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EXHIBIT 1
AMSURG CORP.
3,700,000 SHARES OF CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
_________ ___, 1998
X.X. XXXXXXXX & CO., L.L.C.
XXXXX XXXXXXX INC.
XXXXXX XXXXXX & COMPANY, INC.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxxx & Co.
X.X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Amsurg Corp., a Tennessee corporation (the "Company"), and certain
shareholders of the Company identified on Schedule II hereto (the "Selling
Shareholders") propose to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you are acting as the representatives (the
"Representatives"), 3,500,000 and 200,000 shares, respectively (collectively,
the "Firm Shares"), of the Class A Common Stock, no par value per share (the
"Class A Common Stock"), of the Company. The Company proposes to grant to the
Underwriters an option to purchase up to 555,000 additional shares of Class A
Common Stock as provided for in Section 3 of this Agreement for the purpose of
covering over-allotments (the "Option Shares"). The Underwriters, severally and
not jointly, are willing to purchase the Firm Shares set forth opposite their
respective names on Schedule I hereto and their pro-rata share of the Option
Shares in the event the Representatives elect to exercise the over-allotment
taken in whole or in part. The Firm Shares and the Option Shares purchased
pursuant to this Underwriting Agreement (the "Agreement") are collectively
referred to herein as the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission"), under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form S-1
(Registration No. 333-_________), including the related preliminary
prospectus relating to the Shares. Copies of such registration
statement and any amendments, including any post-effective amendments,
and all forms of the related prospectuses contained therein and any
supplements thereto, have been delivered to you. Such registration
statement, including the
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prospectus, Part II, all financial schedules and exhibits thereto, all
information deemed to be a part of such registration statement pursuant
to Rule 430A under the Rules and Regulations (as hereinafter defined)
and any related registration statement filed pursuant to Rule 462(b)
under the Rules and Regulations, at the time when they became
effective, are herein referred to as the "Registration Statement," and
the prospectus included as part of the Registration Statement on file
with the Commission that discloses all the information that was omitted
from the prospectus pursuant to Rule 430A under the Rules and
Regulations on the date that the Registration Statement became
effective and in the form filed pursuant to Rule 424(b) Rules and
Regulations, is herein referred to as the "Final Prospectus." The
prospectus included as part of the Registration Statement on the date
when the Registration Statement became effective is referred to herein
as the "Effective Prospectus." Any prospectus included in the
Registration Statement and in any amendment thereto prior to the date
on which the Registration Statement became effective is referred to
herein as a "Preliminary Prospectus." For purposes of this Agreement,
"Rules and Regulations" means the rules and regulations promulgated by
the Commission under either the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus and no proceeding for
that purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction. Each
Preliminary Prospectus, at the time of filing thereof, complied with
the requirements of the Securities Act and the Rules and Regulations,
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through X.X. Xxxxxxxx & Co. ("Bradford") specifically for
use therein (it being understood that the only information so provided
is the information included in the last paragraph on the cover page and
in the third, fourth, fifth and eighth paragraphs under the caption
"Underwriting" in the Preliminary, Effective and Final Prospectus).
When the Registration Statement becomes effective and at all times
subsequent thereto up to and including the First Closing Date (as
hereinafter defined), (i) the Registration Statement, the Effective
Prospectus and the Final Prospectus and any amendments or supplements
thereto will contain all statements which are required to be stated
therein in accordance with the Securities Act and the Rules and
Regulations and will comply with the requirements of the Securities Act
and the Rules and Regulations, and (ii) neither the Registration
Statement, the Effective Prospectus nor the Final
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Prospectus nor any amendment or supplement thereto will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; except that the foregoing does not apply to statements
or omissions made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through
Bradford specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and in the third, fourth, fifth and eighth
paragraphs under the caption "Underwriting" in the Final Prospectus).
(c) The Company is duly organized and validly existing and in
good standing under the laws of the jurisdiction of its incorporation
or organization with full power and authority to own its properties and
conduct its business as now conducted and is duly qualified or
authorized to do business and is in good standing in all jurisdictions
wherein the nature of its business or the character of property owned
or leased may require it to be authorized or qualified to do business,
except where failure to obtain such authorization or qualification
would not have a material adverse effect on the Company's condition
(financial or otherwise). The Company holds all licenses, consents and
approvals, and has satisfied all eligibility and other similar
requirements imposed by federal, state and local regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each case as required for the conduct of the business in
which it is engaged and is contemplated to be engaged as set forth in
the Effective Prospectus.
(d) All of the consolidated corporations, partnerships
(including, without limitation, general and limited partnerships) and
limited liability companies in which the Company has a direct or
indirect ownership interest are listed in Schedule III 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 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 Company's
condition (financial or otherwise). 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(d), are owned by the Company
directly, or indirectly through one
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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.
(e) Each Subsidiary that is a partnership (a "Partnership")
has been duly organized, is validly existing as a partnership under the
laws of its jurisdiction of organization and has the 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 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 on the Company's condition (financial or otherwise). 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(e), 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 partnership
agreements by the Company or any Subsidiary or, to the Company's
knowledge, any other party to such agreements.
(f) Each Subsidiary that is a limited liability company (an
"LLC") has been duly organized, is validly existing as a limited
liability company 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 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 Company's condition (financial or otherwise). The capital
contributions with respect to the outstanding
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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(f), 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.
(g) Except to the extent disclosed in the Prospectus, each of
the centers described in the Prospectus as owned by the Company is
owned and operated by a Subsidiary in which the Company directly or
indirectly owns at least 51% 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.
(h) The capitalization of the Company as of March 31, 1998 is
as set forth under the caption "Capitalization" in the Effective
Prospectus and the Final Prospectus, and the Company's capital stock
conforms to the description thereof contained under the caption
"Description of Capital Stock" in the Effective Prospectus and the
Final Prospectus. All the issued shares of the Company's Class A Common
Stock have been duly authorized and validly issued, and are fully paid
and nonassessable. None of the issued shares of the Company's Class A
Common Stock have been issued in violation of any preemptive or similar
rights. The Shares to be sold by the Company hereunder have been duly
and validly authorized and, upon issuance and delivery and payment
therefor in the manner herein described, will be validly issued, fully
paid and nonassessable. Except as set forth in the Effective
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Prospectus and the Final Prospectus, (i) the Company does not have
outstanding any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell, any shares of capital
stock, and (ii) there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the transfer of,
any shares of capital stock pursuant to the Company's charter, bylaws
or any agreement or other instrument to which the Company is a party or
by which it may be bound. Neither the filing of the Registration
Statement nor the issuance, offer 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 or any other securities of the Company. The
Underwriters will receive good and marketable title to the Shares to be
issued and delivered hereunder, free and clear of all liens,
encumbrances, claims, security interests, restrictions, shareholders'
agreements, voting trusts or any other claims of third parties
whatsoever.
(i) The form of stock certificate to be used to evidence the
Class A Common Stock will be in due and proper form and will comply
with all applicable legal requirements.
(j) All offers and sales by the Company of the Company's
securities prior to the date hereof were at all relevant times duly
registered or the subject of an available exemption from the
registration requirements of the Securities Act and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws, and any private placement memoranda delivered in connection
with offers and sales of the Company's securities prior to the date
hereof did not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein not misleading.
(k) The Company has full legal right, power and authority to
enter into this Agreement and to sell and deliver the Shares to be sold
by it to the Underwriters as provided herein, and this Agreement has
been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms. No consent, approval,
authorization or order of any court or governmental agency or body or
third party is required for the performance of this Agreement by the
Company or the consummation by the Company of the transactions
contemplated hereby, except such as have been obtained and such as may
be required by the National Association of Securities Dealers, Inc.
(the "NASD") or under the Securities Act or state securities or Blue
Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters. The issuance and sale of the Shares by
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the Company, the Company's performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in
a breach or violation of, or conflict with, any of the terms and
provisions of, or constitute a default by the Company under, any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company is a party or to which the
Company or any of its properties is subject, the charter, bylaws or
other governing instruments of the Company or any statute or any
judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Company or any of its
properties. The Company is not in violation of its charter, bylaws or
other governing instruments or any law, administrative rule or
regulation or arbitrators' or administrative court decree, judgment or
order or in violation or default (there being no existing state of
facts which with notice or lapse of time or both would constitute a
default) in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
deed of trust, mortgage, loan agreement, note, lease, agreement or
other instrument or permit to which it is a party or by which it or any
of its properties is or may be bound.
(l) The historical financial statements, together with the
related schedules and notes, of the Company, included in the
Registration Statement, the Effective Prospectus and the Final
Prospectus, conform to the requirements of the Securities Act and the
Rules and Regulations. Such financial statements fairly present the
financial position of the Company at the respective dates indicated in
accordance with generally accepted accounting principles applied on a
consistent basis for the periods indicated. The financial and
statistical data set forth in the Effective Prospectus and the Final
Prospectus fairly present the information set forth therein on the
basis stated in the Effective Prospectus and the Final Prospectus.
Deloitte & Touche, LLP, whose reports are included in the Effective
Prospectus and the Final Prospectus, are independent accountants as
required by the Securities Act and the Rules and Regulations. The other
financial statements and schedules included in or as schedules to the
Registration Statement, the Effective Prospectus and the Final
Prospectus conform to the requirements of the Act and the Regulations
and present fairly the information presented therein for the periods
shown. The unaudited pro forma financial statements and notes thereto
are in conformity with generally accepted accounting principles and are
presented on the basis of appropriate and reasonable pro forma
adjustments.
(m) Subsequent to December 31, 1997, the Company and the
Subsidiaries have not sustained any material loss or interference with
its business or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which is not
disclosed in the Effective
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Prospectus and the Final Prospectus; and subsequent to the respective
dates as of which information is given in the Registration Statement,
the Effective Prospectus and the Final Prospectus, (i) the Company and
the Subsidiaries have not incurred any material liabilities or
obligations, direct or contingent, or entered into any transactions not
in the ordinary course of business, and (ii) there has not been any
issuance of options, warrants or rights to purchase interests or the
capital stock of the Company and the Subsidiaries, or any material
adverse change, or any development involving a prospective material
adverse change, in the general affairs, management, business,
prospects, financial position, net worth or results of operations of
the Company and the Subsidiaries, except in each case as described in
the Effective Prospectus and the Final Prospectus.
(n) Except as described in the Effective Prospectus and the
Final Prospectus, there is not pending, or to the knowledge of the
Company threatened, any legal or governmental action, suit, proceeding,
inquiry or investigation, to which the Company, the Subsidiaries or any
of the Company's officers or directors is a party, or to which its
property is subject, before or brought by any court or governmental
agency or body, wherein an unfavorable decision, ruling or finding
could prevent or materially hinder the consummation of this Agreement
or result in a material adverse change in the business condition
(financial or other), prospects, financial position, net worth or
results of operations of the Company.
(o) 4,055,000 shares of Class A Common Stock, including
the Shares, have been approved for listing on the Nasdaq National
Market (the "Nasdaq National Market"), subject to official notice of
issuance.
(p) Neither the Company nor any of its directors, officers or
controlling persons, has taken or will take, directly or indirectly,
any action resulting in a violation of Regulation M under the Exchange
Act, or designed to cause or result under the Exchange Act or otherwise
in, or which has constituted or which reasonably might be expected to
constitute, the stabilization or manipulation of the price of any
securities of the Company or facilitation of the sale or resale of the
Shares.
(q) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required. All such contracts
to which the Company and the Subsidiaries are a party have been duly
authorized, executed and delivered by the Company and the Subsidiaries,
constitute valid and binding agreements of the Company and the
Subsidiaries and are enforceable against the Company and the
Subsidiaries in accordance with the terms thereof. The
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Company and the Subsidiaries have performed all obligations required to
be performed by them, and are neither in default nor have they received
notice of any default or dispute under, any such contract or other
material instrument to which they are a party or by which their
property is bound or affected. To the best knowledge of the Company, no
other party under any such contract or other material instrument to
which the Company and the Subsidiaries are a party is in default in any
material respect thereunder.
(r) Except as described in the Effective Prospectus and the
Final Prospectus, the Company and the Subsidiaries have good and
marketable title to all real and material personal property owned by
them, free and clear of all liens, charges, encumbrances or defects,
except those reflected in the financial statements hereinabove
described. The real and personal property and buildings referred to in
the Effective Prospectus and the Final Prospectus which are leased from
others by the Company and the Subsidiaries are held under valid,
subsisting enforceable leases. The Company and the Subsidiaries own or
lease all such properties as is necessary to the Company's operations
as now conducted.
(s) The Company's system of internal accounting controls is
sufficient to meet the broad objectives of internal accounting controls
insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation
to the Company's financial statements.
(t) The Company and the Subsidiaries have filed all foreign,
federal, state and local income and franchise tax returns required to
be filed through the date hereof and have paid all taxes shown as due
thereon to the extent such taxes have become due and are not being
contested in good faith; and there is no tax deficiency that has been,
nor does the Company have knowledge of any tax deficiency which is
likely to be, asserted against the Company or any of the Subsidiaries
which, if determined adversely, could materially and adversely affect
the earnings, assets, affairs, business prospects or condition
(financial or other) of the Company.
(u) 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 they conduct
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 on the Company's condition (financial or
otherwise). The Company and each of the Subsidiaries and its affiliated
physician practices hold 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 its Subsidiaries and (ii) with respect to those
facilities operated by the Company or any Subsidiary that participate
in Medicare and/or 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 its 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 on the Company's condition (financial or
otherwise). 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, its Subsidiaries or
its affiliated physician practices have not had a material adverse
effect on the Company's condition (financial or otherwise). Neither the
Company nor any of its Subsidiaries or its affiliated physician
practices 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 on the Company's condition (financial or
otherwise), 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.
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(v) Neither the Company nor any of its Subsidiaries is in
violation of any federal, state, local or foreign law or regulation
relating to occupational safety and health or to the storage, handling
or transportation of hazardous or toxic materials, and the Company and
the Subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal, state and foreign
occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and the
Subsidiaries are in compliance with all terms and conditions of any
such permit, license or approval, except for any such violation of law
or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or prospects of the Company.
(w) Neither the Company nor any of its Subsidiaries has failed
to file with the applicable regulatory authorities any statements,
reports, information or forms required by all applicable laws,
regulations or orders; all such filings or submissions were in
compliance with applicable laws when filed, and no material
deficiencies have been asserted by any regulatory commission, agency or
authority with respect to such filings or submissions. Neither the
Company nor any of its Subsidiaries has failed to maintain in full
force and effect any licenses, registrations or permits necessary or
proper for the conduct of their respective businesses, or received any
notification that any revocation or limitation thereof is threatened or
pending, and there is not to the knowledge of the Company pending any
change under any law, regulation, license or permit which could
materially adversely affect the business, operations, property or
business prospects of the Company and the Subsidiaries. Neither the
Company nor any of its Subsidiaries has received any notice of
violation of or been threatened with a charge of violating or is under
investigation with respect to a possible violation of any provision of
any law, regulation or order.
(x) No labor dispute exists or is imminent with any of the
employees of the Company and the Subsidiaries or otherwise which could
materially adversely affect the Company. The Company is not aware of
any existing or imminent labor disturbance by employees of the Company
and the Subsidiaries which could be expected to materially adversely
affect the condition (financial or otherwise), results of operations,
properties, affairs, management, business affairs or business prospects
of the Company. The Company and the Subsidiaries are in compliance with
all federal, state and local employment and labor laws, including but
not limited to, laws relating to non-discrimination in hiring,
promotion and pay of employees.
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(y) The Company and its Subsidiaries and affiliated practice
groups own or possess all licenses, patents, copyrights, trademarks,
service marks and trade names currently employed by it in connection
with the businesses currently operated or proposed to be operated by
them, and none of such parties has received any notice of
infringement of or conflict with asserted rights of others with respect
to any of the foregoing which, alone or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could result in
any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company.
(z) The Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in
which they are engaged and in which they propose to engage, and the
Company has no reason to believe that it and the Subsidiaries will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business.
(aa) Neither the Company, its Subsidiaries, nor any director,
officer, agent, employee or other person acting on behalf of the
Company has (i) used, or authorized the use of, any corporate or other
funds for unlawful payments, contributions, gifts or entertainment,
(ii) made unlawful expenditures relating to political activity to
government officials or others, or (iii) established or maintained any
unlawful or unrecorded funds in violation of any federal, state, local
or foreign law or regulation, including Section 30A of the Exchange
Act. Neither the Company nor any director, officer, agent, employee or
other person acting on behalf of the Company has accepted or received
any unlawful contributions, payments, gifts or expenditures.
(bb) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(cc) Except as disclosed in the Registration Statement and the
Effective Prospectus, there are no business relationships or related
party transactions required to be disclosed therein by Item 404 of
Regulation S-K promulgated by the Commission.
(dd) 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,
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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.
(ee) None of the Company nor any of its officers, directors or
stockholders, or to the knowledge of the Company, any employee, member,
partner, contractor or other agent of the Company or any of its
Subsidiaries or affiliated physician practices, has ever been excluded
from participation in a federal health care program for the provision
of items or services for which payment may be made under such a
program, nor 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 Medicare or Medicaid or any third party (where
applicable federal or state law prohibits such payments to third
parties.
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2. Representations and Warranties of the Selling Shareholders. Each of
the Selling Shareholders, severally and not jointly, represents and warrants to
and agrees with, each of the Underwriters that:
(a) Such Selling Shareholder, at the First Closing Date, will
have good and marketable title to the Shares set forth in Schedule II
to be sold by such Selling Shareholder, free and clear of any liens,
encumbrances, equities and claims (other than as imposed by the
Securities Act or this Agreement), and full right, power and authority
to effect the sale and delivery of such Shares; and upon the delivery
of and payment for the Shares to be sold by such Selling Shareholder
pursuant to this Agreement, good and marketable title thereto, free and
clear of any liens, encumbrances, equities and claims, of any kind,
will be transferred to the Underwriters.
(b) Such Selling Shareholder has duly executed and delivered
the Custody Agreement and Power of Attorney in the form previously
delivered to the Representatives, appointing the persons named therein,
and each of them as such Selling Shareholder's attorney-in-fact (the
"Attorney-in-Fact") and as custodian (the "Custodian"). The
Attorney-in-Fact is authorized to execute, deliver and perform this
Agreement on behalf of such Selling Shareholder, to deliver the Shares
to be sold by such Selling Shareholder hereunder, to accept payment
therefor, and otherwise to act on behalf of such Selling Shareholder in
connection with this Agreement, including payment from the Offering
proceeds of expenses incurred on behalf of such Selling Shareholder.
Certificates, in suitable form for transfer by delivery or accompanied
by duly executed instruments of transfer or assignment in blank,
representing the Shares to be sold by such Selling Shareholder
hereunder have been deposited with the Custodian pursuant to the
Custody Agreement and Power of Attorney for the purpose of delivery
pursuant to this Agreement. Such Selling Shareholder agrees that the
shares of Common Stock represented by the certificates on deposit with
the Custodian are subject to the interest of the Underwriters
hereunder, that the arrangements made for such custody and the
appointment of the Attorney-in-Fact are to that extent irrevocable, and
that the obligations of such Selling Shareholder hereunder shall not be
terminated except as provided in this Agreement and the Custody
Agreement and Power of Attorney. If such Selling Shareholder should die
or become incapacitated, or if any other event should occur, before the
delivery of the Shares of such Selling Shareholder hereunder, the
certificates for such Shares deposited with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such death, incapacity or other event had not
occurred, regardless of whether the Custodian or the Attorney-in-Fact
shall have received notice thereof.
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(c) Such Selling Shareholder, acting through his duly
authorized Attorney-in-Fact, has duly executed and delivered this
Agreement and the Custody Agreement and Power of Attorney; this
Agreement constitutes a legal, valid and binding obligation of such
Selling Shareholder, all authorizations and consents necessary for the
execution and delivery of this Agreement and the Custody Agreement and
Power of Attorney on behalf of such Selling Shareholder and for the
sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder have been given, except as may be required by the Securities
Act or state securities laws; and such Selling Shareholder has the
legal capacity and full right, power and authority to execute this
Agreement and the Custody Agreement and Power of Attorney.
(d) The performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation of the
transactions contemplated hereby and thereby by such Selling
Shareholder will not result in a breach or violation of, or conflict
with, any of the terms or provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument to which such Selling
Shareholder or any of his or its properties is bound, or any statute,
judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to such Selling Shareholder or
any of his, her or its properties.
(e) Such Selling Shareholder has not distributed nor, other
than as permitted by the Securities Act and the Rules and Regulations,
will distribute any prospectus or other offering material in connection
with the offer and sale of the Shares other than any Preliminary
Prospectus filed with the Commission or the Final Prospectus or other
material permitted by the Securities Act.
(f) Such Selling Shareholder has reviewed and is familiar with
the Registration Statement and the Preliminary Prospectus. To the
knowledge of such Selling Shareholder, the Preliminary Prospectus does
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(h) At the time the Registration Statement becomes effective
(i) such parts of the Registration Statement and any amendments and
supplements thereto as specifically refer to such Selling Shareholder
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) such parts of the
Effective Prospectus and Final Prospectus as specifically refer to such
Selling Shareholder will not include an untrue statement of a material
fact or omit to state a material fact
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necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory body, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement by such Selling Shareholder, and the
consummation by such Selling Shareholder of the transactions herein
contemplated (other than as required by the Securities Act, state
securities laws and the NASD).
(j) Any certificates signed by or on behalf of such Selling
Shareholder as such and delivered to the Representatives or to counsel
for the Representatives shall be deemed a representation and warranty
by such Selling Shareholder to each Underwriter as to the matters
covered thereby.
(k) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of
1986, as amended, with respect to the transactions herein contemplated,
such Selling Shareholder agrees to deliver to you prior to or at the
First Closing Date (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(l) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action resulting in a violation of
Regulation M under the Exchange Act which has constituted or which
reasonably might be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company or
facilitation of the sale or resale of the Shares.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling Shareholders,
severally and not jointly, in the amount set forth on Schedule II
hereto, agree to sell to the several Underwriters 3,500,000 and
200,000, Firm Shares, respectively, and each of the Underwriters,
severally and not jointly, agrees to purchase at a purchase price of
$______ per share, the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto.
(b) The Company hereby grants to the Underwriters an option to
purchase, solely for the purpose of covering over-allotments in the
sale of Firm Shares, all or any portion of the Option Shares at the
purchase price per share set forth above. The option granted hereby may
be exercised as to all or any part of the Option Shares at any time
within 30 days after the date of the Final Prospectus. The Underwriters
shall not be under any obligation
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to purchase any Option Shares prior to the exercise of such option. The
option granted hereby may be exercised by the Underwriters by Bradford
giving written notice to the Company setting forth the number of Option
Shares to be purchased and the date and time for delivery of and
payment for such Option Shares and stating that the Option Shares
referred to therein are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the
Firm Shares. If such notice is given prior to the First Closing Date
(as hereinafter defined), the date set forth therein for such delivery
and payment shall not be earlier than two full business days thereafter
or the First Closing Date, whichever occurs later. If such notice is
given on or after the First Closing Date, the date set forth therein
for such delivery and payment shall not be earlier than three full
business days thereafter. In either event, the date so set forth shall
not be more than four full business days after the date of such notice.
The date and time set forth in such notice is herein called the "Option
Closing Date." Upon exercise of the option, the Company shall become
obligated to sell to the Underwriters, and, subject to the terms and
conditions herein set forth, the Underwriters shall become obligated to
purchase, for the account of each Underwriter, from the Company,
severally and not jointly, the number of Option Shares specified in
such notice. Option Shares shall be purchased for the accounts of the
Underwriters in proportion to the number of Firm Shares set forth
opposite such Underwriter's name in Schedule I hereto, except that the
respective purchase obligations of each Underwriter shall be adjusted
so that no Underwriter shall be obligated to purchase fractional Option
Shares.
(c) Certificates in definitive form for the Firm Shares which
each Underwriter has agreed to purchase hereunder shall be delivered by
or on behalf of the Company to the Underwriters for the account of such
Underwriter against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of immediately available funds
to the order of the Company, at the offices of Bradford, 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as may be
agreed upon by Bradford and the Company, at 10:00 A.M., Nashville time,
on the third full business day after this Agreement becomes effective,
or, at the election of the Underwriters, on the fourth full business
day after this Agreement becomes effective, if it becomes effective
after 4:30 P.M. Eastern time, or at such other time not later than the
seventh full business day thereafter as the Underwriters and the
Company may determine, such time of delivery against payment being
herein referred to as the "First Closing Date." The First Closing Date
and the Option Closing Date are herein individually referred to as the
"Closing Date" and collectively referred to as the "Closing Dates."
Certificates in definitive form for the Option Shares which each
Underwriter shall have agreed to purchase hereunder shall be similarly
delivered by or on behalf of the Company on the Option Closing Date.
The certificates in definitive form for the Shares to be delivered will
be in good delivery form
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and in such denominations and registered in such names as Xxxxxxxx xxx
request not less than 48 hours prior to the First Closing Date or the
Option Closing Date, as the case may be. Such certificates will be made
available for checking and packaging at a location in New York, New
York as may be designated by Bradford, at least 24 hours prior to the
First Closing Date or the Option Closing Date, as the case may be. It
is understood that Xxxxxxxx xxx (but shall not be obligated to) make
payment on behalf of any Underwriter or Underwriters for the Shares to
be purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
4. Offering by the Underwriters. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to the
public the Firm Shares and any Option Shares which may be sold at the price and
upon the terms set forth in the Final Prospectus.
5. Covenants of the Company and the Selling Shareholders.
(a) The Company covenants and agrees with each of the
Underwriters that:
(i) The Company shall comply with the provisions of
and make all requisite filings with the Commission pursuant to
Rules 424 and 430A of the Rules and Regulations and shall
notify the Representatives promptly (in writing, if requested)
of all such filings. The Company shall notify the
Representatives promptly of any request by the Commission for
any amendment of or supplement to the Registration Statement,
the Effective Prospectus or the Final Prospectus or for
additional information; the Company shall prepare and file
with the Commission, promptly upon the Underwriters' request,
any amendments of or supplements to the Registration
Statement, the Effective Prospectus or the Final Prospectus
which, in the Underwriters' opinion, may be necessary or
advisable in connection with the distribution of the Shares;
and the Company shall not file any amendment of or supplement
to the Registration Statement, the Effective Prospectus or the
Final Prospectus which is not approved by the Representatives
after reasonable notice thereof. The Company shall advise the
Representatives promptly of the issuance by the Commission or
any jurisdiction or other regulatory body of any stop order or
other order suspending the effectiveness of the Registration
Statement, suspending or preventing the use of any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus
or suspending the qualification of the Shares for offering or
sale in any jurisdiction, or of the institution of any
proceedings for any such purpose; and the Company shall use
its best efforts to prevent the
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issuance of any stop order or other such order and, should a
stop order or other such order be issued, to obtain as soon as
possible the lifting thereof.
(ii) The Company will take or cause to be taken all
necessary action and furnish to whomever the Representatives
direct, such information as may be reasonably required in
qualifying the Shares for offer and sale under the securities
or Blue Sky laws of such jurisdictions as the Underwriters may
designate and will continue such qualifications in effect for
as long as may be reasonably necessary to complete the
distribution of the Shares.
(iii) Within the time during which a Final Prospectus
relating to the Shares is required to be delivered under the
Securities Act, the Company shall comply with all requirements
imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to
time in force, so far as is necessary to permit the
continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final
Prospectus. If during such period any event occurs as a result
of which the Final Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend
the Registration Statement or supplement the Final Prospectus
to comply with the Securities Act, the Company shall promptly
notify the Representatives and shall amend the Registration
Statement or supplement the Final Prospectus (at the expense
of the Company) so as to correct such statement or omission or
effect such compliance.
(iv) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies
of the Registration Statement (four of which shall be signed
and shall be accompanied by all exhibits), each Preliminary
Prospectus, the Effective Prospectus and the Final Prospectus,
and all amendments and supplements thereto, including any
prospectus or supplement prepared after the effective date of
the Registration Statement, in each case as soon as available
and in such quantities as the Underwriters may reasonably
request.
(v) The Company will (A) deliver to the
Representatives at such office or offices as the
Representatives may designate as many copies of the
Preliminary Prospectus and Final Prospectus as the
Representatives may reasonably request, (B) for a period of
not more than nine months after the Registration Statement
becomes effective,
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send to the Representatives as many additional copies of the
Final Prospectus and any supplement thereto as the
Representatives may reasonably request, and (C) following nine
months after the Registration Statement becomes effective,
send to the Representatives at their expense as many
additional copies of the Final Prospectus and any supplement
hereto as the Representative may reasonably request.
(vi) The Company shall make generally available to
its security holders, in the manner contemplated by Rule
158(b) under the Rules and Regulations as promptly as
practicable and in any event no later than 45 days after the
end of its fiscal quarter in which the first anniversary of
the effective date of the Registration Statement occurs, an
earnings statement satisfying the provisions of Section 11(a)
of the Securities Act covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement.
(vii) The Company will apply the net proceeds from
the sale of the Shares to be sold by it as set forth under the
caption "Use of Proceeds" in the Final Prospectus and will
timely report such use of proceeds in its periodic reports
filed pursuant to sections 13(a) and 15(d) of the Exchange Act
in accordance with Rule 463 of the Securities Act or any
successor provision.
(viii) During a period of five years from the
effective date of the Registration Statement or such longer
period as the Representatives may reasonably request, the
Company will furnish to the Representatives copies of all
reports and other communications (financial or other)
furnished by the Company to its shareholders and, as soon as
available, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission or
any national securities exchange or over-the-counter market on
which any class of securities of the Company may be listed for
trading.
(ix) The Company will, from time to time, after the
effective date of the Registration Statement file with the
Commission such reports as are required by the Securities Act,
the Exchange Act and the Rules and Regulations, and shall also
file with foreign, state and other governmental securities
commissions in jurisdictions where the Shares have been sold
by the Underwriters (as the Representatives shall have advised
the Company in writing) such reports as are required to be
filed by the securities acts and the regulations of those
jurisdictions.
(x) Except pursuant to this Agreement or with the
Representatives' written consent, for a period of 120 days
from the effective date of the Registration Statement, the
Company will not,
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and the Company has provided agreements (the "Lockup
Agreements") executed by each of its officers, directors and
5% or greater Shareholders providing that for a period of 120
days from the effective date of the Registration Statement,
such person will not, offer for sale, sell (other than the
issuance by the Company of shares of Common Stock pursuant to
acquisitions or the exercise of options granted pursuant to
existing employee benefit plans and agreements), grant any
options (other than pursuant to existing employee benefit
plans and agreements), rights or warrants with respect to any
shares of Common Stock, securities convertible into shares of
Common Stock or any other capital stock of the Company, or
otherwise dispose of, directly or indirectly, any shares of
Common Stock or such other securities or capital stock.
(xi) Neither the Company nor any of its directors,
officers or controlling persons, has taken or will take,
directly or indirectly, any action resulting in a violation of
Regulation M under the Exchange Act, or designed to cause or
result in, or which has constituted or which reasonably might
be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company or facilitation
of the sale or resale of the Shares.
(xii) The Company will either conduct its business
and operations as described in the Final Prospectus or, if the
Company makes any material change to its business or
operations as so conducted, promptly disclose such change
generally to the Company's security holders.
(xiii) The Company will use its best efforts to
effect the listing of the Class A Common Stock, subject to
notice of issuance, on the Nasdaq National Market on or before
the effective date of the Registration Statement.
(b) Each of the Selling Shareholders, severally and not
jointly, covenants and agrees with each of the Underwriters that:
(i) Such Selling Shareholder will cooperate to the
extent necessary to cause the Registration Statement or any
post-effective amendment thereto to become effective at the
earliest possible time.
(ii) Such Selling Shareholder will pay all federal
and other taxes, if any, on the transfer or sale of the Shares
being sold by such Selling Shareholder to the Underwriters.
(iii) Such Selling Shareholder will do or perform
all things required to be done or performed by such Selling
Shareholder prior to
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the First Closing Date to satisfy all conditions precedent to
the delivery of the Shares pursuant to this Agreement or the
Power of Attorney and Custody Agreement.
(iv) Such Selling Shareholder has delivered to the
Company an agreement pursuant to which such Selling
Shareholder has agreed that during the period of 120 days from
the date the Registration Statement is declared effective
under the Securities Act, such Selling Shareholder will not,
without your prior written consent, offer, pledge, issue,
sell, contract to sell, grant any option for the sale of, or
otherwise dispose of (or announce any offer, pledge, sale,
grant of an option to purchase or other disposition), directly
or indirectly, any shares of Common Stock or securities
convertible into, exercisable or exchangeable for, shares of
Common Stock.
(v) Such Selling Shareholder will not (i) take,
directly or indirectly, prior to the termination of the
underwriting syndicate contemplated by this Agreement, any
action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares, (ii) sell,
bid for, purchase or pay anyone any compensation for the
solicitation of purchases of, the Shares or (iii) pay or agree
to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(vi) Such Selling Shareholder will deliver to the
Custodian on or prior to the First Closing Date a properly
completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by
Treasury Department Regulations in lieu thereof).
(vii) Such Selling Shareholder will furnish any
documents, instruments or other information which you may
reasonably request in connection with the sale and transfer of
the Shares.
(viii) Such Selling Shareholder will use such Selling
Shareholder's best efforts to comply or cause to be complied
with the conditions to the obligations of the Underwriters in
Section 7 hereof insofar as such conditions relate to such
Selling Shareholder.
6. Expenses. The Company agrees with each of the Selling Shareholders
and the Underwriters that (a) whether or not the transactions contemplated by
this Agreement are consummated or this Agreement becomes effective or is
terminated, the Company will pay all fees and expenses incident to the
performance of the obligations of the Company hereunder, including, but not
limited to, (i) the
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Commission's registration fee, (ii) the expenses of printing (or reproduction)
and distributing the Registration Statement (including the financial statements
therein and all amendments and exhibits thereto), each Preliminary Prospectus,
the Effective Prospectus, the Final Prospectus, any amendments or supplements
thereto, any Marketing Materials (as hereinafter defined) and this Agreement and
other underwriting documents, including Underwriter's Questionnaires,
Underwriter's Powers of Attorney, Blue Sky Memoranda, Agreements Among
Underwriters and Selected Dealer Agreements, (iii) fees and expenses of
accountants and counsel for the Company, (iv) expenses of registration or
qualification of the Shares under state Blue Sky and securities laws, including
the fees and disbursements of counsel to the Underwriters in connection
therewith, (v) filing fees paid or incurred by the Underwriters in connection
with filings with the NASD, (vi) expenses of listing the outstanding Common
Stock on the Nasdaq National Market, (vii) all travel, lodging and reasonable
living expenses incurred by the Company in connection with marketing, dealer and
other meetings attended by the Company and the Underwriters in marketing the
Shares, (viii) the costs and charges of the Company's transfer agent and
registrar and the cost of preparing the certificates for the Shares, and (ix)
all other costs and expenses incident to the performance of its obligations
hereunder not otherwise provided for in this Section; and (b) all out-of-pocket
expenses, including counsel fees, disbursements and expenses, incurred by the
Underwriters in connection with investigating, preparing to market and marketing
the Shares and proposing to purchase and purchasing the Shares under this
Agreement, will be borne and paid by the Company if the sale of the Shares
provided for herein is not consummated (i) by reason of the termination of this
Agreement by the Underwriters pursuant to Section 14(b)(ii) or (iv) of this
Agreement or (ii) because of any failure or refusal on the part of the Company
or any Selling Shareholder to comply with the terms or fulfill any of the
conditions of this Agreement.
The provisions of this Section shall not affect any agreement that the
Company and the Selling Shareholders may have for the sharing of such costs and
expenses; provided, however, the Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees, and expenses to be paid
hereunder by the Company and the Selling Shareholders.
7. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters to purchase and pay for the Firm Shares shall be
subject to the accuracy of the representations and warranties of the Company
herein as of the date hereof and as of the Closing Date as if made on and as of
the Closing Date, to the accuracy of the statements of the Company's officers
made pursuant to the provisions hereof, to the performance by the Company and
the Selling Shareholders of all of their respective covenants and agreements
hereunder and to the following additional conditions:
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(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 5:30
P.M., Washington, D.C. time, on the day following the date of this
Agreement, or such later time and date as shall have been consented to
by the Representatives and all filings required by Rule 424 and Rule
430A of the Securities Act Rules shall have been made; no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission; any request of
the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall have
been complied with to the Representatives' satisfaction; and the NASD,
upon review of the terms of the public offering of the Shares, shall
not have objected to such offering, such terms or the Underwriters'
participation in the same.
(b) No Representative shall have advised the Company that the
Registration Statement, Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or any supplement
thereto, contains an untrue statement of fact which, in the
Representatives' reasonable judgment, is material, or omits to state a
fact which, in the Representatives' reasonable judgment, is material
and is required to be stated therein or necessary to make the
statements therein not misleading and the Company shall not have cured
such untrue statement of fact or omission.
(c) The Representatives shall have received an opinion, dated
the Closing Date, from Bass, Xxxxx & Xxxx PLC, counsel for the Company,
to the effect that:
(i) Each of the Company and 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 Company and the Corporate Subsidiaries is duly qualified
to transact business as a foreign corporation and in good
standing in those states where a failure to so qualify would
have a material adverse effect on the Company; 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 fights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in the
Corporate Subsidiaries are outstanding.
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(ii) Each of the Partnerships has been duly
organized and is an existing partnership 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 qualified 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 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 qualified 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) As of the dates specified therein, the Company
had historically authorized and issued capital stock as set
forth under the caption "Capitalization" in the Final
Prospectus. All of the outstanding shares of Common Stock have
been duly authorized and are validly issued, fully paid and
nonassessable, and the Shares to be sold by the Company have
been duly authorized, and upon issuance thereof and payment
therefor as provided herein, will be validly issued, fully
paid and nonassessable; none of the issued shares have been
issued in violation of or subject to any preemptive rights
provided for by law, any agreement known to such counsel or
the Company's charter. To such counsel's knowledge, the
Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any
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contracts or commitments to issue or sell any shares of
capital stock, and there are no preemptive rights or other
rights to subscribe for or purchase any shares of the capital
stock of the Company, or any restriction upon the transfer of,
the Shares pursuant to the Company's charter or bylaws or any
agreement or other instrument known to such counsel to which
the Company is a party or by which it may be bound, except as
described in the Effective Prospectus and Final Prospectus.
Neither the filing of the Registration Statement nor the offer
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 Common
Stock or any other securities of the Company. The Underwriters
will receive good and marketable title to the Shares to be
issued and delivered by the Company pursuant to this
Agreement, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders agreements,
voting trusts and the rights of any third party whatsoever.
The capital stock of the Company and the Shares conform to the
description thereof contained in the Final Prospectus. All
offers and sales of the Company's interests and securities
prior to the date hereof were made in reliance upon available
exemptions from the registration requirements of the
Securities Act and the registration requirements of applicable
state securities or Blue Sky laws or, if not exempt, properly
registered in compliance with such laws.
(v) The form of stock certificate to be used to
evidence the Class A Common Stock will be in due and proper
form and will comply with all applicable legal requirements
under the Tennessee Business Corporation Act.
(vi) No consent, approval, authorization or order of
any court or governmental agency or body or third party is
required for the performance of this Agreement by the Company
or the consummation by the Company of the transactions
contemplated hereby, except such as have been obtained under
the Securities Act and such as may be required by the NASD and
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by several
Underwriters, as to which such counsel need not express an
opinion. The performance of this Agreement by the Company and
the consummation by the Company of the transactions
contemplated hereby will not (a) conflict with or result in a
breach or violation by the Company or any of its Subsidiaries
of any of the terms or provisions of, or constitute a default
by the Company or any of its Subsidiaries under, any material
contract, agreement, indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which
either the Company or any of its Subsidiaries is a party or to
which either the Company or any of its Subsidiaries or their
properties is subject, the charter or bylaws of the Company,
any statute, or any
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judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Company (except
that such counsel need not express an opinion as to whether
performance of the indemnification or contribution provisions
of this Agreement would be permitted); or (b) 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 its Subsidiaries, respectively.
(vii) The Company has full legal right and all
corporate power and authority to enter into this Agreement and
to issue, sell and deliver the Shares to be sold by it to the
Underwriters as provided herein, and this Agreement has been
duly authorized, executed and delivered by the Company and
constitutes the valid and legally binding obligation of the
Company enforceable against the Company in accordance with its
terms.
(viii) Except as described in the Final Prospectus,
there is not pending or threatened, any action, suit,
proceeding, inquiry or investigation, to which the Company or
any of the Subsidiaries are a party, or to which the property
of the Company or any of the Subsidiaries are subject, before
or brought by any court or governmental agency or body, which,
if determined adversely to the Company or any of the
Subsidiaries, could likely result in any material adverse
change in the business, financial position, net worth or
results of operations, or could materially adversely affect
the properties or assets, of the Company or any of the
Subsidiaries.
(ix) No default exists, and no event has occurred
which with notice or after the lapse of time to cure or both,
would constitute a default, in the due performance and
observance of any term, covenant or condition of any material
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which either the Company or
any of its Subsidiaries is a party or to which their
respective properties are subject, or of the charter or bylaws
of the Company.
(x) There are no contracts or documents of the
Company known to such counsel which are required to be filed
as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been so
filed.
(xi) The Company is not an "investment company" or
an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended.
(xii) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act, and, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are threatened, pending or contemplated by the Commission. All
filings required by Rule 424 and Rule 430A of the
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27
Rules and Regulations have been made; the Registration
Statement, the Effective Prospectus and Final Prospectus, and
any amendments or supplements thereto, as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations; the descriptions in the Registration
Statement, the Effective Prospectus and the Final Prospectus
of statutes, regulations, legal and governmental proceedings,
and contracts and other documents are accurate in all material
respects and present fairly in all material respects the
information purported to be summarized; and counsel does not
know of any pending or threatened legal or governmental
proceedings, statutes or regulations required to be described
in the Final Prospectus which are not described as required
nor of any contracts or documents of a character required to
be described in the Registration Statement or the Final
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(xiii) To such counsel's knowledge in the course of
their representation, neither the Company, its Subsidiaries
nor any of the affiliated physician practices is in violation
of any material laws applicable to the Company or any of the
Subsidiaries or any of the affiliated physician practices 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, neither the
Company, its Subsidiaries nor any of the affiliated physician
practices is in violation of applicable state licensure,
Medicare or Medicaid requirements, which violation is likely
to have a material adverse effect on the Company's condition
(financial or otherwise).
(xiv) The Company and each of its 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 applicable law and (b) with respect to those
centers owned or operated by the Company or any Subsidiary
that participate in Medicare and/or Medicaid, to receive
reimbursement thereunder.
(xv) The descriptions of statutes and regulations
under the captions "Risk Factors - Contingent Purchase
Obligations," "Risk Factors - Risks Associated with Capitated
Payment Arrangements," "Risk
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Factors - Dependence on Third-Party Reimbursement; Risk of Fee
Reductions or Exclusion from Managed Care Arrangements," "Risk
Factors - Risk Associated with Medicare -Medicaid Illegal
Remuneration ("anti-kickback") Laws," "Risk Factors - Risks
Associated with Physician Self-Referral Laws," "Risk Factors -
Risk Related to Laws Governing Corporate Practice of
Medicine," "Risk Factors - Risk or Potential Applicability of
Insurance Regulations and Antitrust Laws," "Risk Factors -
Risk of Compliance with Other Governmental Regulation" and
"Business - Government Regulation," in the Prospectus have
been reviewed by such counsel and fairly summarize such
statutes and regulations in all material respects.
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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 the Registration Statement, the
Effective Prospectus and the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made (except that such counsel need
express no view as to financial statements, schedules and other financial or
statistical information included therein).
(d) The Representatives shall have received an opinion, dated
the Closing Date, of counsel for the Selling Shareholders, reasonably
acceptable to the Representatives, to the effect that:
(i) This Agreement and the Custody Agreement and
Power of Attorney have been duly authorized (in the case of
corporate or partnership Selling Shareholders), executed and
delivered by or on behalf of each of the Selling Shareholders
and constitute valid and binding agreements of such Selling
Shareholders in accordance with their terms, subject to limits
on remedies, specific performance and bankruptcy and
insolvency laws.
(ii) The sale of the Shares to be sold by each
Selling Shareholder hereunder and the compliance by such
Selling Shareholder with all of the provisions of this
Agreement, the Custody Agreement and the Power of Attorney and
the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a
default under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling
Shareholder is bound or to which any of the property or assets
of such Selling Shareholder is subject, or any statute, order,
rule or regulation of any court or governmental agency or body
applicable to such Selling Shareholder or the property of such
Selling Shareholder.
(iii) No consent, approval, authorization or order of
any regulatory, administrative or other governmental body is
required for the consummation of the transactions contemplated
by this Agreement in connection with the Shares to be sold by
each Selling Shareholder hereunder, except which have been
duly obtained and in full force and effect, such as have been
obtained under the Securities Act and such as
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30
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares
by the Underwriters, as to which such counsel need express no
opinion.
(iv) Each of the Selling Shareholders has the full
right, power and authority to sell, transfer and deliver such
Shares pursuant to this Agreement. By delivery of a
certificate or certificates therefor, the Selling Shareholders
will transfer to the Underwriters valid title to such shares,
free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
The opinions to be rendered pursuant to paragraphs (c) and (d) may be
limited to federal law, and as to foreign and state law matters, to the laws of
the states or jurisdictions in which such counsel is admitted to practice. Such
counsel may rely upon opinions of other counsel in rendering such opinions
provided that such counsel shall state that they believe that both the
Representatives and they are justified in relying upon such opinions and that
such counsel is reasonably satisfactory to you.
(e) The Underwriters shall have received an opinion or
opinions, dated the Closing Date, of Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, A
Professional Limited Liability Company, counsel for the Underwriters,
with respect to the Registration Statement and the Final Prospectus,
and such other related matters as the Underwriters may require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) The Representatives shall have received from Deloitte &
Touche, LLP, a letter dated the date hereof and, at the Closing Date, a
second letter dated the Closing Date, in form and substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the applicable Rules and
Regulations, and containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information of the Company contained in the Registration Statement and
the Prospectus.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that the Underwriters shall have
determined, after discussions with officers of Company responsible for financial
and accounting matters and with Deloitte & Touche, LLP that such changes,
decreases or increases as are set forth in such letters do not reflect a
material adverse change in the total assets, shareholders' equity or long-term
debt of Company as compared with the amounts shown in the latest balance sheets
of Company included in the Final Prospectus, or a material
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31
adverse change in revenues or net income of Company, in each case as compared
with the corresponding period of the prior year.
(g) There shall have been furnished to the Representatives a
certificate, dated the Closing Date and addressed to you, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to
the effect that:
(i) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct,
as if made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for that purpose have been initiated or are pending, or to
their knowledge, threatened under the Securities Act;
(iii) all filings required by Rule 424 and Rule 430A
of the Rules and Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and such documents
do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances under which they were made; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement, the Effective Prospectus or the Final Prospectus
which has not been so set forth.
(h) The representations and warranties of each Selling
Shareholder in Section 2 of this Agreement shall be true and correct as
of the Closing Date and such Selling Shareholders shall deliver to the
Representatives a certificate to that effect, dated the Closing Date,
signed by such Selling Shareholder or his or its duly appointed
Attorney-in-Fact.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, and
except as stated therein, the Company has not sustained any material
loss or interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any
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32
labor dispute or any court or governmental action, order or decree, or
become a party to or the subject of any litigation which is material to
the Company, nor shall there have been any material adverse change, or
any development involving a prospective material adverse change, in the
business, properties, key personnel, capitalization, prospects, net
worth, results of operations or condition (financial or other) of the
Company, which loss, interference, litigation or change, in the
Representatives' reasonable judgment shall render it inadvisable to
commence or continue the offering of the Shares at the offering price
to the public set forth on the cover page of the Prospectus or to
proceed with the delivery of the Shares.
(j) The Shares shall be listed on the Nasdaq National Market.
(k) The Representatives shall have received the Lockup
Agreements.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representatives and their counsel. The
Company shall furnish to the Representatives such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Shares shall be subject, in their discretion, to the conditions of
this Section 7, except that all references to the "Closing Date" shall be deemed
to refer to the Option Closing Date, if it shall be a date other than the
Closing Date.
8. Condition of the Company's and the Selling Shareholder's
Obligations. The obligations hereunder of the Company and the Selling
Shareholders are subject to the condition set forth in Section 7(a) hereof.
9. Indemnification and Contribution.
(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 Securities Act, against any losses, claims,
damages or liabilities to which such Underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based in whole or in part upon: (i) any
inaccuracy in the representations and warranties of the Company or the
Selling Shareholders contained herein; (ii) any failure of the Company
or the Selling Shareholders to perform their obligations hereunder or
under law; (iii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or supplement thereto, (B) any audio or visual
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33
materials supplied by the Company expressly for use in connection with
the marketing of the Shares, including without limitation, slides,
videos, films and tape recordings (the "Marketing Materials") or (C) in
any Blue Sky application or other written information furnished by the
Company or the Selling Shareholders filed in any state or other
jurisdiction in order to qualify any or all of the Shares under the
securities laws thereof (a "Blue Sky Application"); (iv) or the
omission or alleged omission to state in the Registration Statement,
any Preliminary Prospectus, the Effective Prospectus or Final
Prospectus or any amendment or supplement thereto, any Marketing
Materials or Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading; or
(v) any act or failure to act or any alleged act or failure to act by
any Underwriter in connection with, or relating to in any manner to,
the Shares or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i),
(ii), (iii) or (iv) above (provided that the Company shall not be
liable under this clause (v) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct); and
will reimburse each Underwriter and each such controlling person for
any legal or other expenses reasonably incurred by such Underwriter or
such controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that 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 any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus, the Effective Prospectus or
Final Prospectus, or any amendment or supplement thereto, or any
Marketing Materials or Blue Sky Application in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and in the third, fourth, fifth and eighth
paragraphs under the caption "Underwriting" in any Preliminary
Prospectus and the Final Prospectus and the Effective Prospectus).
(b) The Selling Shareholders, severally and not jointly, agree
to indemnify and hold harmless each Underwriter, and each person, if
any, who controls any Underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities to which such
Underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
in whole or in part upon: (i) any inaccuracy
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in the representations and warranties of the Company or such Selling
Shareholder contained herein; (ii) any failure of the Company or such
Selling Shareholder to perform their obligations hereunder or under
law; (iii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or supplement thereto, (B) any Marketing Materials or
(C) in any Blue Sky Application furnished by the Company or such
Selling Shareholder; or (iv) the omission or alleged omission to state
the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus or any amendment or supplement thereto,
any Marketing Materials or Blue Sky Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading; or (v) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with, or
relating to in any manner to, the Shares or the offering contemplated
hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters
covered by clause (i), (ii), (iii) or (iv) above (provided that the
Company shall not be liable under this clause (v) to the extent that it
is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful
misconduct);and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that such
Selling Shareholder 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 any untrue statement or alleged statement or omission or
alleged omission made in the Registration Statement, the Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or any Marketing Materials or Blue Sky
Application in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use
therein (it being understood that the only information so provided is
the information included in the last paragraph on the cover page and in
the third, fourth, fifth and eighth paragraphs under the caption
"Underwriting" in any Preliminary Prospectus and the Final Prospectus
and the Effective Prospectus).
(c) Notwithstanding the foregoing provisions of Section 9(a)
and (b), the parties agree that the indemnification obligations of each
Selling Shareholder under this Section 9, with respect to any matter
that such Selling Shareholder and the Company are both required to
indemnify the Underwriters hereunder, shall be subject to the
determination by the
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35
Representatives, on behalf of the Underwriters, that, in the
Representatives' reasonable commercial judgment, the Company is or may
be unable to discharge fully its obligations to the Underwriters
hereunder; provided, however, that such Selling Shareholder's
obligations shall (i) be limited to such Selling Shareholder's
proportion of the Firm Shares as set forth on Schedule II, times the
aggregate amount to which the Underwriters are entitled to
indemnification, and (ii) shall be liable in any such case only to the
extent of the total net proceeds (before deducting expenses) received
from the Underwriters by such Selling Shareholder in connection with
the sale of the Shares hereunder. To the extent the Company is or may
be able, in the Representatives' reasonable commercial judgment, to
discharge the Company's obligations to the Underwriters with respect to
any matter that the Company is required to indemnify the Underwriters
hereunder, the Underwriters shall to such extent, first seek
indemnification from the Company.
(d) Each Underwriter, will indemnify and hold harmless each of
the Selling Shareholders, the Company, each of its directors, each of
the Company's officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the
Securities Act against any losses, claims, damages or liabilities to
which such Selling Shareholders, the Company or any such director,
officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, any Marketing Materials or any Blue
Sky Application, or arise out of or are based upon the omission or the
alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or supplement thereto, any Marketing Materials or any
Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein (it being
understood that the only information so provided is the information
included in the last paragraph on the cover page and in the third,
fourth, fifth and eighth paragraphs under the caption "Underwriting" in
any Preliminary Prospectus and in the Effective Prospectus and the
Final Prospectus).
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36
(e) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 9 notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
hereunder unless the indemnifying party has been materially prejudiced
thereby and in any event shall not relieve it from liability otherwise
than under this Section 9. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party; and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section 9 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation except that the indemnified
party shall have the right to employ separate counsel if, in the
indemnified party's reasonable judgment, it is advisable for the
indemnified party to be represented by separate counsel, and in that
event the fees and expenses of separate counsel shall be paid by the
indemnifying party.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 9 is for any reason held to be
unavailable to the Underwriters, the Company or the Selling
Shareholders or is insufficient to hold harmless an indemnified party,
then the Company and the Selling Shareholders shall contribute to the
damages paid by the Underwriters, and the Underwriters shall contribute
to the damages paid by the Company and the Selling Shareholders;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f)) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The amount of such
contribution shall (i) be in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other from the
offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, be in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well
as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Shareholders on the one hand
and
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37
the Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders, in the
case of the Company and the Selling Shareholders, and the total
underwriting discounts and commissions received by the Underwriters
with respect to the Shares purchased under this Agreement, in the case
of the Underwriters, bear to the total gross proceeds from the offering
of the Shares under this Agreement, in each case as set forth in the
Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Shareholders or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even
if the Underwriters were treated as one entity for such purpose).
Notwithstanding the foregoing, (i) no Underwriter or person controlling
such Underwriter shall be obligated to make contribution hereunder
which in the aggregate exceeds the underwriting discount applicable to
the Shares purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages which such Underwriter and its
controlling persons have otherwise been required to pay in respect of
the same or any similar claim and (ii) no Selling Shareholder shall be
required to contribute any amount in excess of the aggregate amount for
which such Selling Shareholder is obligated to provide indemnification
pursuant to Section 9(c). The Underwriters' obligations and the Selling
Shareholders' obligations to contribute hereunder are several in
proportion to their respective obligations and not joint. For purposes
of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as such Underwriters, and each director of
the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company or a
Selling Shareholder within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as the Company or the
Selling Shareholders, as the case may be.
(g) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any
indemnified party is a party or is (or would be, if a claim were to be
made against such indemnified party) entitled to indemnity hereunder,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
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10. Default of Underwriters. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or less
of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters), the
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter so defaults and the total number of Shares with
respect to which such default or defaults occur is more than ten percent of the
total number of Shares to be sold hereunder, and arrangements satisfactory to
the other Underwriters, the Company and the Selling Shareholders for the
purchase of such Shares by other persons (who may include the non-defaulting
Underwriters) are not made within 36 hours after such default, this Agreement,
insofar as it relates to the sale of the Shares, will terminate without
liability on the part of the non-defaulting Underwriters or the Company or the
Selling Shareholders except for (i) the provisions of Section 9 hereof, and (ii)
the expenses to be paid or reimbursed by the Company pursuant to Section 6. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 10. Nothing herein shall relieve a
defaulting Underwriter from liability for its default.
11. Default by the Selling Shareholders. If the Selling Shareholders
shall fail to sell and deliver the number of Firm Shares that the Selling
Shareholders are obligated to sell, the Representatives may, at their option, by
notice to the Company, either (a) require the Company to sell and deliver such
number of shares of Common Stock as to which the Selling Shareholders have
defaulted, or (b) elect to purchase the Firm Shares and the Option Shares that
the Company and the non-defaulting Selling Shareholders have agreed to sell
pursuant to this Agreement.
In the event of a default under this Section that does not result in
the termination of this Agreement, the Representatives shall have the right to
postpone the First Closing Date or Option Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. No action
taken pursuant to this Section shall relieve the Company or the Selling
Shareholder so defaulting from liability, if any, in respect of such default.
12. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Selling
Shareholders, the Company or their officers and the Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (a) any
investigation made by or on behalf of the Company, any of its officers or its
directors, any Underwriter or any
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controlling person, (b) any termination of this Agreement and (c) delivery of
and payment for the Shares.
13. Effective Date. This Agreement shall become effective at whichever
of the following times shall first occur: (i) at 11:30 am Washington D.C. time,
on the next full business day following the date in which the Registration
Statement becomes effective or (ii) at such time after the Registration
Statement has become effective as the Representatives shall release the Firm
Shares for sale to the public; provided, however, that the provisions of
Sections 6,9,12, and 13 hereof shall at all times be effective. For purposes of
this Section 13, the Firm Shares shall be deemed to have been so released upon
the release by the Representatives for publication, at any time after the
Registration Statement has become effective, of any newspaper advertisement
relating to the Firm Shares or upon the release by the Representatives of
telegrams offering the Firm Shares for sale to securities dealers, whichever may
occur first.
14. Termination.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representatives (i) at any
time before it becomes effective in accordance with Section 13 hereof,
or (ii) in the event that the condition set forth in Section 8 shall
not have been satisfied at or prior to the First Closing Date.
(b) This Agreement may be terminated by the Representatives by
notice to the Company (i) at any time before it becomes effective in
accordance with Section 13 hereof; (ii) in the event that at or prior
to the First Closing Date the Company or any Selling Shareholder shall
have failed, refused or been unable to perform any agreement on the
part of the Company or such Selling Shareholder to be performed
hereunder or any other condition to the obligations of the Underwriters
hereunder is not fulfilled; (iii) if at or prior to the Closing Date
trading in securities on the NYSE, the Nasdaq National Market, the
American Stock Exchange or the over-the-counter market shall have been
suspended or materially limited or minimum or maximum prices shall have
been established on either of such exchanges or such market, or a
banking moratorium shall have been declared by Federal or state
authorities; (iv) if at or prior to the Closing Date trading in
securities of the Company shall have been suspended; or (v) if there
shall have been such a material adverse change in general economic,
political or financial conditions or if the effect of international
conditions on the financial markets in the United States shall be such
as, in your reasonable judgment, makes it inadvisable to commence or
continue the offering of the Shares at the offering price to the public
set forth on the cover page of the Prospectus or to proceed with the
delivery of the Shares.
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(c) Termination of this Agreement pursuant to this Section 14
shall be without liability of any party to any other party other than
as provided in Sections 6 and 9 hereof.
15. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to the Underwriters in care of X. X. Xxxxxxxx & Co., X. X.
Xxxxxxxx Financial Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxxx, or if sent to the Company shall be mailed,
delivered or telegraphed and confirmed in writing to the Company at Xxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxx X.
XxXxxxxx, or if sent to the Selling Shareholders shall be mailed, delivered or
telegraphed and confirmed in writing to ___________________________________ as
Attorney-in-Fact for the Selling Shareholders.
16. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company and the Selling Shareholders their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Company, the Selling Shareholders and the
Underwriters and for the benefit of no other person except that (a) the
representations and warranties and indemnities of the Company and the Selling
Shareholder contained in this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Securities Act, and (b) the indemnities by the Underwriters shall also be
for the benefit of the directors of the Company, officers of the Company who
have signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Securities Act. No purchaser of
Shares from any Underwriter will be deemed a successor because of such purchase.
The validity and interpretation of this Agreement shall be governed by the laws
of the State of Tennessee. 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. The Representatives
hereby represent and warrant to the Company that the Representative have
authority to act hereunder on behalf of the Underwriters, and any action
hereunder taken by the Representatives shall be binding upon all the
Underwriters.
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If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among the Company, each of the Selling Shareholders and each of the
Underwriters.
Very truly yours,
AMSURG CORP.
By:
--------------------------------------
Title:
----------------------------------
SELLING SHAREHOLDERS
By:
--------------------------------------
Attorney-in-Fact for each of the Selling
Shareholders listed in Schedule II
hereto
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Confirmed and accepted as of
the date first above written.
X.X. XXXXXXXX & CO., L.L.C.
By:
-------------------------------------
XXXXX XXXXXXX, INC.
By:
-------------------------------------
XXXXXX XXXXXX & COMPANY, INC.
By:
-------------------------------------
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SCHEDULE I
UNDERWRITERS
Underwriter Number of Firm Shares to be Purchased
----------- -------------------------------------
X.X. Xxxxxxxx & Co.
Xxxxx Xxxxxxx, Inc.
Xxxxxx Xxxxxx & Company, Inc.
------------------------
Total
========================
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SCHEDULE II
SELLING SHAREHOLDERS
Selling Shareholder Number of Shares to be Sold
------------------- ---------------------------
------------------------
Total
========================
44
