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6,400,000 SHARES(1)
PROMEDCO MANAGEMENT COMPANY
COMMON STOCK
PURCHASE AGREEMENT
May ___, 1998
XXXXX XXXXXXX INC.
BEAR, XXXXXXX & CO., INC.
XXXXX & COMPANY
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Gentlemen:
ProMedCo Management Company, a Delaware corporation (the "Company"),
and H. Xxxxx Xxxxx (the "Selling Stockholder") propose to sell to the several
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
6,000,000 shares and 400,000 shares, respectively (the "Firm Shares"), of
Common Stock, $0.01 par value per share (the "Common Stock"), of the Company.
The Firm Shares consist of 6,000,000 authorized but unissued shares of Common
Stock to be issued and sold by the Company and 400,000 shares of Common Stock
to be sold by the Selling Stockholder. The Company has also granted to the
several Underwriters an option to purchase up to 960,000 additional shares of
Common Stock on the terms and for the purposes set forth in Section 3 hereof
(the "Option Shares"). The Firm Shares and any Option Shares purchased
pursuant to this Purchase Agreement are herein collectively called the
"Securities."
The Company and the Selling Stockholder hereby confirm their agreement
with respect to the sale of the Securities to the several Underwriters, for
whom you are acting as Representatives (the "Representatives").
1. Registration Statement and Prospectus. A registration statement on
Form S-3 (File No. _________) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933 (the "Act") and the rules
and regulations ("Rules and Regulations") of the Securities and Exchange
-------------------------
(1) Plus an option to purchase up to 960,000 additional shares to cover
over-allotments.
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Commission (the "Commission") thereunder and has been filed with the
Commission; one or more amendments to such registration statement have also
been so prepared and have been, or will be, so filed; and, if the Company has
elected to rely upon Rule 462(b) of the Rules and Regulations to increase the
size of the offering registered under the Act, the Company will prepare and
file with the Commission a registration statement with respect to such increase
pursuant to Rule 462(b). Copies of such registration statement(s) and
amendments and each related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to
the registration statement and an amended prospectus (including a term sheet
meeting the requirements of Rule 434 of the Rules and Regulations). If the
Company has elected to rely upon Rule 430A of the Rules and Regulations, it
will prepare and file a prospectus (or a term sheet meeting the requirements of
Rule 434) pursuant to Rule 424(b) that discloses the information previously
omitted from the prospectus in reliance upon Rule 430A. Such registration
statement as amended at the time it is or was declared effective by the
Commission, and, in the event of any amendment thereto after the effective date
and prior to the First Closing Date (as hereinafter defined), such registration
statement as so amended (but only from and after the effectiveness of such
amendment), including a registration statement (if any) filed pursuant to Rule
462(b) of the Rules and Regulations increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rules 430A(b)
and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement." The prospectus included in the Registration
Statement at the time it is or was declared effective by the Commission is
hereinafter called the "Prospectus," except that if any prospectus (including
any term sheet meeting the requirements of Rule 434 of the Rules and
Regulations provided by the Company for use with a prospectus subject to
completion within the meaning of Rule 434 in order to meet the requirements of
Section 10(a) of the Rules and Regulations) filed by the Company with the
Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the Rules
and Regulations or any other such prospectus provided to the Underwriters by
the Company for use in connection with the offering of the Securities (whether
or not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations) from
and after the time such prospectus is filed with the Commission or transmitted
to the Commission for filing pursuant to such Rule 424(b) (and Rule 434, if
applicable) or from and after the time it is first provided to the Underwriters
by the Company for such use. The term "Preliminary Prospectus" as used herein
means any preliminary prospectus included in the Registration Statement prior
to the time it becomes or became effective under the Act and any prospectus
subject to completion as described in Rule 430A or Rule 434 of the Rules and
Regulations.
Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of the Registration Statement, such
Preliminary Prospectus or the
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Prospectus, as the case may be, and any reference to any amendment or
supplement to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
such date under the Securities Exchange Act of 1934 (the "Exchange Act") which,
upon filing, are incorporated by reference therein, as required by paragraph
(b) of Item 12 of Form S-3. As used herein, the term "Incorporated Documents"
means the documents which at the time are incorporated by reference in the
Registration Statement, any Preliminary Prospectus or the Prospectus, as the
case may be, or any amendment or supplement thereto.
2. Representations and Warranties of the Company and the Selling
Stockholder.
(a) The Company and the Selling Stockholder jointly and severally
represent and warrant to, and agree with, the several Underwriters as
follows:
(i) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and no
proceedings for such purpose are pending before or, to the
Company's knowledge, threatened by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, did not
contain an untrue statement of a material fact or omit to state a
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; except that the foregoing
shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by you, or by any Underwriter
through you, specifically for use in the preparation thereof.
(ii) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act.
As of the time the Registration Statement (or any post-effective
amendment thereto, including a registration statement (if any)
filed pursuant to Rule 462(b) of the Rules and Regulations
increasing the size of the offering registered under the Act) is
or was declared effective by the Commission, upon the filing or
first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus (including any term sheet meeting the
requirements of Rule 434 of the Rules and Regulations)) and at the
First Closing Date and Second Closing Date (as hereinafter
defined), (A) the Registration Statement and Prospectus (in each
case, as so amended and/or supplemented) conformed or will conform
in all material respects to the requirements of the Act and the
Rules and Regulations, (B) the Registration Statement (as so
amended) did not or will not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (C) the Prospectus (as so supplemented) did not or
will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in
which they are or were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written
information furnished to the Company by you, or by any Underwriter
through you, specifically for use in the preparation thereof. If
the Registration Statement has been declared effective by the
Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and no
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proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
(iii) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such
document was filed, when such amendment was filed), conformed in
all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder; any further Incorporated
Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and
the rules and regulations thereunder; no such document when it was
filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed), contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document,
when it is filed, will contain an untrue statement of a material
fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
(iv) The Company manages the business operations of each of
North Texas Medical Surgical, P.A., Cullman Primary Care, P.C.,
Family Medical Clinic, P.C., Xxxxxx-Xxxxx, P.S.C., HealthFirst
Medical Group, P.A., Abilene Diagnostic Clinic Practices, King's
Daughters Clinic, P.A., The Medical Group of Northern Nevada,
Naples Medical Center, P.A., Beacon Medical Group, P.C.,
Intercoastal Medical Group, Inc., Christie Clinic Association,
Xxxxxx Medical Association, P.C., Xxxxxx-Xxxxx Clinic, P.A.,
HealthStar Physicians, P.C., Berkshire Physicians and Surgeons,
P.C. and PMC Medical Management, Inc. (collectively, the "Acquired
Companies") but does not manage the business operations of any
other professional association or other business.
(v) The financial statements of the Company, together with
the notes thereto, set forth in the Registration Statement and
Prospectus (or any amendment or supplement thereto) comply in all
material respects with the requirements of the Act and fairly
present the financial condition of the Company as of the dates
indicated and the results of operations and changes in cash flows
for the periods therein specified in conformity with generally
accepted accounting principles consistently applied throughout the
periods involved (except as otherwise stated therein); and the
supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The
financial statements of each of the Acquired Companies, together
with the notes thereto, set forth in the Registration Statement
and Prospectus comply in all material respects with the
requirements of the Act and fairly present the financial condition
of each Acquired Company as of the dates indicated and the results
of operations and changes in cash flows for the periods therein
specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise stated therein). The pro forma financial
statements (including the notes thereto) and the other pro forma
financial information included in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) (i)
comply (except as expressly noted therein) as to form in all
material respects with the applicable requirements of Regulation
S-X promulgated under the Exchange
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Act, (ii) have been prepared in accordance with the Commission's
rules, regulations and guidelines with respect to pro forma
financial statements (except as expressly noted therein), and
(iii) have been properly computed on the bases described therein;
the assumptions used in the preparation of the pro forma financial
data and other pro forma financial information included in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein. No other financial statements
or schedules are required to be included in the Registration
Statement or Prospectus. Xxxxxx Xxxxxxxx LLP, Coopers & Xxxxxxx
L.L.P. and Ernst & Young LLP, which have expressed their
respective opinions with respect to the financial statements and
schedules of the Company, Berkshire Physicians and Surgeons, P.C.
and PMC Medical Management, Inc., respectively, filed as a part of
the Registration Statement and included in the Registration
Statement and Prospectus, are independent public accountants as
required by the Act and the Rules and Regulations.
(vi) Each of the Company, its subsidiaries and the Acquired
Companies has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company, its subsidiaries and the
Acquired Companies has full corporate power and authority to own,
lease and operate its properties and conduct its business as
currently being carried on and as described in the Registration
Statement and Prospectus, and is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction in
which it owns or leases real property or in which the conduct of
its business makes such qualification necessary and in which the
failure to so qualify would have a material adverse effect upon
its business, condition (financial or otherwise) or properties,
taken as a whole.
(vii) Except as contemplated in the Prospectus (or any
amendment or supplement thereto), subsequent to the respective
dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries nor any of the Acquired Companies has incurred any
material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its
capital stock; and there has not been any change in the capital
stock (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the
capital stock, of the Company, any of its subsidiaries or any of
the Acquired Companies, or any material adverse change, or any
development involving a prospective material adverse change, in
the general affairs, condition (financial or otherwise), business,
key personnel, property, prospects, net worth or results of
operations of the Company, its subsidiaries and the Acquired
Companies, taken as a whole.
(viii) Except as set forth in the Prospectus (or any
amendment or supplement thereto), there is not pending or, to the
knowledge of the Company, threatened or
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contemplated, any action, suit or proceeding to which the Company,
any of its subsidiaries or any of the Acquired Companies is a
party before or by any court or governmental agency, authority or
body, or any arbitrator, which might result in any material
adverse change in the condition (financial or otherwise),
business, prospects, net worth or results of operations of the
Company and its subsidiaries and the Acquired Companies, taken as
a whole.
(ix) There are no contracts or documents of the Company,
any of its subsidiaries or any of the Acquired Companies that are
required to be described in the Registration Statement or the
Prospectus or to be filed as Incorporated Documents or exhibits to
the Registration Statement that are not described or filed as
required by the Act, the Rules and Regulations, or the Exchange
Act.
(x) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and
binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited
by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The
execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any agreement or
instrument to which the Company, any subsidiary of the Company or
any of the Acquired Companies is a party or by which it or any
such subsidiary or any such Acquired Company is bound or to which
any of its or any such subsidiary's or any such Acquired Company's
property is subject, the Company s charter or by-laws, or any
order, rule, regulation or decree of any court or governmental
agency or body having jurisdiction over the Company or any such
subsidiary or any such Acquired Company or any of its or any such
subsidiary's or any such Acquired Company's properties; no
consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including
the issuance or sale of the Securities by the Company or the
Selling Stockholder, except such as may be required under the Act,
the Exchange Act or state securities or blue sky laws; and the
Company has full power and authority to enter into this Agreement
and to authorize, issue and sell the Securities as contemplated by
this Agreement.
(xi) All of the issued and outstanding shares of capital
stock of the Company, including the outstanding shares of Common
Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for
or purchase securities, and the holders thereof are not subject to
personal liability by reason of being such holders; the Securities
which may be sold hereunder by the Company have been duly
authorized and, when issued, delivered and paid for in accordance
with the terms hereof, will have been validly issued and will be
fully paid and nonassessable, and the holders thereof will not be
subject to
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personal liability by reason of being such holders; and the
capital stock of the Company, including the Common Stock, conforms
to the description thereof in the Registration Statement and
Prospectus. Except as otherwise stated in the Registration
Statement and Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon
the voting or transfer of, any shares of Common Stock pursuant to
the Company s charter, by-laws or any agreement or other
instrument to which the Company is a party or by which the Company
is bound. Neither the filing of the Registration Statement nor
the offering or sale of the Securities as contemplated by this
Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of
the Company other than such rights as have been duly waived. All
of the issued and outstanding shares of capital stock of each of
the Company s subsidiaries have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise described in the Registration Statement and Prospectus
and except for any directors qualifying shares, the Company owns
of record and beneficially, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances,
all of the issued and outstanding shares of such stock. Except as
described in the Registration Statement and the Prospectus, there
are no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company or any
subsidiary of the Company any shares of the capital stock of the
Company or any subsidiary of the Company. The Company has an
authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus.
(xii) Each of the Company, its subsidiaries and the
Acquired Companies holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates (including,
without limitation, certificates of need) and orders of any
governmental or self-regulatory body required for the conduct of
its business and all such franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders
are valid and in full force and effect; and each of the Company,
its subsidiaries and the Acquired Companies are in compliance in
all material respects with all applicable federal, state, local
and foreign laws, regulations, orders and decrees.
(xiii) The Company, its subsidiaries and the Acquired
Companies have good and marketable title to all property described
in the Registration Statement and Prospectus as being owned by
them, in each case free and clear of all liens, claims, security
interests or other encumbrances except such as are described in
the Registration Statement and the Prospectus; the property held
under lease by the Company, its subsidiaries and the Acquired
Companies is held by them under valid, subsisting and enforceable
leases with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct
of the business of the Company, its subsidiaries or the Acquired
Companies; each of the Company, its subsidiaries and the Acquired
Companies owns or possesses all patents, patent applications,
trademarks, service marks, tradenames, trademark registrations,
service xxxx registrations, copyrights, licenses, inventions,
trade secrets and rights necessary for the conduct of the business
of the Company, its subsidiaries and the Acquired Companies as
currently carried on and as
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described in the Registration Statement and Prospectus; except as
stated in the Registration Statement and Prospectus, no name which
the Company, any of its subsidiaries or any of the Acquired
Companies uses and no other aspect of the business of the Company,
any of its subsidiaries or any of the Acquired Companies will
involve or give rise to any infringement of, or license or similar
fees for, any patents, patent applications, trademarks, service
marks, tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others material to the business or
prospects of the Company, its subsidiaries and the Acquired
Companies, taken as a whole, and neither the Company nor any of
its subsidiaries nor any of the Acquired Companies has received
any notice alleging any such infringement or fee.
(xiv) Neither the Company nor any of its subsidiaries nor
any of the Acquired Companies is in violation of its respective
charter or by-laws or in breach of or otherwise in default in the
performance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement
or any other material contract, lease or other instrument to which
it is subject or by which any of them may be bound, or to which
any of the material property or assets of the Company, any of its
subsidiaries or any of the Acquired Companies are subject.
(xv) The Company, its subsidiaries and the Acquired
Companies have filed all federal, state, local and foreign income
and franchise tax returns required to be filed and are not in
default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto, other than
any which the Company, any of its subsidiaries or any of the
Acquired Companies is contesting in good faith and for which
adequate reserves have been made on the Company's most recently
prepared balance sheet.
(xvi) Each of the Company, its subsidiaries and the
Acquired Companies has timely filed all reports required to be
filed in connection with federal Medicare and applicable state
Medicaid programs and due on or before the date hereof, and all
such required reports are true and complete in all material
respects; there are no claims, actions or appeals pending (and the
Company, its subsidiaries and the Acquired Companies have not
filed anything that would result in any claims, actions or
appeals) before any commission, board or agency with respect to
any state or federal Medicare or Medicaid cost reports or claim
filed by the Company, any of its subsidiaries or any of the
Acquired Companies on or before the date hereof, or with respect
to any disallowances by any intermediary, carrier, other insurer,
commission, board or agency in connection with any audit of any
cost reports that, if adversely determined, would have a material
adverse effect on the Company, its subsidiaries and the Acquired
Companies, taken as a whole; no validation review or program
integrity review related to the Company, any of its subsidiaries
or the Acquired Companies has been conducted by any commission,
board or agency in connection with federal Medicare or state
Medicaid programs, and no such reviews are scheduled, pending or,
to the Company's knowledge, threatened against or affecting the
Company, any of its subsidiaries or any of the Acquired Companies;
each of the Company, its subsidiaries and the Acquired Companies
has
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timely filed all material reports, data and other information
required by any other regulatory agency with authority to regulate
the Company, its subsidiaries, the Acquired Companies or the
business of any of them in any manner; and except as disclosed in
the Registration Statement and Prospectus, (i) each of the
Company, its subsidiaries and the Acquired Companies is in
compliance in all material respects with all rules, regulations
and requirements of all regulatory agencies, except where such
noncompliance would not have a material adverse effect on the
Company, its subsidiaries and the Acquired Companies taken as a
whole and (ii) the conduct of the business of each of the Company,
its subsidiaries and the Acquired Companies does not violate 42
U.S.C. Section 1320a-7b (commonly known as the "Anti-Kickback
Statute") or 42 U.S.C. Section 1395nn (commonly known as the
"Xxxxx Amendments"), including all amendments thereto to the
extent effective on the date hereof, unless any noncompliance
would not have a material adverse effect on the Company, its
subsidiaries and the Acquired Companies, taken as a whole.
(xvii) Each of the Company, its subsidiaries and the
Acquired Companies maintain reasonably adequate insurance.
(xviii) PMC Medical Management, Inc. is not required to be
licensed as a health maintenance organization, insurer or similar
organization or business under the laws of any jurisdiction.
(xix) The Company has not distributed and will not
distribute any prospectus or other offering material in connection
with the offering and sale of the Securities other than any
Preliminary Prospectus or the Prospectus or other materials
permitted by the Act to be distributed by the Company.
(xx) The Common Stock is quoted and the Securities have
been approved for quotation on the Nasdaq National Market.
(xxi) All the Company's subsidiaries other than ProMedCo of
Berkshire, Inc. (collectively, the "Subsidiaries") are listed in
an exhibit to the Company's Annual Report on Form 10-K, which is
incorporated by reference into the Registration Statement.
(xxii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (a) transactions are executed in accordance with management s
general or specific authorization; (b) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (c) access to assets is
permitted only in accordance with management s general or specific
authorization; and (d) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
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(xxiii) Other than as contemplated by this Agreement, the
Company has not incurred any liability for any finder s or broker
s fee or agent s commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxiv) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(xxv) Neither the Company nor any of its affiliates is
presently doing business with the government of Cuba or with any
person or affiliate located in Cuba.
(b) The Selling Stockholder represents and warrants to, and
agrees with, the several Underwriters as follows:
(i) The Selling Stockholder is the record and beneficial
owner of, and has, and on the First Closing Date will have, valid
and marketable title to the Securities to be sold by the Selling
Stockholder, free and clear of all security interests, claims,
liens, restrictions on transferability, legends, proxies, equities
or other encumbrances; and upon delivery of and payment for such
Securities hereunder, the several Underwriters will acquire valid
and marketable title thereto, free and clear of any security
interests, claims, liens, restrictions on transferability,
legends, proxies, equities or other encumbrances. The Selling
Stockholder is selling the Securities to be sold by the Selling
Stockholder for the Selling Stockholder s own account and is not
selling such Securities, directly or indirectly, for the benefit
of the Company, and no part of the proceeds of such sale received
by such Selling Stockholder will inure, either directly or
indirectly, to the benefit of the Company other than as described
in the Registration Statement and Prospectus.
(ii) The Selling Stockholder has the power and authority to
enter into this Agreement and to sell, transfer and deliver the
Securities to be sold by the Selling Stockholder.
(iii) This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder and constitutes a valid and
binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnity hereunder
or thereunder may be limited by federal or state securities laws
and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or laws affecting the rights of
creditors generally and subject to general principles of equity.
The execution and delivery of this Agreement and the performance
of the terms hereof and the consummation of the transactions
herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under,
any agreement or instrument to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound, or any law,
regulation, order or decree applicable to the Selling Stockholder;
no consent, approval, authorization or order of, or filing with,
any
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court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including
the sale of the Securities being sold by the Selling Stockholder,
except such as may be required under the Act, the Exchange Act or
state securities laws or blue sky laws.
(iv) The Selling Stockholder has not distributed and will
not distribute any prospectus or other offering material in
connection with the offering and sale of the Securities other than
any Preliminary Prospectus or the Prospectus or other materials
permitted by the Act to be distributed by the Selling Stockholder.
(c) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby; and any certificate signed by or on behalf of
the Selling Stockholder as such and delivered to you or to counsel for
the Underwriters shall be deemed a representation and warranty by such
Selling Stockholder to each Underwriter as to the matters covered
thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Company agrees to issue and sell 6,000,000 of the
Firm Shares, and the Selling Stockholder agrees to sell 400,000 of the
Firm Shares, to the several Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company and the Selling
Stockholder the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto. The purchase price for each Firm
Share shall be $[_____] per share. The obligation of each Underwriter
to the Company and the Selling Stockholder shall be to purchase from the
Company and the Selling Stockholder that number of Firm Shares (to be
adjusted by the Representatives to avoid fractional shares) which
represents the same proportion of the number of Firm Shares to be sold
by the Company and the Selling Stockholder pursuant to this Agreement as
the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto represents to the total number of Firm
Shares to be purchased by all Underwriters pursuant to this Agreement.
In making this Agreement, each Underwriter is contracting severally and
not jointly; except as provided in paragraph (c) of this Section 3 and
in Section 8 hereof, the agreement of each Underwriter is to purchase
only the respective number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by the Company and the Selling
Stockholder to you for the accounts of the several Underwriters against
payment of the purchase price therefor in immediately available funds to
the Company and the Selling Stockholder, as appropriate, at the offices
of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable, at 9:00 a.m. Central time on the third (or if the Securities
are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act,
after 4:30 p.m. Eastern time, the fourth) full business day following
the date hereof, or at such other time and date as you and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time
and date of delivery being herein referred to as
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the "First Closing Date." If the Representatives so elect, delivery of
the Firm Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the
Representatives. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names
as you may request upon at least two business days prior notice to the
Company, will be made available for checking and packaging not later
than 10:30 a.m., Central time, on the business day next preceding the
First Closing Date at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx
Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other
location as may be mutually acceptable.
(b) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Company hereby grants to the several Underwriters
an option to purchase all or any portion of the Option Shares at the
same purchase price as the Firm Shares, for use solely in covering any
over-allotments made by the Underwriters in the sale and distribution of
the Firm Shares. The option granted hereunder may be exercised at any
time (but not more than once) within 30 days after the effective date of
this Agreement upon notice (confirmed in writing) by the Representatives
to the Company setting forth the aggregate number of Option Shares as to
which the several Underwriters are exercising the option, the names and
denominations in which the certificates for the Option Shares are to be
registered and the date and time, as determined by you, when the Option
Shares are to be delivered, such time and date being herein referred to
as the "Second Closing" and "Second Closing Date," respectively;
provided, however, that the Second Closing Date shall not be earlier
than the First Closing Date nor earlier than the second business day
after the date on which the option shall have been exercised. If the
option is exercised, each Underwriter shall purchase from the Company
that number of Option Shares (to be adjusted by the Representatives to
avoid fractional shares) which represents the same proportion to the
number of Option Shares to be purchased from the Company as the number
of Firm Shares to be purchased by each Underwriter represents to the
total number of Firm Shares to be purchased by all of the Underwriters
pursuant to this Agreement. No Option Shares shall be sold and
delivered unless the Firm Shares previously have been, or simultaneously
are, sold and delivered.
The Option Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase
price therefor in immediately available funds to the Company at the
offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable at 9:00 a.m., Central time, on the Second Closing
Date. If the Representatives so elect, delivery of the Option Shares
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives.
Certificates representing the Option Shares in definitive form and in
such denominations and registered in such names as you have set forth in
your notice of option exercise, will be made available for checking and
packaging not later than 10:30 a.m., Central time, on the business day
next preceding the Second Closing Date at the office of Xxxxx Xxxxxxx
Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as
Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company or the Selling
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Stockholder, on behalf of any Underwriter for the Securities to be
purchased by such Underwriter. Any such payment by you shall not
relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company or the Selling
Stockholder.
4. Covenants.
(a) The Company covenants and agrees with the several
Underwriters as follows:
(i) If the Registration Statement has not already been
declared effective by the Commission, the Company will use its
best efforts to cause the Registration Statement and any
post-effective amendments thereto to become effective as promptly
as possible; the Company will notify you promptly of the time when
the Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any supplement to
the Prospectus (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations) has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or additional information; if
the Company has elected to rely on Rule 430A of the Rules and
Regulations, the Company will prepare and file a Prospectus (or
term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant
to Rule 430A of the Rules and Regulations with the Commission
within the time period required by, and otherwise in accordance
with the provisions of, Rules 424(b), 430A and 434, if applicable,
of the Rules and Regulations; if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size
of the offering registered under the Act, the Company will prepare
and file a registration statement with respect to such increase
with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rule 462(b); the
Company will prepare and file with the Commission, promptly upon
your request, any amendments or supplements to the Registration
Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) or file any
document which upon filing, becomes an Incorporated Document that,
in your opinion, may be necessary or advisable in connection with
the distribution of the Securities by the Underwriters; and the
Company will not file any amendment or supplement to the
Registration Statement or Prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) or
file any document which, upon filing, becomes an Incorporated
Document to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior
to the filing.
(ii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose;
and the Company will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
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(iii) Within the time during which a prospectus (including
any term sheet within the meaning of Rule 434 of the Rules and
Regulations) relating to the Securities is required to be
delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of
or dealings in the Securities as contemplated by the provisions
hereof and the Prospectus. If during such period any event occurs
as a result of which the Prospectus would include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such
period it is necessary to amend the Registration Statement or
supplement the Prospectus (or to file under the Exchange Act any
document that, upon filing, becomes an Incorporated Document) to
comply with the Act, the Company will promptly notify you and will
forthwith prepare and file with the Commission an appropriate
supplement or amendment thereto (or to such document) (at the
expense of the Company) so as to correct such statement or
omission or effect such compliance.
(iv) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such
jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the distribution
of the Securities, except that the Company shall not be required
in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any state.
(v) The Company will furnish to the Underwriters copies of
the Registration Statement (five of which will be signed and will
include all exhibits), each Preliminary Prospectus, the
Prospectus, all amendments and supplements (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations)
to such documents, in each case as soon as available and in such
quantities as you may from time to time reasonably request. In
addition, the Company will furnish to the Underwriters copies of
the Incorporated Documents and the exhibits to the Incorporated
Documents, in each case in such quantities as you may from time to
time reasonably request.
(vi) During a period of five years commencing with the date
hereof, the Company will (i) mail as soon as reasonably
practicable after the end of each fiscal year to the record
holders of its Common Stock a financial report of the Company and
its subsidiaries on a consolidated basis, all such financial
reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows
and a consolidated statement of stockholders' equity as of the end
of and for such fiscal year, together with comparable information
as of the end of and for the preceding year, certified by
independent certified public accountants, and (ii) mail and make
generally available as soon as practicable after the end of the
first three quarters of each fiscal year (beginning with the
quarter ending March 31, 1998) to the record holders of its Common
Stock, unaudited consolidated summary financial information of the
Company and its subsidiaries for each such quarter in reasonable
detail.
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(vii) During a period of five years commencing with the
date hereof, the Company will furnish to the Representatives, and
to each Underwriter who may so request in writing, copies of all
periodic and special reports furnished to the stockholders of the
Company and all information, documents and reports filed with the
Commission, the National Association of Securities Dealers, Inc.,
the Nasdaq National Market or any securities exchange.
(viii) The Company will make generally available to its
security holders as soon as practicable, but in any event not
later than 15 months after the end of the Company s current fiscal
quarter, an earnings statement (which need not be audited)
covering a 12-month period beginning after the effective date of
the Registration Statement that shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(ix) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is
prevented from becoming effective under the provisions of Section
9(a) hereof or is terminated, will pay or cause to be paid (A)
all expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company s
accountants and counsel but, except as otherwise provided below,
not including fees of the Underwriters counsel) in connection
with the preparation, printing, filing, delivery, and shipping of
the Registration Statement (including the financial statements
therein and all amendments, schedules, and exhibits thereto), the
Securities, each Preliminary Prospectus, the Prospectus, and any
amendment thereof or supplement thereto, and the printing,
delivery, and shipping of this Agreement and other underwriting
documents, including blue sky memoranda, (C) all filing fees and
fees and disbursements of the Underwriters counsel incurred in
connection with the qualification of the Securities for offering
and sale by the Underwriters or by dealers under the securities or
blue sky laws of the states and other jurisdictions which you
shall designate in accordance with Section 4(a)(iv) hereof, (D)
the fees and expenses of any transfer agent or registrar, (E) the
filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale
of the Securities, (F) listing fees, if any, and (G) all other
costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein.
If the sale of the Securities provided for herein is not
consummated by reason of action by the Company pursuant to Section
9(a) hereof which prevents this Agreement from becoming effective,
or by reason of any failure, refusal or inability on the part of
the Company or the Selling Stockholder to perform any agreement on
its or his part to be performed, or because any other condition of
the Underwriters obligations hereunder required to be fulfilled
by the Company or the Selling Stockholder is not fulfilled, the
Company will reimburse the several Underwriters for all
out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or
in contemplation of performing their obligations hereunder. The
Company shall not in any event be liable to any of the
-15-
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Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
(x) The Company will apply the net proceeds from the sale
of the Securities to be sold by it hereunder for the purposes set
forth in the Prospectus.
(xi) The Company will not, without the prior written
consent of Xxxxx Xxxxxxx Inc., offer for sale, sell, contract to
sell, grant any option for the sale of or otherwise issue or
dispose of any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire,
Common Stock, except (A) to the Underwriters pursuant to this
Agreement, (B) under the Company's stock option plans that are
described in the Prospectus and (C) in connection with
affiliations with or acquisitions of physician groups, physician
practice management companies or other healthcare companies, for a
period of 90 days after the commencement of the public offering of
the Securities by the Underwriters; provided, however, that all
transferees of Common Stock in accordance with (C) above agree to
be subject to the restrictions in this paragraph (xi).
(xii) The Company has caused to be delivered to you a
letter from each of the Company s directors and officers stating
that such person agrees that such person will not, without the
prior written consent of Xxxxx Xxxxxxx Inc., offer for sale, sell,
contract to sell or otherwise dispose of any shares of Common
Stock or rights to purchase Common Stock, except to the
Underwriters pursuant to this Agreement, for a period of 90 days
after commencement of the public offering of the Securities by the
Underwriters.
(xiii) The Company has not taken and will not take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(xiv) The Company will not incur any liability for any
finder s or broker s fee or agent s commission in connection with
the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(xv) The Company will inform the Florida Department of
Banking and Finance at any time prior to the consummation of the
distribution of the Securities by the Underwriters if it commences
engaging in business with the government of Cuba or with any
person or affiliate located in Cuba. Such information will be
provided within 90 days after the commencement thereof or after a
change occurs with respect to previously reported information.
(xvi) The Company will use its best efforts to do and
perform all things required or necessary to be done and performed
under this Agreement by the Company prior to the First Closing
Date or the Second Closing Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the
Securities.
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(b) The Selling Stockholder covenants and agrees with the several
Underwriters as follows:
(i) Except as otherwise agreed to by the Company and the
Selling Stockholder, the Selling Stockholder will pay all taxes,
if any, on the transfer and sale, respectively, of the Securities
being sold by the Selling Stockholder, the fees of the Selling
Stockholder s counsel, if any, and the Selling Stockholder s
proportionate share (based upon the number of Securities being
offered by such Selling Stockholder pursuant to the Registration
Statement) of all costs and expenses (except for legal, accounting
and printing expenses and fees of the registrar and transfer
agent) incurred by the Company pursuant to the provisions of
Section 4(a)(ix) of this Agreement; provided, however, that the
Selling Stockholder agrees to reimburse the Company for any
reimbursement made by the Company to the Underwriters pursuant to
Section 4(a)(ix) hereof to the extent such reimbursement resulted
from the failure or refusal on the part of the Selling Stockholder
to comply under the terms or fulfill any of the conditions of this
Agreement.
(ii) If this Agreement shall be terminated by the
Underwriters because of any failure, refusal or inability on the
part of the Selling Stockholder to perform any agreement on the
Selling Stockholder s part to be performed, or because any other
condition of the Underwriters obligations hereunder required to
be fulfilled by the Selling Stockholder is not fulfilled, the
Selling Stockholder agrees to reimburse the several Underwriters
for the Selling Stockholder's proportionate share of out-of-pocket
disbursements (including fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with
their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations
hereunder. The Selling Stockholder shall not in any event be
liable to any of the Underwriters for loss of anticipated profits
from the transactions covered by this Agreement.
(iii) The Securities to be sold by the Selling Stockholder
are subject to the interest of the several Underwriters; and the
obligations of the Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement, by any act of
the Selling Stockholder, by operation of law, by the death of the
Selling Stockholder, or by the occurrence of any other event.
(iv) The Selling Stockholder will not, without your prior
written consent, offer for sale, sell, contract to sell, grant any
option for the sale of or otherwise dispose of any Common Stock or
any securities convertible into or exchangeable for, or any
options or rights to purchase or acquire, Common Stock, except to
the Underwriters pursuant to this Agreement, for a period of 90
days after the commencement of the public offering of the
Securities by the Underwriters.
(v) The Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which
might reasonably be expected to cause or result in
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stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(vi) The Selling Stockholder shall immediately notify you
if any event occurs, or of any change in information relating to
the Selling Stockholder or the Company or any new information
relating to the Company or relating to any matter stated in the
Prospectus or any supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations),
which results in the Prospectus (as supplemented) including any
untrue statement of a material fact or omitting to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
5. Conditions of Underwriters Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as if
made at such Closing Date), of and compliance with all representations,
warranties and agreements of the Company and the Selling Stockholder contained
herein, to the performance by the Company and the Selling Stockholder of their
respective obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., Central time, on the date of this Agreement, or
such later time and date as you, as Representatives of the several
Underwriters, shall approve and all filings required by Rules 424, 430A
and 434 of the Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or
any amendment thereof shall have been issued; no proceedings for the
issuance of such an order shall have been initiated or threatened; and
any request of the Commission for additional information (to be included
in the Registration Statement or the Prospectus or otherwise) shall have
been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations), contains an untrue statement of fact
which, in your opinion, is material, or omits to state a fact which, in
your opinion, is material and is required to be stated therein or
necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries shall have incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution
of any kind with respect to its capital stock; and there shall not have
been any change in the capital stock (other than a change in the number
of outstanding shares of Common Stock due to the issuance of shares upon
the exercise of outstanding options or warrants), or any material change
in the short-term or long-term debt of the Company, or any issuance of
options, warrants, convertible securities or other rights to
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purchase the capital stock of the Company or any of its subsidiaries, or
any material adverse change or any development involving a prospective
material adverse change (whether or not arising in the ordinary course
of business), in the general affairs, condition (financial or
otherwise), business, key personnel, property, prospects, net worth or
results of operations of the Company and its subsidiaries, taken as a
whole, that, in your judgment, makes it impractical or inadvisable to
offer or deliver the Securities on the terms and in the manner
contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, the opinion of Xxxx
Xxxxx & Xxxxxx, counsel for the Company and the Selling Stockholder,
dated such Closing Date and addressed to you, to the effect that:
(i) Each of the Company, its subsidiaries and the Acquired
Companies has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company, its subsidiaries and the
Acquired Companies has full corporate power and authority to own
its properties and conduct its business as currently being carried
on and as described in the Registration Statement and Prospectus,
and is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon the business,
condition (financial or otherwise) or properties of the Company
and its subsidiaries, taken as a whole.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof incorporated by reference in
the Company's Form 8-A Registration Statement filed with the
Commission on March 3, 1997. All of the issued and outstanding
shares of the capital stock of the Company have been duly
authorized and validly issued and are fully paid and
nonassessable, and the holders thereof are not subject to personal
liability by reason of being such holders. The Securities to be
issued and sold by the Company hereunder have been duly authorized
and, when issued, delivered and paid for in accordance with the
terms of this Agreement, will have been validly issued and will be
fully paid and nonassessable, and the holders thereof will not be
subject to personal liability by reason of being such holders.
Except as otherwise stated in the Registration Statement and
Prospectus, there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting
or transfer of, any shares of Common Stock pursuant to the Company
s charter, by-laws or any agreement or other instrument known to
such counsel to which the Company is a party or by which the
Company is bound. To the best of such counsel s knowledge,
neither the filing of the Registration Statement nor the offering
or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any
shares of Common Stock or other securities of the Company other
than such rights as have been duly waived.
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20
(iii) All of the issued and outstanding shares of capital
stock of each of the Company s subsidiaries have been duly and
validly authorized and issued and are fully paid and
nonassessable, and, to the best of such counsel s knowledge,
except as otherwise described in the Registration Statement and
Prospectus, the Company owns of record and beneficially, free and
clear of any security interests, claims, liens, proxies, equities
or other encumbrances, all of the issued and outstanding shares of
such stock. To the best of such counsel s knowledge, except as
described in the Registration Statement and Prospectus, there are
no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company or any
subsidiary any shares of the capital stock of the Company or any
subsidiary of the Company.
(iv) The Registration Statement has become effective under
the Act and, to the best of such counsel s knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of such counsel, threatened by the
Commission.
(v) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know
of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required,
or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or included
as exhibits to the Registration Statement that are not described
or included as required.
(vi) The Company has full corporate power and authority to
enter into this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes
a valid, legal and binding obligation of the Company enforceable
in accordance with its terms (except as rights to indemnity
hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity);
the execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, rule or
regulation, any agreement or instrument known to such counsel to
which the Company or any subsidiary of the Company is a party or
by which it or such subsidiary is bound or to which any of its or
such subsidiary's property is subject, the Company s charter or
by-laws, or any order or decree known to such counsel of any court
or governmental agency or body having jurisdiction over the
Company or such subsidiary or any of its or such subsidiary's
respective properties; and no consent, approval, authorization or
order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act, the
Exchange Act or state securities laws.
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(vii) To the best of such counsel s knowledge, each of the
Company, its subsidiaries and the Acquired Companies holds, and
is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates (including, without limitation,
certificates of need) and orders of any governmental or
self-regulatory body required for the conduct of its business and
all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in
full force and effect.
(viii) To the best of such counsel s knowledge, neither the
Company, any of its subsidiaries nor any of the Acquired Companies
is in violation of its respective charter or by-laws. To the best
of such counsel s knowledge, neither the Company, any of its
subsidiaries nor any of the Acquired Companies is in breach of or
otherwise in default in the performance of any material
obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other material
contract, lease or other instrument to which it is subject or by
which it may be bound, or to which any of the material property or
assets of the Company, any of its subsidiaries or any of the
Acquired Companies are subject.
(ix) To the best of such counsel's knowledge, there are no
legal or governmental proceeding pending or threatened to which
the Company, any of its subsidiaries or any of the Acquired
Companies is a party or to which any of their respective property
or assets are subject which is required to be described in the
Registration Statement or Prospectus and is not so described;
(x) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xi) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) or
any document incorporated by reference therein, comply as to form
in all material respects with the requirements of the Act, the
Rules and Regulations and the Exchange Act; and on the basis of
conferences with officers of the Company, examination of documents
referred to or incorporated by reference in the Registration
Statement and Prospectus and such other procedures as such counsel
deems appropriate, nothing has come to the attention of such
counsel that causes such counsel to believe that the Registration
Statement or any amendment thereof or any document incorporated by
reference therein, at the time the Registration Statement became
effective and as of such Closing Date (including any Registration
Statement filed under Rule 462(b) of the Rules and Regulations),
contained any 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
Prospectus (as of its date and as of such Closing Date), as
amended or supplemented, includes any untrue statement of material
fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; it being
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understood that such counsel need express no opinion as to the
financial statements or other financial data included in any of
the documents mentioned in this clause.
(xii) The Selling Stockholder is the sole record and
beneficial owner of the Securities to be sold by the Selling
Stockholder and delivery of the certificates for the Securities to
be sold by the Selling Stockholder pursuant to this Agreement,
upon payment therefor by the Underwriters, will pass marketable
title to such Securities to the Underwriters and the Underwriters
will acquire all the rights of the Selling Stockholder in the
Securities (assuming the Underwriters have no knowledge of an
adverse claim), free and clear of any security interests, claims,
liens or other encumbrances.
(xiii) The Selling Stockholder has the power and authority
to enter into this Agreement and to perform and discharge his
obligations hereunder; and this Agreement has been duly and
validly authorized, executed and delivered by the Selling
Stockholder and is a valid and binding agreement of the Selling
Stockholder, enforceable in accordance with its terms (except as
rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws
affecting creditors rights generally and subject to general
principles of equity).
(xiv) The execution and delivery of this Agreement and the
performance of the terms hereof and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, rule or regulation, or any agreement
or instrument known to such counsel to which the Selling
Stockholder is a party or by which the Selling Stockholder is
bound or to which any of his property is subject or any order or
decree known to such counsel of any court or government agency or
body having jurisdiction over the Selling Stockholder or any of
his properties; and no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the sale of the Securities being sold by the
Selling Stockholder, except such as may be required under the Act,
the Exchange Act or state securities laws or blue sky laws.
(xv) Such other matters as you may reasonably request.
In rendering such opinion such counsel may rely (i) as to matters
of law other than Delaware and federal law, upon the opinion or opinions of
local counsel reasonably satisfactory to the Representatives, and (a) as to
matters covered by clauses (i), (vii), (viii) and (ix), upon the opinion of
Xxxxxxx X. Xxxxxxx, Senior Vice President of the Company and (b) as to the
matters covered by clause (i), upon the opinion of Boult Xxxxxxxx Xxxxxxx &
Xxxxx PLC, provided that the extent of such reliance is specified in such
opinion and that such counsel shall state that such opinion or opinions are
satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel
deems reasonable upon certificates of officers of the Company and its
subsidiaries and
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of the Selling Stockholder provided that the extent of such reliance is
specified in such opinion.
(e) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, such opinion or opinions
from Xxxxxx & Xxxxxx L.L.P., counsel for the several Underwriters, dated
such Closing Date and addressed to you, with respect to the formation of
the Company, the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as you reasonably may request,
and such counsel shall have received such papers and information as they
request to enable them to pass upon such matters.
(f) On each Closing Date, you, as Representatives of the several
Underwriters, shall have received a letter of Xxxxxx Xxxxxxxx LLP, dated
such Closing Date and addressed to you, confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus,
as of a date not more than five days prior to the date of such letter),
the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the
letter so to be delivered on such Closing Date shall be to confirm the
conclusions and findings set forth in such prior letter.
(g) On each Closing Date, you, as Representatives of the several
Underwriters, shall have received a letter of Coopers & Xxxxxxx L.L.P.,
dated such Closing Date and addressed to you, confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus,
as of a date not more than five days prior to the date of such letter),
the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the
letter so to be delivered on such Closing Date shall be to confirm the
conclusions and findings set forth in such prior letter.
(h) On each Closing Date, you, as Representatives of the several
Underwriters, shall have received a letter of Ernst & Young LLP, dated
such Closing Date and addressed to you, confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus,
as of a date not more than five days prior to the date of such letter),
the conclusions and findings of said firm with
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respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this
Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth
in such prior letter.
(i) On each Closing Date, there shall have been furnished to you,
as Representatives of the Underwriters, a certificate, dated such
Closing Date and addressed to you, signed by the chief executive officer
and by the chief financial officer of the Company (or such other
officers as are acceptable to you), to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct as if made at and as of such
Closing Date, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment
thereof or the qualification of the Securities for offering or
sale has been issued, and no proceeding for that purpose has been
instituted or, to the best of their knowledge, is contemplated by
the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any term
sheet within the meaning of Rule 434 of the Rules and
Regulations), and (A) such documents contain all statements and
information required to be included therein, the Registration
Statement, or any amendment thereof, does not 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 the Prospectus, as amended or
supplemented, does not include any untrue statement of material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, (B) since the effective date of the
Registration Statement, there has occurred no event required to be
set forth in an amended or supplemented prospectus which has not
been so set forth, (C) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries nor
any of the Acquired Companies has incurred any material
liabilities or obligations, direct or contingent, or entered into
any material transactions, not in the ordinary course of business,
or declared or paid any dividends or made any distribution of any
kind with respect to its capital stock, and except as disclosed in
the Prospectus, there has not been any change in the capital stock
(other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the
capital stock, of the Company, any of its subsidiaries or any of
the Acquired Companies, or any material adverse change or any
development involving a prospective material adverse change
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(whether or not arising in the ordinary course of business), in
the general affairs, condition (financial or otherwise), business,
key personnel, property, prospects, net worth or results of
operations of the Company, its subsidiaries and the Acquired
Companies, taken as a whole, and (D) except as stated in the
Registration Statement and the Prospectus, there is not pending,
or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding to which the Company, any of its
subsidiaries or any of the Acquired Companies is a party before or
by any court or governmental agency, authority or body, or any
arbitrator, which might result in any material adverse change in
the condition (financial or otherwise), business, prospects or
results of operations of the Company, its subsidiaries and the
Acquired Companies, taken as a whole.
(j) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, a certificate or
certificates, dated such Closing Date and addressed to you, signed by
the Selling Stockholder or the Selling Stockholder s Attorney-in-Fact to
the effect that the representations and warranties of the Selling
Stockholder contained in this Agreement are true and correct as if made
at and as of such Closing Date, and that the Selling Stockholder has
complied with all the agreements and satisfied all the conditions on the
Selling Stockholder s part to be performed or satisfied at or prior to
such Closing Date.
(k) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you
or they may have reasonably requested.
(l) The Common Stock is quoted and the Securities have been
approved for quotation on the Nasdaq National Market.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and counsel for the Underwriters. The Company will furnish
you with such number of conformed copies of such opinions, certificates,
letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement
is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any breach of any representation,
warranty, agreement or covenant of the Company contained herein, or (ii)
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rules 430A and 434(d) of the Rules and
Regulations, if applicable, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto (including any term sheet within
the meaning of Rule 434 of the Rules and Regulations), or arise out of
or are based upon the omission or alleged omission to state therein
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a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
any such amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by you, or
by any Underwriter through you, specifically for use in the preparation
thereof.
In addition to its other obligations under this Section 6(a), the
Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of
or based upon any statement or omission, or any alleged statement or
omission, described in this Section 6(a), it will reimburse each
Underwriter on a monthly basis for all reasonable legal fees or other
expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company s obligation to reimburse
the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter
that received such payment shall promptly return it to the party or
parties that made such payment, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced
from time to time by NationsBank of Texas, N.A. (the "Prime Rate"). Any
such interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the
Prime Rate from the date of such request. This indemnity agreement
shall be in addition to any liabilities which the Company may otherwise
have.
(b) The Selling Stockholder agrees to indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under
the Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Selling
Stockholder), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any
breach of any representation, warranty, agreement or covenant of the
Selling Stockholder contained herein, or (ii) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of
the Registration Statement at the time of effectiveness pursuant to
Rules 430A and 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations), 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, but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity
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with written information furnished to the Company or such Underwriter by
such Selling Stockholder, specifically for use in the preparation
thereof, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action;
provided, however, that the Selling Stockholder shall not be liable in
any such case to the extent that any such loss, claim, damage, liability
or action arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
any such amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by you, or
by any Underwriter through you, specifically for use in the preparation
thereof. In no event shall the Selling Stockholder be liable under the
provisions of this Section 6 for any amount in excess of the aggregate
amount of proceeds that the Selling Stockholder received from the sale
of the Securities pursuant to this Agreement.
In addition to his other obligations under this Section 6(b), the
Selling Stockholder agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 6(b), he
will reimburse each Underwriter on a monthly basis for all reasonable
legal fees or other expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Selling Stockholder's
obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the
Underwriter that received such payment shall promptly return it to the
party or parties that made such payment, together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the
Prime Rate from the date of such request. This indemnity agreement
shall be in addition to any liabilities which the Selling Stockholder
may otherwise have.
(c) Each Underwriter will indemnify and hold harmless the Company
and the Selling Stockholder against any losses, claims, damages or
liabilities to which the Company and the Selling Stockholder may become
subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of
such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations), or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment
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or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by you, or by such Underwriter
through you, specifically for use in the preparation thereof, and will
reimburse the Company and the Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or the Selling Stockholder
in connection with investigating or defending against any such loss,
claim, damage, liability or action.
(d) 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 the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to any
indemnified party. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of the
indemnifying party s election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
such subsection for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that if, in the
sole judgment of the Representatives, it is advisable for the
Underwriters to be represented as a group by separate counsel, the
Representatives shall have the right to employ a single counsel to
represent the Representatives and all Underwriters who may be subject to
liability arising from any claim in respect of which indemnity may be
sought by the Underwriters under subsection (a) of this Section 6, in
which event the reasonable fees and expenses of such separate counsel
shall be borne by the indemnifying party or parties and reimbursed to
the Underwriters as incurred (in accordance with the provisions of the
second paragraph in subsection (a) above). An indemnifying party shall
not be obligated under any settlement agreement relating to any action
under this Section 6 to which it has not agreed in writing.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Selling Stockholder on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Stockholder on the one hand and the Underwriters on the
other shall be
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deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and Selling
Stockholder bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault 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, the Selling Stockholder or the Underwriters and the parties
relevant intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the
Selling Stockholder and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation (even if the 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 in the first sentence of this subsection (d). The amount
paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending against any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Securities underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. The Underwriters obligations in this
subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder
under this Section 6 shall be in addition to any liability which the
Company and the Selling Stockholder may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 6 shall be in addition to any
liability that the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement
and to each person, if any, who controls the Company or the Selling
Stockholder within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company and the Selling
Stockholder herein or in certificates delivered pursuant hereto, and the
agreements of the several Underwriters, the Company and the Selling Stockholder
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, or the Selling Stockholder, and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
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8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Securities agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Securities
in accordance with the terms hereof, and the amount of Securities not
purchased does not aggregate more than 10% of the total amount of
Securities set forth in Schedule I hereto, the remaining Underwriters
shall be obligated to take up and pay for (in proportion to their
respective underwriting obligations hereunder as set forth in Schedule I
hereto except as may otherwise be determined by you) the Securities that
the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Securities agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Securities
in accordance with the terms hereof, and the amount of Securities not
purchased aggregates more than 10% of the total amount of Securities set
forth in Schedule I hereto, and arrangements satisfactory to you for the
purchase of such Securities by other persons are not made within 36
hours thereafter, this Agreement shall terminate. In the event of any
such termination neither the Company nor the Selling Stockholder shall
be under any liability to any Underwriter (except to the extent provided
in Section 4(a)(ix), Section 4(b)(ii) and Section 6 hereof) nor shall
any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to
purchase the amount of Securities agreed by such Underwriter to be
purchased hereunder) be under any liability to the Company or the
Selling Stockholder (except to the extent provided in Section 6 hereof).
If Securities to which a default relates are to be purchased by
the non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the
First Closing Date or the Second Closing Date, as the case may be, for
not more than seven business days in order that the necessary changes in
the Registration Statement, Prospectus and any other documents, as well
as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under
this Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m., Central
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time
of the Registration Statement as you in your discretion shall first
release the Securities for sale to the public; provided, that if the
Registration Statement is effective at the time this Agreement is
executed, this Agreement shall become effective at such time as you in
your discretion shall first release the Securities for sale to the
public. For the purpose of this Section, the Securities shall be deemed
to have been released for sale to the public upon release by you of the
publication of a newspaper advertisement relating thereto or upon
release by you of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter
specified before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the
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Company may prevent this Agreement from becoming effective without
liability of any party to any other party, except that the provisions of
Section 4(a)(ix), Section 4(b)(ii) and Section 6 hereof shall at all
times be effective.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as
hereinafter specified at any time at or prior to the First Closing Date,
and the option referred to in Section 3(b), if exercised, may be
canceled at any time prior to the Second Closing Date, if (i) the
Company shall have failed, refused or been unable, at or prior to such
Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of the Underwriters obligations
hereunder is not fulfilled, (iii) trading on the New York Stock Exchange
or the American Stock Exchange shall have been wholly suspended, (iv)
minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by such Exchange or
by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by
Federal, New York or Texas authorities, or (vi) there has occurred any
material adverse change in the financial markets in the United States or
an outbreak of major hostilities (or an escalation thereof) in which the
United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or
occurrence of a similar character shall have occurred since the
execution of this Agreement that, in your judgment, makes it impractical
or inadvisable to proceed with the completion of the sale of and payment
for the Securities. Any such termination shall be without liability of
any party to any other party except that the provisions of Section
4(a)(ix), Section 4(b)(ii) and Section 6 hereof shall at all times be
effective.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section,
the Company and the Selling Stockholder shall be notified promptly by
you by telephone or telegram, confirmed by letter. If the Company
elects to prevent this Agreement from becoming effective, you and the
Selling Stockholder shall be notified by the Company by telephone or
telegram, confirmed by letter.
10. Information Furnished by Underwriters. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in
any Preliminary Prospectus and in the Prospectus constitute the written
information furnished by or on behalf of the Underwriters referred to in
Section 2 and Section 6 hereof.
11. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to the Representatives c/o Xxxxx
Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such Underwriter at the address stated in the
Underwriters Questionnaire furnished by such Underwriter in connection with
this offering; if to the Company or the Selling Stockholder, shall be mailed,
telegraphed or delivered to it at ProMedCo Management Company, 000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx 00000, Attention: Mr. H. Xxxxx Xxxxx; or
in each case to such other address as the person to be notified may have
requested in writing. All notices given by telegram
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shall be promptly confirmed by letter. Any party to this Agreement may change
such address for notices by sending to the parties to this Agreement written
notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal
or equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from any of the several Underwriters.
13. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
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Please sign and return to the Company the enclosed duplicates
of this letter whereupon this letter will become a binding agreement between
the Company, the Selling Stockholder and the several Underwriters in accordance
with its terms.
Very truly yours,
PROMEDCO MANAGEMENT COMPANY
By
--------------------------------------------------
President and Chief Executive Officer
--------------------------------------------------
H. XXXXX XXXXX
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXXX INC.
BEAR, XXXXXXX & CO., INC.
XXXXX & COMPANY
As Representatives of the Several Underwriters
By XXXXX XXXXXXX INC.
By
--------------------------------------------------
Managing Director
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SCHEDULE I
TO BE UPDATED
Underwriter Number of Firm Shares (1)
----------- -------------------------
Xxxxx Xxxxxxx Inc.
Bear, Xxxxxxx & Co., Inc.
Xxxxx & Company
---------------
Total. . . . . . . . . . . . . . . . . . . . . . . . ===============
----------------
(1) The Underwriters may purchase up to an additional 960,000 Option
Shares, to the extent the option described in Section 3(b) of the
Agreement is exercised, in the proportions and in the manner described
in the Agreement.
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