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EXHIBIT 1
Draft of October 3, 1996
2,500,000 SHARES
MILESTONE HEALTHCARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
, 1996
XXXXX XXXXXX INC.
XXXXXX XXXX LLC
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
MileStone Healthcare, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 2,100,000 shares of its
common stock, par value $.001 per share (the "Common Stock"), to the several
Underwriters named in Schedule II hereto (the "Underwriters"), and the persons
named in Schedule I hereto as selling stockholders (the "Selling Stockholders,"
which term Selling Stockholders includes ING (U.S.) Investment Corporation
("ING")) propose to sell to the several Underwriters an aggregate of 400,000
shares of Common Stock. The 2,100,000 shares of Common Stock to be issued and
sold to the Underwriters by the Company and the 400,000 shares of Common Stock
to be sold to the Underwriters by the Selling Stockholders are hereinafter
referred to as the "Firm Shares." In addition, solely for the purpose of
covering over-allotments, the Company proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 2 hereof, up to an
additional 375,000 shares (the "Additional Shares") of Common Stock. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as
the "Shares." The Company and the Selling Stockholders are hereinafter
sometimes referred to as the "Sellers."
The Company and the Selling Stockholders wish to confirm as
follows their agreement with you (the "Representatives") and the other several
Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the
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Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-1 under the Act (the "registration statement"), including a prospectus
subject to completion, relating to the Shares. The term "Registration
Statement" as used in this Agreement means the registration statement
(including all financial schedules and exhibits) as amended at the time it
becomes effective or, if the registration statement became effective prior to
the execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. If an
abbreviated registration statement relating to the offering of the Shares is
prepared and filed with the Commission in accordance with Rule 462(b) under the
Act (an "Abbreviated Registration Statement"), the term "Registration
Statement" as used in this Agreement includes the Abbreviated Registration
Statement. The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in reliance
on Rule 430A under the Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectus filed with the Commission
pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in this
Agreement means the prospectus subject to completion in the form included in
the registration statement at the time of the initial filing of the
registration statement with the Commission and as such prospectus shall have
been amended from time to time prior to the date of the Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. Subject to such adjustments as
you may determine to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Sellers herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $ per share
(the "purchase price per share"), that number of Firm Shares which bears the
same proportion to the aggregate number of Firm Shares to be issued and sold by
the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Sellers.
Subject to such adjustments as you may determine in order to
avoid fractional shares, each Selling Stockholder agrees, subject to all the
terms and conditions set forth herein, to sell to each Underwriter and, upon
the basis of the representations, warranties and agreements of the Sellers
herein contained and subject to all the terms and conditions set forth herein,
each Underwriter agrees, severally and not jointly, to purchase from each
Selling Stockholder at the purchase price per share that number of Firm Shares
which bears the same proportion to the number of Firm Shares set forth opposite
the name of such Selling Stockholder in Schedule I hereto as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule II hereto
(or such number of Firm Shares increased as set forth in Section 12 hereof)
bears to the aggregate number of Firm Shares to be sold by the Sellers.
The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Company, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
exercised at any time and from time to time prior to 9:00
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p.m., New York City time, on the 30th day after the date of the Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for trading),
up to an aggregate of 375,000 Additional Shares from the Company. Additional
Shares may be purchased solely to cover over-allotments made in connection with
the offering of the Firm Shares. Upon any exercise of the over-allotment
option, each Underwriter, severally and not jointly, agrees to purchase from
the Company the number of Additional Shares (subject to such adjustments as you
may determine in order to avoid fractional shares) which bears the same
proportion to the number of Additional Shares to be purchased by the
Underwriters as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares.
Certificates in transferable form for the Shares that each of the
Selling Stockholders agrees to sell pursuant to this Agreement have been placed
in custody with MileStone Healthcare, Inc. (the "Custodian") for delivery under
this Agreement pursuant to a Custody Agreement and Power of Attorney (the
"Custody Agreement") executed by each of the Selling Stockholders appointing
Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxx as agents and attorneys-in-fact (the
"Attorneys-in-Fact"). Each Selling Stockholder agrees that (i) the Shares
represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters, the Company and
each other Selling Stockholder, (ii) the arrangements made by the Selling
Stockholders for such custody are, except as specifically provided in the
Custody Agreement, irrevocable and (iii) the obligations of the Selling
Stockholders hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Stockholder or by operation of law, whether by the
death or incapacity of any Selling Stockholder or the occurrence of any other
event. If any Selling Stockholder shall die or be incapacitated or if any
other event shall occur before the delivery of the Shares hereunder,
certificates for the Shares to be sold by such Selling Stockholder shall be
delivered to the Underwriters by the Attorneys-in-Fact in accordance with the
terms and conditions of this Agreement and the Custody Agreement as if such
death or incapacity or other event had not occurred, regardless of whether or
not the Attorneys-in-Fact or any Underwriter shall have received notice of such
death, incapacity or other event. Each Attorney-in-Fact represents that he is
authorized, on behalf of each of the Selling Stockholders, to execute this
Agreement and any other documents necessary or desirable in connection with the
sale of the Shares to be sold hereunder by such Selling Stockholder, to make
delivery of the certificates for such Shares, to receive the proceeds of the
sale of such Shares, to give receipts for such proceeds, to pay therefrom any
expenses to be borne by such Selling Stockholder in connection with the sale
and public offering of such Shares, to distribute the balance thereof to such
Selling Stockholder, and to take such other actions as may be necessary or
desirable in connection with the transactions contemplated by this Agreement.
Each Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
3. TERMS OF PUBLIC OFFERING. The Sellers have been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
A.M., New York City time, on , 1996 (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
among you, the Company and the Attorneys-in-Fact.
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Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at the aforementioned
office of Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to
be purchased hereunder shall be registered in such names and in such
denominations as you shall request by written notice, it being understood that
a facsimile transmission shall be deemed written notice, prior to 9:30 A.M.,
New York City time, on the second business day preceding the Closing Date or
any Option Closing Date, as the case may be. Such certificates shall be made
available to you in New York City for inspection and packaging not later than
9:30 A.M., New York City time, on the business day next preceding the Closing
Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and any Additional Shares to be purchased hereunder
shall be delivered to you on the Closing Date or the Option Closing Date, as
the case may be, against payment of the purchase price therefor in immediately
available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective amendment
thereto or any Abbreviated Registration Statement to be declared or, in the
case of an Abbreviated Registration Statement, to become effective before the
offering of the Shares may commence, the Company will endeavor to cause the
registration statement or such post-effective amendment or Abbreviated
Registration Statement to become effective as soon as possible and will advise
you promptly and, if requested by you, will confirm such advice in writing,
when the registration statement or such post-effective amendment or Abbreviated
Registration Statement has become effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the registration statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding
for such purpose; and (iii) within the period of time referred to in paragraph
(f) below, of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations, or of the
happening of any event, which makes any statement of a material fact made in
the Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations
thereunder to be stated therein or necessary in order to make the statements
therein not misleading in any material respect, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Act or any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
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(c) The Company will furnish to you, without charge, three
signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits to the registration statement and will also furnish to you,
without charge, such number of conformed copies of the registration statement
as originally filed and of each amendment thereto, but without exhibits, as you
may request.
(d) The Company will not (i) file any amendment to the
registration statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you shall object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), without delivering a copy of such information, documents or reports to
you, as Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such
quantities as you have requested or may hereafter request, copies of each form
of the Prepricing Prospectus. The Company consents to the use, in accordance
with the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several Underwriters and
by dealers, prior to the date of the Prospectus, of each Prepricing Prospectus
so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto)
as you may request. The Company consents to the use of the Prospectus (and of
any amendment or supplement thereto) in accordance with the provisions of the
Act and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom
Shares may be sold, both in connection with the offering and sale of the Shares
and for such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set
forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with the Act or any other law,
the Company will forthwith prepare and, subject to the provisions of paragraph
(d) above, file with the Commission an appropriate supplement or amendment
thereto and will expeditiously furnish copies thereof to the Underwriters and
dealers in such quantities as you shall request. In the event that the Company
and you, as Representatives of the several Underwriters, agree that the
Prospectus should be amended or supplemented, the Company, if requested by you,
will promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided,
however, that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
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action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering
a twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 12 hereof or by notice given by you terminating
this Agreement pursuant to Section 12 or Section 13 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or the Selling Stockholders to comply with
the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Representatives for all out-of-pocket expenses
(including reasonable fees and expenses of counsel for the Underwriters)
incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of
the Shares by it substantially in accordance with the description set forth in
the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.
(m) The Company will not (and will not announce or otherwise
disclose any intention to) offer to sell, contract to sell, sell or otherwise
transfer or dispose of, or grant any option or warrant to purchase, any shares
of Common Stock (or any securities convertible into or exercisable or
exchangeable for Common Stock) for a period of 180 days after the date of the
Prospectus (the "Lock-up Period") without the prior written consent of Xxxxx
Xxxxxx Inc. except for (i) the sale of the Shares to the Underwriters pursuant
to this Agreement, (ii) the issuance of shares of Common Stock upon exercise of
options or warrants disclosed to be outstanding in the Prospectus and (iii) the
grant pursuant to stock option plans described in the Prospectus of stock
options not exercisable during the Lock-up Period.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
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(p) The Company will use its best efforts to have the Common
Stock approved for quotation on the Nasdaq National Market prior to or
concurrently with the effectiveness of the registration statement.
6. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each of the Selling
Stockholders agrees (severally and not jointly with the other Selling
Stockholders) with the several Underwriters as follows:
(a) Such Selling Stockholder, will cooperate to the extent
necessary to cause the registration statement, any Abbreviated Registration
Statement or any post-effective amendment thereto to become effective at the
earliest possible time.
(b) Such Selling Stockholder will pay all federal and other
taxes, if any, on the transfer or sale of any Shares that are sold by such
Selling Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all things
reasonably required to be done or performed by such Selling Stockholder prior
to the Closing Date to satisfy all conditions precedent to the delivery of the
Shares by such Selling Stockholder pursuant to this Agreement.
(d) Such Selling Stockholder will not (and will not announce
or otherwise disclose any intention to) offer to sell, contract to sell, sell
or otherwise transfer or dispose of, or grant any option to purchase, any
shares of Common Stock (or any securities convertible into or exercisable or
exchangeable for Common Stock), or exercise any registration rights with
respect to the sale of Common Stock, except for the sale of Shares to the
Underwriters pursuant to this Agreement, without the prior written consent of
Xxxxx Xxxxxx Inc. for a period of 180 days after the date of the Prospectus.
(e) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, such Selling Stockholder will not take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(f) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, within the period of
time referred to in Section 5(f) hereof, of any change in information relating
to such Selling Stockholder and of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations or any other information relating to the Company or relating to any
matter stated in the Prospectus or any amendment or supplement thereto that
comes to the attention of such Selling Stockholder that suggests that any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented, if amended or supplemented) is or
may be untrue in any material respect or that the Registration Statement or
Prospectus (as then amended or supplemented, if amended or supplemented) omits
or may omit to state a material fact or a fact necessary to be stated therein
in order to make the statements therein not misleading in any material respect.
(g) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982, as amended, with respect to the transactions herein
contemplated, such Selling Stockholder agrees to deliver to you prior to or on
the Closing Date a properly completed and executed United States Treasury
Department Form W- 9 if required by Treasury Department regulations (or any
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
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7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The registration statement in the form in which it became
or becomes effective, and also in such form as it may be when any
post-effective amendment thereto or any Abbreviated Registration Statement
shall become effective, and the Prospectus and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the Act,
complied or will comply in all material respects with the provisions of the Act
and did not or will not at any such times 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 not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the registration statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of such Underwriter through you expressly
for use therein.
(c) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable,
are free of any preemptive or similar rights (other than such rights as shall
terminate upon completion of, and be inapplicable to, the offering contemplated
hereby) and have been issued and sold in compliance with all Federal and state
securities laws. The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable and free of
any preemptive or similar rights. The capital stock of the Company conforms in
all material respects to the description thereof in the Registration Statement
and the Prospectus.
(d) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify would not
have a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and
the Subsidiaries (as defined below), taken as a whole (a "Material Adverse
Effect").
(e) All of the Company's subsidiaries (as defined in the Act)
are listed in an exhibit to the Registration Statement and are referred to
herein individually as a "Subsidiary" and collectively as the "Subsidiaries."
Each Subsidiary is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration, except where the failure so to
register or qualify would not have a Material Adverse Effect. All the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and are
wholly-owned by the Company directly or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity or other
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encumbrance, except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto).
(f) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries or any of
their respective properties is subject, that are required to be described in
the Registration Statement or the Prospectus but are not described as required.
There are no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that are
not described or filed as required by the Act. Neither the Company nor any of
the Subsidiaries is involved in any strike, job action or labor dispute, and to
the Company's best knowledge no such action or dispute is threatened.
(g) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate of incorporation or by-laws or other
organizational documents, (ii) in violation, except as to violations which
would not individually or in the aggregate have a Material Adverse Effect, of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries, (iii) in violation of any
decree of any court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries, or (iv) in default, except as to defaults
which would not individually or in the aggregate have a Material Adverse
Effect, in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound.
(h) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby (i) requires any
consent, approval, authorization or other order of, or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required for the registration
of the Shares under the Act and the Exchange Act, all of which have been or
will be effected in accordance with this Agreement, and compliance with the
securities or Blue Sky laws of various jurisdictions and the clearance of the
offering with the National Association of Securities Dealers, Inc. (the
"NASD")) or conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, the certificate of incorporation or bylaws, or
other organizational documents, of the Company or any of the Subsidiaries or
(ii) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any indenture, bond, note, lease or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries or any of their respective
properties may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to the
Company or any of the Subsidiaries or any of their respective properties, or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of their respective property
or assets is subject.
(i) The accountants, Xxxxx & Young LLP, who have certified or
shall certify the financial statements filed or to be filed as part of the
Registration Statement or the Prospectus (or any amendment or supplement
thereto), are independent public accountants as required by the Act.
(j) The financial statements, together with the related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), comply in
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all material respects with the requirements of the Act and present fairly the
consolidated financial position, results of operations and changes in
stockholders' equity and cash flows of the Company and the Subsidiaries on the
basis stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
set forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company.
(k) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement. The
execution and delivery of, and the performance by the Company of its
obligations under, this Agreement have been duly and validly authorized by the
Company. This Agreement has been duly executed and delivered by the Company
and constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or state
securities laws or principles of public policy and subject to the qualification
that the enforceability of the Company's obligations hereunder may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights generally and by
general equitable principles.
(l) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction that is
material to the Company and the Subsidiaries, taken as a whole, and there has
not been any change in the capital stock, or material increase in the
consolidated short-term or long-term debt, of the Company and the Subsidiaries,
or any material adverse change, or any development involving or which may
reasonably be expected to involve a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries, taken as a whole.
(m) Each of the Company and the Subsidiaries has good and
indefeasible title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances or restrictions except such as are (i) not
materially important or significant in relation to the Company and the
Subsidiaries, taken as a whole or (ii) described in the Registration Statement
and the Prospectus. All the property described in the Prospectus as being held
under lease by the Company or any of the Subsidiaries is held by it under
valid, subsisting and enforceable leases.
(n) The Company has not distributed and, prior to the later to
occur of the Closing Date and completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectus, the Prospectus or other materials, if any, permitted by the Act and
state securities or Blue Sky laws.
(o) Each of the Company and the Subsidiaries and the Distinct
Part Units ("DPUs") managed by them have such permits, licenses, franchises,
certificates of need and other approvals or authorizations ("Permits") of
governmental or regulatory authorities as are necessary to own, lease or
operate their respective properties and to conduct their respective businesses
in the manner described in
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the Prospectus, including, without limitation, such Permits as are required (x)
under such federal and state healthcare laws as are applicable to the Company
and the Subsidiaries and their respective businesses and (y) with respect to
those facilities or DPUs that are owned, leased or managed by the Company or
any Subsidiary that participate in Medicare and/or Medicaid, to receive
reimbursement thereunder, subject to such qualifications as may be set forth in
the Prospectus and except as would not have a Material Adverse Effect. Each of
the Company and the Subsidiaries have fulfilled and performed all their
respective material obligations with respect to the Permits, and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the
rights of the holder of any such Permit held by the Company or any Subsidiary,
subject in each case to such qualifications as may be set forth in the
Prospectus and except to the extent that the failure to have so performed or
complied or any such impairment would not have a Material Adverse Effect.
Except as described in the Prospectus, none of the Permits contain any
restriction that is materially burdensome to any of the Company or the
Subsidiaries. The Company's and each Subsidiary's business practices do not
violate any applicable provisions of federal or state laws governing Medicare
or any state Medicaid programs, including without limitation, Sections 1320a-7a
and 1320a-7b of Title 42 of the United States Code. No individual with an
ownership or control interest, as defined in 42 U.S.C. Section 1320a-3(a)(3),
in the Company or any Subsidiary, or who is an officer, director or managing
employee as defined in 42 U.S.C. Section 1320a-5(b), of the Company or any
Subsidiary is a person described in 42 U.S.C. Section 1320a-7(b)(8)(B). The
Company's and each Subsidiary's business practices do not violate any federal
or state laws regarding physician ownership of (or financial relationship with)
and referral to entities providing healthcare related goods or services, or
laws requiring disclosure of financial interests held by physicians in entities
to which they may refer patients for the provisions of health care related
goods or services.
(p) Neither the Company nor any of the Subsidiaries has received
nor is it aware of any communication (written or oral) relating to the
termination or modification or threatened termination or modification of the
agreements described or referred to in the Prospectus under the caption
"Business--Services" which would have a Material Adverse Effect, nor is it
aware of any communication (written or oral) relating to any determination or
threatened determination not to renew or extend any agreement described or
referred to under such caption at the end of the current term of any such
agreement which would have a Material Adverse Effect.
(q) The property, assets and operations of the Company and the
Subsidiaries comply in all material respects with all applicable federal, state
and local laws, rules, orders, decrees, judgments, injunctions, licenses,
permits or regulations relating to environmental matters (the "Environmental
Laws"), except to the extent that the lack of compliance with such
Environmental Laws would not, individually or in the aggregate, have a Material
Adverse Effect. To the Company's best knowledge, none of the Company's nor any
of the Subsidiaries' property, assets or operations is the subject of any
federal, state or local investigation evaluating whether any remedial action is
needed to respond to a release of any substance regulated by or form the basis
of liability under any Environmental Laws (a "Hazardous Material") into the
environment or is in contravention of any federal, state, local or foreign law,
order or regulation. Neither the Company nor any of the Subsidiaries has
received any notice or claim, nor are there any pending or, to the Company's
best knowledge, threatened or reasonably anticipated lawsuits or other
proceedings against it with respect to violations of an Environmental Law or in
connection with the release of any Hazardous Material into the environment.
Neither the Company nor any of the Subsidiaries has any material contingent
liability in connection with any release of Hazardous Material into the
environment.
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(r) Each of the Company and the Subsidiaries is insured by
insurers believed by the Company to have adequate claims-paying ability against
such losses and risks and in such amount as are customary in the business in
which it is engaged. All policies of insurance insuring the Company and each
of the Subsidiaries or their respective business, assets, employees, officers
and directors are in full force and effect, and the Company and each of the
Subsidiaries is in compliance with the terms of such policies in all material
respects. There are no claims by the Company or any of the Subsidiaries under
any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.
(s) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) Neither the Company nor any of the Subsidiaries nor, to the
Company's best knowledge, any employee or agent of the Company or any of the
Subsidiaries has made any payment of funds of the Company or any of the
Subsidiaries or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(u) Each of the Company and the Subsidiaries has filed all
federal, state, local and foreign tax returns and tax forms required to be
filed, such returns and forms are complete and correct in all material
respects, and all taxes shown by such returns or otherwise assessed that are
due or payable have been paid, except such taxes as are being contested in good
faith and as to which adequate reserves have been provided. All payroll
withholdings required to be made by the Company or any of the Subsidiaries with
respect to employees have been made. The charges, accruals and reserves on the
books of the Company and the Subsidiaries in respect of any tax liability for
any year not finally determined are adequate to meet any assessments or
reassessments for additional taxes. There have been no tax deficiencies
asserted and, to the best knowledge of the Company, no tax deficiency might be
reasonably asserted or threatened against the Company or any of the
Subsidiaries that could, individually or in the aggregate, have a Material
Adverse Effect.
(v) Except as described in the Registration Statement, no holder
of any security of the Company has any right (other than rights that have been
validly waived) to require registration under the Act of shares of Common Stock
or any other security of the Company because of the filing of the registration
statement or the consummation of the transactions contemplated by this
Agreement and, except as disclosed in the Prospectus, no person has the right
to require registration under the Act of any shares of Common Stock or other
securities of the Company. No person has the right, contractual or otherwise,
to cause the Company to permit such person to underwrite the sale of any of the
Shares. Except as described in or contemplated by the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any of the Subsidiaries or any security convertible
into or exchangeable or exercisable for capital stock of the Company or any of
the Subsidiaries.
(w) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, licenses, inventions,
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trade secrets and rights described in the Prospectus as being owned by any of
them or necessary for the conduct of their respective businesses, and the
Company is not aware of any claims to the contrary or any challenge by any
other person to the rights of the Company and the Subsidiaries or any facts or
circumstances reasonably likely to lead to a claim of infringement with respect
to the foregoing.
(x) The Company is not, and, upon the sale of the Shares to be
issued and sold by it hereunder and application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds," will
not be an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(y) The Company is in compliance with all provisions of Florida
Statutes Section 517.075 and the regulations thereunder, relating to issuers
doing business with Cuba.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder represents and warrants (severally and not jointly with the
other Selling Stockholders) to each Underwriter that:
(a) Such Selling Stockholder now has, and on the Closing Date
will have, valid and indefeasible title to the Shares to be sold by such
Selling Stockholder, free and clear of any lien, claim, security interest or
other encumbrance, including, without limitation, any restriction on transfer
or other defect in title.
(b) Such Selling Stockholder now has, and on the Closing Date
will have, full legal right, power and authorization, and any approval required
by law (except such as may be required under the Act or state securities or
Blue Sky laws governing the purchase and distribution of the Shares), to sell,
assign, transfer and deliver such Shares in the manner provided in this
Agreement, and upon delivery of and payment for such Shares hereunder, the
several Underwriters will acquire valid and indefeasible title to such Shares,
free and clear of any lien, claim, security interest or other encumbrance,
restriction on transfer or defect in title.
(c) This Agreement and the Custody Agreement have been duly
authorized, and in the case of this Agreement, when executed and delivered on
behalf of such Selling Stockholder in accordance with the Custody Agreement,
have been duly executed and delivered by or on behalf of such Selling
Stockholder and are the valid and binding agreements of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with
their terms, respectively, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles of
public policy and except as enforcement hereof and thereof may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
equitable principles.
(d) Neither the execution and delivery of this Agreement or
the Custody Agreement by or on behalf of such Selling Stockholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Stockholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act or state securities or Blue Sky laws
governing the purchase and distribution of the Shares) or conflicts or will
conflict with or constitutes or will constitute a breach of, or default under,
or violates or will violate, any material agreement, indenture or other
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder is or may be bound or to which any of such Selling
Stockholder's property or assets
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is subject, or any statute, law, rule, regulation, ruling, judgement,
injunction, order or decree applicable to such Selling Stockholder or to any
property or assets of such Selling Stockholder, except in each case as would
not adversely affect the ability of such Selling Stockholder to consummate the
transactions contemplated by this Agreement.
(e) Such Selling Stockholder has reviewed the Registration
Statement and the Prospectus. Such Selling Stockholder, other than ING,
represents and warrants that the Registration Statement does 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 not
misleading, and the Prospectus does not contain an untrue statement of a
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 and, except as disclosed in the Registration Statement and the
Prospectus, such Selling Stockholder knows of no material adverse information
concerning the current or prospective operations of the Company. ING
represents and warrants that the information contained in the Registration
Statement and Prospectus and any amendment or supplement thereto relating to
ING is accurate and complete in all material respects and as to information
contained in the Registration Statement and Prospectus not relating to ING, to
the best knowledge of ING, the Registration Statement and Prospectus and any
amendment or supplement thereto do not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(f) The representations and warranties of such Selling
Stockholder in the Custody Agreement are, and on the Closing Date will be, true
and correct.
(g) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares, except for the lock-up
arrangements described in the Prospectus.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or
in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information relating to such Underwriter furnished in
writing to the Company by or on behalf of such Underwriter through you
expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any Prepricing
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of Shares by such
Underwriter to any person if (i) a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in such Prepricing Prospectus was corrected in the
Prospectus and (ii) the Company delivered the Prospectus to the several
Underwriters in requisite quantity on a timely basis to permit such delivery or
sending. The
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foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or any such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Company has agreed in writing to pay such fees and
expenses, (ii) the Company has failed to assume the defense and employ counsel
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Underwriter or such controlling person
and the Company and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the Company shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Company shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and any such controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The Company shall not be liable for
any settlement of any such action, suit or proceeding effected without its
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Company agrees to indemnify and hold harmless any Underwriter and any such
controlling person, to the extent provided in the preceding paragraph, from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each of the Selling Stockholders agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act to the same extent as the indemnity from the
Company to each Underwriter set forth in Section 9(a) hereof (but subject to
Section 9(g) hereof); provided, however, that the foregoing indemnification
with respect to ING shall apply only to information relating to ING. In case
any action or claim shall be brought or asserted against any Underwriter or any
such controlling person in respect of which indemnity may be sought against
such Selling Stockholder pursuant to this paragraph (c), such Selling
Stockholder shall have the rights and duties given to the Company, and each
Underwriter and any such controlling person shall have the rights and duties
given to the Underwriters, under paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which each of the Selling
Stockholders may otherwise have.
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Stockholders and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with respect to information relating to
such Underwriter furnished in writing to
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the Company by or on behalf of such Underwriter through you expressly for use
in the Registration Statement, the Prospectus or any Prepricing Prospectus, or
any amendment or supplement thereto. If any action, suit or proceeding shall
be brought against the Company, any of its directors, any such officer, any
such controlling person or any Selling Stockholder based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (d), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officer,
any such controlling person and any such Selling Stockholder shall have the
rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriters
on the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other hand
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Stockholders 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; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholders and the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Stockholders, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholders on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (e) above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities and expenses referred
to in paragraph (e) above shall be deemed to include, subject to the
limitations set
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forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule II hereto (or such
numbers of Firm Shares increased as set forth in Section 12 hereof) and not
joint.
(g) Notwithstanding any other provision of this Section 9, the
total liability of any Selling Stockholder for indemnification or contribution
under this Section 9 shall not exceed an amount equal to the number of Shares
sold by such Selling Stockholder hereunder multiplied by the purchase price per
share set forth in Section 2 hereof.
(h) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(i) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 9 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any person controlling the Company or any Selling Stockholders, (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company or any Selling Stockholders, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective amendment
thereto or an Abbreviated Registration Statement to be declared effective
before the offering of the Shares may commence, the registration statement or
such post-effective amendment or Abbreviated Registration Statement shall have
become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act
shall have been timely made.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial
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or other), business, prospects, properties, net worth, or results of operations
of the Company or any of the Subsidiaries not contemplated by the Prospectus,
which in your opinion, as Representatives of the several Underwriters, would
materially, adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company or any of the Subsidiaries,
any officer or director of the Company or any of the Subsidiaries or any
Selling Stockholder, which makes any statement made in the Prospectus untrue or
which, in the opinion of the Company and its counsel or the Underwriters and
their counsel, requires the making of any addition to or change in the
Prospectus in order to state a material fact required by the Act or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion, as Representatives of the several
Underwriters, materially, adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of
Xxxx, Xxxx, Xxxxxxx, Xxxxx & Xxxx, L.L.P., counsel for the Company, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register
or qualify would not have a Material Adverse Effect;
(ii) Each Subsidiary is a corporation duly incorporated
and validly existing and in good standing under the laws of the
jurisdiction of its organization, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus
(and any amendment or supplement thereto); each Subsidiary is duly
registered and qualified to conduct its business and is in good standing
as a foreign corporation in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register
or qualify or to be in good standing would not have a Material Adverse
Effect; and all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned of record by the Company directly,
or indirectly through one of the other Subsidiaries, free and clear of
any perfected security interest or, to such counsel's knowledge, any
other lien, adverse claim, equity or other encumbrance, except as
disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement thereto);
(iii) The authorized capital stock of the Company is as
set forth under the caption "Capitalization" in the Prospectus, and the
authorized capital stock of the Company conforms in all material
respects as to legal matters to the description contained in the
Prospectus under the caption "Description of Capital Stock";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares have been duly
authorized and validly issued, are fully paid and nonassessable and were
issued and sold in compliance with all applicable federal and state
securities laws;
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(v) The Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and free of (A) any preemptive rights arising under the
Company's certificate of incorporation or the Delaware General
Corporation Law or (B) to the knowledge of such counsel, similar rights
that entitle or will entitle any person to acquire any shares of capital
stock of the Company upon the issuance and sale of the Shares by the
Company;
(vi) The form of certificate for the Shares conforms to
the requirements of the Delaware General Corporation Law;
(vii) Such counsel has received oral confirmation from
the staff of the Commission that the Registration Statement and all
post-effective amendments, if any, have become effective under the Act
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule
424(b) has been made in accordance with Rule 424(b);
(viii) The Company has the corporate power and authority
to enter into this Agreement and to issue, sell and deliver the Shares
to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and is a valid, legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or principles of public policy and subject to the qualification
that the enforceability of the Company's obligations hereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(ix) To the knowledge of such counsel, neither the
Company nor any of the Subsidiaries is in violation of its certificate
of incorporation or bylaws, or other organizational documents, or in
default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness, or in any agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which
any of them or any of their respective properties may be bound, in each
case that is made an exhibit to the Registration Statement;
(x) Neither the offer, sale or delivery of the Shares,
the execution, delivery or performance of this Agreement, compliance by
the Company with the provisions hereof nor consummation by the Company
of the transactions contemplated hereby conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, the
certificate of incorporation or bylaws, or other organizational
documents, of the Company or any of the Subsidiaries or any, indenture,
bond, note, lease or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or any of their respective properties is bound that is
made an exhibit to the Registration Statement, or to the knowledge of
such counsel will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of the Subsidiaries, nor will any such action result in any violation of
any existing law, regulation, ruling (assuming compliance with all
applicable state securities or Blue Sky laws and the bylaws and rules of
the NASD other than those relating to the inclusion of the Common Stock
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on the Nasdaq National Market), judgment, injunction, order or decree
known to such counsel and applicable to the Company or any of the
Subsidiaries or any of their respective properties;
(xi) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company or any of the Subsidiaries (except
as have been obtained under the Act and the Exchange Act, as may be
required by the bylaws and rules of the NASD other than those relating
to the inclusion of the Common Stock on the Nasdaq National Market or
such as may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters as contemplated by
this Agreement;
(xii) The Registration Statement and the Prospectus and
any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein, as to which such counsel need not
express any opinion) comply as to form in all material respects with the
requirements of the Act;
(xiii) To the knowledge of such counsel, (A) there are no
legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or any of
the Subsidiaries or any of their respective properties is subject, which
are required to be described in the Registration Statement or Prospectus
(or any amendment or supplement thereto) that are not described as
required and (B) there are no agreements, contracts, indentures, leases
or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that
are not described or filed as required, as the case may be;
(xiv) To the knowledge of such counsel, neither the
Company nor any of the Subsidiaries is in violation of any law,
ordinance, administrative or governmental rule or regulation applicable
to the Company or any of the Subsidiaries, the violation of which would
have a Material Adverse Effect, or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries;
(xv) To the knowledge of such counsel, each of the
Company and the Subsidiaries has all necessary Permits (except where the
failure to so have any such Permits, individually or in the aggregate,
would not have a Material Adverse Effect) to own its properties and to
conduct its business as now being conducted as described in the
Prospectus; provided, however, that, with respect to such Permits as are
required under such federal, state or local healthcare laws as are
applicable to the Company and the Subsidiaries and their respective
businesses, such counsel may rely on an opinion of Xxxxxx, Xxxxx Xxxxxx
& Xxxxxxxx, P.C.;
(xvi) The statements in the Registration Statement and
Prospectus under the captions "Risk Factors -- Contract Terms and
Renewals," "Risk Factors -- Benefit of Offering to Certain Existing
Stockholders," "Risk Factors -- Shares Eligible for Future Sales," "Risk
Factors -- Anti-Takeover Matters," "The Company," the third and fourth
paragraphs of "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources,"
"Business -- Clients -- Hospital Program Management Contracts,"
"Business -- Clients -- Contract Therapy Agreements," "Management --
Employment Agreements," "Management -- Stock Option Plan," "Certain
Transactions," "Description of Capital Stock," "Shares Eligible For
Future Sale," Part II -- Item 14 and Part II -- Item 15
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insofar as they are descriptions of contracts, agreements or other legal
documents, or refer to statements of law or legal conclusions, are
accurate and present fairly the information required to be shown;
(xvii) Except as described in the Prospectus, such counsel
does not know of any holder of any securities of the Company or any
other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any
Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require the Company to register under the Act
any shares of Common Stock or other securities of the Company, and any
registration rights in connection with the offering contemplated hereby
have been validly waived or exercised as described in the Registration
Statement; and
(xviii) The Company is not an "investment company" or a
person "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company and representatives of the independent public accountants for the
Company and the Underwriters and representatives of legal counsel for the
Underwriters, at which the information in the Registration Statement and the
Prospectus relating to the Company was discussed and, although such counsel is
not passing upon and does not assume any responsibility for and shall not be
deemed to have independently verified the accuracy, completeness or fairness of
the statements contained in the Registration Statement and Prospectus, on the
basis of the foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Company), no facts have
come to such counsel's attention that lead such counsel to believe that the
Registration Statement (except for the financial statements and schedules
contained therein (including the notes and auditors' report thereon) or the
other financial or statistical date contained therein, as to which such counsel
makes no statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (except for the financial statements and schedules
contained therein (including notes thereto and the auditors' report thereon) or
the other financial or statistical data contained therein, as to which such
counsel makes no statement), as of its date and on the Closing Date or the
Option Closing Date, as the case may be, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which that were made, not misleading.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the federal laws
of the United States or the states of Texas and New York or the corporation law
of the State of Delaware, provided, however that (1) each such local counsel is
acceptable to the Representatives, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is delivered to the
Representatives and is, in form and substance, satisfactory to them and counsel
for the Underwriters and (3) counsel shall state in their opinion that they
believe that they and the Underwriters are justified in relying thereon.
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(d) You shall have received on the Closing Date an opinion of Powers
Xxxxx Xxxxxx & Xxxxxxxx, P.C., regulatory counsel for the Company, dated the
Closing Date and addressed to you, to the effect that:
(i) The statements of federal law or regulation
relating to Medicare and Medicaid reimbursement contained in the
Prospectus under the captions "Risk Factors--Reimbursement
Considerations," "Risk Factors--Contract Terms and Renewals," "Risk
Factors--Developments in the Health Care Industry,"
"Business--Reimbursement for Services" and "Business--Government
Regulation" are, in all material respects, correct and accurate
statements or summaries of applicable federal law and regulation,
subject to the qualifications set forth therein; and
(ii) No facts have come to the attention of such
counsel, that lead them to believe that the information contained in the
Registration Statement and the Prospectus forming a part thereof under
the captions "Risk Factors--Reimbursement Considerations," "Risk
Factors--Contract Terms and Renewals," "Risk Factors--Developments in
the Health Care Industry," "Business--Reimbursement for Services" and
"Business--Government Regulation," as of the time the Registration
Statement became effective and as of the date of the Prospectus and as
of the Closing Date, 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.
In rendering their opinion as aforesaid, such counsel may state
that such counsel was not asked to, nor did it conduct any review or
investigation with respect to the Company's compliance with reimbursement
requirements, including fraud and abuse laws. In addition such counsel's
opinion letter may state its response to Section 10(d)(ii) hereof is not a
legal opinion.
(e) (i) You shall have received on the Closing Date an opinion of
Xxxx, Xxxx, Xxxxxxx, Xxxxx & Xxxx, L.L.P., counsel to the Selling Stockholders,
other than ING, dated the Closing Date and addressed to you, that:
(a) This Agreement and the Custody Agreement have each
been duly executed and delivered by or on behalf of each of the Selling
Stockholders, other than ING;
(b) To the knowledge of such counsel, each Selling
Stockholder, other than ING, has full legal right, power and authorization, and
any approval required by law, to sell, assign, transfer and deliver good and
indefeasible title to the Shares which such Selling Stockholder has agreed to
sell pursuant to this Agreement; upon delivery of such Shares pursuant to this
Agreement and payment therefor as contemplated herein and assuming that the
several Underwriters purchased such Shares in good faith and without notice of
an adverse claim within the meaning of the Uniform Commercial Code (the "UCC"),
the Underwriters will acquire such Shares free and clear of any adverse claim
(within the meaning of Section 8-302 of the UCC); and
(c) To the knowledge of such counsel, the execution and
delivery of this Agreement and the Custody Agreement by or on behalf of the
Selling Stockholders, other than ING, and the consummation of the transactions
contemplated hereby and thereby will not conflict with, violate, result in a
breach of or constitute a default under the terms or provisions of material any
agreement, indenture or other instrument known to such counsel to which any
Selling Stockholder is a party or by which any of them or any of their
respective assets or property is bound, or any court order or decree
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known to such counsel or any law, rule, or regulation applicable to any such
Selling Stockholder or to any of the respective property or assets of any such
Selling Stockholder.
(ii) You shall have received on the Closing Date an opinion of
Xxxx & Xxxxxxxx, counsel to ING, dated the Closing Date and addressed to you,
that:
(a) This Agreement and the Custody Agreement have each
been duly executed and delivered by or on behalf of ING;
(b) To the knowledge of such counsel, ING has full
legal right, power and authorization, and any approval required by law, to
sell, assign, transfer and deliver good and indefeasible title to the Shares
which ING has agreed to sell pursuant to this Agreement; upon delivery of such
Shares pursuant to this Agreement and payment therefor as contemplated herein
and assuming that the several Underwriters purchased such Shares in good faith
and without notice of an adverse claim within the meaning of the Uniform
Commercial Code (the "UCC"), the Underwriters will acquire such Shares free and
clear of any adverse claim (within the meaning of Section 8-302 of the UCC);
and
(c) To the knowledge of such counsel, the execution and
delivery of this Agreement and the Custody Agreement by or on behalf of ING and
the consummation of the transactions contemplated hereby and thereby will not
conflict with, violate, result in a breach of or constitute a default under the
terms or provisions of material any agreement, indenture or other instrument
known to such counsel to which ING is a party or by which any of them or any of
their respective assets or property is bound, or any court order or decree
known to such counsel or any law, rule, or regulation applicable to ING or to
any of the respective property or assets of ING.
In rendering their opinion as aforesaid, each such counsel may
rely as to factual matters (i) upon certificates of the Selling Stockholders
and (ii) the representations of the Selling Stockholders contained herein and
in the Custody Agreement.
(f) You shall have received on the Closing Date an opinion of
Xxxxx Xxxxxxxxxx, counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (v) (other than subclause (B) thereof),
(vii), (viii), (xii) and the penultimate paragraph of Section 10(c) hereof and
such other related matters as you may request.
(g) You shall have received letters addressed to you and
dated the date hereof and the Closing Date from Ernst & Young L.L.P.,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(h)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company,
contemplated by the Commission at or prior to the Closing Date 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; (ii) there shall not have been any material change in the capital stock
of the Company nor any material increase in the short-term or long-term debt of
the Company and the Subsidiaries, taken as a whole, from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and
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Prospectus (or any amendment or supplement thereto), any material adverse
change in the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries, taken
as a whole; (iv) neither the Company nor any of the Subsidiaries shall have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in or contemplated
by the Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on
and as of the Closing Date, and you shall have received a certificate, dated
the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you), as to the matters set forth in this Section 10(h) and in Section 10(i)
hereof.
(i) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(j) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing Date
and signed by or on behalf of the Selling Stockholders set forth in this
Section 10(j) and in Section 10(k) hereof.
(k) The Selling Stockholders shall not have failed at or
prior to the Closing Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with by
them hereunder at or prior to the Closing Date.
(l) The Shares shall have been approved for quotation subject
to notice of issuance on the Nasdaq National Market.
(m) The Company shall not have received notices of
termination relating to the Company's contracts with its customers, the
termination of which, individually or in the aggregate, would have a Material
Adverse Effect.
(n) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
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, as Representatives of the several Underwriters,
and counsel for the Underwriters.
Any certificate or document signed by any officer of the
Company or by or on behalf of any Selling Stockholder and delivered to you, as
Representatives of the several Underwriters, or to counsel for the
Underwriters, shall be deemed a representation or warranty by the Company or
such Selling Stockholder, as the case may be, to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except
that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and
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letters referred to in paragraphs (c) through (h), except paragraph (e), and
paragraph (n) shall be dated the Option Closing Date in question and the
opinions called for by paragraphs (c) and (f) and the certificates called for
by paragraphs (h) and (n) shall be revised to reflect the sale of Additional
Shares.
11. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the registration statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the offering of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v)
the registration of the Common Stock under the Exchange Act and the listing of
the Shares on the Nasdaq National Market; (vi) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the NASD in connection with the offering; (viii) the transportation and
other expenses incurred by or on behalf of representatives of the Company in
connection with presentations to prospective purchasers of the Shares; (ix) the
fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Stockholders; and (x) the performance by the Company of its other obligations
under this Agreement.
12. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto;
or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or an Abbreviated Registration Statement to be declared or become effective
before the offering of the Shares may commence, when notification of the
effectiveness of the registration statement or such post-effective amendment
has been released by the Commission or such Abbreviated Registration Statement
has, pursuant to the provisions of Rule 462 under the Act, become effective.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company by notifying you and the Attorneys-in-Fact, or by
you, as Representatives of the several Underwriters, by notifying the Company
and the Attorneys-in-Fact.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date, each non-defaulting Underwriter shall be obligated,
severally, in the proportion which the number of Firm Shares set forth opposite
its name in Schedule II hereto bears to the aggregate number of Firm Shares set
forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Xxxxx Xxxxxx, Xxxxxx Xxxxx & Co. Incorporated
(predecessor of Xxxxx Xxxxxx Inc.), to purchase the Shares which such
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defaulting Underwriter or Underwriters agreed, but failed or refused, to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase on the Closing Date and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date and arrangements satisfactory to you
and the Company for the purchase of such Shares by one or more non-defaulting
Underwriters or other party or parties approved by you and the Company are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement. The term "Underwriter"
as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule II hereto who, with your approval and the approval
of the Company, purchases Shares which a defaulting Underwriter agreed, but
failed or refused, to purchase.
Any notice under this Section 12 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
13. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Sellers, by notice to the Company and the Attorneys-in-Fact,
if prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be,
(i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
14. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page and the statements in the first and third paragraphs
under the caption "Underwriting" in any Prepricing Prospectus and in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Sections 7(b)
and 9 hereof.
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of
the Company at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000, XX00, Xxxxxx, Xxxxx 00000,
Attention: Xx. Xxxxxxx X. Xxxxx, President and Chief Executive Officer, with a
copy to Xxxx, Gump, Xxxxxxx, Xxxxx & Xxxx, L.L.P, 0000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, Attention: X. Xxxxxxx Xxxxxx, Xx., P.C.; or (ii) if
to you, as Representatives of the several Underwriters, in care of Xxxxx Xxxxxx
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager,
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Investment Banking Division, with a copy to Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxx X. Xxxxxx, Esq.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Company, its directors, its officers who sign the
Registration Statement, the Selling Stockholders and the controlling persons
referred to in Section 9 hereof and, to the extent provided herein, their
respective successors and assigns and no other person shall acquire or have any
right under or by virtue of this Agreement. Neither the term "successor" nor
the term "successors and assigns" as used in this Agreement shall include a
purchaser from any Underwriter of any of the Shares in his status as such
purchaser.
16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and the several Underwriters.
Very truly yours,
MILESTONE HEALTHCARE, INC.
By:
---------------------------
Xxxxxxx X. Xxxxx
President and
Chief Executive Officer
EACH OF THE SELLING
STOCKHOLDERS NAMED
IN SCHEDULE I HERETO
By:
---------------------------
Attorney-in-Fact
Confirmed as of the date first By:
above mentioned on behalf of ---------------------------
themselves and the other several Attorney-in-Fact
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXX XXXX LLC
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By:
-------------------------------------------
Managing Director
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SCHEDULE I
MILESTONE HEALTHCARE, INC.
Number of
Selling Stockholder Firm Shares
------------------- -----------
ING (U.S.) Investment
Corporation 150,000
Xxxxxxx X. Xxxxx 129,753
Xxx X. Xxxxxxxx, Xx. 83,762
Xxxxxxx X. Xxxxxxx 36,485
-------
400,000
=======
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SCHEDULE II
MILESTONE HEALTHCARE, INC.
Number of
Underwriter Firm Shares
----------- -----------
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . . .
Xxxxxx Xxxx LLC . . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . 2,500,000
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