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EXHIBIT 1.1
4,700,000 Shares
Province Healthcare Company
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
February____, 1998
BT Alex. Xxxxx Incorporated
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company, LLC
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Province Healthcare Company, a Delaware corporation (the "Company"),
proposes to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 4,700,000 shares of the Company's Common
Stock, $0.01 par value (the "Firm Shares"). The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to 705,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part for the
accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
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In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the
Underwriters as follows:
(a) A registration statement on Form S-1 (File No. 333-34221)
with respect to the Shares has been carefully prepared by the Company
in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission. Copies
of such registration statement, including any amendments thereto, the
preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements
and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule
462(b) of the Act, herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in
reliance upon Rule 430A and contained in the Prospectus referred to
below, has become effective under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date
of this Agreement. "Prospectus" means (a) the form of prospectus first
filed with the Commission pursuant to Rule 424(b) or (b) the last
preliminary prospectus included in the Registration Statement filed
prior to the time it becomes effective or filed pursuant to Rule 424(a)
under the Act that is delivered by the Company to the Underwriters for
delivery to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein
referred to as a "Preliminary Prospectus." Any reference herein to any
Prospectus shall be deemed to include any supplements or amendments
thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the termination of
the offering of the Shares by the Underwriters.
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. The Company is duly qualified and is active on the records
of the Corporation Division of the State of Oregon and is duly
qualified and in good standing as a foreign corporation authorized to
do business in each other jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the earnings, business, assets,
operations, condition (financial or other) or prospects for the
business, assets, operations, condition (financial or other) of the
Company and its Subsidiaries (as defined), taken as a whole (such
effect is referred to herein as a "Material Adverse Effect").
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(c) All of the consolidated corporations, partnerships
(including, without limitation, general, limited and limited liability
partnerships) and limited liability companies in which the Company has
a direct or indirect ownership interest are listed in Schedule II to
this Agreement (collectively, the "Subsidiaries"). Each Subsidiary that
is a corporation (a "Corporate Subsidiary") has been duly organized and
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement. Each Corporate
Subsidiary is duly qualified and [is active on the records of the
Corporation Division of the State of Oregon and is duly qualified and]
in good standing as a foreign corporation authorized to do business in
each other jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a Material Adverse
Effect. All of the outstanding shares of capital stock of each
Corporate Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable, were not issued in violation of or
subject to any preemptive or similar rights, and, except as set forth
on Schedule 1(c), are owned by the Company directly, or indirectly
through one of the other Subsidiaries, free and clear of all security
interests, liens, encumbrances and equities and claims; and no options,
warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of
capital stock or ownership interests in any Corporate Subsidiary are
outstanding.
(d) Each Subsidiary that is a partnership (a "Partnership")
has been duly organized, is validly existing as a partnership in good
standing under the laws of its jurisdiction of organization and has the
partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement. Each Partnership is duly qualified and [active on the
records of the Corporation Division of the State of Oregon and is duly
qualified and ] in good standing as a foreign partnership authorized to
do business in each other jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect. The capital contributions with respect
to the outstanding units of each Partnership have been made to the
Partnership. Except as set forth in Schedule 1(d), the general and
limited partnership interests therein held directly or indirectly by
the Company are owned free and clear of all security interests, liens,
encumbrances and equities and claims; and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into ownership interests in any
Partnership are outstanding. Each partnership agreement pursuant to
which the Company or a Subsidiary holds an interest in a Partnership is
in full force and effect and constitutes the legal, valid and binding
agreement of the parties thereto, enforceable against such parties in
accordance with the terms thereof, except as enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally. There has been no material
breach of or default under, and no event which with notice or lapse of
time would constitute a material breach of or default under, such
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partnership agreements by the Company or any Subsidiary or, to the
Company's knowledge, any other party to such agreements.
(e) Each Subsidiary that is a limited liability company (an
"LLC") has been duly organized, is validly existing as a limited
liability company in good standing under the laws of its jurisdiction
of organization and has the limited liability company power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement. Each LLC is duly
qualified and [active on the records of the Corporation Division of the
State of Oregon and is duly qualified and] in good standing as a
foreign limited liability company authorized to do business in each
other jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the earnings, business, management, properties, assets, rights,
operations, condition (financial or other) or prospects of the Company
and its Subsidiaries, taken as a whole. The capital contributions with
respect to the outstanding membership interests of each LLC have been
made to the LLC. All outstanding membership interests in the LLCs were
issued and sold in compliance with the applicable operating agreements
or such LLCs and all applicable federal and state securities laws, and,
except as set forth in Schedule 1(e), the membership interests therein
held directly or indirectly by the Company are owned free and clear of
all security interests, liens, encumbrances and equities and claims;
and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations
into ownership interests in any LLC are outstanding. Each operating
agreement pursuant to which the Company or a Subsidiary holds a
membership interest in an LLC is in full force and effect and
constitutes the legal, valid and binding agreement of the parties
thereto, enforceable against such parties in accordance with the terms
thereof, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally. There has been no material breach of or
default under, and no event which with notice or lapse of time would
constitute a material breach of or default under, such operating
agreements by the Company or any Subsidiary or, to the Company's
knowledge, any other party to such agreements.
(f) Except to the extent disclosed in the Prospectus, each of
the hospitals described in the Prospectus as owned or leased by the
Company is owned or leased and operated by a Subsidiary in which the
Company directly or indirectly owns at least 80% of the outstanding
ownership interests. Except as disclosed in the Prospectus, there are
no consensual encumbrances or restrictions on the ability of any
Subsidiary (i) to pay any dividends or make any distributions on such
Corporate Subsidiary's capital stock, such Partnership's partnership
interests or such LLC's membership interests or to pay any indebtedness
owed to the Company or any other Subsidiary, (ii) to make any loans or
advances to, or investments in, the Company or any other Subsidiary, or
(iii) to transfer any of its property or assets to the Company or any
other Subsidiary.
(g) The outstanding shares of Common Stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued
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and sold by the Company have been duly authorized and when issued and
paid for as contemplated herein will be validly issued, fully paid and
non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof. Neither the
filing of the Registration Statement nor the offering or sale of the
Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating
to the registration of any shares of Common Stock.
(h) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the
Shares conform in all material respects to the description thereof
contained in the Registration Statement. The form of certificates for
the Shares conforms in all material respects to the corporate law of
the jurisdiction of the Company's incorporation.
(i) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement conforms, and the Prospectus and any amendments
or supplements thereto will conform, to the requirements of the Act and
the Rules and Regulations. The Registration Statement and any amendment
thereto do not contain, and will not contain, any untrue statement of a
material fact and do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue
statement of material fact and do not omit, and will not omit, to state
any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company
makes no representations or warranties as to information contained in
or omitted from the Registration Statement or the Prospectus, or any
such amendment or supplement, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives, specifically for use in the
preparation thereof.
(j) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as set
forth in the Registration Statement, present fairly the financial
position and the results of operations and cash flows of the Company
and the consolidated Subsidiaries, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have
been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary
financial and statistical data included in the Registration Statement
presents fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements presented
therein and the books and records of the company. The pro forma
financial statements and other pro forma financial information included
in the Registration Statement and the Prospectus present fairly the
information shown therein, have been
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prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been properly compiled
on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(k) Ernst & Young LLP and KPMG Peat Marwick LLP, who have
certified certain of the financial statements filed with the Commission
as part of the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(l) There is no action, suit, claim or proceeding pending or,
to the knowledge of the Company, overtly threatened against the Company
or any of the Subsidiaries before any court or administrative agency or
otherwise which if determined adversely to the Company or any of its
Subsidiaries would reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect or to prevent the
consummation of the transactions contemplated hereby, except as set
forth in the Registration Statement.
(m) The Company and the Subsidiaries have good and marketable
title to all of the material properties and assets reflected in the
financial statements (or as described in the Registration Statement)
hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial
statements (or as described in the Registration Statement) or which are
not material in amount. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases conforming in all
material respects to the description thereof set forth in the
Registration Statement; provided, however, that the Company makes no
representations or warranties regarding the validity or enforceability
of any purchase options for leased premises.
(n) The Company and the Subsidiaries have filed all Federal,
State, material local and material foreign income tax returns which
have been required to be filed and have paid all taxes indicated by
said returns and all assessments received by them or any of them to the
extent that such taxes have become due, other than taxes being
contested in good faith by appropriate proceedings. All tax liabilities
have been adequately provided for in the financial statements of the
Company.
(o) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any
development that would reasonably be expected to, individually or in
the aggregate, result in a Material Adverse Effect, whether or not
occurring in the ordinary course of business, and there has not been
any material transaction entered into or any material transaction that
is probable of being entered into by the Company or the Subsidiaries,
other than transactions in the ordinary course of business and changes
and transactions described in the Registration Statement, as it may be
amended or supplemented. The Company and the Subsidiaries have no
material contingent obligations
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which are not disclosed in the Company's financial statements which are
included in the Registration Statement.
(p) Neither the Company nor any of the Subsidiaries is or with
the giving of notice or lapse of time or both, will be, in violation of
or in default under its Charter or By-Laws or other organizational
agreement or under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any
of its properties, is bound, except for such violations or defaults
which would not reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect. The execution and
delivery of this Agreement and the consummation of the transactions
herein contemplated and the fulfillment of the terms hereof will not
conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any
Subsidiary is a party, or of the Charter or by-laws of the Company or
any order, rule or regulation applicable to the Company or any
Subsidiary of any court or of any regulatory body or administrative
agency or other governmental body having jurisdiction, except for such
conflicts, breaches or defaults which would not reasonably be expected
to, individually or in the aggregate, result in a Material Adverse
Effect.
(q) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated (except such additional steps as may
be required by the Commission, the National Association of Securities
Dealers, Inc. (the "NASD") or such additional steps as may be necessary
to qualify the Shares for public offering by the Underwriters under
state securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(r) Each of the Company and its Subsidiaries owns or possesses
adequate rights to use all material patents, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names and
copyrights described or referred to in the Prospectus as owned or used
by it or which are necessary for the conduct of its business as
described in the Prospectus. Neither the Company nor any of the
Subsidiaries has infringed, or received notice of any infringement of,
any patents, patent rights, trade names, trademarks or copyrights,
except for any infringement which has been settled and except for such
infringements which would not reasonably be expected to, individually
or in the aggregate, result in a Material Adverse Effect. The Company
knows of no material infringement by others of patents, patent rights,
trade names, trademarks or copyrights owned by or licensed to the
Company or any Subsidiary.
(s) Neither the Company, nor to the Company's best knowledge,
any of its affiliates, has taken or may take, directly or indirectly,
any action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of the Shares.
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(t) Neither the Company nor any Subsidiary is, nor will the
Company nor any Subsidiary become upon the sale of the Shares and the
application of the proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds," an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(u) 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.
(v) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
customary for companies engaged in similar industries.
(w) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability
which would reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect; the Company has not
incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(x) The Shares have been approved for listing, subject to
notice of issuance, on the Nasdaq National Market.
(y) To the best of the Company's knowledge, no officer,
director or securityholder of the Company has an "association" or
"affiliation" with any member of the National Association of Securities
Dealers, Inc. ("NASD"), within the meaning of Article III, Section 44
of the Rules of Fair Practice of the NASD. The Company does not have an
"association" or "affiliation" with any member of the NASD, within the
meaning of Article III, Section 44 of the Rules of Fair Practice of the
NASD.
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(z) Each of the parties to the Amended and Restated Plan and
Agreement of Merger, dated as of January 15, 1998 (the "Merger
Agreement"), by and between the Company and Principal Hospital Company,
an Oregon corporation, had, at the time of the execution and delivery
of the Merger Agreement and at all times through and including the
consummation of the transactions contemplated thereby, full legal
right, power and authority to enter into the Merger Agreement and to
perform the transactions contemplated thereby. The Merger Agreement was
duly authorized, executed and delivered by each of the parties thereto;
the performance of the Merger Agreement and the consummation of the
transactions therein contemplated did not result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or require the consent or approval of any person or entity
under, (i) any bond, debenture, note or other evidence of indebtedness,
or under any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which any
of the parties to the Merger Agreement is or was a party or by which
any of such parties or their respective properties is or was bound,
(ii) the charter or bylaws of any of the parties to the Merger
Agreement, or (iii) any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over any of the parties
to the Merger Agreement or over their respective properties, except for
such consents or approvals as have been duly and timely received or
obtained and except for such breaches, violations or defaults which
would not reasonably be expected to, individually or in the aggregate,
result in a Material Adverse Effect. No consent, approval,
authorization or order of or qualification with any court, government
or governmental agency or body, domestic or foreign, having
jurisdiction over any of the parties to the Merger Agreement or over
their respective properties is or was required for the execution and
delivery of the Merger Agreement and the consummation of the
transactions contemplated thereby, except for such consents, approvals,
authorizations, orders or qualifications as have been duly and timely
received or obtained. The merger contemplated by the Merger Agreement
has been duly and validly consummated and has become effective under
applicable law. The transactions contemplated by the Merger Agreement
constitute an entirely tax free reorganization under Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the
"Code"), and otherwise did not require the Company to recognize gain
under the Code.
(aa) The Company and its Subsidiaries have operated and
currently operate their business in conformity with all applicable
laws, rules and regulations of each jurisdiction in which it is
conducting business, except where the failure to so be in compliance
would not reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect. The Company and each of the
Subsidiaries holds all material certificates, consents, exemptions,
orders, licenses, authorizations, accreditations, permits or other
approvals or rights from all governmental authorities, all
self-regulatory organizations, all governmental and private accrediting
bodies and all courts and other tribunals (collectively, "Permits")
which are necessary to own their properties and to conduct their
businesses, including, without limitation, such Permits as are required
(i) under such federal and state healthcare laws as are applicable to
the Company and the Subsidiaries and (ii) with respect to those
facilities operated by the Company or any Subsidiary that participate
in Medicare and/or
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Medicaid, to receive reimbursement thereunder, except for such failures
to have Permits which would not reasonably be expected to, individually
or in the aggregate, result in a Material Adverse Effect. The Company
and each of the Subsidiaries have fulfilled and performed all of their
material obligations with respect to such Permits, and no event or
change in condition 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, except as to such qualifications as may be set forth in the
Prospectus and except for such failures which would not reasonably be
expected to, individually or in the aggregate, result in a Material
Adverse Effect. During the period for which financial statements are
included in the Prospectus, denials by third party payers of claims for
reimbursement for services rendered by the Company have not had a
Material Adverse Effect, and any such denials are either under appeal
or the Company has ceased seeking reimbursement for the services or
supplies to which they relate.
(bb) The accounts receivable of the Company and its
Subsidiaries have been and will continue to be adjusted to reflect
reimbursement policies of third party payors such as Medicare,
Medicaid, MediCal, Blue Cross/Blue Shield, private insurance companies,
health maintenance organizations, preferred provider organizations,
managed care systems and other third party payors. The accounts
receivable relating to such third party payors do not and shall not
exceed amounts the Company and its Subsidiaries are entitled to
receive, subject to adjustments to reflect reimbursement policies of
third party payors and normal discounts in the ordinary course of
business.
(cc) None of the Company nor any of its officers, directors or
stockholders, or to the knowledge of the Company, any employee or other
agent of the Company, has engaged on behalf of the Company in any of
the following: (i) knowingly and willfully making or causing to be made
a false statement or representation of a material fact in any
applications for any benefit or payment under the Medicare or Medicaid
program or from any third party (where applicable federal or state law
prohibits such payments to third parties); (ii) knowingly and willfully
making or causing to be made any false statement or representation of a
material fact for use in determining rights to any benefit or payment
under the Medicare or Medicaid program or from any third party (where
applicable federal or state law prohibits such payments to third
parties); (iii) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any
benefit or payment under the Medicare or Medicaid program or from any
third party (where applicable federal or state law prohibits such
payments to third parties) on its own behalf or on behalf of another,
with intent to secure such benefit or payment fraudulently; (iv)
knowingly and willfully offering, paying, soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or
indirectly overtly or covertly, in cash or in kind (a) in return for
referring an individual to a Person for the furnishing or arranging for
the furnishing of any item or service for which payment may be made in
whole or in part by Medicare or Medicaid or any third party (where
applicable federal or state law prohibits such payments to third
parties), or (b) in return for purchasing, leasing or ordering or
arranging for or recommending the purchasing, leasing or ordering of
any good, facility, service, or item for which payment may be made in
whole or in part by
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Medicare or Medicaid or any third party (where applicable federal or
state law prohibits such payments to third parties); provided, however,
that it is agreed and understood that (x) from time to time the Company
settles, without admitting liability, claims made by governmental
authorities which allege conduct which may be deemed to violate clause
(i) or (ii) above; (y) such settlements have not been, individually or
in the aggregate, material; and (z) such claims and settlements do not
constitute a breach of the representations and warranties contained in
this paragraph (cc).
(dd) Neither the Company nor any of its Subsidiaries has
failed to file with applicable regulatory authorities any statement,
report, information or form required by any applicable law, regulation
or order, except where the failure to be so in compliance would not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, all such filings or submissions were in
material compliance with applicable laws when filed and no material
deficiencies have been asserted by any regulatory commission, agency or
authority with respect to any such filings or submissions.
(ee) The property, assets and operations of the Company and
the Subsidiaries comply in all material respects with all applicable
federal, state or local law, common law, doctrine, rule, order, decree,
judgment, injunction, license, permit or regulation relating to
environmental matters (the "Environmental Laws"). None of the property,
assets or operations of the Company and the Subsidiaries is the subject
of any material federal, state or local investigation evaluating
whether any remedial action is needed to respond to a release into the
environment of any substance regulated by, or form the basis of
liability under, any Environmental Laws (a "Hazardous Material"), or is
in contravention of any Environmental Law. Neither the Company nor any
Subsidiary has received any notice or claim, nor are there pending or,
to the Company's knowledge, threatened lawsuits against them 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 Subsidiary has any material contingent liability in
connection with any release of Hazardous Material into the environment.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set
forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a price
of $_____ per share, the number of Firm Shares set forth opposite the
name of each Underwriter in Schedule I hereof, subject to adjustments
in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be
made in immediately available funds by wire transfer to the account(s)
designated by the Company against delivery of certificates therefor to
the Representatives for the several accounts of the Underwriters. Such
payment and delivery are to be made at the offices of BT Alex. Xxxxx
Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000 at 10:00 a.m.,
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Baltimore time, on the third business day after the date of this
Agreement or at such other time and date not later than five business
days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." (As used herein,
"business day" means a day on which the New York Stock Exchange is open
for trading and on which banks in New York are open for business and
are not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such
denominations and in such registrations as the Representatives requests
in writing not later than the second full business day prior to the
Closing Date, and will be made available for inspection by the
Representatives at least one business day prior to the Closing Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company hereby grants an option to the several
Underwriters to purchase the Option Shares at the price per share as
set forth in the first paragraph of this Section 2. The option granted
hereby may be exercised in whole or in part by giving written notice
(i) at any time before the Closing Date and (ii) only once thereafter
within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting
forth the number of Option Shares as to which the several Underwriters
are exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined
by the Representatives but shall not be earlier than three nor later
than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of
the option is three days before the Closing Date, the notice of
exercise shall set the Closing Date as the Option Closing Date. The
number of Option Shares to be purchased by each Underwriter shall be in
the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such
Underwriter bears to the Total number of Firm Shares, adjusted by you
in such manner as to avoid fractional shares. The option with respect
to the Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters.
You, as Representatives of the several Underwriters, may cancel such
option at any time prior to its expiration by giving written notice of
such cancellation to the Company. To the extent, if any, that the
option is exercised, payment for the Option Shares shall be made on the
Option Closing Date in immediately available funds by wire transfer to
the account(s) designated by the Company against delivery of
certificates therefor at the offices of BT Alex. Xxxxx Incorporated, 0
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem
it advisable to do so. The Firm Shares are to be initially offered to
the public at the initial public offering price set forth in the
Prospectus. The Representatives may from time to time thereafter change
the public
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offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the
Underwriters will offer them to the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the
Shares in accordance with a Master Agreement Among Underwriters entered
into by you and the several other Underwriters.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters
that:
(a) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely
file with the Commission under Rule 424(b) of the Rules and Regulations
a Prospectus in a form approved by the Representatives containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives
shall not previously have been advised and furnished with a copy or to
which the Representatives shall have reasonably objected in writing or
which is not substantially in compliance with the Rules and
Regulations.
(b) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment thereto
shall have become effective, (B) of receipt of any written comments
from the Commission, provided that the Company shall request any oral
comments of the Commission to be provided in writing, (C) of any
request of the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional material
information, and (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
use of the Prospectus or of the institution of any proceedings for that
purpose. The Company will use its reasonable best efforts to prevent
the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof,
if issued.
(c) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have
designated in writing and will make such applications, file such
documents, and furnish such information as may be reasonably required
for that purpose, provided the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time,
prepare and file such statements, reports, and other documents, as are
or may be required to continue such qualifications in effect for so
long a period (not to
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exceed nine months) as the Representatives may reasonably request for
distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company
will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as many
copies of the Prospectus in final form, or as thereafter amended or
supplemented, as the Representatives may reasonably request. The
Company will deliver to the Representatives at or before the Closing
Date, one signed and four conformed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of
copies of the Registration Statement (including such number of copies
of the exhibits filed therewith that may reasonably be requested), and
of all amendments thereto, as the Representatives may reasonably
request.
(e) The Company will comply in all material respects with the
Act and the Rules and Regulations, and the Securities Exchange Act of
1934 (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur
as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at
any time to amend or supplement the Prospectus to comply with any law,
the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to
the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration
Statement, an earning statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement, which
earning statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(g) The Company will, for a period of two years from the
Closing Date, deliver to the Representatives copies of annual reports
and copies of all other documents, reports and information furnished by
the Company to its stockholders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Securities Exchange Act of 1934, as amended.
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(h) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible
into or exchangeable or exercisable for shares of Common Stock or
derivative of Common Stock (or agreement for such) will be made for a
period of 180 days after the date of this Agreement, directly or
indirectly, by the Company otherwise than hereunder or with the prior
written consent of BT Alex. Xxxxx Incorporated, except for grants of
options pursuant to the Company's 1997 Long-Term Incentive Plan, as
amended.
(i) The Company will use its reasonable best efforts to list,
subject to notice of issuance, the Shares on the Nasdaq National
Market.
(j) The Company has caused each officer and director and
specific shareholders of the Company identified to the Company to
furnish to you, on or prior to the date of this agreement, a letter or
letters, in form and substance satisfactory to the Underwriters,
pursuant to which each such person shall agree not to offer, sell, sell
short or otherwise dispose (except bona fide gifts and transfers to
affiliates as specifically provided in such letters) of any shares of
Common Stock of the Company or other capital stock of the Company, or
any other securities convertible, exchangeable or exercisable for
Common Shares or derivative of Common Shares owned by such person or
request the registration for the offer or sale of any of the foregoing
(or as to which such person has the right to direct the disposition of)
for a period of 180 days after the date of this Agreement, directly or
indirectly, except with the prior written consent of BT Alex. Xxxxx
Incorporated ("Lockup Agreements").
(k) The Company shall apply the net proceeds of its sale of
the Shares substantially as set forth in the Prospectus and shall file
such reports with the Commission with respect to the sale of the Shares
and the application of the proceeds therefrom as may be required in
accordance with Rule 463 under the Act.
(l) The Company shall endeavor in the future to conduct its
business in such a manner so as to ensure that the Company or any of
the Subsidiaries to will not be an "investment company" or an entity
"controlled" by an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act").
(m) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(n) Until its completion of participation in the distribution,
the Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any securities of the Company for the applicable restricted period
required by Regulation M under the Securities Act.
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5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements
of counsel for the Company; the cost of printing and delivering to, or
as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, the Listing Application, the
Blue Sky Survey and any supplements or amendments thereto; the filing
fees of the Commission; the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc.
(the "NASD") of the terms of the sale of the Shares; the Listing Fee of
the Nasdaq National Market; and the expenses, including the reasonable
fees and disbursements of counsel for the Underwriters not to exceed
$5,000, incurred in connection with the qualification of the Shares
under State securities or Blue Sky laws. The Company shall not,
however, be required to pay for any of the Underwriters expenses (other
than those related to qualification under NASD regulation and State
securities or Blue Sky laws) except that, if this Agreement shall not
be consummated because the conditions in Section 6 hereof are not
satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11(b)(i), (iv) or (vi) hereof, or
by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure to satisfy said condition or to comply
with said terms be due to the default or omission of any Underwriter,
then the Company shall reimburse the several Underwriters for
reasonable out-of-pocket expenses, including reasonable fees and
disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the
Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from
the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the
Option Closing Date are subject to the accuracy, as of the Closing Date
or the Option Closing Date, as the case may be, of the representations
and warranties of the Company contained herein, and to the performance
by the Company of its covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made, and any request of the Commission for additional
material information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as
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amended from time to time, shall have been issued and no proceedings
for that purpose shall have been taken or, to the knowledge of the
Company, shall be contemplated by the Commission and no injunction,
restraining order, or order of any nature by a Federal or state court
of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of
Xxxxxxxx & Xxxxx, counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the
Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(i) The Company has been duly organized and is
existing as a corporation in good standing under the General
Corporation Law of the State of Delaware. The Company is duly
qualified to transact business as a foreign corporation in the
states of Oregon and Tennessee, and is active on the records
of the Corporation Divsion of the state of Oregon and is in
good standing in the state of Tennessee.
(ii) The Company has the corporate power to own or
lease its properties and conduct its business as described in
the Registration Statement.
(iii) The issuance of the Shares to be sold on the
date hereof pursuant to the Underwriting Agreement has been
duly authorized by the Company and when appropriate
certificates representing those Shares are duly countersigned
by the Company's transfer agent and registrar (or other
similar action is taken by the Company's transfer agent and
registrar with regard to electronic transfer of such Shares)
and delivered against payment of the agreed consideration
therefor in accordance with this Agreement, those Shares will
be validly issued, fully paid and nonassessable. Such counsel
may assume for purposes of the foregoing opinion that in the
case of eachsuch share issuance and transfer, the shares were
represented by a share certificate in the form of the specimin
certificate filed as an exhibit to the Registration Statement.
The Shares conform in all material respects to the description
of the terms thereof contained in the Registration Statement
and the Prospectus under the heading "Description of Capital
Stock." The issuance of those Shares is not subject to any
preemptive rights under the terms of the General Corporation
Law of the State of Delaware, under the Company's Certificate
of Incorporation or bylaws, or under any contractual
provisions of which such counsel has knowledge. To such
counsel's knowledge, no holder of securities of the Company
has the right, which has not been satisfied or effectively
waived, to have any Common Shares 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 registration under the Act of any shares of Common
Stock or other securities of the Company. The form of
certificate evidencing the Shares, a specimen of which is
filed as an exhibit to the Registration Statement, complies
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with all applicable requirements of the General Corporation
Law of the State of Delaware.
(iv) The Company's authorized capital stock is as
set forth under the caption "Capitalization" in the
Prospectus. The issued and outstanding shares of the Company's
Common Stock have been duly authorized and validly issued and
are fully paid and non-assessable. None of the issued shares
of capital stock of the Company has been issued in violation
of any statutory preemptive rights of shareholders. For
purposes of this opinion, such counsel may assume that in the
case of each share issuance and transfer, the shares were
represented by a share certificate which complied with all
applicable requirements imposed by law, by the Company's
certificate of incorporation and bylaws and by any applicable
resolutions by the Company's board of directors, that such
certificate was properly signed and authenticated and that
payment for such shares was received by the Company.
(v) A member of the Commission's staff has advised
such counsel by telephone that the Commission's Division of
Corporation Finance pursuant to authority delegated to it by
the Commission, has entered an order declaring the
Registration Statement effective under the Securities Act on
February ___, 1998 (the "Effective Date") and such counsel has
no knowledge that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are
pending before, or overtly threatened by, the Commission.
(vi) The Company was not required to obtain any
consent, approval, authorization or order of any governmental
agency or body or, to such counsel's knowledge, court for the
issuance, delivery and sale by the Company of the Shares, the
execution, delivery and performance of the Underwriting
Agreement and the consummation by the Company of the
transactions contemplated thereby, except for the order by the
Commission declaring the Registration Statement effective and
the effectiveness of the Form 8-A under the Exchange Act.
(vii) The statements in the Registration Statement
and Prospectus under the headings "The Recapitalization and
The Merger," "Management -- Employment Agreements" (with
respect to the agreements with Messrs. Rash and Xxxx only),
"Management--Long-Term Incentive Plan," "Certain Relationships
and Related Transactions -- Professional Services Agreement,"
"--Stockholders Agreement and Senior Management Agreements,"
and "-- Registration Agreement," "Description of Capital
Stock," and "Shares Eligible for Future Sale -- Registration
Rights Agreement," to the extent they summarize laws,
governmental rules or regulations (other than those regarding
accounting treatment, as to which such counsel need express no
opinion) or documents are correct in all material respects.
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(viii) Such counsel has no knowledge about any
contract, lease or other legal document to which the Company
or a Subsidiary is a party or to which any of their property
is subject that has caused such counsel to conclude that such
contract, lease or other document is required to be described
in the Prospectus but is not so described or is required to be
filed as an exhibit to the Registration Statement but has not
been so filed.
(ix) The Company has corporate power to enter into
this Agreement and to issue, sell and deliver the Shares to
the Underwriters as provided herein. This Agreement has been
duly authorized, executed and delivered by the Company.
(x) The Company's execution and delivery of this
Agreement and the consummation of the transactions herein
contemplated do not and will not (a) violate the Charter or
by-laws of the Company, (b) breach, or result in a default
under, any existing obligation of the Company under any of the
agreements filed as any of the following exhibits to the
Registration Statement (provided, that such counsel need not
express an opinion as to compliance with any financial test or
cross-default provision in any such agreement): 4.2, 10.7,
10.8, 10.9, 10.10, 10.11, 10.12, 10.13, 10.14, 10.28, 10.29,
10.30, and 10.31; (c) except with respect to Health Care Laws
as to which such counsel renders no opinion, to such counsel's
knowledge, violate or conflict with any applicable statute,
rule or regulation or, to such counsel's knowledge, any
judgment, decree or order of any court or governmental agency
or body (except that such counsel need not express an opinion
as to compliance with any disclosure requirement or any
prohibition against fraud or misrepresentation or as to
whether performance of the indemnification or contribution
provisions of this Agreement would be permitted); or (d) other
than with respect to Health Care Laws, to such counsel's
knowledge, result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the
Company or the Subsidiaries, respectively.
(xi) The Company is not, and after giving effect to
the offering and sale of the Shares and the application of the
net proceeds therefrom as described in the Prospectus, will
not be an "investment company" as such term is defined in the
1940 Act.
(xii) Each of the parties to the Amended and
Restated Plan and Agreement of Merger, dated as of January 15,
1998 (the "Merger Agreement"), by and between the Company and
Principal Hospital Company, an Oregon corporation, had, at the
time of the execution and delivery of the Merger Agreement and
at all times through and including the consummation of the
transactions contemplated thereby, the corporate power to
enter into the Merger Agreement and to consummate the
transactions contemplated thereby. The Merger Agreement has
been duly authorized by all necessary corporate action on the
part of each of the parties thereto and was duly executed and
delivered by each of the parties thereto. The execution and
delivery of the Merger Agreement and
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the consummation of the transactions therein contemplated did
not and will not (a) violate the Charter or by-laws of the
Company, (b) breach, or result in a default under, any
existing obligation of the Company under any of the agreements
filed as any one of the following exhibits to the Registration
Statement (provided, that such counsel need not express an
opinion as to compliance with any financial test or
cross-default provision in any such agreement): 4.2, 10.7,
10.8, 10.9, 10.10, 10.11, 10.12, 10.13, 10.14, 10.28, 10.29,
10.30, and 10.31; (c) except with respect to Health Care Laws
as to which such counsel renders no opinion, to such counsel's
knowledge, violate or conflict with any applicable statute,
rule or regulation, or, to such counsel's knowledge, judgment,
decree or order of any court or governmental agency or body;
or (d) other than with respect to Health Care Laws, to such
counsel's knowledge, result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or
asset of the Company or the Subsidiaries, respectively, except
for such consents or approvals as have been duly and timely
received or obtained. The merger contemplated by the Merger
Agreement has become effective under applicable law.
For purposes of this opinion, the term "Health Care Laws"
shall mean those statutes, rules and regulations, judgments, decrees or
orders which are generally applicable to hospitals and health care
providers as a group as described under the headings "Risk Factors --
Effect of Reimbursement and Payment Policies; Health Care Reform
Legislation," "Risk Factors -- Health Care Regulation," "Business --
Reimbursement" and "Business -- Health Care Reform, Regulation and
Licensing" in the Prospectus, including, without limitation, (i) health
care licensure, permit, certificate of need and medical waste
requirements, (ii) Title XVIII, XVIX and XXI of the Social Security
Act; (iii) the Anti-Kickback Amendments (as defined in the Prospectus)
and the regulations promulgated thereunder, (iv) the Xxxxx Laws (as
defined in the Prospectus) and the regulations promulgated thereunder,
(v) the False Claims Act, (vi) the Health Insurance Portability and
Accountability Act of 1996, and (vii) state statutes, rules and
regulations concerning matters similar to (ii) through (vi) above.
Such counsel may state that the purpose of its professional
engagement was not to establish factual matters, and preparation of the
Registration Statement involved many determination of a wholly or
partially nonlegal character. Such counsel need not make any
representation that it has independently verified the accuracy,
completeness or fairness of the Prospectus or Registration Statement or
that the actions taken in connection with the preparation of the
Registration Statement or Prospectus (including the actions described
in the next paragraph) were sufficient to cause the Prospectus or
Registration Statement to be accurate, complete or fair. Such counsel
need not pass upon or assume any responsibility for the accuracy,
completeness or fairness of the Prospectus or the Registration
Statement except to the extent otherwise explicitly indicated in
numbered paragraphs (iii), (iv), (vii) and (viii) above.
Such counsel shall, however, confirm that it has participated
in conferences with representatives of the Company, representatives of
the Underwriters, counsel for the
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Underwriters and representatives of the independent accountants for the
Company during which disclosures in the Registration Statement and
Prospectus and related matters were discussed. In addition, such
counsel shall state that it has reviewed such corporate records as it
deemed necessary in connection with the foregoing representation.
Based upon such counsel's participation in the conferences and
its document review identified in the preceding paragraph, its
understanding of applicable law and the experience it has gained in its
practice thereunder and relying as to materiality of factual matters
upon the opinions and statements of officers of the Company, such
counsel shall, however, advise the Underwriters that nothing has come
to its attention that has caused it to conclude that (i) the
Registration Statement, at the Effective Date (but after giving effect
to any modifications incorporated therein pursuant to Rule 430A under
the Act) and as of the Closing Date or the Option Closing Date, as the
case may be, 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, (ii) the
Prospectus, or any supplement thereto, at the date it bears and as of
the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except
that such counsel need express no view as to financial statements,
schedules and statistical information therein), or (iii) the
Registration Statement, at the Effective Date and as of the Closing
Date or the Option Closing Date, or Prospectus, or any supplement
thereto, at the date it bears and as of the Closing Date or the Option
Closing Date, appeared on its face not to be responsive in all material
respects to the requirements of Form S-1.
(c) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, a Professional Limited Liability Company
("Xxxxxx Xxxxxxx"), counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the
Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(i) Each of the Corporate Subsidiaries has been duly
organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or
lease its properties and conduct its business as described in
the Registration Statement; each of the Corporate Subsidiaries
are duly qualified to transact business as a foreign
corporation and in good standing in those states listed on a
Schedule thereto; and the outstanding shares of capital stock
of each of the Corporate Subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Corporate
Subsidiary; and, to the best of such counsel's knowledge, the
outstanding shares of capital stock of each of the
Subsidiaries is owned free and clear of all liens,
encumbrances and equities and claims, and no options, warrants
or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations
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into any shares of capital stock or of ownership interests in
the Corporate Subsidiaries are outstanding.
(ii) Each of the Partnerships has been duly
organized and is an existing partnership in good standing
under the laws of the jurisdiction of its organization, with
the power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified
to conduct its business; each of the Partnerships is in good
standing as a foreign partnership in those states listed on a
schedule thereto ; to the best of such counsel's knowledge,
the partnership interests in the Partnerships held directly or
indirectly by the Company are free and clear of all liens,
encumbrances and equities and claims, and no options, warrants
or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any
ownership interests in the Partnerships are outstanding.
(iii) Each of the LLCs has been duly organized and is
an existing limited liability company in good standing under
the laws of the jurisdiction of its organization, with the
power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified to conduct its
business; each of the LLCs is in good standing as a foreign
limited liability company in those states listed on a schedule
thereto; to the best of such counsel's knowledge, the
membership interests in the LLCs held directly or indirectly
by the Company are free and clear of all liens, encumbrances
and equities and claims, and no options, warrants or other
rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any ownership
interests in the LLCs are outstanding.
(iv) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the
Company or any of the Subsidiaries except as set forth in the
Prospectus.
(v) Such counsel is not aware that the Company or
any of the Subsidiaries is in violation of its certificate or
articles of incorporation or bylaws, or other organizational
documents or is in default in the performance of any material
obligation, agreement or condition contained in any evidence
of indebtedness, except as may be disclosed in the Prospectus.
(vi) To such counsel's knowledge in the course of
their representation, none of the Company or any of the
Subsidiaries is in violation of any material law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or any of the Subsidiaries or of any decree of
any court or governmental agency or body having jurisdiction
over the Company or any of the Subsidiaries. To such counsel's
knowledge, the Company and its Subsidiaries are not in
violation of applicable state licensure, Medicare or Medicaid
requirements, which violation is likely to have a Material
Adverse Effect.
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(vii) The Company and each of the Subsidiaries have
all necessary Permits (except where the failure to have such
Permits, individually or in the aggregate, would not have a
material adverse effect on the business, operations or
financial condition of the Company and the Subsidiaries taken
as a whole), to own their respective properties and to conduct
their respective businesses as now being conducted, and as
described in the Registration Statement and Prospectus,
including, without limitation, such Permits as are required
(a) under Health Care Laws and (b) with respect to those
facilities owned or operated by the Company or any Subsidiary
that participate in Medicare and/or Medicaid, to receive
reimbursement thereunder.
(viii) The descriptions of statutes and regulations
under the captions "Risk Factors -- Effect of Reimbursement
and Payment Policies; Health Care Reform Legislation," "Risk
Factors -- Health Care Regulation," "Business --
Reimbursement," "Business -- Health Care Reform, Regulation
and Licensing," "Management -- Employment Agreements" and
"Certain Relationships and Related Transactions -- Senior
Living Divestiture" and "-- Option Settlements" in the
Prospectus have been reviewed by such counsel and fairly
summarize such statutes and regulations in all material
respects.
(ix) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
do not and will not (a) breach, or result in a default under,
any existing obligation of the Company under any of the
agreements filed as any of the following exhibits to the
Registration Statement (provided, that such counsel need not
express an opinion as to compliance with any financial test or
cross-default provision in any such agreement): 10.1, 10.2,
10.3, 10.4, 10.5, 10.6, 10.15, 10.16, 10.17, 10.18, 10.19,
10.20, 10.21, 10.22, 10.23, 10.24, 10.25 and 10.27; (b) with
respect to Health Care Laws, violate or conflict with any
applicable statute, rule or regulation or, to such counsel's
knowledge any judgment, decree or order of any court or
governmental agency or body (except that such counsel need not
express an opinion as to compliance with any disclosure
requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the
indemnification or contribution provisions of this Agreement
would be permitted); or (c) to such counsel's knowledge,
result in the creation or imposition or any lien, charge,
claim or encumbrance upon any property or asset of the Company
or the Subsidiaries, respectively, under any Health Care Laws.
(x) The execution and delivery of the Merger
Agreement and the consummation of the transactions therein
contemplated did not and will not, (a) breach, or result in a
default under, any existing obligation of the Company under
any of the agreements filed as any one of the following
exhibits to the Registration Statement (provided, that such
counsel need not express an opinion as to compliance with any
financial test or cross-default provision in any such
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agreement): 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.15, 10.16,
10.17, 10.18, 10.19, 10.20, 10.21, 10.22, 10.23, 10.24, 10.25
and 10.27; (b) with respect to Health Care Laws, violate or
conflict with any applicable statute, rule or regulation, or
to such counsel's knowledge, any judgment, decree or order of
any court or governmental agency or body; or (c) to such
counsel's knowledge, result in the creation or imposition or
any lien, charge, claim or encumbrance upon any property or
asset of the Company or the Subsidiaries, respectively, under
any Health Care Laws. With respect to Health Care Laws, no
consent, approval, authorization or order of or qualification
with any court, government or governmental agency or body
having jurisdiction over any party to the Merger Agreement or
over any of their respective properties or operations is or
was required for the execution and delivery of the Merger
Agreement and the consummation of the transactions
contemplated thereby, except for such consents, approvals,
authorizations, orders or qualifications as have been duly and
timely received or obtained.
For purposes of this opinion, the term "Health Care Laws"
shall mean those statutes, rules and regulations, judgments, decrees or
orders which are generally applicable to hospitals and health care
providers as a group as described under the headings "Risk Factors --
Effect of Reimbursement and Payment Policies; Health Care Reform
Legislation," "Risk Factors -- Health Care Regulation," "Business --
Reimbursement" and "Business -- Health Care Reform, Regulation and
Licensing" in the Prospectus, including, without limitation, (i) health
care licensure, permit, certificate of need and medical waste
requirements, (ii) Title XVIII, XVIX and XXI of the Social Security
Act; (iii) the Anti-Kickback Amendments (as defined in the Prospectus)
and the regulations promulgated thereunder, (iv) the Xxxxx Laws (as
defined in the Prospectus) and the regulations promulgated thereunder,
(v) the False Claims Act, (vi) the Health Insurance Portability and
Accountability Act of 1996, and (vii) state statutes, rules and
regulations concerning matters similar to (ii) through (vi) above.
In rendering such opinion Xxxxxx Xxxxxxx may rely as to
matters governed by the laws of states other than Tennessee, Delaware
or Federal laws on local counsel in such jurisdictions, provided that
in each case Xxxxxx Xxxxxxx shall state that they believe that they and
the Underwriters are justified in relying on such other counsel.
(d) The Representatives shall have received from Xxxxxx & Bird
LLP, counsel for the Underwriters, an opinion dated the Closing Date or
the Option Closing Date, as the case may be, substantially to the
effect specified in subparagraphs (ii), (iii), (iv), (v) and (x) of
Paragraph (b) of this Section 6, and that the Company is validly
incorporated and validly existing under the laws of the State of
Delaware. In rendering such opinion Xxxxxx & Bird LLP may rely as to
all matters governed other than by the laws of the State of Delaware or
Federal laws on the opinion of counsel referred to in Paragraph (b) of
this Section 6. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel which leads them to believe that
(i) the Registration Statement, or any amendment thereto, as of the
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time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act)
as of the Closing Date or the Option Closing Date, as the case may be,
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, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact, necessary in order to make the
statements, in the light of the circumstances under which they are
made, not misleading (except that such counsel need express no view as
to financial statements, schedules and statistical information
therein). With respect to such statement, Xxxxxx & Bird LLP may state
that their belief is based upon the procedures set forth therein, but
is without independent check and verification.
(e) You shall have received, on each of the dates hereof, the
Closing Date and the Option Closing Date, as the case may be, letters
dated the date hereof, the Closing Date or the Option Closing Date, as
the case may be, in form and substance satisfactory to you, of Ernst &
Young LLP and KPMG Peat Marwick LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that
in their opinion the financial statements and schedules examined by
them and included in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations; and containing
such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial and statistical information
contained in the Registration Statement and Prospectus.
(g) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial
Officer of the Company to the effect that, as of the Closing Date or
the Option Closing Date, as the case may be, on behalf of the Company:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registrations Statement has been issued, and no
proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as
of the Closing Date or the Option Closing Date, as the case
may be;
(iii) All filings required to have been made pursuant
to Rules 424 or 430A under the Act have been made;
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(iv) As of the effective date of the Registration
Statement, the statements contained in the Registration
Statement were true and correct, and such Registration
Statement and Prospectus did not omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in
such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and
Prospectus, there has not been any material adverse change or
any development involving a prospective material adverse
change in or affecting the earnings, business, assets,
operations, condition (financial or otherwise) or prospects
for the business, assets, operations, condition (financial or
other) of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(h) The Company shall have furnished to the Representatives
such further certificates and documents confirming the representations
and warranties, covenants and conditions contained herein and related
matters as the Representatives may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been
approved for designation upon notice of issuance on the Nasdaq National
Market.
(j) The Lockup Agreements described in Section 4(j) are in
full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if
they are in all material respects reasonably satisfactory to the
Representatives and to Xxxxxx & Bird LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this
Agreement to be fulfilled, the obligations of the Underwriters
hereunder may be terminated by the Representatives by notifying the
Company of such termination in writing or by telegram at or prior to
the Closing Date or the Option Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in
Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion
of the Shares required to be delivered as and when specified in this
Agreement are subject to the
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conditions that at the Closing Date or the Option Closing Date, as the
case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or
proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or any such controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; and will
reimburse each Underwriter and each such controlling person upon demand
for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter
or controlling person is a party to any action or proceeding; provided,
however, that (x) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically
for use in the preparation thereof and (y) the indemnity agreement
provided in this Section 8(a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any losses, claims, damages or liabilities or
actions based upon any untrue statement or alleged untrue statement of
material fact or omission or alleged omission to state therein a
material fact purchased the Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or
alleged omission was corrected had not been sent or given to such
person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the
Company with Section 4(d) hereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Act, against
any losses, claims, damages or liabilities to which the Company or any
such director, officer, or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue
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statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability,
action or proceeding; provided, however, that each Underwriter will be
liable in each case to the extent, but only to the extent, that (x)
such untrue statement or alleged untrue statement or omission or
alleged omission has been made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or such amendment or supplement,
in reliance upon and in conformity with written information furnished
to the Company by or through the Representatives specifically for use
in the preparation thereof and (y) such untrue statement or alleged
untrue statement or omission or alleged omission was corrected in the
Prospectus, if a copy of such Prospectus had not been sent or given by
such Underwriter to the purchaser of the Shares within the time
required by the Act and the Rules and Regulations, unless such failure
is the result of noncompliance by the Company with Section 4(d) hereof.
This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing within 60
days. No indemnification provided for in Section 8(a) or (b) or
contribution provided for in Section 8(d) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if
the party to whom notice was not given was prejudiced in any material
respect by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party
otherwise than on account of the provisions of Section 8(a), (b) or
(d). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as
incurred (or within 30 days of presentation) the fees and expenses of
the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying
party shall have failed to assume the defense and employ counsel
reasonably acceptable to the indemnified party within a
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reasonable period of time after notice of commencement of the action.
It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one separate
firm for all such indemnified parties. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to Section
8(a) and by the Company in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding of which indemnification may be
sought hereunder (if the indemnified party is a party to such claim,
action or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient (other than as a result of the failure
to give notice required by Section 8(c)) to hold harmless an
indemnified party under Section 8(a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities, (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if
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the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 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 8 and the representations and
warranties of the Company 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 persons controlling the Company, (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) any termination of this
Agreement, provided that in the event of termination, the Company shall
not be liable to any of the several Underwriters for damages on account
of loss of anticipated profits from the sale by them of the Shares. A
successor to any Underwriter, or to the Company, its directors or
officers, or any person controlling the Company, shall be entitled to
the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion
of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of
the Company), you, as Representatives of the Underwriters, shall use
your reasonable efforts to procure within 36 hours thereafter one or
more of the other Underwriters, or any others, to purchase from the
Company such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during
such 36 hours you, as such Representatives, shall not have procured
such other Underwriters, or any others, to purchase the Firm Shares or
Option Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate
number of shares with respect to which such default shall occur does
not
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exceed 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the other Underwriters shall be obligated, severally,
in proportion to the respective numbers of Firm Shares or Option
Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case
may be, which such defaulting Underwriter or Underwriters failed to
purchase, or (b) if the aggregate number of shares of Firm Shares or
Option Shares, as the case may be, with respect to which such default
shall occur exceeds 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the Company or you as the Representatives
of the Underwriters will have the right, by written notice given within
the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company except to the extent provided in Section
8 hereof. In the event of a default by any Underwriter or Underwriters,
as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected.
The term "Underwriter" includes any person substituted for a defaulting
Underwriter. Any action taken under this Section 9 shall not relieve
any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx
Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx
Xxxxx, IV; with a copy to BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel; if to the Company, to
Province Healthcare Company, 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000, Attention: Xxxxxx X.
Xxxx, III.
11. TERMINATION.
This Agreement may be terminated by you by notice to the
Company as follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by you for sale by notice to the Underwriters, or
(ii) 11:30 a.m. on the first business day following the date of this
Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the prospectus,
any material adverse change or any development reasonably involving a
prospective material adverse change in or affecting the earnings,
assets, operations, condition (financial or otherwise) or prospects for
the business, assets, operations, condition (financial or other) of the
Company and its Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business, (ii) any outbreak or material
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escalation of hostilities or declaration of war or national emergency
or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable
judgment, make it impracticable to market the Shares or to enforce
contracts for the sale of the Shares, or (iii) suspension of trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange,
(iv) the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by United States or
New York State authorities, (vi) the suspension of trading of the
Company's common stock by the Commission on the Nasdaq National Market
or (vii) the taking of any action by any governmental body or agency in
respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the
United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. No purchaser of any
of the Shares from any Underwriter shall be deemed a successor or
assign merely because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter to
the Company for inclusion in any Prospectus or the Registration
Statement consists of the information set forth in the last paragraph
on the front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(d) of Regulation S-K under
the Act and the information under the caption "Underwriting" in the
Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or its directors or
officers and (c) delivery of and payment for the Shares under this
Agreement.
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This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
[Remainder of Page Intentionally Blank]
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
PROVINCE HEALTHCARE COMPANY
By:
---------------------------------------
Xxxxxx X. Xxxx, Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BT ALEX. XXXXX INCORPORATED
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXX, XXXXX & CO.
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By:
------------------------------------
Authorized Officer
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
------------------------------------------------------------------------------
BT Alex. Xxxxx Incorporated
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company, LLC
----------
Total
----------
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SCHEDULE I
SCHEDULE OF SUBSIDIARIES
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SCHEDULE 1(c)
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SCHEDULE 1(d)
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SCHEDULE 1(e)
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