in respect of any Damages, then each
such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Damages (i) as between the Company and the Registering
Shareholders holding Registrable Securities covered by a registration statement
on the one hand and the underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Company and such
Shareholders on the one hand and the underwriters on the other, from the
offering of the Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of the Company and such
Shareholders on the one hand and of such underwriters on the other in
connection with the statements or omissions that resulted in such Damages, as
well as any other relevant equitable considerations and (ii) as between
the Company on the one hand and each such Shareholder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and
of each such Shareholder in connection with such statements or omissions, as
well as any other relevant equitable considerations.  The relative benefits received by the Company
and such Shareholders on the one hand and such underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses) received
by the Company and such Shareholders bear to the total underwriting discounts
and commissions received by such underwriters, in each case as set forth in the
table on the cover page of the prospectus. 
The relative fault of the Company and such Shareholders on the one hand
and of such underwriters on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and such Shareholders or by such
underwriters.  The relative fault of the
Company on the one hand and of each such Shareholder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

 

The Company and the Registering Shareholders
agree that it would not be just and equitable if contribution pursuant to this Section
5.08 were determined by 

 

44

 

pro rata allocation (even if the underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. 
The amount paid or payable by an Indemnified Party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim.  Notwithstanding the provisions of this Section
5.08, no underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any Damages that such underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission, and no Registering Shareholder shall be required to contribute any
amount in excess of the amount by which the total price at which the
Registrable Securities of such Shareholder were offered to the public (less
underwriters’ discounts and commissions) exceeds the amount of any Damages that
such Shareholder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.  Each Registering
Shareholder’s obligation to contribute pursuant to this Section 5.08 is several
in the proportion that the proceeds of the offering received by such
Registering Shareholder bears to the total proceeds of the offering received by
all such Registering Shareholders and not joint.  No Registering Shareholder shall be liable under
this Section 5.08 for any contribution obligations in excess of the net
proceeds realized by such shareholder in the sale of Registrable Securities of
such Shareholder to which such obligations relate.

 

Notwithstanding the foregoing Sections 5.05
through 5.08, the indemnification and contribution provisions contained in any
underwriting agreement shall control in the event of any conflict with the
provisions of this Agreement in relation to the underwriters, on the one hand,
and the Company or any Requesting Shareholder, on the other.

 

Section 5.09.  Participation
in Public Offering.  No
Shareholder may participate in any Public Offering hereunder unless such
Shareholder (i) agrees to sell such Shareholder’s Registrable Securities
on the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and the provisions of this Agreement in respect of
registration rights.

 

45

 

Section 5.10.  Other
Indemnification. 
Indemnification similar to that specified herein (with appropriate
modifications) shall be given by the Company and each Registering Shareholder
participating therein with respect to any required registration or other
qualification of securities under any federal or state law or regulation or
governmental authority other than the Securities Act.

 

Section 5.11.  Cooperation
by the Company.  If any
Shareholder shall transfer any Registrable Securities pursuant to Rule 144,
the Company shall cooperate, to the extent commercially reasonable, with such
Shareholder and shall provide to such Shareholder such information as such
Shareholder shall reasonably request.

 

Section 5.12.  No
Transfer of Registration Rights. 
None of the rights of Shareholders under this Article 5 shall be
assignable by any Shareholder to any Person acquiring Securities in any Public
Offering or pursuant to Rule 144. 
The Demand Registration rights are not assignable or transferable by the
Crestview Shareholder.

 

ARTICLE 6

CERTAIN COVENANTS AND AGREEMENTS

 

Section 6.01.  Confidentiality.  (a)  Each Shareholder agrees that
Confidential Information furnished and to be furnished to it has been and may
in the future be made available in connection with such Shareholder’s
investment in the Company.  Each
Shareholder agrees that it shall use, and that it shall cause any Person to
whom Confidential Information is disclosed pursuant to clause (i) below to
use, the Confidential Information only in connection with its investment in the
Company and not for any other purpose. 
Each Shareholder further acknowledges and agrees that it shall not
disclose any Confidential Information to any Person, except that Confidential
Information may be disclosed:

 

(i)        to such Shareholder’s
Representatives in the normal course of the performance of their duties (which
shall include, for the sake of clarity, ordinary course reporting to such
Shareholder’s limited partners) or to any financial institution providing
credit to such Shareholder;

 

(ii)       to
the extent required by applicable law, rule or regulation of any
governmental or regulatory authority or self-regulatory authority organization,
including without limitation the National Association of Insurance
Commissioners, Inc. (including complying with any oral or written
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process to which a Shareholder is
subject; provided that such Shareholder agrees to give the Company prompt
notice of such request(s), to the extent practicable, so 

 

46

 

that the Company may seek an appropriate protective order or similar
relief (and the Shareholder shall cooperate with such efforts by the Company,
and shall in any event make only the minimum disclosure required by such law, rule or
regulation));

 

(iii)      to
any Person to whom such Shareholder is contemplating a Transfer of its Company
Securities; provided that such Transfer would not
be in violation of the provisions of this Agreement and such potential
transferee is advised of the confidential nature of such information and agrees
to be bound by a confidentiality agreement consistent with the provisions
hereof;

 

(iv)     to
the extent related to the tax treatment and tax structure of the transactions
contemplated by this Agreement (including all materials of any kind, such as
opinions or other tax analyses that the Company, its Affiliates or its
Representatives have provided to such Shareholder relating to such tax
treatment and tax structure); provided that
the foregoing does not constitute an authorization to disclose the identity of
any existing or future party to the transactions contemplated by this Agreement
or their Affiliates or Representatives, or, except to the extent relating to
such tax structure or tax treatment, any specific pricing terms or commercial
or financial information; or

 

(v)      if
the prior written consent of the Board shall have been obtained or if the
Confidential Information is disclosed by a Management Shareholder in the
performance of his or her duties as an officer or employee of the Company or
any of its Subsidiaries.

 

Nothing contained herein shall prevent the
use (subject, to the extent possible, to a protective order) of Confidential
Information in connection with the assertion or defense of any claim by or
against the Company or any Shareholder.

 

(b)      “Confidential Information” means any
information concerning the Company or any Persons that are or become its
Subsidiaries or its joint ventures or the financial condition, business,
operations or prospects of the Company or any such Persons in the possession of
or furnished to any Shareholder (including by virtue of its present or former
right to designate a director of the Company); provided
that the term “Confidential Information” does not
include information that (i) is or becomes generally available to the
public other than as a result of a disclosure by a Shareholder or its
directors, officers, employees, stockholders, members, partners, agents,
counsel, investment advisers or other representatives (all such persons being
collectively referred to as “Representatives”) in violation of
any agreement to which it may be subject (including this Agreement), (ii) was
available to such Shareholder on a non-confidential basis prior to its
disclosure to such Shareholder or its Representatives by the Company, (iii) becomes
available

 

47

 

to such Shareholder on a
non-confidential basis from a source other than the Company after the
disclosure of such information to such Shareholder or its Representatives by
the Company, which source is (at the time of receipt of the relevant
information) not, to the best of such Shareholder’s knowledge, bound by a
confidentiality agreement with (or other confidentiality obligation to) the
Company or another Person or (iv) is independently developed by such
Shareholder without violating any confidentiality agreement with, or other
obligation of secrecy to, the Company.

 

Section 6.02.  Reports.  The Company agrees to furnish each
Institutional Shareholder, for so long as such Shareholder owns at least 3% of
the Common Stock or 50% of the Common Stock held by such Institutional
Shareholder on the Closing Date:

 

(a)       as soon as practicable and, in any event within 30 days after
the end of each month, the unaudited consolidated balance sheet of the Company
and its Subsidiaries as at the end of such month and the related unaudited
statement of operations and cash flow for such month, and for the portion of
the fiscal year then ended, in each case prepared in accordance with GAAP,
setting forth in comparative form the figures for the corresponding month and
portion of the previous fiscal year, and the figures for the corresponding
month and portion of the then current fiscal year as in the Company’s annual
operating budget,

 

(b)      as soon as practicable and, in any event, within 45 days after
the end of each of the first three fiscal quarters commencing with the fiscal
quarter ending September 30, 2007, the unaudited consolidated balance
sheet of the Company and its Subsidiaries as at the end of such quarter and the
related unaudited statement of operations and cash flow for such quarter and
for the portion of the fiscal year then ended, in each case prepared in
accordance with GAAP,

 

(c)       as soon as practicable and, in any event, within 90 days after
the end of each fiscal year commencing with the fiscal year ended December 31,
2007, (i) the audited consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year and the related audited
statement of operations and cash flow for such fiscal year, in each case
prepared in accordance with GAAP and certified by a nationally recognized firm of
independent public accountants of nationally recognized standing, together with
a comparison of the figures in such financial statements with the figures for
the previous fiscal year and the figures in the Company’s annual operating
budget; provided, however, that the accountant’s
certification or opinion shall not cover the Company’s annual operating budget,
(ii) any management letters or other correspondence from such accountants
and (iii) the Company’s annual operating budget for the coming fiscal year,

 

(d)      promptly following the preparation thereof, a copy of any
revisions to the annual operating budget delivered pursuant to clause (c) above,

 

48

 

(e)       promptly upon their becoming available, copies of all
registration statements under the Securities Act and Reports on Form 8-K
filed by the Company with any securities exchange or with the SEC;

 

(f)       as soon as practicable and, in any event, within five Business
Days after any officer of the Company obtains knowledge thereof, notice (with a
description in reasonable detail, and stating the action that the Company is
taking or proposes to take with respect thereto) of (i) the commencement
of any material litigation, investigation or other proceeding to which the
Company or any of its Subsidiaries is a party before any court or arbitrator or
any governmental body, agency or official or (ii) the existence of any
material default or breach under this Agreement or any other material contract
or agreement to which the Company or any of its Subsidiaries is a party, and

 

(g)      as promptly as reasonably practicable, such other information
with respect to the Company or any of its Subsidiaries as may reasonably be
requested by such Shareholder.

 

Section 6.03.  Limitations
on Subsequent Registration Rights. 
The Company agrees that it shall not enter into any agreement with any
holder or prospective holder of any securities of the Company (i) that
would allow such holder or prospective holder to include such securities in any
Demand Registration or Piggyback Registration unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that their inclusion would not reduce the
amount of the Registrable Securities of the Shareholders included therein or (ii) on
terms otherwise more favorable than this Agreement.

 

Section 6.04.  Affiliate
Transactions.  The Company
shall not, and shall not permit any of its Subsidiaries or Affiliates to, make
any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase, lease or otherwise acquire any property
or assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with or for the benefit
of, any Institutional Shareholder or any Affiliate or “Associate” of any
Institutional Shareholder (within the meaning of Rule 12b-2 under the
Exchange Act), unless such transaction is on terms that are disclosed to the
Board and each Board Observer and are no less favorable to the Company or such
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Subsidiary with an unrelated Person; provided
that the parties understand and agree that entry into, the performance of, and
payment under, the Advisory Fee and Monitoring Agreement dated as of the date
hereof between the Company and Crestview Advisor shall be deemed for all
purposes to be consistent with this Section 6.04.

 

49

 

Section 6.05.  Conflicting
Agreements.  The Company and
each Shareholder represents and agrees that it shall not (i) grant any
proxy or enter into or agree to be bound by any voting trust or agreement with
respect to the Company Securities, except as expressly contemplated by this
Agreement, (ii) enter into any agreement or arrangement of any kind with
any Person with respect to any Company Securities that is inconsistent with the
provisions of this Agreement or for the purpose or with the effect of denying
or reducing the rights of any other Shareholder under this Agreement, including
agreements or arrangements with respect to the Transfer or voting of its
Company Securities or (iii) act, for any reason, as a member of a group or
in concert with any other Person in connection with the Transfer or voting of
its Company Securities in any manner that is inconsistent with the provisions
of this Agreement.

 

ARTICLE 7

MISCELLANEOUS

 

Section 7.01.  Binding Effect; Assignability;
Benefit.  (a) This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors, legal representatives and permitted
assigns.  Any Shareholder that ceases to
own beneficially any Company Securities shall cease to be bound by the terms
hereof (other than (i) the provisions of Sections 5.05, 5.06, 5.07, 5.08
and 5.10 applicable to such Shareholder with respect to any offering of
Registrable Securities completed before the date such Shareholder ceased to own
any Company Securities and (ii) Sections 6.01 (which shall survive as
against such Shareholder for two years after such Shareholder ceases to
beneficially own any Company Securities), 7.02, 7.05, 7.06, 7.07 and 7.08).

 

(b)      Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any
party hereto pursuant to any Transfer of Company Securities or otherwise,
except that any Permitted Transferee acquiring Company Securities shall (unless
already bound hereby) execute and deliver to the Company an agreement to be
bound by this Agreement in the form of Exhibit A hereto and shall
thenceforth be a “Shareholder”.  The Company shall not issue any shares of its
capital stock to any Person, unless that Person executes and delivers an
agreement to be bound by the terms of this Agreement in the Form of Exhibit A
hereto.

 

(c)       Except as otherwise set forth in Sections 5.05, 5.06 and 5.08,
nothing in this Agreement, expressed or implied, is intended to confer on any
Person, other than the parties hereto, and their respective heirs, successors,
legal representatives and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.

 

50

 

Section 7.02.  Notices.  All notices, requests and other
communications to any party shall be in writing and shall be delivered in
person, mailed by certified or registered mail, return receipt requested, or
sent by facsimile transmission,

 

if to the Company to:

 

Symbion Holdings
Corporation

c/o Symbion, Inc. 

40 Burton Hills Boulevard

Suite 500

Nashville, Tennessee  37215

Attention: Richard E. Francis

Fax:  (615) 234-5999

 

with a copy to the Crestview
Shareholder at the address listed below.

 

if to the Crestview
Shareholder, to:

 

Crestview Symbion
Holdings, L.L.C.

c/o Crestview Partners

667 Madison Avenue

New York, NY  10021

Attention: Thomas S. Murphy, Jr.

Fax: (212) 906-0750

 

with a copy to:

 

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York  10017

Attention: John D. Amorosi, Esq.

Fax:  (212) 450-3010

 

if to any other Institutional Shareholder to
the addresses and facsimile numbers listed on Exhibit B hereto, and
if to any Management Shareholder, to the address of such Management Shareholder
listed in the personnel records of the Company.

 

All notices, requests and other communications shall
be deemed received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m. in the place of receipt and such day is a Business Day
in the place of receipt.  Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding Business Day in the place of receipt.  Any notice, request or other written
communication sent by facsimile transmission shall be confirmed by certified or
registered mail, return receipt requested, posted 

 

51

 

within one Business Day, or by personal
delivery, whether courier or otherwise, made within two Business Days after the
date of such facsimile transmissions.

 

Section 7.03.  Waiver;
Amendment; Termination.  (a) No
provision of this Agreement may be waived except by an instrument in writing
executed by the party against whom the waiver is to be effective.  No provision of this Agreement may be amended
or otherwise modified, except by an instrument in writing executed by the
Company with the approval of the Board, the Crestview Shareholder (for so long
as it holds at least 50% of the Common Stock it acquired on the Closing Date)
and Other Shareholders owning a majority of the outstanding Common Stock held
by all Other Shareholders at that time; provided that (u) no
amendment or modification that by its terms (as opposed to its effect) would
adversely and disparately affect any Shareholder under the terms of this
Agreement (relative to other Shareholders) shall be effective without the prior
written consent of that Shareholder, (v) no amendment or modification of
this Section 7.03 shall be effective without the prior written consent of
the Company (with Board approval) and each Shareholder, (w) no amendment
or modification of Section 3.05 or Section 4.06 shall be effective
without the prior written consent of Management Shareholders owning a majority
of the Company Securities held by the Management Shareholders on a Fully
Diluted basis at that time, (x) no amendment or modification of Section 3.04
or Section 3.05 (as such Sections speak of the Chief Executive Officer of
the Company) shall be effective without the consent of Mr. Francis, but
only for so long as Mr. Francis remains CEO of the Company, and only as
relates to the language in such Sections addressing the rights of the Chief
Executive Officer of the Company thereunder, (y) no amendment or
modification of Section 2.01(a) (as such Section speaks of Mr. Francis
or Mr. Adlerz) shall be effective without the consent of Mr. Francis
or Mr. Adlerz, as applicable, but only for so long as such Person remains
CEO or COO of the Company, respectively, and only as relates to the language in
such Section addressing his personal rights thereunder and (z) no
amendment or modification of Section 2.01(a) (as such Section speaks
of Trident IV) or Section 2.10 (as such Section speaks of NW Mutual,
BACI or R6) shall be effective without the consent of Trident IV, NW Mutual,
BACI or R6, as applicable.

 

(b)      Article 2, 3 (other than Sections 3.02, 3.04 and 3.05), 4
and 6 (other than Section 6.01) and Section 7.04 shall terminate, and
be of no further force or effect, upon and after the IPO.

 

Section 7.04.  Fees and
Expenses.  (a) Unless
otherwise provided herein or in any other written agreements between the
parties hereto, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement, the Merger Agreement, the
Subscription Agreement and all related transactions shall be paid by the party
incurring such costs and expenses.

 

52

 

(b)      Notwithstanding anything herein to the contrary, the Company
shall pay and bear (i) all out-of-pocket costs and expenses of the
Crestview Shareholder incurred in connection with the transactions contemplated
by this Agreement, the Merger Agreement, the Subscription Agreement and all
related transactions and (ii) the reasonable and documented, out-of-pocket
expenses of each Institutional Shareholder that is incurred in connection with
the transactions contemplated by this Agreement, the Merger Agreement, the
Subscription Agreement and all related transactions.

 

(c)       The Board shall adopt a policy providing for the reimbursement
of expenses incurred by the directors and Board Observers in connection with
the performance of their duties.

 

Section 7.05.  Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, without regard to the conflicts of laws rules of such state.

 

Section 7.06.  Jurisdiction.  Except for any determination of Fair Market
Values for purposes of this Agreement (which shall be determined in accordance
with the definition thereof), the parties hereby agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in New York County, so
long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and that any case of action arising out of this
Agreement shall be deemed to have arisen from a transaction of business in the
State of New York, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient form. 
Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of any
such court.  Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 7.02 shall be deemed effective service of process on such
party.

 

Section 7.07.  WAIVER OF
JURY TRIAL.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

53

 

Section 7.08.  Specific
Enforcement.  Each party
hereto acknowledges that the remedies at law of the other parties for a breach
or threatened breach of this Agreement would be inadequate and, in recognition
of this fact, any party to this Agreement, without posting any bond, and in
addition to all other remedies that may be available, shall be entitled to
obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary or permanent injunction or any other equitable
remedy that may then be available.

 

Section 7.09.  Counterparts; Effectiveness.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto. 
Until and unless each party has received a counterpart hereof signed by
the other party hereto, this Agreement shall have no effect and no party shall
have any right or obligation hereunder (whether by virtue of any other oral or
written agreement or other communication).

 

Section 7.10.  Entire Agreement.  This Agreement, the Subscription Agreement
and the Employee Contribution Agreements constitute the entire agreement among
the parties hereto and thereto and supersede all prior and contemporaneous
agreements and understandings, both oral and written, among the parties hereto
with respect to the subject matter hereof and thereof.

 

Section 7.11.  Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party.

 

54

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the date on the cover page of this Agreement.

 

	
   

  	
  SYMBION HOLDINGS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Richard E. Francis, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Richard
  E. Francis, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Chairman
  and Chief Executive 

  Officer

  

 

 

	
   

  	
  CRESTVIEW SYMBION HOLDINGS,

  L.L.C.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Thomas S. Murphy, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Thomas
  S. Murphy, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Vice-President

  

 

 

	
   

  	
  THE NORTHWESTERN MUTUAL LIFE

  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Timothy S. Collins

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  S. Collins

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  THE NORTHWESTERN MUTUAL LIFE 

  INSURANCE COMPANY (For Its Group 

  Annuity Separate Account)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Timothy S. Collins

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  S. Collins

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  TRIDENT
  IV, L.P. 

  
	
   

  	
   

  	
  By:
  Trident Capital IV, L.P., as sole 

  general partner

  
	
   

  	
   

  	
  By:
  DW Trident GP, LLC, as a general 

  partner of the general partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  David Wermuth

  
	
   

  	
   

  	
  Name:

  	
  David
  Wermuth

  
	
   

  	
   

  	
  Title:

  	
  Principal

  
						

 

 

	
   

  	
  TRIDENT IV PROFESSIONALS FUND,  

  
	
   

  	
   

  	
  L.P.

  
	
   

  	
   

  	
  By: Stone Point Capital LLC,
  as manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  David Wermuth

  
	
   

  	
   

  	
  Name:

  	
  David
  Wermuth

  
	
   

  	
   

  	
  Title:

  	
  Principal

  
						

 

 

	
   

  	
  BANC
  OF AMERICA CAPITAL INVESTORS V, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Scott R. Poole

  
	
   

  	
   

  	
  Name:

  	
  Scott
  R. Poole

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
   

  	
   /s/
  Richard E. Francis, Jr.

  
	
   

  	
   

  	
  Richard
  E. Francis, Jr.

  

 

 

	
   

  	
   

  	
   /s/
  Clifford G. Adlerz

  
	
   

  	
   

  	
  Clifford
  G. Adlerz

  

 

2

 

	
   

  	
  R6
  OPPORTUNITY FUND, L.P., as  

  
	
   

  	
   

  	
  Beneficiary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  R6
  Partners, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Anil L. Crasto

  
	
   

  	
   

  	
  Name:

  	
  Anil
  L. Crasto

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  R6
  OVERSEAS OPPORTUNITY FUND, 

  
	
   

  	
   

  	
  LTD.,
  as Beneficiary 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  R6
  Capital Management, L.P., as 

  investment manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Anil L. Crasto

  
	
   

  	
   

  	
  Name:

  	
  Anil
  L. Crasto

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

3

 

EXHIBIT A

 

JOINDER
TO SHAREHOLDERS AGREEMENT

 

This Joinder Agreement (this “Joinder Agreement”)
is made as of the date written below by the undersigned (the “Joining
Party”) in accordance with the Shareholders Agreement dated
as of August     , 2007 (the “Shareholders Agreement”)
among Symbion Holdings Corporation and the other parties thereto, as the same
may be amended from time to time. 
Capitalized terms used, but not defined, herein shall have the meaning
ascribed to such terms in the Shareholders Agreement.

 

The Joining Party hereby acknowledges, agrees and
confirms that, by its execution of this Joinder Agreement, the Joining Party
shall be deemed to be a party to the Shareholders Agreement as of the date
hereof and shall have all of the rights and obligations of a “Shareholder”
thereunder as if it had executed the Shareholders Agreement.  The Joining Party hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Shareholders Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed
this Joinder Agreement as of the date written below.

 

Date:
                      
      ,

 

	
   

  	
  [NAME
  OF JOINING PARTY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  

 

 

 

EXHIBIT B

 

CONTACT INFORMATION

 

NW
Mutual, on behalf of itself and its Group Annuity Separate Account

 

The
Northwestern Mutual Life Insurance Company

720
East Wisconsin Avenue

Milwaukee,
WI 53202

Attn:
Securities Department

Fax:
(414) 665-7124

 

with
a copy to:

 

Pepe &
Hazard, LLP

Goodwin
Square

225
Asylum Street

Hartford,
CT 06103

Attn:
Gary S. Hammersmith, Esq.

Fax:
(860) 522-2796

 

Trident IV, L.P. and Trident IV Professionals Fund, L.P.

 

Trident
IV, L.P. and Trident IV Professionals Fund, L.P.

c/o
Stone Point Capital LLC

20
Horseneck Lane

Greenwich,
CT 06830

Attn:
Richard A. Goldman

Fax:
(203) 862-2951

 

BACI

 

Banc
of America Capital Investors

100
North Tryon Street - 25th Floor

Charlotte,
NC 28255

Attn:
Scott R. Poole

Fax:
(704) 386-6432

 

with
a copy to:

 

Kennedy
Covington Lobdell & Hickman, L.L.P.

Hearst
Tower

214
North Tryon Street, 47th Floor

 

 

Charlotte,
NC 28202

Attn:
T. Richard Giovannelli, Esq.

Fax:
(704) 353-3184

 

R6

 

R6
Capital Management

1
East 57th Street, 8th Floor

New
York, NY 10022

Attn:
Ira Platt, R6 Operations

Fax:
(212) 230-4822Exhibit 10.10

 

ADVISORY
SERVICES AND MONITORING AGREEMENT

 

This Advisory Services and Monitoring Agreement
(this “Agreement”) is entered into
as of August 23, 2007, among Symbion, Inc., a Delaware corporation
(the “Company”), Symbion Holdings
Corporation, a Delaware corporation (“Parent”),
and Crestview Advisors, L.L.C., a Delaware limited liability company (“Advisor”).

 

WHEREAS, pursuant to
the terms of the Agreement and Plan of Merger dated as of April 24, 2007
(the “Merger Agreement”) by and among the Company,
Symbol Acquisition, L.L.C., a Delaware limited liability company (and
predecessor entity of Parent), and Symbol Merger Sub, Inc., a Delaware
corporation, Symbol Merger Sub, Inc. will be merged with and into the
Company, with the Company as the surviving corporation (the “Merger”);

 

WHEREAS, prior to but in connection with the Merger, Symbol Acquisition,
L.L.C. will be converted into Parent, which will become the holding company of
the Company by virtue of the Merger;

 

WHEREAS, in connection with the Merger, the Advisor
(together with any investment funds managed or advised by such entity) has
provided advice and analysis including assistance with due diligence and other
investigatory matters related to the Company, Parent, their subsidiaries and
other affiliates and the industries in which they operate, and advice with
respect to financing facilities and related arrangements and other matters
(collectively, “Advisory Services”);

 

WHEREAS, Advisor has staff specially skilled in corporate
finance, strategic corporate planning, and other management skills and advisory
and business monitoring services;

 

WHEREAS, Parent, the Company and subsidiaries of the
Company (collectively, the “Company Group”)
will require such skills and services from Advisor in connection with their
business operations and execution of their strategic plan going forward;

 

WHEREAS, Advisor is willing to provide such skills and
services to Parent, the Company and the other members of the Company Group; and

 

WHEREAS, concurrently herewith, Parent, Crestview Symbion Holdings, L.L.C., a
Delaware limited liability company (the “Crestview
Shareholder”) and certain other persons named therein are entering
into a shareholders agreement relating to their shareholdings in Parent and
certain matters applicable to Parent (the “Shareholders
Agreement”).

 

 

NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:

 

1.                                      Appointment.

 

(a)                                  The Company and
Parent hereby appoint Advisor, or its designees, as one of their financial
advisors with respect to the following services to the extent appropriate and requested
by Parent, the Company or any member of the Company Group: (i) assisting
Parent, the Company or any member of the Company Group in analyzing its
operations and historical performance; (ii) assisting Parent, the Company
or any member of the Company Group in analyzing future prospects; (iii) assisting
Parent, the Company or any member of the Company Group with respect to future
proposals for tender offers, acquisitions, sales, mergers, financings, exchange
offers, recapitalizations, restructurings or other similar transactions that
may be consummated during the term of this Agreement; and (iv) providing
financial and business monitoring services, including with respect to assisting
Parent, the Company or any member of the Company Group in preparing a strategic
plan.

 

(b)                                 Advisor does
not make any representations or warranties, express or implied, in respect of
the services to be provided by Advisor or any of its designees hereunder.  In no event shall Advisor or any of its
respective Affiliates (as defined in the Shareholders Agreement) be liable to
Parent, the Company, any other member of the Company Group or any of their
respective Affiliates for any act, alleged act, omission or alleged omission
that does not constitute gross negligence or willful misconduct of Advisor or
its designee as determined by a final, non-appealable determination of a court
of competent jurisdiction.

 

(c)                                  Advisor or its
designees shall devote such time and efforts to the performance of services
contemplated hereby as Advisor or its designees reasonably deems necessary or
appropriate; provided, however, that no minimum number of hours
is required to be devoted by Advisor or its designees on a weekly, monthly,
annual or other basis.  Parent and the
Company acknowledge that Advisor’s or its designees’ services are not exclusive
to Parent, the Company or any other members of the Company Group and that
Advisor and its designees may render similar services to other persons and
entities.

 

2.                                      Payment
of Fees.

 

(a)                                  In
consideration of the Advisory Services provided by Advisor in connection with
the transactions related to the consummation of the Merger, Parent agrees to
pay to Advisor (or its designees) upon execution of this Agreement, a one-time
fee (the “Transaction Fee”) equal
to $6,300,000.

 

2

 

(b)                                 In
consideration of the ongoing management and other advisory services to be
provided by Advisor to Parent, the Company and any other member of the Company
Group and their respective subsidiaries, the Company will pay to Advisor (or
its designees) an annual fee (“Annual Fee”)
equal to $1 million on the date this agreement becomes effective (the “Effective Date”) and on each anniversary of
the Effective Date.  The Annual Fee shall
also be payable on the date of termination or expiration of this Agreement (if
payable upon termination or expiration of this Agreement, such final
installment to be paid on the effective date of such termination or expiration
and prorated for any final period consisting of less than one year).

 

(c)                                  All payments and reimbursements made to
Advisor pursuant to any of Sections 2, 3 or 4 will be paid
by wire transfer of immediately available U.S. Dollars to an account specified
by Advisor in writing to the Company.

 

3.                                      Term
and Termination.

 

(a)                                  This Agreement shall be in effect for an
initial term commencing on the Effective Date and ending on the tenth
anniversary of the Effective Date (the “Term”), which
Term shall automatically be extended thereafter on a year to year basis unless
Parent, the Company or the Advisor provides written notice of its desire to
terminate this Agreement to each of Parent, the Company and the Advisor at
least 90 days prior to the expiration of the Term or any extension thereof.

 

(b)                                 In connection with the consummation of an
IPO (as defined in the Shareholders Agreement), either the Advisor, or the
Company and Parent, may terminate this Agreement by delivery of written notice
of termination to the other parties to this Agreement. In the event of a
termination of this Agreement in connection with the consummation of an IPO,
the Company shall pay in cash to the Advisors (i) all unpaid Annual Fees
and all Out-of-pocket Expenses (as hereinafter defined) due under this Agreement with respect to
periods prior to the termination date, plus (ii) the net present value
(using a discount rate equal to the yield as of such termination date on U.S.
Treasury securities of like maturity based on the times such payments would
have been due) of the Annual Fees that would have been payable with respect to
the period from to the termination date through the tenth anniversary of the
Effective Date or, in the case of any extension thereof, through the end of
such extension period.

 

(c)                                  This Agreement
may be terminated by Advisor at any time upon written notice to Parent and the
Company.  Upon termination of this
Agreement not in connection with the consummation of an IPO, Advisor will be
entitled to prompt payment by the Company of all reasonable fees, including,
but not limited, to the Annual Fee accrued prior to such termination in
accordance with Section 2(c), and all Out-of-pocket Expenses due under this Agreement with respect to
periods prior to the termination date.  Upon any termination or 

 

3

 

expiration of this
Agreement, the Annual Fee shall cease to accrue for any period thereafter.

 

(d)                                 No termination
of Advisor’s engagement hereunder shall affect any of the Company’s obligations
under this Agreement, including, without limitation, the Company’s indemnity
obligations as set forth herein.

 

(e)                                  The terms and
provisions of Sections  2, 3, 4, 5, 7,
12 and 18 shall survive any termination of this Agreement.

 

4.                                      Expenses;
Indemnification.

 

(a)                                  Expenses.  In addition to the compensation to be paid
pursuant to Section 2 above, promptly upon request by Advisor from
time to time, the Company shall reimburse Advisor for its Out-of-pocket
Expenses (as defined below) incurred in connection with the provision of
services hereunder to Parent, the Company or other member of the Company
Group.  “Out-of-pocket Expenses” means the reasonable out-of-pocket
costs and expenses incurred by or on behalf of Advisor in connection with the
Advisory Services provided under this Agreement (including prior to the
Effective Date), including, without limitation, (a) fees and disbursements of any independent
professionals and organizations, including independent accountants, outside
legal counsel or consultants, retained by Advisor or any of its Affiliates, (b) costs
of any outside services or independent contractors such as couriers, business
publications, on-line financial services or similar services, retained or used
by Advisor or any of its Affiliates and (c) transportation, per diem
costs, word processing expenses or any similar expense not associated with
Advisor’s or its Affiliates’ ordinary operations.  All payments or reimbursements for
out-of-pocket expenses will be made by wire transfer in same-day funds to the
bank account designated by Advisor promptly upon or as soon as practicable
following request for reimbursement in accordance with this Agreement, to the
account indicated to the Company by the relevant payee.

 

(b)                                 Indemnification.  Parent and the Company shall indemnify and
hold harmless Advisor, its Affiliates, and their respective partners (both
general and limited), members (both managing and otherwise), directors,
officers, controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20(a) of the
Securities Exchange Act of 1934, as amended), if any, agents and employees
(Advisor, its Affiliates, and such other specified persons being collectively
referred to as “Indemnified Persons,”
and individually as an “Indemnified Person”)
from and against any and all claims, liabilities, losses, damages and expenses,
whether joint or several (the “Liabilities”)
incurred by any Indemnified Person (including those arising out of an
Indemnified Person’s negligence and reasonable fees and disbursements of the
respective Indemnified Person’s counsel) which (A) are related to or arise
out of (i) actions taken or omitted to be taken (including, without
limitation, any untrue statements made or any statements omitted to be made) by
Parent or the Company 

 

4

 

or (ii) actions taken
or omitted to be taken by an Indemnified Person with Parent’s or the Company’s
consent or in conformity with Parent’s or the Company’s instructions or Parent’s
or the Company’s actions or omissions or (B) are otherwise related to or
arise out of Advisor’s engagement, and will reimburse each Indemnified Person
for all costs and expenses, including, without limitation, reasonable fees and
disbursements of any Indemnified Person’s counsel, as they are incurred, in
connection with investigating, preparing for, defending or appealing any
action, formal or informal claim, investigation, inquiry or other proceeding,
whether or not in connection with pending or threatened litigation, caused by
or arising out of or in connection with Advisor’s acting pursuant to Advisor’s
engagement, whether or not any Indemnified Person is named as a party thereto
and whether or not any liability results therefrom.  Parent and the Company will not, however, be
responsible for any claims, liabilities, losses, damages or expenses pursuant
to clause (B) of the preceding sentence that have resulted primarily from
the Indemnified Person’s bad faith, gross negligence or willful
misconduct.  Parent and the Company also
agree that neither Advisor nor any other Indemnified Person shall have any
liability to Parent, the Company or any member of the Company Group for or in
connection with such engagement except for any such liability for claims,
liabilities, losses, damages or expenses incurred by Parent, the Company or any
member of the Company Group that have resulted primarily from Advisor’s bad
faith, gross negligence or willful misconduct. 
Parent and the Company further agree that it will not, without the prior
written consent of Advisor, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release without any admission of culpability or wrongdoing of
Advisor and each other Indemnified Person hereunder from all liability arising
out of such claim, action, suit or proceeding. 
PARENT AND THE
COMPANY HEREBY ACKNOWLEDGE THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO
ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR
ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR
CONCURRENT ORDINARY NEGLIGENCE OF ADVISOR OR ANY OTHER INDEMNIFIED PERSON.

 

The foregoing right to indemnity shall be in
addition to any rights that Parent, the Company and/or any other Indemnified
Person may have at common law or otherwise and shall remain in full force and
effect following the completion or any termination of the engagement.  Parent and the Company hereby consents to
personal jurisdiction and to service and venue in any court in which any claim
which is subject to this Agreement is brought against Advisor or any other
Indemnified Person.

 

It is understood that, in connection with Advisor’s
engagement, Advisor or one or more of its Affiliates may also be engaged to act
for Parent or 

 

5

 

the Company in one or more
additional capacities, and that the terms of this engagement or any such
additional engagement(s) may be embodied in one or more separate written
agreements.  This indemnification shall
apply to the engagement specified in Section 1 hereof as well as to
any such additional engagement(s) (whether written or oral) and any
modification of said engagement or such additional engagement(s) and shall
remain in full force and effect following the completion or termination of said
engagement or such additional engagements.

 

Parent and the Company further understand and agree
that if Advisor is asked to furnish to Parent or the Company a financial
opinion letter or act for Parent or the Company in any other formal capacity,
such further action may be subject to a separate agreement containing
provisions and terms to be mutually agreed upon.

 

5.                                      No
Exclusive Duty to Parent or the Company.  (a) In recognition that (i) Advisor
currently has, and will in the future have or will consider acquiring,
investments in numerous companies with respect to which Advisor may serve as an
advisor, a director or in some other capacity, (ii) Advisor may have a
myriad of duties to various investors and partners, (iii) Advisor (or one
or more Affiliates, associated investment funds or portfolio companies) may
engage in the same or similar activities or lines of business as Parent or the
Company and have an interest in the same areas of corporate opportunities, (iv) Parent
and the Company will derive certain benefits hereunder and (v) Advisor, in
desiring and endeavoring fully to satisfy its duties, may confront difficulties
in determining the full scope of such duties in any particular situation, the
provisions of this Section 5 are set forth to regulate, define and
guide the conduct of certain affairs of Parent and the Company and other
members of the Company Group as they may involve Advisor.

 

(b)                                 Notwithstanding anything to the contrary
contained herein, (i) Advisor shall not be required to manage Parent or the Company
as its sole and exclusive function and it, and any of its Affiliates, may have
other business interests and may engage in other activities in addition to
those relating to Parent, the Company and the Company Group, and such other
business interests or activities may be of any nature or description, and may
be engaged in independently or with others, and (ii) neither Parent, the
Company nor the Company Group shall have any right, by virtue of this Agreement
or the Company relationship created hereby, in or to such other ventures or
activities of Advisor or any of its Affiliates, or to the income or proceeds
derived therefrom, and the pursuit of such ventures, even if competitive with
Parent business or the Company business, shall not be deemed wrongful or
improper.

 

(c)                                  Neither Advisor
nor any of its Affiliates, shall be liable to Parent, the Company or any of their
Affiliates for breach of any duty (contractual or otherwise) by reason of any
activities or omissions of the types referred to in Section 5(a) or
Advisor’s or their Affiliates’ participation therein.

 

6

 

6.                                      Amendments
and Waivers.  No
amendment or waiver of any term, provision or condition of this Agreement shall
be effective, unless in writing and executed by Advisor, Parent and the
Company.  No waiver on any one occasion
shall extend to or effect or be construed as a waiver of any right or remedy on
any future occasion.  No course of dealing
of any person nor any delay or omission in exercising any right or remedy shall
constitute an amendment of this Agreement or a waiver of any right or remedy of
any party hereto.

 

7.                                      Miscellaneous.

 

(a)                                  Choice
of Law.  This Agreement shall be
governed by and construed in accordance with the domestic substantive laws of
the State of New York without giving effect to any choice or conflict of law
provision or rule that would cause the application of the domestic
substantive laws of any other jurisdiction.

 

(b)                                 Consent
to Jurisdiction.  Each of the
parties agrees that all actions, suits or proceedings arising out of or based
upon this Agreement or the subject matter hereof shall be brought and
maintained exclusively in the federal and state courts of the State of New
York.  Each of the parties hereto by
execution hereof (i) hereby irrevocably submits to the jurisdiction of the
federal and state courts in the State of New York for the purpose of any
action, suit or proceeding arising out of or based upon this Agreement or the
subject matter hereof and (ii) hereby waives to the extent not prohibited
by applicable law, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that it is
immune from extraterritorial injunctive relief or other injunctive relief, that
its property is exempt or immune from attachment or execution, that any such
action, suit or proceeding may not be brought or maintained in one of the
above-named courts, that any such action, suit or proceeding brought or
maintained in one of the above-named courts should be dismissed on grounds of forum
non  conveniens, should be transferred to any court other than one
of the above-named courts, should be stayed by virtue of the pendency of any
other action, suit or proceeding in any court other than one of the above-named
courts, or that this Agreement or the subject matter hereof may not be enforced
in or by any of the above-named courts. 
Each of the parties hereto hereby consents to service of process in any
such suit, action or proceeding in any manner permitted by the laws of the
State of New York, agrees that service of process by registered or certified mail,
return receipt requested, at the address specified in or pursuant to Section 12
is reasonably calculated to give actual notice and waives and agrees not to
assert by way of motion, as a defense or otherwise, in any such action, suit or
proceeding any claim that service of process made in accordance with Section 12
does not constitute good and sufficient service of process.  The provisions of this Section 7(b) shall
not restrict the ability of any party to enforce in any court any judgment
obtained in a federal or state court of the State of New York.

 

7

 

(c)                                  Waiver
of Jury Trial.  TO THE
EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE
PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT HEREOF,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT
OR TORT OR OTHERWISE.  Each of the
parties hereto acknowledges that it has been informed by each other party that
the provisions of this Section 7(c) constitute a material
inducement upon which such party is relying and will rely in entering into this
Agreement and the transactions contemplated hereby.  Any of the parties hereto may file an
original counterpart or a copy of this Agreement with any court as written
evidence of the consent of each of the parties hereto to the waiver of its
right to trial by jury.

 

(d)                                 Authority
to Enter Agreement.  Each party
to this Agreement has all requisite power and authority to enter into this
Agreement and the transactions contemplated hereby.  This Agreement has been duly and validly
authorized by all necessary action on the part of each party and when duly
executed and delivered by such party shall constitute a legal, valid and
binding agreement of such party, enforceable in accordance with its terms.

 

8.                                      Independent
Contractor.  The parties
agree and understand that Advisor is and shall act as an independent contractor
of Parent and the Company in the performance of its duties hereunder.  Advisor, in the performance of its duties hereunder
will not hold itself out as, an employee, agent or partner of Parent or the
Company.

 

9.                                      Information.  Parent and the Company acknowledge and
confirm that Advisor (i) will rely solely on information provided by the
Company and information that is available from public sources in the
performance of the services contemplated by this engagement without independent
investigation or verification thereof, (ii) will assume no responsibility
for the accuracy or completeness of such information or any other information
regarding Parent or the Company and (iii) will not make any appraisal of
any assets of Parent or the Company.

 

10.                               Confidentiality.  No advice rendered by Advisor, whether formal
or informal, may be disclosed, in whole or in part, or summarized, excerpted
from or otherwise referred to without Advisor’s prior written consent.  To the extent consistent with legal
requirements, all information given to one party of this Agreement (the “Recipient Party”) by another party (the “Providing Party”), including, without
limitation, this Agreement, unless publicly available or otherwise available to
the Recipient Party without restriction or breach of any confidentiality
agreement, will be held by the Recipient Party in 

 

8

 

confidence and will not,
without the Providing Party’s prior approval, be disclosed to anyone other than
the Recipient’s agents and advisors who require such information to perform
services for the Providing Party as contemplated by this Agreement (and who
agree to use such information only in connection with such services) or used by
such person for any purpose other than those contemplated by this
Agreement.  Each party hereto shall be
responsible for violations of its respective agents and advisors of the
obligations set forth in this Section 10.  Notwithstanding anything to the contrary set
forth herein or in any other agreement to which the parties hereto are parties
or by which they are bound, the obligations of confidentiality contained herein
and therein, as they relate to the services to be provided hereunder, shall not
apply to the tax structure or tax treatment of the transactions subject to the
services to be provided hereunder, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
persons, without limitation of any kind, the tax structure and tax treatment of
the transaction subject to the services to be provided hereunder and all
materials of any kind (including opinions or other tax analysis) that are
provided to such party relating to such tax treatment and tax structure; provided,
however, that such disclosure shall not include the name (or other
identifying information not relevant to the tax structure or tax treatment) of
any person and shall not include information for which nondisclosure is
reasonably necessary in order to comply with applicable securities laws.

 

11.                               Merger/Entire
Agreement.  This
Agreement and the other agreements referred to herein, contain the entire
understanding of the parties with respect to the specific subject matter hereof
and supersedes any prior communication or agreement with respect thereto.

 

12.                               Notice.  All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:

 

9

 

If to Parent, to:

 

Symbion Holdings Corporation

c/o Symbion, Inc. 

40 Burton Hills Boulevard

Suite 500

Nashville, Tennessee  37215

Attention: Richard E. Francis

Fax: (615) 234-5999

 

with a copy to the Advisor at the address listed below.

 

If to the Company, to:

 

Symbion, Inc. 

40 Burton Hills Boulevard

Suite 500

Nashville, Tennessee  37215

Attention: Richard E. Francis

Fax: (615) 234-5999

 

with a copy to the Advisor at the address listed below.

 

If to Advisor, to:

 

Crestview
Advisors, L.L.C.

c/o Crestview Partners

667 Madison Avenue

New York, NY  10021

Attention: Thomas S. Murphy, Jr.

Fax: (212) 906-0750

 

with a copy to:

 

Davis Polk &
Wardwell

450 Lexington Avenue

New York, New York  10017

Attention: John D. Amorosi, Esq.

Fax: (212) 450-3010

 

All such notices, requests, consents and
other communications shall be deemed to have been delivered (a) in the
case of personal delivery or delivery by telecopy, on the date of such
delivery, (b) in the case of dispatch by nationally-recognized overnight
courier, on the next business day following such dispatch and (c) in the
case of mailing, on the third business day after the posting thereof.

 

10

 

13.                               Severability.  If in any judicial or arbitral proceedings a
court or arbitrator shall refuse to enforce any provision of this Agreement,
then such unenforceable provision shall be deemed eliminated from this
Agreement for the purpose of such proceedings to the extent necessary to permit
the remaining provisions to be enforced. 
To the full extent, however, that the provisions of any applicable law
may be waived, they are hereby waived to the end that this Agreement be deemed
to be a valid and binding agreement enforceable in accordance with its terms,
and in the event that any provision hereof shall be found to be invalid or
unenforceable, such provision shall be construed by limiting it so as to be
valid and enforceable to the maximum extent consistent with and possible under
applicable law.

 

14.                               Counterparts.  This Agreement may be executed in any number
of counterparts and by each of the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which together shall constitute one and the same agreement.

 

15.                               Descriptive
Headings.  All
descriptive headings in this Agreement are inserted for convenience only and
shall be disregarded in construing or applying any provision of this Agreement.

 

16.                               Prevailing
Party.  If any legal action or other
proceedings is brought for a breach of this Agreement, the prevailing party
shall be entitled to recover its reasonable attorneys’ fees and other costs
incurred in bringing such action or proceeding, in addition to any other relief
to which such party may be entitled.

 

17.                               Non-Recourse. 
No past, present or future director, officer, employee, incorporator,
member, partner, stockholder, affiliate, agent, attorney or representative of
Advisor, any member of the Company Group or any of their respective Affiliates
shall have any liability for any obligations or liabilities of Advisor, any
member of the Company Group or any of their respective Affiliates under this
Agreement or for any claim based on, in respect of, or by reason of, the
transactions or other matters contemplated hereby.

 

18.                               Joint and Several
Liability.  Each obligation described herein (including
but not limited to the Transaction Fee, Annual Fees, Out-of-pocket Expenses and
Liabilities) of Parent, the Company and/or its subsidiaries, as the case may
be, shall be a joint and several obligation of Parent, the Company and their
subsidiaries. If requested by Advisor, then Parent or the Company shall cause
any of its subsidiaries to sign a counterpart signature page to this
Agreement to evidence such joint and several liability.

 

19.                               Assignment. 
Advisor may not assign this Agreement without the prior written consent
of the Company; provided, however, that Advisor may assign this
Agreement with the prior written consent of the 

 

11

 

Company to its Affiliates.  This Agreement shall be binding upon, and
shall inure to the benefit of, all permitted successors and assigns.

 

[Signature page follows.]

 

12

 

IN WITNESS WHEREOF, each of the parties has
caused this Agreement to be executed on its behalf by its duly authorized
officer or representative as of the date first above written.

 

 

	
   

  	
  SYMBION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Richard E. Francis, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Richard
  E. Francis, Jr.

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SYMBION HOLDINGS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Richard E. Francis, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Richard
  E. Francis, Jr.

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRESTVIEW ADVISORS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    Thomas
  J. Murphy, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Thomas
  S. Murphy, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

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