AMERICAN MEDSERVE CORPORATION
5,357,000 Shares Common Stock *
UNDERWRITING AGREEMENT
______________, 1996
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Equitable Securities Corporation
As Representatives of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. American Medserve Corporation ("COMPANY") a
Delaware corporation, has an authorized capital stock consisting of 1,000,000
shares of Preferred Stock, $.01 par value, none of which were outstanding as of
____________, 1996 and 30,000,000 shares of Common Stock ("COMMON STOCK"), $.01
par value, of which ________ shares were outstanding as of such date. The
Company proposes to issue and sell 5,357,000 shares of its authorized but
unissued Common Stock ("FIRM SHARES") to the several underwriters named in
Schedule A as it may be amended by the Pricing Agreement hereinafter defined
("UNDERWRITERS"), who are acting severally and not jointly. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
803,550 additional shares of Common Stock ("OPTION SHARES") as provided in
Section 4 hereof. The Firm Shares and, to the extent such option is exercised,
the Option Shares, are hereinafter collectively referred to as the "SHARES."
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the "PRICING AGREEMENT"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Representatives and shall
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* Plus an option to acquire up to 803,550 additional shares to cover
overallotments.
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Pricing Agreement. From and after the date of the execution and delivery of
the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-11667) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("COMMISSION") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 ACT;" all references herein
to specific rules are rules promulgated under the 0000 Xxx); and the
Company has so prepared and has filed such amendments thereto, if any, and
such amended preliminary prospectuses as may have been required to the date
hereof. If the Company has elected not to rely upon Rule 430A, the Company
has prepared and will promptly file an amendment to the registration
statement and an amended prospectus. If the Company has elected to rely
upon Rule 430A, it will prepare and file a prospectus pursuant to Rule
424(b) that discloses the information previously omitted from the
prospectus in reliance upon Rule 430A. There have been or will promptly be
delivered to you four signed copies of such registration statement and
amendments, four copies of each exhibit filed therewith, and conformed
copies of such registration statement and amendments (but without exhibits)
and of the related preliminary prospectus or prospectuses and final forms
of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "REGISTRATION STATEMENT,"
and the "PROSPECTUS," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434 of
the 1933 Act, all references to "Prospectus" shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken
together, provided to the Underwriters by the Company in accordance with
Rule 434 of the 1933 Act ("RULE 434 PROSPECTUS"). Any registration
statement (including any amendment or supplement thereto or information
which is deemed part thereof) filed by the Company under Rule 462(b) ("RULE
462(b) REGISTRATION STATEMENT") shall be deemed to be part of the
"Registration Statement" as defined herein, and any prospectus (including
any amendment or supplement thereto or
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information which is deemed part thereof) included in such registration
statement shall be deemed to be part of the "Prospectus," as defined
herein, as appropriate. The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the "EXCHANGE ACT."
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to the
requirements of the 1933 Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that the Company
makes no representation or warranty as to information contained in or
omitted from any preliminary prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
in the preparation thereof.
(c) The Company and its subsidiaries (as defined in the 0000 Xxx)
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective places of incorporation,
with corporate power and authority to own their properties and conduct
their business as described in the Prospectus; the Company and each of its
subsidiaries are duly qualified to do business as foreign corporations
under the corporation law of, and are in good standing as such in, each
jurisdiction in which they own or lease substantial properties, have an
office, or in which substantial business is conducted and such
qualification is required except in any such case where the failure to so
qualify or be in good standing would not have a material adverse effect
upon the Company and its subsidiaries taken as a whole; and no proceeding
of which the Company has knowledge has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(d) Except as disclosed in the Registration Statement, the Company
owns directly or indirectly all of the issued and outstanding capital stock
of each of its subsidiaries, free and clear of any claims, liens,
encumbrances or security interests and all of such capital stock has been
duly authorized and validly issued and is fully paid and nonassessable.
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(e) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued, delivered
and paid for pursuant to this Agreement, will be validly issued, fully paid
and nonassessable, and will conform to the description thereof contained in
the Prospectus.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed
of trust, or other instrument to which the Company or any subsidiary is a
party or by which the Company, any subsidiary or the property of any of
them may be bound or affected, or any order, rule or regulation applicable
to the Company or any subsidiary of any court or regulatory body,
administrative agency or other governmental body having jurisdiction over
the Company or any subsidiary or any of their respective properties, or any
order of any court or governmental agency or authority entered in any
proceeding to which the Company or any subsidiary was or is now a party or
by which it is bound. No consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or the
Pricing Agreement or the consummation of the transactions contemplated
herein or therein, except for compliance with the 1933 Act and blue sky
laws applicable to the public offering of the Shares by the several
Underwriters and clearance of such offering with the National Association
of Securities Dealers, Inc. ("NASD"). This Agreement has been duly
executed and delivered by the Company.
(h) Each of the accountants who have expressed their opinions with
respect to the financial statements and schedules in the Registration
Statement are independent accountants as required by the 1933 Act.
(i) The consolidated financial statements and schedules of the
Company included in the Registration Statement present fairly the
consolidated financial position of the Company as of the respective dates
of such financial statements, and the consolidated results of operations
and cash flows of the Company for the respective periods covered thereby,
all in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
in the Prospectus. The financial information set forth in the Prospectus
under "Selected Consolidated Financial Information and Operating Data"
presents fairly on the basis stated in the Prospectus, the information set
forth therein.
The financial statements of G.H.S.C., Inc. and the Contract Services
Division of Xxxxx X. Xxxxx, Inc., Xxxxx Pharmacy, Inc., Extended Care
Associates, Inc., Good Samaritan Supply Services, Inc., Nihan & Xxxxxx,
Inc., Pharmed, Inc., Royal Care of America, Inc., Sterling Acquisition
Partners, Inc., Xxxxxxxxxx Pharmacy - Institutional Division, Xxxxxxxxxx
Drug Company, Inc. and Xxxxxxx Pharmacy and Medical Supply, Inc. (each,
a "COMPLETED ACQUISITION" and, collectively, the
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"COMPLETED ACQUISITIONS") included in the Registration Statement present
fairly the financial position of each Completed Acquisition, as applicable,
as of the respective date of such financial statements, and the results of
operations and cash flows of each Completed Acquisition, as applicable, for
the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed in the Prospectus.
The pro forma financial statements and other pro forma information
included in the Prospectus present fairly the information shown therein,
have been prepared in accordance with generally accepted accounting
principles and the Commission's rules and guidelines with respect to pro
forma financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate under the
circumstances.
(j) Neither the Company nor any subsidiary is in violation of its
charter or in default under any consent decree, or in default with respect
to any material provision of any lease, loan agreement, franchise, license,
permit or other contract obligation to which it is a party; and there does
not exist any state of facts which constitutes an event of default as
defined in such documents or which, with notice or lapse of time or both,
would constitute such an event of default, in each case, except for
defaults which neither singly nor in the aggregate are material to the
Company and its subsidiaries taken as a whole.
(k) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company or any
subsidiary is or may be a party or of which material property owned or
leased by the Company or any subsidiary is or may be the subject, or
related to environmental or discrimination matters which are not disclosed
in the Prospectus, or which question the validity of this Agreement or the
Pricing Agreement or any action taken or to be taken pursuant hereto or
thereto.
(l) There are no holders of securities of the Company having rights
to registration thereof or preemptive rights to purchase Common Stock
except as disclosed in the Prospectus. Holders of registration rights have
waived such rights with respect to the offering being made by the
Prospectus.
(m) The Company and each of its subsidiaries have good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Company and its subsidiaries
taken as a whole. The Company and each of its subsidiaries hold their
respective leased properties which are material to the Company and its
subsidiaries taken as a whole under valid and binding leases.
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(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company and its subsidiaries, taken as
a whole, have not incurred any material liabilities or obligations, direct
or contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material adverse
change in their condition (financial or otherwise) or results of operations
nor any material change in their capital stock, short-term debt or
long-term debt.
(p) The Company agrees not to offer, sell, contract to sell or
otherwise dispose of any Common Stock or securities convertible into Common
Stock (except for the issuance of the Additional GTCR Shares and Common
Stock issued pursuant to currently outstanding options upon conversion of
the Royal Care Note, pursuant to the Good Samaritan Shareholders Agreement
and in connection with possible future acquisitions) for a period of 180
days after this Agreement becomes effective without the prior written
consent of Xxxxxxx Xxxxx & Company, L.L.C. In addition, the Company's
officers, directors and other stockholders, holding in the aggregate all of
the Company's currently outstanding shares of Common Stock, have agreed not
to offer, sell, contract to sell or otherwise dispose of any Common Stock
for a period of 180 days after this Agreement becomes effective without the
prior written consent of Xxxxxxx Xxxxx & Company, L.L.C.
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
(r) The Company together with its subsidiaries, owns and possesses
all rights, title and interest in and to, or has duly licensed from third
parties, all patents, patent right, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary
rights ("TRADE RIGHTS") material to the business of the Company and each of
its subsidiaries taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of infringement, misappropriation or
conflict from any third party as to such material Trade Rights which has
not been resolved or disposed of and neither the Company nor any of its
subsidiaries has infringed, misappropriated or otherwise conflicted with
material Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company
and its subsidiaries taken as a whole.
(s) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the failure to
be in compliance would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of
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the Company and its subsidiaries taken as a whole. Each of the Company and
its subsidiaries has the requisite provider number or other authorization
to xxxx the Medicare program and the respective Medicaid program in the
state or states in which such entity operates. There is no action pending
or, to the Company's knowledge, threatened which could result in a
revocation of any such provider number or authorization or result in the
Company's or any subsidiary's exclusion from the Medicare or any state
Medicaid programs. The Company's and each subsidiary's business practices
do not violate any applicable provisions of federal or state laws governing
Medicare or any state Medicaid programs, including, without limitation,
Sections 1320a-7a and 1320a-7b of Title 42 of the United States Code. No
individual with an ownership or control interest, as defined in 42 U.S.C.
Section 1320a-3(a)(3), in the Company or any subsidiary, or who is an
officer, director or managing employee as defined in 42 U.S.C. Section
1320a-5(b), of the Company or any subsidiary is a person described in 42
U.S.C. Section 1320a-7(b)(8)(B). The Company's and each subsidiary's
business practices do not violate any federal or state laws regarding
physician ownership of (or financial relationship with) and referral to
entities providing healthcare related goods or services, or laws requiring
disclosure of financial interests held by physicians in entities to which
they may refer patients for the provision of health care related goods or
services.
(t) The property, assets and operations of the Company and the
subsidiaries comply in all material respects with all applicable federal,
state and local laws, rules, orders, decrees, judgments, injunctions,
licenses, permits or regulations relating to environmental matters (the
"ENVIRONMENTAL LAWS"), except to the extent that the lack of compliances
with such Environmental Laws would not, singularly or in the aggregate,
have a material adverse effect upon the condition (financial or otherwise)
or results of operations of the Company and its subsidiaries taken as a
whole. To the Company's best knowledge, none of the Company's or any
subsidiary's property, assets or operations is the subject of any federal,
state or local investigation evaluating whether any remedial action is
needed to respond to a release of any substance regulated by or form the
basis of liability under any Environmental Laws (a "HAZARDOUS MATERIAL")
into the environment or is in contravention of any federal, state, local or
foreign law, order or regulation. Neither the Company nor any subsidiary
has received any notice or claim, nor are there any pending or, to the
Company's best knowledge, threatened or reasonably anticipated lawsuits
against it with respect to violations of an Environmental Law or in
condition with the release of any Hazardous Material into the environment.
Neither the Company nor any subsidiary has any material contingent
liability in connection with any release of Hazardous Material into the
environment.
(u) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times exempt from the registration
requirements of the 1933 Act and were duly registered with or the subject
of an available exemption from the registration requirements of the
applicable state securities or blue sky laws.
(v) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon, and
there is no tax deficiency that has been, or to the knowledge of the
Company might be, asserted
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against the Company or any of its properties or assets that would or could
be expected to have a material adverse affect upon the condition (financial
or otherwise) or results of operations of the Company and its subsidiaries
taken as a whole.
(w) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Common Stock thereunder,
has filed an application to list the Shares on the Nasdaq National Market,
and has received notification that the listing has been approved, subject
to notice of issuance or sale of the Shares, as the case may be.
(x) The Company is not, and does not intend to conduct its business
in a manner in which it would become, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended ("INVESTMENT
COMPANY ACT").
(y) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase the Firm Shares from the Company at the price per
share set forth in the Pricing Agreement. The obligation of each Underwriter to
the Company shall be to purchase from the Company that number of full shares set
forth opposite the name of such Underwriter in Schedule A hereto. The initial
public offering price and the purchase price shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section
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12) following the date the Registration Statement becomes effective (or, if the
Company has elected to rely upon Rule 430A, the fourth business day, if
permitted under Rule 15c6-1 under the Exchange Act, (or the third business day
if required under Rule 15c6-1 under the Exchange Act) after execution of the
Pricing Agreement), or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives and the Company, the
Company will deliver to you at the offices of counsel for the Underwriters or
through the facilities of The Depository Trust Company for the accounts of the
several Underwriters, certificates representing the Firm Shares to be sold by it
against payment of the purchase price therefor by delivery of federal or other
immediately available funds, by wire transfer or otherwise, to the Company.
Such time of delivery and payment is herein referred to as the "First Closing
Date." The certificates for the Firm Shares so to be delivered will be in such
denominations and registered in such names as you request by notice to the
Company prior to 10:00 A.M., Chicago Time, on the second full business day
preceding the First Closing Date, and will be made available at the Company's
expense for checking and packaging by the Representatives at 10:00 A.M., Chicago
Time, on the business day preceding the First Closing Date. Payment for the
Firm Shares so to be delivered shall be made at the time and in the manner
described above at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 803,550 Option Shares, at the
same purchase price per share to be paid for the Firm Shares, for use solely in
covering any overallotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date, shall not be earlier than three nor later than 10 full business days after
delivery of such notice of exercise. The number of Option Shares to be
purchased by each Underwriter shall be determined by multiplying the number of
Option Shares to be sold by a fraction, the numerator of which is the number of
Firm Shares to be purchased by such Underwriter as set forth opposite its name
in Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at
10:00 A.M., Chicago Time, on the first full business day preceding the Second
Closing Date. The manner of payment for and delivery of the Option Shares shall
be the same as for the Firm Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First
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Closing Date or the Second Closing Date, as the case may be, for the account of
such Underwriter, but any such payment shall not relieve such Underwriter from
any obligation hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees
that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) and any term sheet as contemplated by Rule 434) and
will furnish you with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include 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, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in
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connection with the offering of the Shares which differs from the
prospectus on file with the Commission at the time of effectiveness of the
Registration Statement, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) to comply with the 1933 Act, the
Company promptly will advise you thereof and will promptly prepare and file
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance;
and, in case any Underwriter is required to deliver a prospectus nine
months or more after the effective date of the Registration Statement, the
Company upon request, but at the expense of such Underwriter, will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the 1933 Act.
(e) Neither the Company nor any of its subsidiaries will, prior to
the earlier of the Second Closing Date or termination or expiration of the
related option, incur any liability or obligation, direct or contingent, or
enter into any material transaction, other than in the ordinary course of
business, except as contemplated by the Prospectus.
(f) Neither the Company nor any of its subsidiaries will acquire any
capital stock of the Company prior to the earlier of the Second Closing
Date or termination or expiration of the related option nor will the
Company declare or pay any dividend or make any other distribution upon the
Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case as contemplated by the Prospectus.
(g) Not later than ____________, 1998 the Company will make generally
available to its security holders an earnings statement (which need not be
audited) covering a period of at least 12 months beginning after the
effective date of the Registration Statement, which will satisfy the
provisions of the last paragraph of Section 11(a) of the 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the
purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for the distribution of the Shares.
The Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where
it is not currently qualified or where it would be subject to taxation as a
foreign corporation.
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(j) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or the NASD; (ii) as soon as
practicable after the release thereof, of each material press release in
respect of the Company; and (iii) as soon as available, of each report of
the Company mailed to stockholders.
(k) The Company will use the net proceeds received by it from the
sale of the Shares being sold by it in the manner specified in the
Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of the
execution of the Pricing Agreement. If a Rule 462(b) Registration
Statement is filed, the Company shall make payment of, or arrange for
payment of, the additional registration fee owing to the Commission
required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market
and will file with the Commission in a timely manner all reports on Form SR
required by Rule 463 and will furnish you copies of any such reports as
soon as practicable after the filing thereof.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, this
Agreement, the Pricing Agreement and the Blue Sky Memorandum, (ii) all costs,
fees and expenses (including legal fees not to exceed $________ and
disbursements of counsel for the Underwriters) incurred by the Underwriters in
connection with qualifying or registering all or any part of the Shares for
offer and sale under blue sky laws, including the preparation of a blue sky
memorandum relating to the Shares and clearance of such offering with the NASD;
and (iii) all fees and expenses of the Company's transfer agent, printing of the
certificates for the Shares and all transfer taxes, if any, with respect to the
sale and delivery of the Shares to the several Underwriters.
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SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company herein set forth as of the date hereof and as of the First Closing
Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company or you, shall be contemplated by the
Commission. If the Company has elected to rely upon Rule 430A and/or Rule
434, the information concerning the initial public offering price of the
Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Representatives
of such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing Date, the Company
shall have provided evidence of such filing and effectiveness in accordance
with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale of the Shares hereunder, the validity and form of the certificates
representing the Shares, the execution and delivery of this Agreement and
the Pricing Agreement, and all corporate proceedings and other legal
matters incident thereto, and the form of the Registration Statement and
the Prospectus (except financial statements) shall have been approved by
counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in
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or affecting particularly the business or properties of the Company or its
subsidiaries, whether or not arising in the ordinary course of business,
which, in the judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or purchase of the Shares
as contemplated hereby.
(f) The Good Samaritan Consolidation (as defined in the Registration
Statement and Prospectus) shall have occurred.
(g) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Xxxxxxx, Carton & Xxxxxxx, counsel for the
Company addressed to the Underwriters and dated the First Closing Date
or the Second Closing Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company has been duly qualified to do
business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction where the
ownership or leasing of property, or the conduct of its business
requires such qualification except where the failure so to
qualify would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of
the Company and its subsidiaries taken as a whole;
(2) an opinion to the same general effect as clause (1) of
this subparagraph (i) in respect of each subsidiary of the
Company;
(3) all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized, validly
issued and is fully paid and nonassessable, and, except as
disclosed in the Registration Statement, the Company owns, either
directly or indirectly, all of the outstanding capital stock of
each subsidiary, and to the best knowledge of such counsel, such
stock is owned free and clear of any claims, liens, encumbrances
or security interests;
(4) the authorized capital stock of the Company, of which
there is outstanding the amount set forth in the Registration
Statement and Prospectus (except for subsequent issuances, if
any, pursuant to stock options or other rights referred to in the
Prospectus), conforms as to legal matters in all material
respects to the description thereof in the Registration Statement
and Prospectus;
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(5) the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable;
(6) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly countersigned
by the Company's transfer agent and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement and the Pricing
Agreement, the Shares represented thereby will be duly authorized
and validly issued, fully paid and nonassessable;
(7) the Registration Statement has become effective under
the 1933 Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act, and
the Registration Statement (including the information deemed to
be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or Rule 434, if
applicable), the Prospectus and each amendment or supplement
thereto (except for the financial statements and other
statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act; such
counsel have no reason to believe that either the Registration
Statement (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to
Rule 430A(b) and/or Rule 434, if applicable) or the Prospectus,
or the Registration Statement or the Prospectus as amended or
supplemented (except as aforesaid), as of their respective
effective or issue dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus as amended or supplemented, if
applicable, as of the First Closing Date or the Second Closing
Date, as the case may be, contained any untrue statement of a
material fact or omitted to state any material fact necessary to
make the statements therein not misleading in light of the
circumstances under which they were made; the statements in the
Registration Statement and the Prospectus summarizing statutes,
rules and regulations are accurate and fairly and correctly
present the information required to be presented by the 1933 Act
or the rules and regulations thereunder, in all material respects
and such counsel does not know of any statutes, rules and
regulations required to be described or referred to in the
Registration Statement or the Prospectus that are not described
or referred to therein as required; and such counsel does not
know of any legal or governmental proceedings pending or
threatened required to be described in the Prospectus which are
not described as required, nor of any contracts or documents of a
character required to be described in the Registration
-15-
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed, as
required;
(8) the statements under the captions "Management --
Employee Benefit Plans," "-- Compensation Committee Interlocks
and Insider Participation" "Certain Transactions," "Description
of Capital Stock" and "Shares Eligible for Future Sale" in the
Prospectus, insofar as such statements constitute a summary of
documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material
respects, the information called for with respect to such
documents and matters;
(9) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been duly
authorized by all necessary corporate action and this Agreement
and the Pricing Agreement have been duly executed and delivered
by and on behalf of the Company, and are legal, valid and binding
agreements of the Company, enforceable in accordance with their
terms, except as enforceability of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights and by the exercise of
judicial discretion in accordance with general principles
applicable to equitable and similar remedies and except as to
those provisions relating to indemnities for liabilities arising
under the 1933 Act as to which no opinion need be expressed; and
no approval, authorization or consent of any public board,
agency, or instrumentality of the United States or of any state
or other jurisdiction is necessary in connection with the issue
or sale of the Shares pursuant to this Agreement (other than
under the 1933 Act, applicable blue sky laws and the rules of the
NASD) or the consummation by the Company of any other
transactions contemplated hereby;
(10) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a default
under, any agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument known to such counsel, of the
Company or any of its subsidiaries or by which the property of
any of them is bound and which contravention or default would be
material to the Company and its subsidiaries taken as a whole; or
violate any of the provisions of the charter or bylaws of the
Company or any of its subsidiaries or, so far as is known to such
counsel, violate any statute, order, rule or regulation of any
regulatory or governmental body having jurisdiction over the
Company or any of its subsidiaries; and
(11) to such counsel's knowledge, all offers and sales of
the Company's capital stock since the Company's inception were at
all relevant times exempt from the registration requirements of
the 1933 Act and were duly registered or the subject of an
available exemption from
-16-
the registration requirements of the applicable state securities
or blue sky laws.
In rendering such opinion, such counsel may state that they are
relying upon the certificate of ________________, the transfer agent
for the Common Stock, as to the number of shares of Common Stock at
any time or times outstanding, and that insofar as their opinion under
clause (7) above relates to the accuracy and completeness of the
Prospectus and Registration Statement, it is based upon a general
review with the Company's representatives and independent accountants
of the information contained therein, without independent verification
by such counsel of the accuracy or completeness of such information.
Such counsel may also rely upon the opinions of other competent
counsel and, as to factual matters, on certificates of officers of the
Company and of state officials, in which case their opinion is to
state that they are so doing and copies of said opinions or
certificates are to be attached to the opinion unless said opinions or
certificates (or, in the case of certificates, the information
therein) have been furnished to the Representatives in other form.
(ii) Such opinion or opinions of Xxxxxxx and Xxxxxx, counsel for
the Underwriters, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement and
the Prospectus and other related matters as you may reasonably
require, and the Company shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as
they request for the purpose of enabling them to pass upon such
matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such
Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the 1933 Act.
The delivery of the certificate provided for in this subparagraph
shall be and constitute a representation and warranty of the Company
as to the facts
-17-
required in the immediately foregoing clauses (1) and (2) of this
subparagraph to be set forth in said certificate.
(iv) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Ernst & Young, LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule B. There
shall not have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(v) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from X.X. Xxxxxx & Company,
L.L.P., independent accountants, the first one to be dated the date of
the Pricing Agreement, the second one to be dated the First Closing
Date and the third one (in the event of a second closing) to be dated
the Second Closing Date, to the effect set forth in Schedule C.
(vi) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Lindgren, Callihan, Van
Osdol & Co., Ltd., independent accountants, the first one to be dated
the date of the Pricing Agreement, the second one to be dated the
First Closing Date and the third one (in the event of a second
closing) to be dated the Second Closing Date, to the effect set forth
in Schedule D.
(vii) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Coopers & Xxxxxxx L.L.P.,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule E.
(viii) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Price Waterhouse LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule F.
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(ix) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxxx and Xxxxxx, counsel for the Underwriters, which approval shall not be
unreasonably withheld. The Company shall furnish you with such manually signed
or conformed copies of such opinions, certificates, letters and documents as you
request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 6 and 8 hereof and except
to the extent provided in Section 10 hereof.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
the sale of the Shares. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section, Section 6
and Section 10 shall at all times be effective and shall apply.
SECTION 9. EFFECTIVENESS OF REGISTRATION STATEMENT. You and the
Company will use your and its best efforts to cause the Registration Statement
to become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 10. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information
deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A and/or Rule 434, if applicable, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
-19-
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Company will not
be liable in any such case to the extent that (i) any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the 1933 Act. In addition to its other obligations
under this Section 11(a), the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 11(a), it will reimburse the Underwriters
on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with Section 3 of this
Agreement or any other written information furnished to the Company by such
Underwriter through the Representatives specifically for use in the preparation
thereof; and will reimburse any legal or other expenses reasonably incurred by
the Company, or any such director, officer or controlling person in connection
with
-20-
investigating or defending any such loss, claim, damage, liability or action.
In addition to their other obligations under this Section 11(b), the
Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 11(b), they will reimburse the Company on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; PROVIDED, HOWEVER,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, 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,
-21-
unless such settlement includes an unconditional release of such indemnified
party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
the Underwriters shall be deemed to be in the same proportion in the case of the
Company as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter 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 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section are several in proportion to their respective underwriting commitments
and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 11. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter
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to purchase the Shares hereunder, that, except as hereinafter in this paragraph
provided, each of the Underwriters shall purchase and pay for all Shares agreed
to be purchased by such Underwriter hereunder upon tender to the Representatives
of all such Shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Shares hereunder on the
First Closing Date and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10
percent of the total number of Shares which the Underwriters are obligated to
purchase on the First Closing Date, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
date the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Shares which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default and the aggregate number of Shares with
respect to which such default or defaults occur is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
for the purchase of such Shares by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any nondefaulting Underwriter or the Company, except for the expenses to be
paid by the Company pursuant to Section 6 hereof and except to the extent
provided in Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 12. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 6, 8, 10 and 13 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 13. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall
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become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company to any Underwriter (except
for the expenses to be paid or reimbursed pursuant to Section 6 hereof and
except to the extent provided in Section 10 hereof) or of any Underwriter
to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
canceled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any change in
financial markets or in political, economic or financial conditions which,
in the opinion of the Representatives, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the
terms set forth in the Prospectus or materially and adversely affects the
market for the Shares, or (iv) there shall have been an outbreak of major
armed hostilities between the United States and any foreign power which in
the opinion of the Representatives makes it impractical or inadvisable to
offer or sell the Shares. Any termination pursuant to this paragraph (b)
shall be without liability on the part of any Underwriter to the Company or
on the part of the Company to any Underwriter (except for expenses to be
paid or reimbursed pursuant to Section 6 hereof and except to the extent
provided in Section 10 hereof).
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, principals, members, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Shares sold hereunder.
SECTION 15. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxxxxx X. Xxxxxxx, Esq., Xxxxxxx and
Xxxxxx; and if sent to the Company will be mailed, delivered or telegraphed and
confirmed to the Company at its corporate headquarters with a copy to Xxxxx X.
Xxxx, Esq., Xxxxxxx, Carton & Xxxxxxx.
SECTION 16. SUCCESSORS. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 10,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 17. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
-24-
SECTION 18. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 19. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
AMERICAN MEDSERVE CORPORATION
By_____________________________
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
EQUITABLE SECURITIES CORPORATION
Acting as Representatives of the several
Underwriters named in Schedule A.
By XXXXXXX XXXXX & COMPANY, L.L.C.
By__________________________________
Principal
-25-
SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
----------- ---------
Xxxxxxx Xxxxx & Company, L.L.C.. . . . . . . . . . . . . . .
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation. . . . .
Equitable Securities Corporation . . . . . . . . . . . . . .
-------------
TOTAL . . . . . . . . . . . . . 5,357,000
---------
---------
SCHEDULE B
Comfort Letter of Ernst & Young, LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries and the following companies: G.H.S.C., Inc. and the
Contract Services Division of Xxxxx X. Xxxxx, Inc. (Predecessor), Nihan &
Xxxxxx, Inc., Pharmed, Inc., Sterling Acquisition Partners, Inc., Good Samaritan
Supply Services, Inc. and Xxxxxxx Pharmacy and Medical Supply (collectively, the
"ACQUIRED COMPANIES") within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and schedules
of the Company and its subsidiaries and the financial statements of the Acquired
Companies included in the Registration Statement and the consolidated financial
statements of the Company from which the information presented under the caption
"Selected Consolidated Financial Information and Operating Data" has been
derived which are stated therein to have been examined by them comply as to form
in all material respects with the applicable accounting requirements of the 1933
Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries
of certain officers of the Company and its subsidiaries responsible for
financial and accounting matters as to transactions and events subsequent to
December 31, 1995, a reading of minutes of meetings of the stockholders and
directors of the Company and its subsidiaries since December 31, 1995, a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its subsidiaries (with an indication of the
date thereof) and other procedures as specified in such letter, nothing came
to their attention which caused them to believe that (i) the unaudited
consolidated financial statements of the Company and its subsidiaries
included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
or that such unaudited financial statements are not fairly presented in
accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Registration Statement, (ii) the pro forma financial
statements included in the Prospectus are not properly prepared on the basis
set forth therein, do not present fairly the information shown therein, or
were not prepared in accordance with generally accepted accounting principles
and the rules and guidelines of the Commission with respect to pro forma
financial information; or that the assumptions used in the preparation
thereof are not reasonable or that the adjustments used therein are not
appropriate to give effect to the transactions or circumstances referred to
therein, and (iii) at a specified date not more than five days prior to the
date thereof in the case of the first letter and not more than two business
days prior to the date thereof in the case of the second and third letters,
there was any change in the capital stock or long-term debt or short-term
debt (other than normal payments) of the Company and its subsidiaries on a
consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the
latest unaudited balance sheet of the Company included in the Registration
Statement or for the period from the date of such balance sheet to a date not
more than five days prior to the date thereof in the case of the first letter
and
not more than two business days prior to the date thereof in the case of the
second and third letters, there were any decreases, as compared with the
corresponding period of the prior year, in consolidated net sales, consolidated
income before income taxes or in the total or per share amounts of consolidated
net income except, in all instances, for changes or decreases which the
Prospectus discloses have occurred or may occur or which are set forth in such
letter.
(4) They have carried out specified procedures, which have been agreed to
by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and its subsidiaries.
SCHEDULE C
Comfort Letter of X.X. Xxxxxx & Company, L.L.P.
(1) They are independent public accountants with respect to Extended Care
Associates, Inc., Xxxxxxxxxx'x Pharmacy -- Institutional Division and Xxxxxxxxxx
Drug Company, Inc. and the Company and its subsidiaries within the meaning of
the 1933 Act.
(2) In their opinion the financial statements of Extended Care Associates,
Inc., Xxxxxxxxxx'x Pharmacy -- Institutional Division and Xxxxxxxxxx Drug
Company, Inc. included in the Registration Statement and the financial
statements of Extended Care Associates, Inc., Xxxxxxxxxx'x Pharmacy --
Institutional Division and Xxxxxxxxxx Drug Company, Inc. which are stated
therein to have been examined by them comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act.
SCHEDULE D
Comfort Letter of Lindgren, Callihan, Van Osdol & Co., Ltd.
(1) They are independent public accountants with respect to Xxxxx
Pharmacy, Inc. and the Company and its subsidiaries within the meaning of the
1933 Act.
(2) In their opinion the financial statements of Xxxxx Pharmacy, Inc.
included in the Registration Statement and the financial statements of Xxxxx
Pharmacy, Inc. which are stated therein to have been examined by them comply as
to form in all material respects with the applicable accounting requirements of
the 1933 Act.
SCHEDULE E
Comfort Letter of Coopers & Xxxxxxx L.L.P.
(1) They are independent public accountants with respect to Royal Care of
America, Inc. and the Company and its subsidiaries within the meaning of the
1933 Act.
(2) In their opinion the consolidated financial statements of Royal Care
of America, Inc. included in the Registration Statement and the consolidated
financial statements of Royal Care of America, Inc. which are stated therein to
have been examined by them comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act.
SCHEDULE F
Comfort Letter of Price Waterhouse LLP
(1) They are independent public accountants with respect to Royal Care of
America, Inc. and the Company and its subsidiaries within the meaning of the
1933 Act.
(2) In their opinion the consolidated financial statements of Royal Care
of America, Inc. included in the Registration Statement and the consolidated
financial statements of Royal Care of American, Inc. which are stated therein to
have been examined by them comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act.
EXHIBIT A
AMERICAN MEDSERVE CORPORATION
5,357,000 Shares Common Stock*
PRICING AGREEMENT
____________, 1996
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Equitable Securities Corporation
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ____________, 1996
(the "UNDERWRITING AGREEMENT") relating to the sale by the Company and the
purchase by the several Underwriters for whom Xxxxxxx Xxxxx & Company, L.L.C.,
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Equitable Securities
Corporation are acting as representatives (the "REPRESENTATIVES"), of the above
Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $__________, being an amount equal to the initial public
offering price set forth above less $__________ per share.
------------------------
*Plus an option to acquire up to 803,550 additional shares to cover
overallotments.
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters,
including you, all in accordance with its terms.
Very truly yours,
AMERICAN MEDSERVE CORPORATION
By
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
EQUITABLE SECURITIES CORPORATION
Acting as Representatives of the several
Underwriters.
By XXXXXXX XXXXX & COMPANY, L.L.C.
By
-------------------------------
Principal
-2-
