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EXHIBIT 1.1
9,800,000 SHARES OF COMMON STOCK
HEALTHCARE RECOVERIES, INC.
U.S. UNDERWRITING AGREEMENT
________, 1997
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
as U.S. Representatives of the
several U.S. Underwriters named in
Schedule I attached hereto
c/o BEAR, XXXXXXX & CO. INC.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
Medaphis Corporation ("Medaphis"), the parent of Healthcare
Recoveries, Inc. (the "Company"), (each a corporation organized and existing
under the laws of Delaware), proposes, subject to the terms and conditions
stated herein, to sell to the several U.S. underwriters named in Schedule I
hereto (the "U.S. Underwriters") an aggregate of 7,840,000 shares (the "Firm
U.S. Shares") of the Company's common stock, par value $.001 per share (the
"Common Stock") and, for the sole purpose of covering over-allotments in
connection with the sale of the Firm U.S. Shares, at the option of the U.S.
Underwriters, the Company proposes to sell up to an additional 1,176,000 shares
(the "Additional U.S. Shares") of Common Stock. The Firm U.S. Shares and any
Additional U.S. Shares purchased by the U.S. Underwriters are referred to
herein as the "U.S. Shares." The U.S. Shares are more fully described in the
Registration Statement referred to below.
It is understood that the Company and Medaphis are
concurrently entering into an agreement dated the date hereof (the
"International Underwriting Agreement") pursuant to which Medaphis proposes,
subject to the terms and conditions stated therein, to sell outside the United
States and Canada an aggregate of 1,960,000 shares of Common Stock (the "Firm
International Shares") through arrangements with certain underwriters
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outside the United States and Canada (the "Managers") for whom Bear, Xxxxxxx
International Limited, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and
The Xxxxxxxx-Xxxxxxxx Company, Inc. are acting as representatives and, for the
sole purpose of covering over-allotments in connection with the sale of Firm
International Shares, at the option of the Managers, the Company proposes to
sell up to an additional 294,000 shares (the "Additional International Shares")
of Common Stock. The Firm International Shares and any Additional
International Shares purchased by the Managers are referred to herein as the
"International Shares." It is understood that the Company is not obligated to
sell, and the U.S. Underwriters are not obligated to purchase, any Firm U.S.
Shares unless all of the Firm International Shares are contemporaneously
purchased by the Managers.
It is also understood and agreed to by all the parties that
the U.S. Underwriters have entered into an agreement with the Managers (the
"Agreement between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may (i) purchase from the Managers a portion of
the International Shares to be sold to the Managers pursuant to the
International Underwriting Agreement or (ii) sell to the Managers a portion of
the U.S. Shares to be sold to the U.S. Underwriters pursuant to this Agreement.
The Company also understands that any such purchases and sales between the U.S.
Underwriters and the Managers shall be governed by the Agreement between U.S.
Underwriters and the Managers and shall not be governed by the terms of this
Agreement.
The U.S. Underwriters and the Managers are collectively
referred to herein as the "Underwriters," the Firm U.S. Shares and the Firm
International Shares are collectively referred to herein as the "Firm Shares,"
the U.S. Shares and the International Shares are collectively referred to
herein as the "Shares" and the Additional U.S. Shares and the Additional
International Shares are collectively referred to as the "Additional Shares."
1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the U.S. Underwriters
that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-1 (No. 333-23287), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement" and the prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b) or
Rule 434 filing is required, is herein called the "U.S. Prospectus". The term
"U.S. preliminary prospectus" as used herein means a preliminary prospectus as
described in Rule 430 of the Regulations.
(b) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the U.S. Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the U.S. Prospectus is filed with the Commission
and the Additional Closing Date (as hereinafter respectively defined), if any,
the Registration Statement and the U.S. Prospectus and any amendments thereof
and supplements thereto complied or will comply in all material respects with
the
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applicable provisions of the Act and the Regulations and does not or will not
contain an untrue statement of a material fact and does not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (i) in the case of the Registration Statement, not
misleading and (ii) in the case of the U.S. Prospectus, in light of the
circumstances under which they were made, not misleading. When any related
U.S. preliminary prospectus was first filed with the Commission (whether filed
as part of the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such U.S. preliminary prospectus and any amendments thereof and supplements
thereto complied in all material respects with the applicable provisions of the
Act and the Regulations and did not contain an untrue statement of a material
fact and did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein in light of the
circumstances under which they were made not misleading. No representation and
warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or the U.S.
Prospectus or any related U.S. preliminary prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any U.S. Underwriter
through you as herein stated expressly for use in connection with the
preparation thereof. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) Insofar as statements in the U.S. Prospectus
purport to summarize the status of litigation or the provisions of laws, rules,
regulations, orders, judgments, decrees, contracts, agreements, instruments,
leases or licenses, such statements are correct in all material respects.
(d) Coopers & Xxxxxxx L.L.P., who have certified the
financial statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Act and the
Regulations.
(e) Subsequent to the respective dates as of which
information is given in the Registration Statement and the U.S. Prospectus,
except as set forth in the Registration Statement and the U.S. Prospectus,
there has been no material adverse change or any development involving a
prospective material adverse change in the business, prospects, properties,
operations, condition (financial or other) or results of operations of the
Company, whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet presented in the
Registration Statement and the U.S. Prospectus, the Company has not incurred or
undertaken any liabilities or obligations, direct or contingent, which are
material to the Company except for liabilities or obligations which are
reflected in the Registration Statement and the U.S. Prospectus.
(f) This Agreement and the transactions contemplated
herein have been duly and validly authorized by the Company and this Agreement
has been duly and validly executed and delivered by the Company and constitutes
the valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights generally and to
general equitable principles and, with respect to this Agreement, except as the
enforceability of rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public policy underlying
such laws.
(g) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict
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with or result in a breach of any of the terms and provisions of, or constitute
a default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to, any agreement, instrument, franchise, license or permit to which the
Company is a party or by which the Company or its properties or assets may be
bound or (ii) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or its
properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or its properties or assets is required for the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the Shares to
be issued, sold and delivered by the Company hereunder, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the U.S. Shares by the U.S. Underwriters.
(h) All of the outstanding shares of Common Stock
are duly and validly authorized and issued, fully paid and nonassessable and
were not issued and are not now in violation of or subject to any preemptive
rights. The Firm U.S. Shares and the Additional U.S. Shares, when issued,
delivered and sold in accordance with this Agreement, will be duly and validly
issued and outstanding, fully paid and nonassessable, and will not have been or
were not issued in violation of or be subject to any preemptive rights. The
Company had, at March 31, 1997, an authorized and outstanding capitalization as
set forth in the Registration Statement and the U.S. Prospectus. The Common
Stock and the Shares conform to the descriptions thereof contained in the
Registration Statement and the U.S. Prospectus.
(i) Assuming the exercise of the Underwriters'
over-allotment option, upon the issuance and delivery of the Additional U.S.
Shares and payment therefor pursuant hereto, good and valid title to such
Additional U.S. Shares, free and clear of all liens, encumbrances, equities,
claims, security interests, restrictions on transfer, shareholders' agreements,
voting trusts or other defects of title whatsoever, will pass to the several
U.S. Underwriters.
(j) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character
or location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the aggregate
have a material adverse effect on the Company. The Company has all requisite
power and authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses and permits of and from all
public, regulatory or governmental agencies and bodies, to own, lease and
operate its properties and conduct its business as now being conducted and as
described in the Registration Statement and the U.S. Prospectus, except where
the failure to do so, will not, in the aggregate, have a material adverse
effect on the Company, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the U.S.
Prospectus. The Company has no subsidiaries.
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(k) Except as described in the U.S. Prospectus,
there is no litigation or governmental proceeding to which the Company is a
party or to which any property of the Company is subject or which is pending
or, to the knowledge of the Company, contemplated against the Company which
might result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or, results of operations of the Company or
which is required to be disclosed in the Registration Statement and the U.S.
Prospectus.
(l) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(m) The financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and
the U.S. Prospectus present fairly the financial position of the Company as of
the dates indicated and the results of its operations for the periods
specified; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein.
(n) Except as described in the U.S. Prospectus, no
holder of securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration Statement
or otherwise in connection with the sale of the U.S. Shares contemplated
hereby.
(o) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(p) To the Company's knowledge, neither the Company
nor any employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the U.S. Prospectus.
(q) The Company has filed all tax returns required
to be filed, which returns are complete and correct in all material respects,
and the Company is not in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto.
(r) The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred,
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whether by action or by failure to act, which would cause the loss of such
qualification; and the there has been no action threatened against the Company
by the Pension Benefit Guaranty Corporation to terminate any of the Company's
pension plans.
(s) Except as described in the U.S. Prospectus, the
Company owns or possesses adequate rights to use all material patents, patent
applications, patent rights, inventions, trade secrets, know-how, proprietary
techniques, including processes and substances, trademarks, service marks,
trademark registrations, service xxxx registrations, trade names, copyrights
and licenses described or referred to in the U.S. Prospectus or owned or used
by it or which are necessary for the conduct of its business as described in
the U.S. Prospectus. Except as described in the U.S. Prospectus, the Company
has not received any notice of, or is aware of, any infringement of or conflict
with asserted rights of others with respect to any patents, patent
applications, patent rights, inventions, trade secrets, know-how, proprietary
techniques, including processes and substances, trademarks, service marks,
trademark registrations, service xxxx registrations, trade names, copyrights or
licenses which individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding might result in a material adverse
change or development involving a prospective material adverse change in the
business, prospects, properties, operations, condition (financial or other) or
results of operations of the Company.
(t) There are no contracts or other documents which
are required to be described in the U.S. Prospectus or filed as exhibits to
the Registration Statement by the Act or by the Regulations which have not been
described in the U.S. Prospectus or filed as exhibits to the Registration
Statement.
(u) The Shares have been and continue to be
designated for inclusion on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") National Market, and the Company is in
compliance with the maintenance and designation criteria applicable to Nasdaq
National Market issuers.
(v) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand, which is
required to be described in the U.S. Prospectus which is not so described.
(w) Since the date as of which information is given
in the U.S. Prospectus through the date hereof, and except as may otherwise be
disclosed in the U.S. Prospectus, the Company has not (i) issued or granted any
securities, (ii) entered into any transaction not in the ordinary course of
business or (iii) declared or paid any dividend on its capital stock.
(x) Each of the Company's executive officers and
directors, as have been heretofore designated by you and listed on Schedule II
attached hereto, has entered into or is subject to a lock-up agreement (the
"Lock-Up Agreements") under which such stockholder has agreed not, directly or
indirectly, to offer or agree to sell, hypothecate, pledge or otherwise dispose
of any shares of Common Stock, options or warrants to acquire shares of Common
Stock (or securities exchangeable for, exercisable for or convertible into
Common Stock) owned by them for a period of 180 days after the date of the U.S.
Prospectus, without the prior written consent of Bear, Xxxxxxx & Co. Inc.; each
Lock-Up Agreement constitutes the legal, valid and binding obligations of the
stockholder or stockholders party thereto enforceable against each such
stockholder in accordance with its terms.
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2. Representations and Warranties of Medaphis. Medaphis
represents and warrants to, and agrees with, the U.S. Underwriters that:
(a) This Agreement and the transactions contemplated
herein have been duly and validly authorized by Medaphis and this Agreement has
been duly and validly executed and delivered by Medaphis and constitutes the
valid and binding agreement of Medaphis, enforceable against Medaphis in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights generally and to
general equitable principles and, with respect to this Agreement, except as the
enforceability of rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public policy underlying
such laws.
(b) Immediately prior to the closing of the offering
contemplated hereby, Medaphis will have good and valid title to the Firm U.S.
Shares to be sold by it hereunder on such date, free and clear of all liens,
encumbrances, equities, claims, security interests, restrictions on transfer,
shareholders' agreements, voting trusts or other defects of title whatsoever;
and upon delivery of such Firm U.S. Shares and payment therefor pursuant
hereto, good and valid title to such Firm U.S. Shares, free and clear of all
liens, encumbrances, equities, claims, security interests, restrictions on
transfer, shareholders' agreements, voting trusts or other defects of title
whatsoever, will pass to the several U.S. Underwriters.
(c) Medaphis has full right, power and authority to
enter into this Agreement; the execution, delivery and performance of this
Agreement by Medaphis and the consummation by it of the transactions
contemplated hereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Medaphis is a party or by which Medaphis is bound or to
which any of its property or assets is subject, nor will such actions result in
any violation of the provisions of the constituent documents of Medaphis, if
any, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its property or
assets; and, except for the registration of the U.S. Shares under the Act and
such consents, approvals, authorizations, registrations or qualifications as
may be required under applicable state securities laws in connection with the
purchase and distribution of the U.S. Shares by the U.S. Underwriters, no
consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by Medaphis and the consummation by
it of the transactions contemplated hereby.
(d) Medaphis is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(e) To the extent that any statements or omissions
made in the Registration Statement, the U.S. preliminary prospectus, the U.S.
Prospectus or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by Medaphis
specifically for use therein, (i) the Registration Statement and any amendments
or supplements thereto will not, when they become effective or are filed with
the Commission, as the case may be, contain any 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 (ii) the U.S.
preliminary prospectus, the U.S. Prospectus and any amendments or supplements
thereto will not, when each registration statement of which they are a part
becomes effective or is
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filed with the Commission, as the case may be, contain any untrue statement of
a material fact or omit to state any material fact stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; and Medaphis has no actual knowledge of facts which
lead it to believe that the Registration Statement, the U.S. preliminary
prospectus, the U.S. Prospectus or any amendments or supplements thereto will,
when they become effective or are filed with the Commission, as the case may
be, contain any untrue statement of any other material fact or omit to state
any other material fact required to be stated therein or necessary to make the
statements therein not misleading.
(f) Medaphis has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, Medaphis agrees to sell to the U.S. Underwriters
and the U.S. Underwriters, severally and not jointly, agree to purchase from
Medaphis, at a purchase price per share of $_______, the number of Firm U.S.
Shares set forth opposite the respective names of the U.S. Underwriters in
Schedule I hereto plus any additional number of U.S. Shares which such U.S.
Underwriter may become obligated to purchase pursuant to the provisions of
Section 11 hereof.
(b) Payment of the purchase price for, and delivery
of certificates for, the U.S. Shares shall be made at the office of Xxxxxxx
Xxxxxxx & Xxxxxxxx, 425 Lexington Avenue, New York, New York, or at such other
place as shall be agreed upon by you and Medaphis, at 10:00 A.M. on the third
or fourth business day (as permitted under Rule 15c6-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (unless postponed in
accordance with the provisions of Section 11 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the initial public offering price of the U.S. Shares), or such other time not
later than ten business days after such date as shall be agreed upon by you and
Medaphis (such time and date of payment and delivery being herein called the
"Closing Date"). Payment shall be made to Medaphis by wire transfer in same
day funds, against delivery to you for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Shares to be purchased by them.
Certificates for the U.S. Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two
full business days prior to the Closing Date. Medaphis will permit you to
examine and package such certificates for delivery at least one full business
day prior to the Closing Date.
(c) In addition, the Company hereby grants to the
U.S. Underwriters the option to purchase up to 1,176,000 Additional U.S. Shares
at the same purchase price per share to be paid by the U.S. Underwriters to
Medaphis for the Firm U.S. Shares as set forth in this Section 3, for the sole
purpose of covering over-allotments in the sale of Firm U.S. Shares by the U.S.
Underwriters. This option may be exercised at any time, in whole or in part,
on or before the thirtieth day following the date of the U.S. Prospectus, by
written notice by you to the Company. Such notice shall set forth the
aggregate number of Additional U.S. Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be
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delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the eighth full business day after the date on which the option
shall have been exercised (unless such time and date are postponed in
accordance with the provisions of Section 11 hereof). Certificates for the
Additional U.S. Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full
business day prior to the Additional Closing Date.
The number of Additional U.S. Shares to be sold to each U.S.
Underwriter shall be the number which bears the same ratio to the aggregate
number of Additional U.S. Shares being purchased as the number of Firm U.S.
Shares set forth opposite the name of such U.S. Underwriter in Schedule I
hereto (or such number increased as set forth in Section 11 hereof) bears to
7,840,000 shares, subject, however, to such adjustments to eliminate any
fractional shares as you in your sole discretion shall make.
Payment for the Additional U.S. Shares shall be made by wire
transfer in same day funds at the offices of Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional U.S. Shares to
you for the respective accounts of the U.S. Underwriters.
4. Offering. Upon your authorization of the release of the
Firm U.S. Shares, the U.S. Underwriters propose to offer the U.S. Shares for
sale to the public upon the terms set forth in the U.S. Prospectus.
5. Covenants of the Company. The Company covenants and
agrees with the U.S. Underwriters that:
(a) If the Registration Statement has not yet been
declared effective the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly as possible, and if Rule 430A is used or the filing of the U.S.
Prospectus is otherwise required under Rule 424(b) or Rule 434, the Company
will file the U.S. Prospectus (properly completed if Rule 430A has been used)
pursuant to Rule 424(b) or Rule 434 within the prescribed time period and will
provide evidence satisfactory to you of such timely filing. If the Company
elects to rely on Rule 434, the Company will prepare and file a term sheet that
complies with the requirements of Rule 434.
(b) The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) (i) when the
Registration Statement and any amendments thereto become effective, (ii) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the U.S. Prospectus or for any additional
information, (iii) of the mailing or the delivery to the Commission for filing
of any amendment of or supplement to the Registration Statement or the U.S.
Prospectus, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereto or of the initiation, or the threatening, of any proceedings therefor,
(v) of the receipt of any comments from the Commission, and (vi) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the U.S. Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for that purpose. If the
Commission shall propose or enter a stop order at any time, the Company will
make every reasonable effort
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to prevent the issuance of any such stop order and, if issued, to obtain the
lifting of such order as soon as possible. The Company will not file any
amendment to the Registration Statement or any amendment of or supplement to
the U.S. Prospectus (including the prospectus required to be filed pursuant to
Rule 424(b) or Rule 434) that differs from the prospectus on file at the time
of the effectiveness of the Registration Statement before or after the
effective date of the Registration Statement to which you shall reasonably
object in writing after being timely furnished in advance a copy thereof.
(c) If at any time when a prospectus relating to the
U.S. Shares is required to be delivered under the Act any event shall have
occurred as a result of which the U.S. Prospectus as then amended or
supplemented would, in the judgment of the U.S. Underwriters or the Company
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 shall be necessary at any time to amend or supplement the U.S.
Prospectus or Registration Statement to comply with the Act or the Regulations,
the Company will notify you promptly and prepare and file with the Commission
an appropriate amendment or supplement (in form and substance satisfactory to
you) which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(d) The Company will promptly deliver to you such
reasonable number of signed copies of the Registration Statement, including
exhibits and all amendments thereto, and the Company will promptly deliver to
each of the U.S. Underwriters such number of copies of any U.S. preliminary
prospectus, the U.S. Prospectus, the Registration Statement and all amendments
of and supplements to such documents, if any, as you may reasonably request.
(e) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the U.S. Shares for offering and sale under
the securities laws relating to the offering or sale of the U.S. Shares of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(f) The Company will make generally available
(within the meaning of Section 11(a) of the Act) to its security holders and to
you as soon as practicable, but not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying with the
provisions of Rule 158 of the Regulations) covering a period of at least twelve
consecutive months beginning after the effective date of the Registration
Statement.
(g) During the period of 180 days from the date of
the U.S. Prospectus, the Company will not, without your prior written consent,
issue, sell, offer or agree to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common Stock),
other than (i) the Company's sale of Additional U.S. Shares hereunder and the
Company's sale of Additional International Shares under the International
Underwriting Agreement and (ii) the Company's issuance of Common Stock and
stock options pursuant to the (a) Healthcare Recoveries, Inc. Non-Qualified
Stock Option Plan of Eligible Employees, (b) Healthcare Recoveries, Inc.
Directors' Stock Option Plan or (c) the Divestiture Bonus Agreement.
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(h) During a period of three years from the
effective date of the Registration Statement, the Company will furnish to you
copies of (i) all reports to its shareholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(i) The Company will apply the proceeds received by
it, if any, from the sale of the Shares as set forth under "Use of Proceeds" in
the U.S. Prospectus.
(j) The Company will use its best efforts to cause
the Shares to be listed for inclusion on the Nasdaq National Market.
6. Covenants of Medaphis. Medaphis covenants and agrees with
the U.S. Underwriters that:
(a) If at any time when a prospectus relating to the
U.S. Shares is required to be delivered under the Act any information which
Medaphis has provided to the Company or the U.S. Underwriters becomes
incorrect, or if it shall be necessary at any time to amend or supplement any
information provided by Medaphis to the Company for inclusion in the U.S.
preliminary prospectus, U.S. Prospectus or Registration Statement to comply
with the Act or the Regulations, Medaphis will notify the Company and the U.S.
Underwriters promptly so that the Company may prepare and file with the
Commission an appropriate amendment or supplement (in form and substance
satisfactory to the U.S. Underwriters) which will correct such statement or
omission.
(b) Medaphis will deliver to the U.S.
Representatives prior to the Closing Date a properly completed and executed
United States Treasury Department Form W-9.
7. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
Medaphis hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company and Medaphis hereunder,
including, without limitation, those in connection with (i) preparing,
printing, duplicating, filing and distributing the Registration Statement, as
originally filed and all amendments thereof (including all exhibits thereto),
any U.S. preliminary prospectus, the U.S. Prospectus and any amendments or
supplements thereto, the underwriting documents (including this Agreement, the
International Underwriting Agreement, the Master Agreement Among Underwriters
and the Supplement to Master Agreement Among Underwriters, the Master Selling
Agreement, the Agreement between U.S. Underwriters and Managers and the
Agreement Among Managers) and all other documents related to the public
offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated) (in each case, including, without limitation,
fees and expenses of the Company's accountants and counsel, but not
Underwriters' Counsel (as defined below)), (ii) the issuance, transfer and
delivery of the Shares to the U.S. Underwriters, including any transfer or
other taxes payable thereon, (iii) the qualification of the Shares under state
or foreign securities or Blue Sky laws, including the costs of printing and
mailing a preliminary and final "Blue Sky Survey" and the fees of counsel for
the Underwriters and such counsel's disbursements in relation thereto, (iv)
quotation of the Shares on the Nasdaq National Market, (v) filing fees of the
Commission and the National Association of Securities Dealers, Inc. (the
"NASD"), (vi) the cost of printing certificates representing the Shares, (vii)
the cost and charges of any transfer agent or registrar and (viii) travel and
lodging expenses of employees of the Company who participate in the advertising
and marketing of the Shares.
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8. Conditions of U.S. Underwriters' Obligations. The
obligations of the U.S. Underwriters to purchase and pay for the Firm U.S.
Shares and the Additional U.S. Shares, as provided herein, shall be subject to
the accuracy of the representations and warranties of the Company and Medaphis
herein contained, as of the date hereof and as of the Closing Date (for
purposes of this Section 8 "Closing Date" shall refer to the Closing Date for
the Firm U.S. Shares and any Additional Closing Date, if different, for the
Additional U.S. Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Xxxxxxx Xxxxxxx & Xxxxxxxx
("Underwriters' Counsel") pursuant to this Section 8 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and
to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented to in
writing by you; if the Company shall have elected to rely upon Rule 430A or
Rule 434 of the Regulations, the U.S. Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 5(a) hereof; and, at
or prior to the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.
(b) At the Closing Date you shall have received the
opinion of King & Spalding, counsel for the Company, dated the Closing Date
addressed to the U.S. Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. The Company is duly qualified and
in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a material
adverse effect on the Company. The Company has all requisite
corporate authority to own, lease and license its respective
properties and conduct its business as now being conducted and as
described in the Registration Statement and the U.S. Prospectus.
(ii) The Company has an authorized capital stock
as set forth in the Registration Statement and the U.S. Prospectus.
All of the outstanding shares of Common Stock are duly and validly
authorized and issued, are fully paid and nonassessable and were not
issued in violation of or subject to any preemptive rights. The U.S.
Shares to be delivered on the Closing Date have been duly and validly
authorized and, each of (A) the Firm U.S. Shares, when delivered by
Medaphis in accordance with this Agreement, and (B) the Additional
U.S. Shares, when delivered by the Company in accordance with this
Agreement, will be duly and validly issued, fully paid and
nonassessable and will not have been issued in violation of or subject
to any preemptive rights. The Common Stock and the U.S. Shares
conform to the descriptions thereof contained in the Registration
Statement and the U.S. Prospectus.
(iii) Assuming the exercise of the Underwriters'
over-allotment option, upon the issuance and delivery of the
Additional U.S.
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Shares and payment therefor pursuant hereto, good and valid title to
such Additional U.S. Shares, free and clear of all liens,
encumbrances, equities, claims, security interests, restrictions on
transfer, shareholders' agreements, voting trusts or other defects of
title whatsoever, will pass to the several U.S. Underwriters.
(iv) The U.S. Shares to be sold under this
Agreement to the U.S. Underwriters are duly authorized for quotation
on the Nasdaq National Market.
(v) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(vi) Assuming due execution and delivery by the
U.S. Representatives of this Agreement, this Agreement constitutes the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except that
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights
of creditors generally and by general equitable principles and, except
as the enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities laws or the
public policy underlying such laws.
(vii) There is no litigation or governmental or
other action, suit, proceeding or investigation before any court or
before or by any public, regulatory or governmental agency or body
pending or to the best of such counsel's knowledge, threatened
against, or involving the properties or business of, the Company which
is of a character required to be disclosed in the Registration
Statement and the U.S. Prospectus which has not been properly
disclosed therein.
(viii) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby by the Company do not and will not (A) conflict with or result
in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any agreement, instrument,
franchise, license or permit known to such counsel to which the
Company is a party or by which its properties or assets may be bound
or (B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company, or, to the best knowledge of
such counsel, any judgment, decree, order, statute, rule or regulation
of any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or its properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over
the Company or its properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (1) such as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the U.S. Underwriters
(as to which such counsel need
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express no opinion) and (2) such as have been made or obtained under
the Act.
(ix) The Registration Statement and the U.S.
Prospectus and any amendments thereof or supplements thereto (other
than the financial statements and schedules and other financial data
included therein, as to which no opinion need be rendered) comply as
to form in all material respects with the requirements of the Act and
the Regulations.
(x) The Registration Statement is effective
under the Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) of the Regulations
have been made.
(xi) In addition, such opinion shall also contain
a statement that such counsel has participated in conferences with
officers and representatives of the Company, representatives of the
independent public accountants for the Company and the Underwriters at
which the contents of the U.S. Prospectus and related matters were
discussed and, no facts have come to the attention of such counsel
which would lead such counsel to believe that either the Registration
Statement at the time it became effective (including the information
deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or
any amendment thereof made prior to the Closing Date as of the date of
such amendment, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
U.S. Prospectus as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such
amendment or supplement) and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no belief or opinion with respect to the financial
statements and schedules and other financial data included therein or
with respect to the matters set forth under the heading "Notice to
Canadian Residents").
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and certificates or other written statements of officers of departments
of various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and other public officials (including
oral statements of representatives of the Commission and correspondence and
oral statements of representatives of the Nasdaq National
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Market), provided that copies of any such written statements or certificates
shall be delivered to Underwriters' Counsel. The opinion of such counsel for
the Company shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and, in their opinion, you and they are justified
in relying thereon.
(c) At the Closing Date you shall have received the
opinion of King & Spalding, counsel for Medaphis, dated the Closing Date
addressed to the U.S. Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) This Agreement has been duly and validly
authorized, executed and delivered by Medaphis.
(ii) Assuming the due execution and delivery by
the U.S. Representatives of this Agreement, this Agreement constitutes
the legal, valid and binding obligation of Medaphis, enforceable
against Medaphis in accordance with its terms, except that
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights
of creditors generally and by general equitable principles and, except
as the enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities laws or the
public policy underlying such laws.
(iii) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby by Medaphis do not and will not (A) conflict with or result in
a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of Medaphis pursuant to, any agreement, instrument, franchise,
license or permit known to such counsel to which it is a party or by
which its properties or assets may be bound or (B) violate or conflict
with any provision of the certificate of incorporation or by-laws of
Medaphis, or, to the best knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over
Medaphis or its properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental, or regulatory
agency or body having jurisdiction over Medaphis or its properties or
assets is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the U.S. Underwriters (as to which such counsel need
express no opinion) and (2) such as have been made or obtained under
the Act.
(iv) The Firm U.S. Shares, when delivered by
Medaphis in accordance with this Agreement, will be fully paid and
nonassessable and will not have been issued in violation of or subject
to any preemptive rights.
(v) Immediately prior to the closing of the
offering contemplated hereby, Medaphis will have good and valid title
to the Firm U.S.
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Shares to be sold by it hereunder on such date, free and clear of all
liens, encumbrances, equities, claims, security interests,
restrictions on transfer, shareholders' agreements, voting trusts or
other defects of title whatsoever; and upon delivery of such Firm U.S.
Shares and payment therefor pursuant hereto, good and valid title to
such Firm U.S. Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several U.S. Underwriters.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of
Medaphis and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of Medaphis, provided that copies of any
such statements or certificates shall be delivered to Underwriters' Counsel.
The opinion of such counsel for Medaphis shall state that the opinion of any
such other counsel is in form satisfactory to such counsel and, in their
opinion, you and they are justified in relying thereon.
(d) All proceedings taken in connection with the
sale of the Firm U.S. Shares and the Additional U.S. Shares as herein
contemplated shall be satisfactory in form and substance to you and to
Underwriters' Counsel, and the U.S. Underwriters shall have received from said
Underwriters' Counsel a favorable opinion, dated as of the Closing Date with
respect to the issuance and sale of the U.S. Shares, the Registration Statement
and the U.S. Prospectus and such other related matters as you may reasonably
require, and the Company shall have furnished to Underwriters' Counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date to the effect that (i) the condition set forth
in subsection (a) of this Section 8 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the U.S.
Prospectus, the Company has not sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving a material adverse
change, in the business prospects, properties, operations, condition (financial
or otherwise), or results of operations of the Company, except in each case as
described in or contemplated by the U.S. Prospectus.
(f) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Medaphis, dated the Closing Date to the effect that (i) as of the date hereof
and as of the Closing Date the representations and warranties of Medaphis set
forth in Section 2 hereof are accurate
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and (ii) as of the Closing Date the obligations of Medaphis to be performed
hereunder on or prior thereto have been duly performed.
(g) At the time this Agreement is executed and at
the Closing Date, you shall have received a letter, from Coopers & Xxxxxxx
L.L.P., independent public accountants for the Company, dated, respectively, as
of the date of this Agreement and as of the Closing Date addressed to the U.S.
Underwriters and in form and substance satisfactory to you, to the effect that:
(i) they are independent certified public accountants with respect to the
Company within the meaning of the Act and the Regulations and stating that the
answer to Item 10 of the Registration Statement is correct insofar as it
relates to them; (ii) stating that, in their opinion, the financial statements
and schedules of the Company included in the Registration Statement and the
U.S. Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act and
the applicable published rules and regulations of the Commission thereunder;
(iii) on the basis of procedures consisting of a reading of the latest
available unaudited interim financial statements of the Company, a reading of
the minutes of meetings and consents of the shareholders and board of directors
of the Company and the committees of such board subsequent to December 31,
1996, inquiries of officers and other employees of the Company who have
responsibility for financial and accounting matters of the Company with respect
to transactions and events subsequent to December 31, 1996 and other specified
procedures and inquiries to a date not more than five days prior to the date of
such letter, nothing has come to their attention that would cause them to
believe that: (A) the unaudited financial statements and schedules of the
Company presented in the Registration Statement and the U.S. Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the applicable published rules and regulations of
the Commission thereunder or that such unaudited financial statements are not
fairly presented in conformity with generally accepted accounting principles;
(B) with respect to the period subsequent to December 31, 1996, there were, as
of the date of the most recent available monthly financial statements of the
Company, if any, and as of a specified date not more than five days prior to
the date of such letter, any changes in the capital stock or long-term
indebtedness of the Company or any decrease in the net current assets or
stockholders' equity of the Company, in each case as compared with the amounts
shown in the most recent balance sheet presented in the Registration Statement
and the U.S. Prospectus, except for changes or decreases which the Registration
Statement and the U.S. Prospectus disclose have occurred or may occur or which
are set forth in such letter or (C) that during the period from December 31,
1996 to the date of the most recent available monthly financial statements of
the Company, and to a specified date not more than five days prior to the date
of such letter, there was any decrease, as compared with the corresponding
period in the prior fiscal year, in total revenues, or total or per share net
income, except for decreases which the Registration Statement and the U.S.
Prospectus disclose have occurred or may occur or which are set forth in such
letter; and (iv) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, and other financial
information pertaining to the Company set forth in the Registration Statement
and the U.S. Prospectus, which have been specified by you prior to the date of
this Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records of
the Company or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries, and other
appropriate procedures specified by you set forth in such letter, and found
them to be in agreement.
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(h) At the Closing Date, you shall have received
from each person who is a director or officer of the Company and each
stockholder listed named in Schedule II hereto, an agreement, or each such
person shall be subject to an agreement, to the effect that such person will
not, directly or indirectly, without the prior written consent of Bear, Xxxxxxx
& Co. Inc., offer, sell, offer or agree to sell, grant any option to purchase
or otherwise dispose (or announce any offer, sale, grant of an option to
purchase or other disposition) of any shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable or exercisable for shares of
Common Stock) for a period of 180 days after the date of the Prospectus.
(i) Prior to the Closing Date the Company shall have
furnished to you such further information, certificates and documents as you
may reasonably request.
(j) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
(k) The NASD, upon review of the terms of the
underwriting arrangements for the public offering of the Shares, shall have
raised no objections thereto.
If any of the conditions specified in this Section 8 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 8 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the U.S. Underwriters hereunder may
be cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the U.S. Underwriters to purchase the Additional U.S. Shares may
be cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone, telex or telegraph, confirmed in writing.
9. Indemnification.
(a) Each of the Company and Medaphis agrees to
indemnify, jointly and severally, and hold harmless each U.S. Underwriter and
each person, if any, who controls any U.S. Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but limited to attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact
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required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact, in light of the circumstances under which they were made,
contained in any related U.S. preliminary prospectus or the U.S. Prospectus, or
in any supplement thereto or amendment thereof, 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, in light of
the circumstances in which they were made, not misleading; provided, however,
neither the Company nor Medaphis will be liable in any such case to the extent
but only to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company or Medaphis, as
the case may be, by or on behalf of any U.S. Underwriter through you expressly
for use therein. This indemnity agreement will be in addition to any liability
which the Company or Medaphis may otherwise have including under this
Agreement. The foregoing indemnity agreement with respect to any U.S.
preliminary prospectus shall not inure to the benefit of any U.S. Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares (or any person who controls such U.S. Underwriter within the
meaning of Section 15 of the Act) if a copy of the U.S. Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such U.S.
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Shares to such person and if the U.S.
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) Each U.S. Underwriter severally, and not
jointly, agrees to indemnify and hold harmless the Company and Medaphis, each
of the directors of the Company and Medaphis, each of the officers of the
Company who shall have signed the Registration Statement, and each other
person, if any, who controls the Company or Medaphis within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for
the registration of the Shares, as originally filed or any amendment thereof or
in any amendment thereof 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
or (ii) any untrue statement or alleged untrue statement of a material fact, in
light of the circumstances in which they were made, contained in any related
U.S. preliminary prospectus or the U.S. Prospectus, or in any supplement
thereto or amendment thereof, 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, in light of the circumstances in
which they were made, not misleading, in each case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any U.S.
Underwriter through you expressly for use therein; provided, however, that in
no case shall any U.S. Underwriter be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
U.S. Underwriter hereunder. This indemnity will be in addition to any
liability which any U.S. Underwriter may otherwise have including under this
Agreement. The Company and
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Medaphis each acknowledge that the statements set forth in the last paragraph
of the cover page and in the paragraphs four, six, seven, eight and ten under
the caption "Underwriting" in the U.S. Prospectus constitute the only
information furnished in writing by or on behalf of any U.S. Underwriter
expressly for use in the registration statement relating to the Shares as
originally filed or in any amendment thereof, any related U.S. preliminary
prospectus or the U.S. Prospectus or in any amendment thereof or supplement
thereto, as the case may be.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the commencement thereof
(but the failure so to notify an indemnifying party shall not relieve it from
any liability which it may have under this Section 9). 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 therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof with counsel satisfactory
to such indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties shall
not have employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall
not be liable for any settlement of any claim or action effected without its
written consent; provided, however, that such consent was not unreasonably
withheld.
10. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 9 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company,
Medaphis and the U.S. Underwriters shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company or Medaphis any contribution received by the Company or Medaphis, as
the case may be, from persons, other than the U.S. Underwriters, who may also
be liable for contribution, including persons who control the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
officers of the Company who signed the Registration Statement and directors of
the Company) as incurred to which the Company, Medaphis and one or more of the
U.S. Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and Medaphis, on the one
hand, and the U.S. Underwriters, on the other hand, from the offering of the
Shares or, if such allocation is not
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permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 9
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and
Medaphis, on the one hand, and the U.S. Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
Medaphis, on the one hand, and the U.S. Underwriters, on the other hand, shall
be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and Medaphis and (y) the underwriting
discounts and commissions received by the U.S. Underwriters, respectively, in
each case as set forth in the table on the cover page of the U.S. Prospectus.
The relative fault of the Company and Medaphis, on the one hand, and of the
U.S. Underwriters, on the other hand, 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 or the U.S. Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 10 were determined by pro rata allocation (even if the
U.S. Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 10, (i) in no case shall any U.S. Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such U.S. Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the provisions of this Section
10 and the preceding sentence, no U.S. Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the U.S. Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages that such U.S. Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Section 10,
each person, if any, who controls a U.S. Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as such U.S. Underwriter, and each person, if any, who
controls the Company or Medaphis within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company and Medaphis
shall have the same rights to contribution as the Company and Medaphis, as the
case may be, subject in each case to clauses (i) and (ii) of this Section 10.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 10 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
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11. Default by a U.S. Underwriter.
(a) If any U.S. Underwriter or U.S. Underwriters
shall default in its or their obligation to purchase Firm U.S. Shares or
Additional U.S. Shares hereunder, and if the Firm U.S. Shares or Additional
U.S. Shares with respect to which such default relates do not (after giving
effect to arrangements, if any, made by you pursuant to subsection (b) below)
exceed in the aggregate 10% of the number of Firm U.S. Shares or Additional
U.S. Shares, such Firm U.S. Shares or Additional U.S. Shares, as the case may
be, to which the default relates shall be purchased by the non-defaulting U.S.
Underwriters in proportion to the respective proportions which the numbers of
Firm U.S. Shares set forth opposite their respective names in Schedule I hereto
bear to the aggregate number of Firm U.S. Shares set forth opposite the names
of the non-defaulting U.S. Underwriters.
(b) In the event that such default relates to more
than 10% of the Firm U.S. Shares or Additional U.S. Shares, as the case may be,
you may in your discretion arrange for yourself or for another party or parties
(including any non-defaulting U.S. Underwriter or U.S. Underwriters who so
agree) to purchase such Firm U.S. Shares or Additional U.S. Shares, as the
case may be, to which such default relates on the terms contained herein. In
the event that within five calendar days after such a default you do not
arrange for the purchase of the Firm U.S. Shares or Additional U.S. Shares, as
the case may be, to which such default relates as provided in this Section 11,
this Agreement or, in the case of a default with respect to the Additional U.S.
Shares, the obligations of the U.S. Underwriters to purchase and of the
Company to sell the Additional U.S. Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Sections 7, 9(a) and 10 hereof) or the U.S. Underwriters, but
nothing in this Agreement shall relieve a defaulting U.S. Underwriter or U.S.
Underwriters of its or their liability, if any, to the other U.S. Underwriters,
the Company and Medaphis for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm U.S. Shares or
Additional U.S. Shares to which the default relates are to be purchased by the
non-defaulting U.S. Underwriters, or are to be purchased by another party or
parties as aforesaid, you or the Company shall have the right to postpone the
Closing Date or Additional Closing Date, as the case may be for a period, not
exceeding five business days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the U.S. Prospectus or in
any other documents and arrangements, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the U.S.
Prospectus which, in the opinion of Underwriters' Counsel, may thereby be made
necessary or advisable. The term "U.S. Underwriter" as used in this Agreement
shall include any party substituted under this Section 11 with like effect as
if it had originally been a party to this Agreement with respect to such Firm
U.S. Shares and Additional U.S. Shares.
12. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the U.S.
Underwriters, the Company and Medaphis contained in this Agreement, including
the agreements contained in Section 7, the indemnity agreements contained in
Section 9 and the contribution agreements contained in Section 10, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any U.S. Underwriter or any controlling person thereof or by or
on behalf of the Company, any of its officers and directors or any controlling
person thereof, and shall survive delivery of and payment for the U.S. Shares
to and by the U.S. Underwriters. The representations contained
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in Sections 1 and 2, and the agreements contained in Sections 7, 9, 10 and
13(d) hereof shall survive the termination of this Agreement, including
termination pursuant to Section 11 or 13 hereof.
13. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the
later of when (i) you, the Company and Medaphis shall have received
notification of the effectiveness of the Registration Statement or (ii) the
execution of this Agreement. If either the initial public offering price or
the purchase price per Share has not been agreed upon prior to 5:00 P.M., New
York time, on the fifteenth full business day after the Registration Statement
shall have become effective, this Agreement shall thereupon terminate without
liability to the Company, Medaphis or the U.S. Underwriters except as herein
expressly provided. Until this Agreement becomes effective as aforesaid, it
may be terminated by the Company by notifying you or by you notifying the
Company. Notwithstanding the foregoing, the provisions of this Section 13 and
of Sections 1, 2, 6, 7, 8 and 9 hereof shall at all times be in full force and
effect.
(b) You shall have the right to terminate this
Agreement at any time prior to the Closing Date or the obligations of the U.S.
Underwriters to purchase the Additional U.S. Shares at any time prior to the
Additional Closing Date, as the case may be, if (A) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; or (B) if trading on the Nasdaq
National Market or the New York or American Stock Exchanges shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the
Nasdaq National Market by the NASD or on the New York or American Stock
Exchanges by the New York or American Stock Exchanges or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
U.S. Shares or the Additional U.S. Shares, as the case may be, shall have
become effective; or (D) (i) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United
States or there is a declaration of a national emergency or war by the United
States or (ii) if there shall have been such change in political, financial or
economic conditions if the effect of any such event in (i) or (ii) as in your
judgment makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm U.S. Shares or the Additional U.S. Shares, as the
case may be, on the terms contemplated by the U.S. Prospectus.
(c) Any notice of termination pursuant to this
Section 13 shall be by telephone, telex, or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant
to any of the provisions hereof (otherwise than pursuant to (i) notification by
you as provided in Section 13(a) hereof or (ii) Section 11(b) or 13(b) hereof),
or if the sale of the U.S. Shares provided for herein is not consummated
because any condition to the obligations of the U.S. Underwriters set forth
herein is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by you, reimburse the
U.S. Underwriters for all out-of-pocket expenses (including the
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fees and expenses of their counsel), incurred by the U.S. Underwriters in
connection herewith.
14. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
U.S. Underwriter, shall be mailed, delivered, or telexed or telegraphed and
confirmed in writing, to such U.S. Underwriter c/o Bear, Xxxxxxx & Co. Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000, Attention: Xxxxxxx X. Xxxxxx, Senior
Managing Director (and a copy thereof shall be sent in the same manner to
Underwriters' Counsel, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx X. Xxxxxxx, Esq.); if sent to the Company, shall be mailed,
delivered, or telegraphed and confirmed in writing to the Company, 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. XxXxxxxx,
Chairman and Chief Executive Officer (and a copy thereof shall be sent in the
same manner to King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000-0000, Attention: Xxxxxx X. Xxxxxx, Esq.); if sent to Medaphis, shall be
mailed, delivered, or telegraphed and confirmed in writing to Medaphis, 0000
Xxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X.
XxXxxxxx (and a copy thereof shall be sent in the same manner to King &
Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000, Attention: Xxxxxx
X. Xxxxxx, Esq.).
15. Parties. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the U.S. Underwriters, the Company and
Medaphis and the controlling persons, directors, officers, employees and agents
referred to in Sections 9 and 10, and their respective successors and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of U.S. Shares from any of the
U.S. Underwriters.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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If the foregoing correctly sets forth the understanding
between you, the Company and Medaphis, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
HEALTHCARE RECOVERIES, INC.
By
-------------------------
Name:
Title:
MEDAPHIS CORPORATION
By
-------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
THE XXXXXXXX-XXXXXXXX COMPANY INC.
By: BEAR, XXXXXXX & CO. INC.
By:
--------------------------------
Name:
Title:
On behalf of themselves and the other
U.S. Underwriters named in Schedule I hereto.
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SCHEDULE I
Number of Firm U.S.
Name of U.S. Underwriter Shares to be Purchased
------------------------ ----------------------
Bear, Xxxxxxx & Co. Inc
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
The Xxxxxxxx-Xxxxxxxx Company Inc.
Total. . . . . .
----------
7,840,000
27
SCHEDULE II
Directors and Executive Officers subject to a Lock-Up Agreement
Xxxxxxx X. XxXxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxxx
28
9,800,000 SHARES OF COMMON STOCK
HEALTHCARE RECOVERIES, INC.
INTERNATIONAL UNDERWRITING AGREEMENT
_________, 1997
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
as Lead Managers of the
several Managers named in
Schedule I attached hereto
c/o Bear, Xxxxxxx International Limited
One Canada Square
Xxxxxx X00 0XX, Xxxxxxx
Dear Sirs:
Medaphis Corporation ("Medaphis"), the parent of Healthcare
Recoveries, Inc. (the "Company"), (each a corporation organized and existing
under the laws of Delaware), proposes, subject to the terms and conditions
stated herein, to sell to the several managers named in Schedule I hereto (the
"Managers") an aggregate of 1,960,000 shares (the "Firm International Shares")
of the Company's common stock, par value $.001 per share (the "Common Stock")
and, for the sole purpose of covering over-allotments in connection with the
sale of the Firm International Shares, at the option of the Managers, the
Company proposes to sell up to an additional 294,000 shares (the "Additional
International Shares") of Common Stock. The Firm International Shares and any
Additional International Shares purchased by the Managers are referred to
herein as the "International Shares." The International Shares are more fully
described in the Registration Statement referred to below.
It is understood that the Company and Medaphis are
concurrently entering into an agreement dated the date hereof (the "U.S.
Underwriting Agreement") pursuant to which Medaphis proposes, subject to the
terms and conditions stated therein, to sell within the United States and
Canada an aggregate of 7,840,000 shares of Common Stock (the "Firm U.S.
Shares") through arrangements with certain underwriters within the United
29
States and Canada (the "U.S. Underwriters") for whom Bear, Xxxxxxx & Co. Inc.,
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and The Xxxxxxxx-Xxxxxxxx
Company, Inc. are acting as representatives and, for the sole purpose of
covering over-allotments in connection with the sale of Firm U.S. Shares, at
the option of the U.S. Underwriters, the Company proposes to sell up to an
additional 1,176,000 shares (the "Additional U.S. Shares") of Common Stock.
The Firm U.S. Shares and any Additional U.S. Shares purchased by the U.S.
Underwriters are referred to herein as the "U.S. Shares." It is understood that
the Company is not obligated to sell, and the Managers are not obligated to
purchase, any Firm International Shares unless all of the Firm U.S. Shares are
contemporaneously purchased by the U.S. Underwriters.
It is also understood and agreed to by all the parties that
the U.S. Underwriters have entered into an agreement with the Managers (the
"Agreement between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may (i) purchase from the Managers a portion of
the International Shares to be sold to the Managers pursuant to this Agreement
or (ii) sell to the Managers a portion of the U.S. Shares to be sold to the
U.S. Underwriters pursuant to the U.S. Underwriting Agreement. The Company
also understands that any such purchases and sales between the U.S.
Underwriters and the Managers shall be governed by the Agreement between U.S.
Underwriters and the Managers and shall not be governed by the terms of this
Agreement.
The U.S. Underwriters and the Managers are collectively
referred to herein as the "Underwriters," the Firm U.S. Shares and the Firm
International Shares are collectively referred to herein as the "Firm Shares,"
the U.S. Shares and the International Shares are collectively referred to
herein as the "Shares" and the Additional U.S. Shares and the Additional
International Shares are collectively referred to as the "Additional Shares."
1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the Managers that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-1 (No. 333-23287), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement" and the prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b) or
Rule 434 filing is required, is herein called the "International Prospectus".
The term "International preliminary prospectus" as used herein means a
preliminary prospectus as described in Rule 430 of the Regulations.
(b) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the International Prospectus is first filed
with the Commission pursuant to Rule 424(b) or Rule 434 of the Regulations,
when any supplement to or amendment of the International Prospectus is filed
with the Commission and the Additional Closing Date (as hereinafter
respectively defined), if any, the Registration Statement and the International
Prospectus
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and any amendments thereof and supplements thereto complied or will comply in
all material respects with the applicable provisions of the Act and the
Regulations and does not or will not contain an untrue statement of a material
fact and does not or will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of the
International Prospectus, in light of the circumstances under which they were
made, not misleading. When any related International preliminary prospectus
was first filed with the Commission (whether filed as part of the registration
statement for the registration of the Shares or any amendment thereto or
pursuant to Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such International
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein in light of the circumstances
under which they were made not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the International Prospectus
or any related International preliminary prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Manager through you
as herein stated expressly for use in connection with the preparation thereof.
If Rule 434 is used, the Company will comply with the requirements of Rule 434.
(c) Insofar as statements in the International
Prospectus purport to summarize the status of litigation or the provisions of
laws, rules, regulations, orders, judgments, decrees, contracts, agreements,
instruments, leases or licenses, such statements are correct in all material
respects.
(d) Coopers & Xxxxxxx L.L.P., who have certified the
financial statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Act and the
Regulations.
(e) Subsequent to the respective dates as of which
information is given in the Registration Statement and the International
Prospectus, except as set forth in the Registration Statement and the
International Prospectus, there has been no material adverse change or any
development involving a prospective material adverse change in the business,
prospects, properties, operations, condition (financial or other) or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the International Prospectus, the
Company has not incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company except for liabilities or
obligations which are reflected in the Registration Statement and the
International Prospectus.
(f) This Agreement and the transactions contemplated
herein have been duly and validly authorized by the Company and this Agreement
has been duly and validly executed and delivered by the Company and constitutes
the valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights generally and to
general equitable principles and, with respect to this Agreement, except as the
enforceability of rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public policy underlying
such laws.
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(g) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to, any agreement, instrument, franchise, license or
permit to which the Company is a party or by which the Company or its
properties or assets may be bound or (ii) violate or conflict with any
provision of the certificate of incorporation or by-laws of the Company or any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction over the
Company or its properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or its properties or assets is required for the
execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby, including the issuance, sale and delivery
of the International Shares to be issued, sold and delivered by the Company
hereunder, except the registration under the Act of the Shares and such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
International Shares by the Managers.
(h) All of the outstanding shares of Common Stock
are duly and validly authorized and issued, fully paid and nonassessable and
were not issued and are not now in violation of or subject to any preemptive
rights. The Firm International Shares and the Additional International Shares,
when issued, delivered and sold in accordance with this Agreement, will be duly
and validly issued and outstanding, fully paid and nonassessable, and will not
have been or were not issued in violation of or be subject to any preemptive
rights. The Company had, at March 31, 1997, an authorized and outstanding
capitalization as set forth in the Registration Statement and the International
Prospectus. The Common Stock and the Shares conform to the descriptions
thereof contained in the Registration Statement and the International
Prospectus.
(i) Assuming the exercise of the Managers'
over-allotment option, upon the issuance and delivery of the Additional
International Shares and payment therefor pursuant hereto, good and valid title
to such Additional International Shares, free and clear of all liens,
encumbrances, equities, claims, security interests, restrictions on transfer,
shareholders' agreements, voting trusts or other defects of title whatsoever,
will pass to the several Managers.
(j) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character
or location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the aggregate
have a material adverse effect on the Company. The Company has all requisite
power and authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses and permits of and from all
public, regulatory or governmental agencies and bodies, to own, lease and
operate its properties and conduct its business as now being conducted and as
described in the Registration Statement and the International Prospectus,
except where the failure to do so, will not, in the aggregate, have a material
adverse effect on the Company, and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a materially
burdensome restriction
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not adequately disclosed in the Registration Statement and the International
Prospectus. The Company has no subsidiaries.
(k) Except as described in the International
Prospectus, there is no litigation or governmental proceeding to which the
Company is a party or to which any property of the Company is subject or which
is pending or, to the knowledge of the Company, contemplated against the
Company which might result in any material adverse change or any development
involving a material adverse change in the business, prospects, properties,
operations, condition (financial or other) or, results of operations of the
Company or which is required to be disclosed in the Registration Statement and
the International Prospectus.
(l) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(m) The financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and
the International Prospectus present fairly the financial position of the
Company as of the dates indicated and the results of its operations for the
periods specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein.
(n) Except as described in the International
Prospectus, no holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the
International Shares contemplated hereby.
(o) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(p) To the Company's knowledge, neither the Company
nor any employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the International Prospectus.
(q) The Company has filed all tax returns required
to be filed, which returns are complete and correct in all material respects,
and the Company is not in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto.
(r) The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the
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33
regulations and published interpretations thereunder (the "Code"); each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification; and the there has been
no action threatened against the Company by the Pension Benefit Guaranty
Corporation to terminate any of the Company's pension plans.
(s) Except as described in the International
Prospectus, the Company owns or possesses adequate rights to use all material
patents, patent applications, patent rights, inventions, trade secrets,
know-how, proprietary techniques, including processes and substances,
trademarks, service marks, trademark registrations, service xxxx registrations,
trade names, copyrights and licenses described or referred to in the
International Prospectus or owned or used by it or which are necessary for the
conduct of its business as described in the International Prospectus. Except
as described in the International Prospectus, the Company has not received any
notice of, or is aware of, any infringement of or conflict with asserted rights
of others with respect to any patents, patent applications, patent rights,
inventions, trade secrets, know-how, proprietary techniques, including
processes and substances, trademarks, service marks, trademark registrations,
service xxxx registrations, trade names, copyrights or licenses which
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding might result in a material adverse change or development
involving a prospective material adverse change in the business, prospects,
properties, operations, condition (financial or other) or results of operations
of the Company.
(t) There are no contracts or other documents which
are required to be described in the International Prospectus or filed as
exhibits to the Registration Statement by the Act or by the Regulations which
have not been described in the International Prospectus or filed as exhibits to
the Registration Statement.
(u) The Shares have been and continue to be
designated for inclusion on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") National Market, and the Company is in
compliance with the maintenance and designation criteria applicable to Nasdaq
National Market issuers.
(v) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand, which is
required to be described in the International Prospectus which is not so
described.
(w) Since the date as of which information is given
in the International Prospectus through the date hereof, and except as may
otherwise be disclosed in the International Prospectus, the Company has not (i)
issued or granted any securities, (ii) entered into any transaction not in the
ordinary course of business or (iii) declared or paid any dividend on its
capital stock.
(x) Each of the Company's executive officers and
directors, as have been heretofore designated by you and listed on Schedule II
attached hereto, has entered into or is subject to a lock-up agreement (the
"Lock-Up Agreements") under which such stockholder has agreed not, directly or
indirectly, to offer or agree to sell, hypothecate, pledge or otherwise dispose
of any shares of Common Stock, options or warrants to acquire shares of Common
Stock (or securities exchangeable for, exercisable for or convertible into
Common Stock) owned by them for a period of 180 days after the date of the
International Prospectus, without the prior written consent of Bear, Xxxxxxx &
Co. Inc.; each Lock-Up Agreement constitutes the legal, valid and binding
obligations of the
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stockholder or stockholders party thereto enforceable against each such
stockholder in accordance with its terms.
2. Representations and Warranties of Medaphis. Medaphis
represents and warrants to, and agrees with, the Managers that:
(a) This Agreement and the transactions contemplated
herein have been duly and validly authorized by Medaphis and this Agreement has
been duly and validly executed and delivered by Medaphis and constitutes the
valid and binding agreement of Medaphis, enforceable against Medaphis in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights generally and to
general equitable principles and, with respect to this Agreement, except as the
enforceability of rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public policy underlying
such laws.
(b) Immediately prior to the closing of the offering
contemplated hereby, Medaphis will have good and valid title to the Firm
International Shares to be sold by it hereunder on such date, free and clear of
all liens, encumbrances, equities, claims, security interests, restrictions on
transfer, shareholders' agreements, voting trusts or other defects of title
whatsoever; and upon delivery of such Firm International Shares and payment
therefor pursuant hereto, good and valid title to such Firm International
Shares, free and clear of all liens, encumbrances, equities, claims, security
interests, restrictions on transfer, shareholders' agreements, voting trusts or
other defects of title whatsoever, will pass to the several Managers.
(c) Medaphis has full right, power and authority to
enter into this Agreement; the execution, delivery and performance of this
Agreement by Medaphis and the consummation by it of the transactions
contemplated hereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Medaphis is a party or by which Medaphis is bound or to
which any of its property or assets is subject, nor will such actions result in
any violation of the provisions of the constituent documents of Medaphis, if
any, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its property or
assets; and, except for the registration of the International Shares under the
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and distribution of the International Shares by
the Managers, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by Medaphis and
the consummation by it of the transactions contemplated hereby.
(d) Medaphis is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(e) To the extent that any statements or omissions
made in the Registration Statement, the International preliminary prospectus,
the International Prospectus or any amendment or supplement thereto are made in
reliance upon and in conformity with written information furnished to the
Company by Medaphis specifically for use therein, (i) the Registration
Statement and any amendments or supplements thereto will not, when they become
effective or are filed with the Commission, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact
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35
required to be stated therein or necessary to make the statements therein not
misleading and (ii) the International preliminary prospectus, the International
Prospectus and any amendments or supplements thereto will not, when each
registration statement of which they are a part becomes effective or is filed
with the Commission, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; and Medaphis has no actual knowledge of facts which
lead it to believe that the Registration Statement, the International
preliminary prospectus, the International Prospectus or any amendments or
supplements thereto will, when they become effective or are filed with the
Commission, as the case may be, contain any untrue statement of any other
material fact or omit to state any other material fact required to be stated
therein or necessary to make the statements therein not misleading.
(f) Medaphis has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
3. Purchase, Sale and Delivery of the International Shares.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, Medaphis agrees to sell to the Managers and the
Managers, severally and not jointly, agree to purchase from Medaphis, at a
purchase price per share of $_______, the number of Firm International Shares
set forth opposite the respective names of the Managers in Schedule I hereto
plus any additional number of International Shares which such Manager may
become obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) Payment of the purchase price for, and delivery
of certificates for, the International Shares shall be made at the office of
Xxxxxxx Xxxxxxx & Xxxxxxxx, 425 Lexington Avenue, New York, New York, or at
such other place as shall be agreed upon by you and Medaphis, at 10:00 A.M. on
the third or fourth business day (as permitted under Rule 15c6-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (unless
postponed in accordance with the provisions of Section 11 hereof) following the
date of the effectiveness of the Registration Statement (or, if the Company has
elected to rely upon Rule 430A of the Regulations, the third or fourth business
day (as permitted under Rule 15c6-1 under the Exchange Act) after the
determination of the initial public offering price of the International
Shares), or such other time not later than ten business days after such date as
shall be agreed upon by you and Medaphis (such time and date of payment and
delivery being herein called the "Closing Date"). Payment shall be made to
Medaphis by wire transfer in same day funds, against delivery to you for the
respective accounts of the Managers of certificates for the International
Shares to be purchased by them. Certificates for the International Shares
shall be registered in such name or names and in such authorized denominations
as you may request in writing at least two full business days prior to the
Closing Date. Medaphis will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the
Managers the option to purchase up to 294,000 Additional International Shares
at the same purchase price per share to be paid by the Managers to Medaphis for
the Firm International Shares as set forth in this Section 3, for the sole
purpose of covering over-allotments in the sale of Firm International Shares by
the Managers. This option may be exercised at any time, in whole or in part,
on or before the thirtieth day following the date of the International
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36
Prospectus, by written notice by you to the Company. Such notice shall set
forth the aggregate number of Additional International Shares as to which the
option is being exercised and the date and time, as reasonably determined by
you, when the Additional Shares are to be delivered (such date and time being
herein sometimes referred to as the "Additional Closing Date"); provided,
however, that the Additional Closing Date shall not be earlier than the Closing
Date or earlier than the second full business day after the date on which the
option shall have been exercised nor later than the eighth full business day
after the date on which the option shall have been exercised (unless such time
and date are postponed in accordance with the provisions of Section 11 hereof).
Certificates for the Additional International Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional International Shares to be sold to
each Manager shall be the number which bears the same ratio to the aggregate
number of Additional International Shares being purchased as the number of Firm
International Shares set forth opposite the name of such Manager in Schedule I
hereto (or such number increased as set forth in Section 11 hereof) bears to
1,196,000 shares, subject, however, to such adjustments to eliminate any
fractional shares as you in your sole discretion shall make.
Payment for the Additional International Shares shall be made
by wire transfer in same day funds at the offices of [Bear, Xxxxxxx & Co. Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000], or such other location as may be
mutually acceptable, upon delivery of the certificates for the Additional
International Shares to you for the respective accounts of the Managers.
4. Offering. Upon your authorization of the release of the
Firm International Shares, the Managers propose to offer the International
Shares for sale to the public upon the terms set forth in the International
Prospectus.
5. Covenants of the Company. The Company covenants and
agrees with the Managers that:
(a) If the Registration Statement has not yet been
declared effective the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly as possible, and if Rule 430A is used or the filing of the
International Prospectus is otherwise required under Rule 424(b) or Rule 434,
the Company will file the International Prospectus (properly completed if Rule
430A has been used) pursuant to Rule 424(b) or Rule 434 within the prescribed
time period and will provide evidence satisfactory to you of such timely
filing. If the Company elects to rely on Rule 434, the Company will prepare
and file a term sheet that complies with the requirements of Rule 434.
(b) The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) (i) when the
Registration Statement and any amendments thereto become effective, (ii) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the International Prospectus or for any additional
information, (iii) of the mailing or the delivery to the Commission for filing
of any amendment of or supplement to the Registration Statement or the
International Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the
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37
receipt of any comments from the Commission, and (vi) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the International Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if
issued, to obtain the lifting of such order as soon as possible. The Company
will not file any amendment to the Registration Statement or any amendment of
or supplement to the International Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(c) If at any time when a prospectus relating to the
International Shares is required to be delivered under the Act any event shall
have occurred as a result of which the International Prospectus as then amended
or supplemented would, in the judgment of the Managers or the Company 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 shall be necessary at any time to amend or supplement the International
Prospectus or Registration Statement to comply with the Act or the Regulations,
the Company will notify you promptly and prepare and file with the Commission
an appropriate amendment or supplement (in form and substance satisfactory to
you) which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(d) The Company will promptly deliver to you such
reasonable number of signed copies of the Registration Statement, including
exhibits and all amendments thereto, and the Company will promptly deliver to
each of the Managers such number of copies of any International preliminary
prospectus, the International Prospectus, the Registration Statement and all
amendments of and supplements to such documents, if any, as you may reasonably
request.
(e) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the International Shares for offering and
sale under the securities laws relating to the offering or sale of the
International Shares of such jurisdictions as you may designate and to maintain
such qualification in effect for so long as required for the distribution
thereof; except that in no event shall the Company be obligated in connection
therewith to qualify as a foreign corporation or to execute a general consent
to service of process.
(f) The Company will make generally available
(within the meaning of Section 11(a) of the Act) to its security holders and to
you as soon as practicable, but not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying with the
provisions of Rule 158 of the Regulations) covering a period of at least twelve
consecutive months beginning after the effective date of the Registration
Statement.
(g) During the period of 180 days from the date of
the International Prospectus, the Company will not, without your prior written
consent, issue, sell, offer or agree to sell, grant any option for the sale of,
or otherwise dispose of, directly or indirectly, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common Stock),
other than (i) the Company's sale of Additional
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International Shares hereunder and the Company's sale of Additional U.S. Shares
under the U.S. Underwriting Agreement and (ii) the Company's issuance of Common
Stock and stock options pursuant to the (a) Healthcare Recoveries, Inc. Non-
Qualified Stock Option Plan of Eligible Employees, (b) Healthcare Recoveries,
Inc. Directors' Stock Option Plan or (c) the Divestiture Bonus Agreement.
(h) During a period of three years from the
effective date of the Registration Statement, the Company will furnish to you
copies of (i) all reports to its shareholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(i) The Company will apply the proceeds received by
it, if any, from the sale of the Shares as set forth under "Use of Proceeds" in
the International Prospectus.
(j) The Company will use its best efforts to cause
the Shares to be listed for inclusion on the Nasdaq National Market.
6. Covenants of Medaphis. Medaphis covenants and agrees with
the Managers that:
(a) If at any time when a prospectus relating to the
International Shares is required to be delivered under the Act any information
which Medaphis has provided to the Company or the Managers becomes incorrect,
or if it shall be necessary at any time to amend or supplement any information
provided by Medaphis to the Company for inclusion in the International
preliminary prospectus, International Prospectus or Registration Statement to
comply with the Act or the Regulations, Medaphis will notify the Company and
the Managers promptly so that the Company may prepare and file with the
Commission an appropriate amendment or supplement (in form and substance
satisfactory to the Managers) which will correct such statement or omission.
(b) Medaphis will deliver to the Lead Managers prior
to the Closing Date a properly completed and executed United States Treasury
Department Form W-9.
7. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
Medaphis hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company and Medaphis hereunder,
including, without limitation, those in connection with (i) preparing,
printing, duplicating, filing and distributing the Registration Statement, as
originally filed and all amendments thereof (including all exhibits thereto),
any International preliminary prospectus, the International Prospectus and any
amendments or supplements thereto, the underwriting documents (including this
Agreement, the U.S. Underwriting Agreement, the Master Agreement Among
Underwriters and the Supplement to Master Agreement Among Underwriters, the
Master Selling Agreement, the Agreement between U.S. Underwriters and Managers
and the Agreement Among Managers) and all other documents related to the public
offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated) (in each case, including, without limitation,
fees and expenses of the Company's accountants and counsel, but not
Underwriters' Counsel (as defined below)), (ii) the issuance, transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the qualification of the Shares under state or
foreign securities or Blue Sky laws, including the costs of printing and
mailing a preliminary and final "Blue Sky Survey" and the fees of counsel for
the Underwriters and such counsel's disbursements in relation thereto, (iv)
quotation of the Shares on the Nasdaq National Market, (v) filing fees of the
Commission
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and the National Association of Securities Dealers, Inc. (the "NASD"), (vi) the
cost of printing certificates representing the Shares, (vii) the cost and
charges of any transfer agent or registrar and (viii) travel and lodging
expenses of employees of the Company who participate in the advertising and
marketing of the Shares.
8. Conditions of Managers' Obligations. The obligations of
the Managers to purchase and pay for the Firm International Shares and the
Additional International Shares, as provided herein, shall be subject to the
accuracy of the representations and warranties of the Company and Medaphis
herein contained, as of the date hereof and as of the Closing Date (for
purposes of this Section 8 "Closing Date" shall refer to the Closing Date for
the Firm International Shares and any Additional Closing Date, if different,
for the Additional International Shares), to the absence from any certificates,
opinions, written statements or letters furnished to you or to Xxxxxxx Xxxxxxx
& Xxxxxxxx ("Underwriters' Counsel") pursuant to this Section 8 of any
misstatement or omission, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented to in
writing by you; if the Company shall have elected to rely upon Rule 430A or
Rule 434 of the Regulations, the International Prospectus shall have been filed
with the Commission in a timely fashion in accordance with Section 5(a) hereof;
and, at or prior to the Closing Date no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof shall
have been issued and no proceedings therefor shall have been initiated or
threatened by the Commission.
(b) At the Closing Date you shall have received the
opinion of King & Spalding, counsel for the Company, dated the Closing Date
addressed to the Managers and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. The Company is duly qualified and
in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a material
adverse effect on the Company. The Company has all requisite
corporate authority to own, lease and license its respective
properties and conduct its business as now being conducted and as
described in the Registration Statement and the International
Prospectus.
(ii) The Company has an authorized capital stock
as set forth in the Registration Statement and the International
Prospectus. All of the outstanding shares of Common Stock are duly
and validly authorized and issued, are fully paid and nonassessable
and were not issued in violation of or subject to any preemptive
rights. The International Shares to be delivered on the Closing Date
have been duly and validly authorized and, each of (A) the Firm
International Shares, when delivered by Medaphis in accordance with
this Agreement, and (B) the Additional International Shares, when
delivered by the Company in accordance with this Agreement, will be
duly and validly issued, fully paid and nonassessable and will not
have been issued in violation of or subject to any preemptive rights.
The Common Stock and the International Shares conform to the
descriptions thereof contained in the Registration Statement and the
International Prospectus.
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(iii) Assuming the exercise of the Underwriters'
over-allotment option, upon the issuance and delivery of the
Additional International Shares and payment therefor pursuant hereto,
good and valid title to such Additional International Shares, free and
clear of all liens, encumbrances, equities, claims, security
interests, restrictions on transfer, shareholders' agreements, voting
trusts or other defects of title whatsoever, will pass to the several
Managers.
(iv) The International Shares to be sold under
this Agreement to the Managers are duly authorized for quotation on
the Nasdaq National Market.
(v) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(vi) Assuming due execution and delivery by the
Lead Managers of this Agreement, this Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that enforceability may
be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors
generally and by general equitable principles and, except as the
enforceability of rights to indemnity and contribution under this
Agreement may be limited under applicable securities laws or the
public policy underlying such laws.
(vii) There is no litigation or governmental or
other action, suit, proceeding or investigation before any court or
before or by any public, regulatory or governmental agency or body
pending or to the best of such counsel's knowledge threatened against,
or involving the properties or business of, the Company, which is of a
character required to be disclosed in the Registration Statement and
the International Prospectus which has not been properly disclosed
therein.
(viii) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby by the Company do not and will not (A) conflict with or result
in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any agreement, instrument,
franchise, license or permit known to such counsel to which the
Company is a party or by which its properties or assets may be bound
or (B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company, or, to the best knowledge of
such counsel, any judgment, decree, order, statute, rule or regulation
of any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or its properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over
the Company or its properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (1) such as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Managers (as to
which such counsel need express no opinion) and (2) such as have been
made or obtained under the Act.
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(ix) The Registration Statement and the
International Prospectus and any amendments thereof or supplements
thereto (other than the financial statements and schedules and other
financial data included therein, as to which no opinion need be
rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
(x) The Registration Statement is effective
under the Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) of the Regulations
have been made.
(xi) In addition, such opinion shall also
contain a statement that such counsel has participated in conferences
with officers and representatives of the Company, representatives of
the independent public accountants for the Company and the
Underwriters at which the contents of the International Prospectus and
related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to believe
that either the Registration Statement at the time it became effective
(including the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A(b) or
Rule 434, if applicable), or any amendment thereof made prior to the
Closing Date as of the date of such amendment, contained an untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the International Prospectus as of its
date (or any amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement) and as of
the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and
other financial data included therein or with respect to the matters
set forth under the heading "Notice to Canadian Residents").
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and certificates or other written statements of officers of departments
of various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and other public officials (including
oral statements of representatives of the Commission and correspondence and
oral statements of representatives of the Nasdaq National Market), provided
that copies of any such written statements or certificates shall be delivered
to Underwriters' Counsel. The opinion of such counsel for the Company shall
state that the opinion of any such other counsel is in form satisfactory to
such counsel and, in their opinion, you and they are justified in relying
thereon.
(c) At the Closing Date you shall have received the
opinion of King & Spalding, counsel for Medaphis, dated the Closing Date
addressed to the Managers and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
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(i) This Agreement has been duly and validly
authorized, executed and delivered by Medaphis.
(ii) Assuming the due execution and delivery by
the Lead Managers of this Agreement, this Agreement constitutes the
legal, valid and binding obligation of Medaphis, enforceable against
Medaphis in accordance with its terms, except that enforceability may
be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors
generally and by general equitable principles and, except as the
enforceability of rights to indemnity and contribution under this
Agreement may be limited under applicable securities laws or the
public policy underlying such laws.
(iii) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby by Medaphis do not and will not (A) conflict with or result in
a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of Medaphis pursuant to, any agreement, instrument, franchise,
license or permit known to such counsel to which it is a party or by
which its properties or assets may be bound or (B) violate or conflict
with any provision of the certificate of incorporation or by-laws of
Medaphis, or, to the best knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over
Medaphis or its properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental, or regulatory
agency or body having jurisdiction over Medaphis or its properties or
assets is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the Managers (as to which such counsel need express no
opinion) and (2) such as have been made or obtained under the Act.
(iv) The Firm International Shares, when
delivered by Medaphis in accordance with this Agreement, will be fully
paid and nonassessable and will not have been issued in violation of
or subject to any preemptive rights.
(v) Immediately prior to the closing of the
offering contemplated hereby, Medaphis will have good and valid title
to the Firm International Shares to be sold by it hereunder on such
date, free and clear of all liens, encumbrances, equities, claims,
security interests, restrictions on transfer, shareholders'
agreements, voting trusts or other defects of title whatsoever; and
upon delivery of such Firm International Shares and payment therefor
pursuant hereto, good and valid title to such Firm International
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Managers.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable
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to Underwriters' Counsel, familiar with the applicable laws; and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of Medaphis and certificates or other written statements of officers
of departments of various jurisdictions having custody of documents respecting
the corporate existence or good standing of Medaphis, provided that copies of
any such statements or certificates shall be delivered to Underwriters'
Counsel. The opinion of such counsel for Medaphis shall state that the opinion
of any such other counsel is in form satisfactory to such counsel and, in their
opinion, you and they are justified in relying thereon.
(d) All proceedings taken in connection with the
sale of the Firm International Shares and the Additional International Shares
as herein contemplated shall be satisfactory in form and substance to you and
to Underwriters' Counsel, and the Managers shall have received from said
Underwriters' Counsel a favorable opinion, dated as of the Closing Date with
respect to the issuance and sale of the International Shares, the Registration
Statement and the International Prospectus and such other related matters as
you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date to the effect that (i) the condition set forth
in subsection (a) of this Section 8 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the
International Prospectus, the Company has not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a material
adverse change, in the business prospects, properties, operations, condition
(financial or otherwise), or results of operations of the Company, except in
each case as described in or contemplated by the International Prospectus.
(f) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Medaphis, dated the Closing Date to the effect that (i) as of the date hereof
and as of the Closing Date the representations and warranties of Medaphis set
forth in Section 2 hereof are accurate and (ii) as of the Closing Date the
obligations of Medaphis to be performed hereunder on or prior thereto have been
duly performed.
(g) At the time this Agreement is executed and at
the Closing Date, you shall have received a letter, from Coopers & Xxxxxxx
L.L.P., independent public accountants for the Company, dated, respectively, as
of the date of this Agreement and as of the Closing Date addressed to the
Managers and in form and substance satisfactory to you, to the effect that: (i)
they are independent certified public accountants with respect to the Company
within the meaning of the Act and the Regulations and stating that the answer
to Item 10 of the Registration Statement is correct insofar as it relates to
them; (ii) stating that, in their opinion, the financial statements and
schedules of the Company included in the Registration Statement and the
International Prospectus and covered by their opinion therein comply as to form
in all material respects with the applicable accounting requirements of the Act
and the applicable published rules and regulations of the Commission
thereunder; (iii) on the basis of procedures consisting of a reading of the
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latest available unaudited interim financial statements of the Company, a
reading of the minutes of meetings and consents of the shareholders and board
of directors of the Company and the committees of such board subsequent to
December 31, 1996, inquiries of officers and other employees of the Company who
have responsibility for financial and accounting matters of the Company with
respect to transactions and events subsequent to December 31, 1996 and other
specified procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that would cause
them to believe that: (A) the unaudited financial statements and schedules of
the Company presented in the Registration Statement and the International
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable published
rules and regulations of the Commission thereunder or that such unaudited
financial statements are not fairly presented in conformity with generally
accepted accounting principles; (B) with respect to the period subsequent to
December 31, 1996, there were, as of the date of the most recent available
monthly financial statements of the Company, if any, and as of a specified date
not more than five days prior to the date of such letter, any changes in the
capital stock or long-term indebtedness of the Company or any decrease in the
net current assets or stockholders' equity of the Company, in each case as
compared with the amounts shown in the most recent balance sheet presented in
the Registration Statement and the International Prospectus, except for changes
or decreases which the Registration Statement and the International Prospectus
disclose have occurred or may occur or which are set forth in such letter or
(C) that during the period from December 31, 1996 to the date of the most
recent available monthly financial statements of the Company, and to a
specified date not more than five days prior to the date of such letter, there
was any decrease, as compared with the corresponding period in the prior fiscal
year, in total revenues, or total or per share net income, except for decreases
which the Registration Statement and the International Prospectus disclose have
occurred or may occur or which are set forth in such letter; and (iv) stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, and other financial information pertaining to the
Company set forth in the Registration Statement and the International
Prospectus, which have been specified by you prior to the date of this
Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records of
the Company or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries, and other
appropriate procedures specified by you set forth in such letter, and found
them to be in agreement.
(h) At the Closing Date, you shall have received
from each person who is a director or officer of the Company and each
stockholder listed named in Schedule II hereto, an agreement, or each such
person shall be subject to an agreement, to the effect that such person will
not, directly or indirectly, without the prior written consent of Bear, Xxxxxxx
& Co. Inc., offer, sell, offer or agree to sell, grant any option to purchase
or otherwise dispose (or announce any offer, sale, grant of an option to
purchase or other disposition) of any shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable or exercisable for shares of
Common Stock) for a period of 180 days after the date of the Prospectus.
(i) Prior to the Closing Date the Company shall have
furnished to you such further information, certificates and documents as you
may reasonably request.
(j) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
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(k) The NASD, upon review of the terms of the
underwriting arrangements for the public offering of the Shares, shall have
raised no objections thereto.
If any of the conditions specified in this Section 8 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 8 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Managers hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Managers to purchase the Additional International Shares may
be cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone, telex or telegraph, confirmed in writing.
9. Indemnification.
(a) Each of the Company and Medaphis agrees to
indemnify, jointly and severally, and hold harmless each Manager and each
person, if any, who controls any Manager within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for
the registration of the Shares, as originally filed or any amendment thereof or
in any supplement thereto or amendment thereof, 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
or (ii) any untrue statement or alleged untrue statement of a material fact, in
light of the circumstances under which they were made, contained in any related
International preliminary prospectus or the International Prospectus, or in any
supplement thereto or amendment thereof, 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, in light of the
circumstances in which they were made, not misleading; provided, however,
neither the Company nor Medaphis will be liable in any such case to the extent
but only to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company or Medaphis, as
the case may be, by or on behalf of any Manager through you expressly for use
therein. This indemnity agreement will be in addition to any liability which
the Company or Medaphis may otherwise have including under this Agreement. The
foregoing indemnity agreement with respect to any International preliminary
prospectus shall not inure to the benefit of any Manager from whom the person
asserting any such losses, claims, damages or liabilities purchased Shares (or
any person who controls such Manager within the meaning of Section 15 of the
Act) if a copy of the International Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) was
not sent or given by or on behalf of such Manager to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Shares to such person and if the International Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
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(b) Each Manager severally, and not jointly, agrees
to indemnify and hold harmless the Company and Medaphis, each of the directors
of the Company and Medaphis, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company or Medaphis within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof or in any amendment
thereof 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 or (ii) any
untrue statement or alleged untrue statement of a material fact, in light of
the circumstances in which they were made, contained in any related
International preliminary prospectus or the International Prospectus, or in any
supplement thereto or amendment thereof, 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, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Manager through you expressly for use therein; provided, however,
that in no case shall any Manager be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Manager hereunder. This indemnity will be in addition to any liability which
any Manager may otherwise have including under this Agreement. The Company and
Medaphis each acknowledge that the statements set forth in the last paragraph
of the cover page and in the paragraphs four, six, seven, eight and ten under
the caption "Underwriting" in the International Prospectus constitute the only
information furnished in writing by or on behalf of any Manager expressly for
use in the registration statement relating to the Shares as originally filed or
in any amendment thereof, any related International preliminary prospectus or
the International Prospectus or in any amendment thereof or supplement thereto,
as the case may be.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the commencement thereof
(but the failure so to notify an indemnifying party shall not relieve it from
any liability which it may have under this Section 9). 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 therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof with counsel satisfactory
to such indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the
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defense of such action, (ii) the indemnifying parties shall not have employed
counsel to have charge of the defense of such action within a reasonable time
after notice of commencement of the action, or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
10. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 9 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company,
Medaphis and the Managers shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company or Medaphis any contribution received by the Company or Medaphis, as
the case may be, from persons, other than the Managers, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company, Medaphis and one or more of the Managers may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and Medaphis, on the one hand, and the Managers, on the
other hand, from the offering of the International Shares or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 9 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and Medaphis, on the one hand, and the Managers, on the other hand,
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
Medaphis, on the one hand, and the Managers, on the other hand, shall be deemed
to be in the same proportion as (x) the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Company and Medaphis and (y) the underwriting discounts and
commissions received by the Managers, respectively, in each case as set forth
in the table on the cover page of the International Prospectus. The relative
fault of the Company and Medaphis, on the one hand, and of the Managers, on the
other hand, 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 or the Managers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Managers agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation (even if the Managers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 10, (i) in no case shall any Manager be liable or responsible
for any amount in excess of the underwriting discount applicable to the
International Shares purchased by such Manager hereunder, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of
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Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 10 and the preceding sentence, no Manager shall be
required to contribute any amount in excess of the amount by which the total
price at which the International Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Manager has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this
Section 10, each person, if any, who controls a Manager within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as such Manager, and each person, if any, who controls
the Company or Medaphis within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company and Medaphis who shall
have signed the Registration Statement and each director of the Company and
Medaphis shall have the same rights to contribution as the Company and
Medaphis, as the case may be, subject in each case to clauses (i) and (ii) of
this Section 10. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 10 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
11. Default by Manager.
(a) If any Manager or Managers shall default in its
or their obligation to purchase Firm International Shares or Additional
International Shares hereunder, and if the Firm International Shares or
Additional International Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm
International Shares or Additional International Shares, such Firm
International Shares or Additional International Shares, as the case may be, to
which the default relates shall be purchased by the non-defaulting Managers in
proportion to the respective proportions which the numbers of Firm
International Shares set forth opposite their respective names in Schedule I
hereto bear to the aggregate number of Firm International Shares set forth
opposite the names of the non-defaulting Managers.
(b) In the event that such default relates to more
than 10% of the Firm International Shares or Additional International Shares,
as the case may be, you may in your discretion arrange for yourself or for
another party or parties (including any non-defaulting Manager or Managers who
so agree) to purchase such Firm International Shares or Additional
International Shares, as the case may be, to which such default relates on the
terms contained herein. In the event that within five calendar days after such
a default you do not arrange for the purchase of the Firm International Shares
or Additional International Shares, as the case may be, to which such default
relates as provided in this Section 11, this Agreement or, in the case of a
default with respect to the Additional International Shares, the obligations of
the Managers to purchase and of the Company to sell the Additional
International Shares shall thereupon terminate, without liability on the part
of the Company with respect thereto (except in each case as provided in
Sections 7, 9(a) and 10 hereof) or the Managers, but nothing in this Agreement
shall relieve a defaulting Manager or Managers of its or their liability, if
any, to the other Managers and the Company and Medaphis for damages occasioned
by its or their default hereunder.
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(c) In the event that the Firm International Shares
or Additional International Shares to which the default relates are to be
purchased by the non-defaulting Managers, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or Additional Closing Date, as the case may be, for a
period, not exceeding five business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the
International Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the International Prospectus which, in the opinion of
Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Manager" as used in this Agreement shall include any party substituted under
this Section 11 with like effect as if it had originally been a party to this
Agreement with respect to such Firm International Shares and Additional
International Shares.
12. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Managers, the
Company and Medaphis contained in this Agreement, including the agreements
contained in Section 7, the indemnity agreements contained in Section 9 and the
contribution agreements contained in Section 10, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Manager or any controlling person thereof or by or on behalf of the
Company, any of its officers and directors or any controlling person thereof,
and shall survive delivery of and payment for the International Shares to and
by the Managers. The representations contained in Sections 1 and 2, and the
agreements contained in Sections 7, 9, 10 and 13(d) hereof shall survive the
termination of this Agreement, including termination pursuant to Section 11 or
13 hereof.
13. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the
later of when (i) you, the Company and Medaphis shall have received
notification of the effectiveness of the Registration Statement or (ii) the
execution of this Agreement. If either the initial public offering price or
the purchase price per Share has not been agreed upon prior to 5:00 P.M., New
York time, on the fifteenth full business day after the Registration Statement
shall have become effective, this Agreement shall thereupon terminate without
liability to the Company, Medaphis or the Managers except as herein expressly
provided. Until this Agreement becomes effective as aforesaid, it may be
terminated by the Company by notifying you or by you notifying the Company.
Notwithstanding the foregoing, the provisions of this Section 13 and of
Sections 1, 2, 6, 7, 8 and 9 hereof shall at all times be in full force and
effect.
(b) You shall have the right to terminate this
Agreement at any time prior to the Closing Date or the obligations of the
Managers to purchase the Additional International Shares at any time prior to
the Additional Closing Date, as the case may be, if (A) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; or (B) if trading on the Nasdaq
National Market or the New York or American Stock Exchanges shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the
Nasdaq National Market by the NASD or on the New York or American Stock
Exchanges by the New York or American Stock Exchanges or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
International Shares or the Additional International Shares, as the case may
be, shall
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have become effective; or (D)(i) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United
States or there is a declaration of a national emergency or war by the United
States or (ii) if there shall have been such change in political, financial or
economic conditions if the effect of any such event in (i) or (ii) as in your
judgment makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm International Shares or the Additional
International Shares, as the case may be, on the terms contemplated by the
International Prospectus.
(c) Any notice of termination pursuant to this
Section 13 shall be by telephone, telex, or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant
to any of the provisions hereof (otherwise than pursuant to (i) notification by
you as provided in Section 13(a) hereof or (ii) Section 11(b) or 13(b) hereof),
or if the sale of the International Shares provided for herein is not
consummated because any condition to the obligations of the Managers set forth
herein is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by you, reimburse the
Managers for all out-of-pocket expenses (including the fees and expenses of
their counsel), incurred by the Managers in connection herewith.
14. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Manager, shall be mailed, delivered, or telexed or telegraphed and confirmed in
writing, to such Manager c/o Bear, Xxxxxxx International Limited, One Canada
Square, Xxxxxx X00 0XX, Xxxxxxx, Attention: Corporate Finance Dept. (and a copy
thereof shall be sent in the same manner to Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, X.X. 00000, Attention: Gal Israely, and to Underwriters'
Counsel, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X.
Xxxxxxx, Esq.); if sent to the Company, shall be mailed, delivered, or
telegraphed and confirmed in writing to the Company, 0000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. XxXxxxxx, Chairman and Chief
Executive Officer (and a copy thereof shall be sent in the same manner to King
& Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000, Attention:
Xxxxxx X. Xxxxxx, Esq.); if sent to Medaphis, shall be mailed, delivered, or
telegraphed and confirmed in writing to Medaphis, 0000 Xxxxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. XxXxxxxx (and a copy
thereof shall be sent in the same manner to King & Spalding, 000 Xxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000, Attention: Xxxxxx X. Xxxxxx, Esq.).
15. Parties. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the Managers, the Company and Medaphis
and the controlling persons, directors, officers, employees and agents referred
to in Sections 9 and 10, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of International Shares from any
of the Managers.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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If the foregoing correctly sets forth the understanding
between you, the Company and Medaphis, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
HEALTHCARE RECOVERIES, INC.
By
------------------------
Name:
Title:
MEDAPHIS CORPORATION
By
------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
THE XXXXXXXX-XXXXXXXX COMPANY INC.
By: BEAR, XXXXXXX INTERNATIONAL LIMITED
By:
----------------------------------
Name:
Title:
On behalf of themselves and the other
Managers named in Schedule I hereto.
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SCHEDULE I
Number of Firm International
Name of Manager Shares to be Purchased
--------------- ----------------------
Bear, Xxxxxxx International Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
The Xxxxxxxx-Xxxxxxxx Company Inc.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,960,000
=========
53
SCHEDULE II
Directors and Executive Officers subject to a Lock-Up Agreement
Xxxxxxx X. XxXxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxxx
