Exhibit 1.1
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PSYCHIATRIC SOLUTIONS, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: December 14, 2004
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WGM DRAFT
12/14/04
PSYCHIATRIC SOLUTIONS, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
(Par Value $0.01 Per Share)
UNDERWRITING AGREEMENT
December 14, 2004
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Citigroup Global Markets Inc.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
PSYCHIATRIC SOLUTIONS, INC., a Delaware corporation (the "COMPANY"),
and the persons listed in Schedule B hereto (the "SELLING STOCKHOLDERS"),
confirm their respective agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX") and each of the other
Underwriters named in Schedule A hereto (collectively, the "UNDERWRITERS," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Xxxxxxx Xxxxx and Citigroup Global Markets Inc.
("CITIGROUP") are acting as representatives (in such capacity, the
"REPRESENTATIVES"), with respect to (i) the sale by the Company and the Selling
Stockholders, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $0.01 per share, of the Company ("COMMON
STOCK") set forth in Schedules A and B hereto and (ii) the grant by the Company
and one director of the Company (the "SELLING DIRECTOR") to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 450,000 additional shares of Common Stock to
cover overallotments, if any. The aforesaid 3,000,000 shares of Common Stock
(the "INITIAL SECURITIES") to be purchased by the Underwriters and all or any
part of the 450,000 shares of Common Stock subject to the option described in
Section 2(b) hereof (the "OPTION SECURITIES") are hereinafter called,
collectively, the "SECURITIES."
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-120804), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 ACT").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("RULE 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 ACT REGULATIONS") and paragraph (b) of Rule 424 ("RULE 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "RULE 430A
INFORMATION." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, including all documents incorporated by reference therein, is herein
called a "PRELIMINARY PROSPECTUS." Such registration statement, including the
exhibits and any schedules thereto, at the time it became effective, and
including the Rule 430A Information and all documents incorporated by reference
therein, is herein called the "REGISTRATION STATEMENT." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "RULE 462(b) REGISTRATION STATEMENT," and after such filing
the term "REGISTRATION STATEMENT" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the Securities, including all
documents incorporated by reference therein, is herein called the "PROSPECTUS."
For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that
(i) The Registration Statement, including a
Prospectus, with respect to, among other things, the
Securities has (i) been prepared by the Company in conformity
in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations, (ii) been filed with the
Commission under the 1933 Act and (iii) become effective under
the 1933 Act. Copies of such Registration Statement and each
of the amendments thereto have been delivered by the Company
to you as the Representatives of the Underwriters. As used in
this Agreement, "EFFECTIVE TIME" means the date and the time
as of which the Registration Statement, or the most recent
post-effective amendment thereto, if any, was declared
effective by the Commission; "EFFECTIVE DATE" means the date
of each Effective Time.
(ii) In the case of the Registration Statement, the
conditions for the use of Form S-3, as set forth in the
General Instructions thereto have been satisfied.
(iii) The Commission has not issued any order
preventing or suspending the use of the Registration
Statement.
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(iv) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they
become effective or are filed with the Commission, as the case
may be, conform in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations and do not and
will not, as of the Effective Date (as to the Registration
Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or
supplement thereto) 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; provided, however, that no representation or
warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives
expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information, or
any Preliminary Prospectus or the Prospectus (or any amendment
or supplement thereto).
(v) The documents incorporated by reference in the
Prospectus and Registration Statement, when they were filed
with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), the rules and regulations
thereunder (the "EXCHANGE ACT RULES") and the 1933 Act
Regulations, and none of such documents contained an untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements therein not misleading
in light of the circumstances in which they were made; and any
further documents so filed and incorporated by reference in
each Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the
requirements of the Exchange Act, the Exchange Act Rules and
the 1933 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading in
light of the circumstances in which they were made.
(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, is duly qualified
to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, except such failures to qualify as are not,
either individually or in the aggregate, material to the
Company and its subsidiaries, taken as a whole, affecting the
management, condition, financial or otherwise, stockholders'
equity, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole (a "MATERIAL
ADVERSE EFFECT"), and has all corporate power and authority
necessary to own or hold its properties and to conduct the
business in which it is engaged.
(vii) Neither the Company nor any of its subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in
default, and no event has occurred that, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant, condition or
other obligation contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of
its properties or assets is subject, except for such
violations or defaults that do not have a Material Adverse
Effect, or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree
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to which it or its property or assets may be subject or has
failed to obtain or maintain any license, permit, certificate,
franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct
of its business, except for such violations or defaults that
do not have a Material Adverse Effect.
(viii) The Company has an authorized capitalization
as set forth in the Prospectus (and on the Closing Date (as
defined in Section 2(c)) will have the authorized
capitalization so set forth in the Prospectus as of that date)
under the caption "Description of Capital Stock." All of the
issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly authorized
and validly issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, other than liens,
encumbrances, equities or claims under the Company's existing
credit facility, and none of such shares of capital stock were
issued in violation of preemptive or other similar rights
arising by operation of law, under the charter and bylaws (or
similar organizational documents) of the Company or any of its
subsidiaries or under any agreement to which the Company or
any of its subsidiaries is a party or otherwise.
(ix) The Securities to be issued and sold by the
Company to the Underwriters hereunder have been duly and
validly authorized and, when issued and delivered against
payment therefor as provided in this Agreement, will be duly
and validly issued, fully paid and non-assessable. The
Securities conform to the description thereof in the
Prospectus in all material respects.
(x) The Company has all requisite corporate power and
authority to enter into this Agreement. This Agreement has
been duly authorized, executed and delivered by the Company.
(xi) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby (i) will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
except for such conflicts, breaches, violations or defaults
that do not have a Material Adverse Effect or for which a
waiver or consent has been obtained, (ii) will not result in
any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or (iii) will not
violate any applicable statute, order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
properties or assets, except for such conflicts, breaches,
violations or defaults that do not have a Material Adverse
Effect; and except for filings with NASDAQ, the National
Association of Securities Dealers, Inc. (the "NASD") and under
the 1933 Act, the Exchange Act and applicable state or foreign
securities laws in connection with the purchase and
distribution of the Securities by the Underwriters, no
consent, approval, authorization or order of, or filing,
registration or qualification with, any such court or
governmental agency or body is required for the execution of
this Agreement by the Company and the consummation of the
transactions contemplated hereby other than such
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consents, approvals, authorizations, orders, filings,
registrations or qualifications the failure to make or obtain
would not have a Material Adverse Effect.
(xii) There are no persons with registration rights
or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered
by the Company under the 1933 Act.
(xiii) Except as set forth or incorporated by
reference in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales
pursuant to Regulation D or Regulation S of the 1933 Act,
other than shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(xiv) The historical financial statements of the
Company (including the related notes and supporting schedules)
included in or incorporated by reference in the Registration
Statement and the Prospectus present fairly in all material
respects the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and
for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(xv) The historical financial statements of Ramsay
Youth Services, Inc. ("RAMSAY") (including the related notes
and supporting schedules) incorporated by reference in the
Registration Statement and the Prospectus present fairly in
all material respects the financial condition and results of
operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved.
(xvi) The historical financial statements of Northern
Healthcare Associates and Subsidiaries ("NORTHERN HEALTHCARE")
(including the related notes and supporting schedules)
incorporated by reference in the Registration Statement and
the Prospectus present fairly in all material respects the
financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(xvii) The historical financial statements of
Brentwood Health Management, LLC and subsidiaries
("BRENTWOOD") (including the related notes and supporting
schedules) incorporated by reference in the Registration
Statement and the Prospectus present fairly in all material
respects the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and
for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(xviii) The other financial data, operating data and
statistical information and data included in or incorporated
by reference in the Registration Statement and the Prospectus
is presented fairly in all material respects and, to the
extent
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derived therefrom, has been prepared on a basis consistent
with such financial statements and the books and records of
the Company and its subsidiaries.
(xix) Ernst & Young LLP, who has certified certain
historical financial statements of the Company, whose report
is incorporated by reference in the Registration Statement and
Prospectus and who has delivered (a) the initial letter
referred to in Section 5(f)(i) hereof, and (b) the bring-down
letters referred to in Section 5(g)(i) hereof, is an
independent public accounting firm as required by the 1933 Act
and the 1933 Act Regulations during the periods covered by the
financial statements on which it reported that were or are
incorporated by reference in the Registration Statement and
Prospectus.
(xx) Deloitte & Touche LLP, who has certified certain
historical financial statements of Ramsay, whose report is
incorporated by reference in the Registration Statement and
Prospectus and who has delivered (a) the initial letter
referred to in Section 5(f)(ii) hereof, and (b) the bring-down
letter referred to in Section 5(g)(ii) hereof, are independent
public accountants as required by the 1933 Act and the 1933
Act Regulations during the periods covered by the financial
statements on which it reported that were or are incorporated
by reference in the Registration Statement and Prospectus.
(xxi) Xxxxxxxx & Company, LLP, who has certified
certain historical financial statements of Northern
Healthcare, whose report is incorporated by reference in the
Registration Statement and Prospectus and who has delivered
(a) the initial letter referred to in Section 5(f)(iii)
hereof, and (b) the bring-down letter referred to in Section
5(g)(iii) hereof, are independent public accountants during
the periods covered by the financial statements on which it
reported that were or are incorporated by reference in the
Registration Statement and Prospectus.
(xxii) Xxxxx Xxxxxx and Company LLC, who has
certified certain historical financial statements of
Brentwood, whose report is incorporated by reference in the
Registration Statement and Prospectus and who has delivered
(a) the initial letter referred to in Section 5(f)(iv) hereof,
and (b) the bring-down letter referred to in Section 5(g)(iv)
hereof, are independent public accountants as required by the
1933 Act and the 1933 Act Regulations during the periods
covered by the financial statements on which it reported that
were or are incorporated by reference in the Registration
Statement and Prospectus.
(xxiii) The Company and each subsidiary (i) makes and
keeps accurate books and records and (ii) maintains internal
accounting controls that provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization
and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(xxiv) Since the date as of which information is
given or incorporated by reference in the Preliminary
Prospectus through the date hereof, and except as may
otherwise be disclosed in the Prospectus, neither the Company
nor any subsidiary has (i) issued or granted any securities,
other than shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation
plans or pursuant to
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outstanding options, rights or warrants, (ii) incurred any
liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary
course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(xxv) There are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any
of its subsidiaries is the subject that, if determined
adversely to the Company or any of its subsidiaries, would
reasonably be likely to have a Material Adverse Effect, and to
the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
(xxvi) The Company and each of its subsidiaries own
or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations,
copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the
conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with,
any such rights of others, except for such conflicts that do
not or would not have a Material Adverse Effect.
(xxvii) The Company and each of its subsidiaries have
good and marketable title to all real property and good title
to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as
are described or incorporated by reference in the Registration
Statement and Prospectus and such as do not materially affect
the value of the property of the Company and its subsidiaries
taken as a whole and do not materially interfere with the use
made and proposed to be made of such property by the Company
or any of its subsidiaries; and all real property and
buildings held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material
and do not interfere with the use made and proposed to be made
of such property and buildings by the Company or any of its
subsidiaries.
(xxviii) No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries on the
one hand, and the directors, officers, stockholders, customers
or suppliers of the Company or any of its subsidiaries on the
other hand, which is required to be described or incorporated
by reference in the Prospectus or filed or incorporated by
reference as exhibits in the Registration Statement that is
not described in the Prospectus or filed or incorporated by
reference as exhibits in the Registration Statement.
(xxix) The Company and each of its subsidiaries has
filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries
that has had (nor does the Company or any subsidiary have any
knowledge of any tax deficiency that, if determined adversely
to the Company or any of its subsidiaries, might have) a
Material Adverse Effect.
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(xxx) The Company and each of its subsidiaries carry,
or are covered by, insurance in such amounts and covering such
risks as is customary for companies engaged in similar
businesses in similar industries.
(xxxi) No labor disturbance by the employees of the
Company or any of its subsidiaries exists or, to the knowledge
of the Company or any of its subsidiaries, is imminent that
could be expected to have a Material Adverse Effect.
(xxxii) The Company is in compliance in all material
respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or any of its
subsidiaries would have any liability; neither the Company nor
any of its subsidiaries has incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to
the termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the "CODE"); and each "pension
plan" for which the Company or any of its subsidiaries would
have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such
qualification.
(xxxiii) Set forth on Exhibit B hereto is a list of
each employee pension or benefit plan with respect to which
the Company or any corporation considered an affiliate of the
Company within the meaning of Section 407(d)(7) of ERISA is a
party in interest or disqualified person.
(xxxiv) Neither the Company nor any of its
subsidiaries, nor any director, officer, agent, employee or
other person associated with or acting on behalf of the
Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made
any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(xxxv) Except for such matters as would not,
individually or in the aggregate, either result in a Material
Adverse Effect or require disclosure in the Prospectus, the
Company and its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) (1) are
conducting and have conducted their businesses, operations and
facilities in compliance with Environmental Law (as defined
below); (2) possess, and are in compliance with, any and all
permits, licenses or registrations required under
Environmental Law ("ENVIRONMENTAL PERMITS"); (3) will not
require material expenditures to maintain such compliance with
Environmental Law or their Environmental Permits or to
remediate, clean up, xxxxx or remove any Hazardous Substance
(as defined below); and (4) are not subject to any pending or,
to the best knowledge of the Company and its subsidiaries,
threatened claim or other legal proceeding under any
Environmental Laws against the Company or its subsidiaries,
and have not been named as a "potentially responsible party"
under or pursuant to any
8
Environmental Law. As used in this paragraph, "ENVIRONMENTAL
LAW" means any and all applicable federal, state, local and
foreign laws, ordinances, regulations and common law, or any
administrative or judicial order, consent, decree or judgment
thereof, relating to pollution or the protection of human
health or the environment, including, without limitation,
those related to (i) emissions, discharges, releases or
threatened releases of, or exposure to, Hazardous Substances,
(ii) the generation, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Substances, or (iii) the investigation, remediation
or cleanup of any Hazardous Substances. As used in this
paragraph, "HAZARDOUS SUBSTANCES" means pollutants,
contaminants or hazardous, dangerous, toxic, biohazardous or
infectious substances, materials or wastes or any other
chemical substance regulated under Environmental Laws.
(xxxvi) Except as set forth or incorporated by
reference in the Prospectus, neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any
other person who has a direct or indirect ownership or control
interest in the Company or any of its subsidiaries or who is
an officer, director, agent or managing employee of the
Company or any of its subsidiaries (1) has engaged in any
activities which are prohibited, or are cause for criminal or
civil penalties and/or mandatory or permissive exclusion from
Medicare or Medicaid, under Section 1320a-7, 1320a-7a,
1320a-7b, or 1395nn of Title 42 of the United States Code, the
federal TRICARE statute, the Federal False Claims Act 31
U.S.C. Section 3729-3733, or the regulations promulgated
pursuant to such statutes or regulations or related state or
local statutes or by generally recognized professional
standards of care or conduct, except for such activities as
would not, individually or in the aggregate, result in a
Material Adverse Effect; (2) has had a civil monetary penalty
assessed against it under Section 1128A of the Social Security
Act ("SSA"); (3) is currently excluded from participation
under the Medicare program or a Federal Health Care Program
(as that term is defined in SSA Section 1128(B)(f)); or (4)
has been convicted (as that term is defined in 42 C.F.R.
Section 1001.2) of any of the categories of offenses described
in SSA Section 1128(a) and (b)(1), (2) and (3).
(xxxvii) Neither the Company nor any subsidiary is,
or, after giving effect to the offering and sale of the
Securities as described in the Prospectus, will be, an
"investment company" as defined in the Investment Company Act
of 1940, as amended.
(xxxviii) Prior to the date hereof, neither the
Company and its subsidiaries nor any of their respective
affiliates nor any person acting on its or their behalf (other
than you, as to whom the Company and its subsidiaries make no
representation) has taken nor will take any action that is
designed to or that has constituted or that might have been
expected to cause or result in stabilization or manipulation
of the price of any security of the Company or its
subsidiaries to facilitate the sale or resale of the Common
Stock.
(xxxix) The minute books and records of the Company
relating to proceedings of its shareholders, board of
directors and committees of its board of directors made
available to Weil, Gotshal & Xxxxxx LLP, counsel for the
Underwriters, are the original minute books and records or are
true, correct and complete copies thereof, with respect to all
proceedings of said shareholders, board of directors and
committees since December 24, 2003 through the date hereof. In
the event that definitive minutes have not been prepared with
respect to any proceedings of such shareholders, board of
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directors or committees, the Company has provided Weil,
Gotshal & Xxxxxx LLP with originals or true, correct and
complete copies of draft minutes or written agendas relating
thereto, which drafts and agendas, if any, reflect all events
that occurred in connection with such proceedings.
(xl) The statements set forth in the Prospectus under
the caption "Description of Capital Stock" insofar as it
purports to constitute a summary of the terms of the Common
Stock and the statements incorporated by reference from the
Company's proxy statement filed with the Commission on April
9, 2004 under the heading "Certain Relationships and Related
Party Transactions" insofar as they relate solely to factual
matters, are accurate in all material respects.
(xli) The Company is subject to and in full
compliance with the reporting requirements of Section 13 or
15(d) of the Exchange Act. All reports filed by the Company
with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act comply as to form in all material respects with
the Exchange Act and the Exchange Act Rules.
(xlii) The Company has established and maintains
disclosure controls and procedures (as such term is defined in
Rule 13a-15 under the Exchange Act), which (i) are designed to
ensure that information required to be disclosed by the
Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported
and is made known to the Company's principal executive officer
and its principal financial officer by others within those
entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being
prepared; (ii) have been evaluated for effectiveness as of the
end of the last fiscal quarter; and (iii) are effective in all
material respects to perform the functions for which they were
established.
(xliii) Based on the evaluation of its disclosure
controls and procedures, the Company is not aware of (i) any
significant deficiency in the design or operation of internal
controls which could adversely affect the Company's ability to
record, process, summarize and report financial data or any
material weaknesses in internal controls; or (ii) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company's
internal controls.
(xliv) Since the date of the most recent evaluation
of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors
that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies
and material weaknesses.
(xlv) There is and has been no failure on the part of
the Company and any of the Company's directors or officers, in
their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the "SARBANES OXLEY
ACT"), including Section 402 related to loans and Section 302
and 906 related to certifications.
10
(xlvi) Except as disclosed or incorporated by
reference in the Prospectus, there are no contracts,
agreements or understandings between the Company and any
person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with this
offering.
(xlvii) The Securities have been approved for listing
subject to notice of issuance on the NASDAQ National Market.
(xlviii) The market-related and industry data
included or incorporated by reference in the Prospectus and
the Registration Statement are based upon estimates by the
Company derived from sources that the Company believes to be
reliable and accurate.
(b) Representations and Warranties by the Selling
Stockholders. Each of the Selling Stockholders, severally and not jointly
represents, warrants and agrees that:
(i) Immediately prior to each applicable Date of
Delivery, such Selling Stockholder will have full right, power
and authority to sell, assign, transfer and deliver the shares
of Common Stock to be sold by the Selling Stockholder
hereunder on such date; and upon delivery of such shares and
payment therefor pursuant hereto, assuming each purchaser
thereof is otherwise a bona fide purchaser and has no notice
of any "adverse claim" (within the meaning of the New York
Uniform Commercial Code), each purchaser thereof will receive
title to the shares of Common Stock purchased by it from such
Selling Stockholder free and clear of any adverse claim.
(ii) Pursuant to the Irrevocable Power of Attorney
and Custody Agreement (the "CUSTODY AGREEMENT"), such Selling
Stockholder (i) has placed in custody with StockTrans, Inc.,
as custodian (the "CUSTODIAN"), for delivery under this
Agreement, certificates in negotiable form representing the
shares of the Stock to be sold by such Selling Stockholder
hereunder; and (ii) has duly and irrevocably appointed Xxxxx
Xxxxxx, as attorney-in-fact (the "ATTORNEY-IN-FACT"), with
full power of substitution, and with full authority to execute
and deliver this Agreement and to take such other actions as
set forth in such Custody Agreement.
(iii) Such Selling Stockholder has full right, power
and authority, corporate or otherwise, to enter into this
Agreement and the Custody Agreement; the execution, delivery
and performance of this Agreement and the Custody Agreement by
such Selling Stockholder and the consummation by such Selling
Stockholder of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets
of such Selling Stockholder is subject, other than such
breaches, violations or defaults that, singly or in the
aggregate, could not materially adversely affect such Selling
Stockholder's ability to consummate the transactions
contemplated hereby, nor will such actions result in a
violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over such Selling Stockholder or the property or assets of
such Selling Stockholder; and, except for filings with NASDAQ,
the NASD and under the 1933 Act, the Exchange Act
11
and applicable state or foreign securities laws in connection
with the purchase and distribution of the Securities by the
Underwriters, no consent, approval, authorization or order of,
or filing, registration or qualification with, any such court
or governmental agency or body is required for the execution,
delivery and performance of this Agreement or the Custody
Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated
hereby and thereby.
(iv) To the knowledge of each Selling Stockholder,
the Registration Statement, as of the Effective Date, and the
Prospectus, as of its date, do not and will not contain an
untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of
the circumstances under which made) not misleading; provided
that no representation or warranty is made as to the
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in
the Registration Statement (or any amendment thereto),
including the Rule 430A Information, or any Preliminary
Prospectus or the Prospectus (or any amendment or supplement
thereto); provided, further, that this paragraph (iv) shall
apply to each of the Selling Stockholders other than
Management Selling Stockholders only to the extent that the
statements or omissions from the Registration Statement or the
Prospectus were made in conformity with written information
relating to such Selling Stockholder furnished to the Company
by any such Selling Stockholder expressly for use in the
Registration Statement (or any amendment thereto) or any
Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto).
(v) Each of including Xxxx X. Xxxxxx and Xxxx X.
Xxxxxxx (collectively, the "MANAGEMENT SELLING STOCKHOLDERS")
have no reason to believe that the representations and
warranties of the Company contained in this Section 1 are not
true and correct and have no knowledge of any material fact,
condition or information not disclosed or incorporated by
reference in the Prospectus or any supplement thereto which
has adversely affected or may adversely affect the business of
the Company or any of its subsidiaries; and the sale of
Securities by any such Management Selling Stockholder pursuant
hereto is not prompted by any information concerning the
Company or any of its subsidiaries which is not set forth or
incorporated by reference in the Prospectus or any supplement
thereto.
(vi) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings between the Selling
Stockholder and any person that would give rise to a valid
claim against the Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in
connection with this offering.
(vii) Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered
12
thereby; and any certificate signed by or on behalf of the Selling Stockholders
as such and delivered to the Representatives or to counsel for the Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by such Selling Stockholder to the Underwriters as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Stockholder, severally and not jointly,
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company and
each Selling Stockholder, at $[ ] per share that proportion of the number of
Initial Securities set forth in Schedule B opposite the name of the Company or
such Selling Stockholder, as the case may be, which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial Securities, subject, in each case, to such
adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company grants to the Underwriters, severally and not jointly, an
option to purchase up to 435,000 shares of Common Stock at $[ ] per share and
the Selling Director grants to the Underwriters, severally and not jointly, an
option to purchase up to 15,000 shares of Common Stock at $[ ] per share. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company and the Selling Director setting forth the number of Option Securities
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "DATE OF DELIVERY") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Weil,
Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Representatives and the Company and
the Selling Stockholders, at 9:00 A.M. (Eastern time) on the third (fourth, if
the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Company and the Selling
Stockholders (such time and date of payment and delivery being herein called
"CLOSING DATE").
13
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company and the Selling Stockholders, on each Date of Delivery as
specified in the notice from the Representatives to the Company and the Selling
Stockholder(s).
Payment shall be made to the Company and the Selling Stockholders by
wire transfer of immediately available funds to one or more bank accounts
designated by the Company and the Custodian pursuant to the Custody Agreement,
as the case may be, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be purchased
by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Each of the
Representatives, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Date or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriters from their respective obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Date or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Date or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
(a) Covenants of the Company. The Company covenants with each
Underwriter as follows:
(i) Compliance with Regulations and Commission Requests. The
Company, subject to Section 3(a)(ii), will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the
14
issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
(ii) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)) or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, will furnish the Representatives with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Representatives or counsel for the
Underwriters shall object.
(iii) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will
also deliver to the Representatives, without charge, a conformed copy
of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(iv) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each Preliminary
Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend
the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(a)(ii), such amendment or
supplement as may be necessary to correct such
15
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(vi) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.
(vii) Rule 158. The Company will timely file such reports
pursuant to the Exchange Act as are necessary in order to make
generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds."
(ix) Listing. The Company will use its best efforts to effect
and maintain the quotation of the Securities on the Nasdaq National
Market.
(x) Restriction on Sale of Securities. During a period of 75
days from the date hereof , the Company will not, without the prior
written consent of the Representatives, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer
any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities
to be sold hereunder, (B) any shares of Common Stock issued by the
Company upon the exercise of an option or warrant or the conversion of
a security outstanding on the date hereof and referred to or
incorporated by reference in the Prospectus, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company referred to or
incorporated by reference in the Prospectus or (D) any shares of Common
Stock issued pursuant to any non-employee director stock plan or
dividend reinvestment plan; the Company will cause each person
identified on Schedule C hereto to furnish to the Representatives,
prior to the Closing Date, a letter or letters, substantially in the
form of Exhibit C hereto (the "LOCK-UP LETTER AGREEMENT").
16
(xi) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act,
will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by the
Exchange Act and the Exchange Act Rules.
(b) Covenants of the Selling Stockholders. Each of the Selling
Stockholders severally and not jointly covenants with each Underwriter as
follows:
(i) Each of the Selling Stockholders will comply with its
obligations under its respective Lock-up Letter Agreement and the
Custody Agreement.
(ii) Each of the Selling Stockholders will deliver to the
Representatives prior to the Closing Date a properly completed and
executed United States Treasury Department Form W-8 (if the Selling
Stockholder is a non-United States person) or Form W-9 (if the Selling
Stockholder is a United States person).
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of their obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of a blue sky survey and any supplement thereto,
(vi) the printing and delivery to the Underwriters of copies of each Preliminary
Prospectus and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the blue sky survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, (ix) investor presentations
on any "ROAD SHOW" undertaken in connection with the marketing of the offering
of the Stock, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, and 25% of the cost of any aircraft chartered in
connection with the road show, (x) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities and (xi)
the fees and expenses incurred in connection with the inclusion of the
Securities in the Nasdaq National Market; provided that except as set forth in
this Section 4, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on
Securities which they may sell and the expense of advertising any offering of
the Securities made by the Underwriters.
(b) Expenses of the Selling Stockholders. The Selling Stockholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective
17
obligations under, and the consummation of the transactions contemplated by this
Agreement, including (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the Underwriters, and
their transfer between the Underwriters pursuant to an agreement between such
Underwriters, and (ii) the fees and disbursements of their respective counsel
and other advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Stockholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained in Section 1 hereof or in certificates of any officer of the Company
or on behalf of any Selling Stockholder delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) The Prospectus shall have been timely filed with the Commission; no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in either the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Securities, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement, the Custody Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to counsel for
the Underwriters, and the Company and the Selling Stockholders shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(c) Xxxxxx Xxxxxxx Xxxxxx & Xxxxx PLLC shall have furnished to the
Underwriters its written opinion, or letter or letters, as counsel to the
Company and the Selling Stockholders, addressed to the Underwriters and dated
the Closing Date and each Date of Delivery, substantially in the form of Exhibit
A hereto.
(d) The Underwriters shall have received from Weil, Gotshal & Xxxxxx
LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and each Date of Delivery, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus and other related matters
as the Underwriters may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
18
(e) At time of the execution of this Agreement, the Underwriters shall
have received from:
(i) Ernst & Young LLP, a letter with respect to the financial
information of the Company incorporated by reference in the Prospectus,
in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (A) confirming that it is an
independent public accounting firm within the meaning of the 1933 Act
and is in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (B) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given or incorporated by
reference in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings;
(ii) Deloitte & Touche LLP, a letter with respect to the
financial information of Ramsay, in form and substance satisfactory to
the Representatives, addressed to the Underwriters and dated the date
hereof (A) confirming that they are independent public accountants
within the meaning of the 1933 Act and is in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (B) stating, as of
the date hereof, the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings;
(iii) Xxxxxxxx & Company, LLP, a letter with respect to the
financial information of Northern Healthcare, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (A) confirming that they are independent public
accountants with respect to Northern Healthcare, (B) stating, as of the
date hereof, the conclusions and findings of such firm with respect to
the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings; and
(iv) Xxxxx Xxxxxx and Company LLC, a letter with respect to
the financial information of Brentwood, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (A) confirming that they are independent public
accountants within the meaning of the 1933 Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (B)
stating, as of the date hereof, the conclusions and findings of such
firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings
(f) With respect to the letters referred to in the immediately
preceding paragraph and delivered to the Underwriters concurrently with the
execution of this Agreement (each, an "INITIAL LETTER"), the Underwriters shall
have received a letter (each, a "BRING-DOWN LETTER") addressed to the
Underwriters and dated as of the Closing Date and each Date of Delivery from:
19
(i) Ernst & Young LLP, with respect to the financial
information of the Company, incorporated by reference in the
Prospectus, (A) confirming that it is an independent public accounting
firm within the meaning of the 1933 Act and is in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (B) stating, as of
the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given or incorporated by
reference in the Prospectus, as of a date not more than five days prior
to the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by the initial letter and (C) confirming in all material
respects the conclusions and findings set forth in the initial letter;
(ii) Deloitte & Touche LLP, with respect to the financial
information of Ramsay, incorporated by reference in the Prospectus, (A)
confirming that they are independent public accountants within the
meaning of the 1933 Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (B) stating, as of the date
of the bring-down letter, the conclusions and findings of such firm
with respect to the financial information and other matters covered by
the initial letter;
(iii) Xxxxxxxx & Company, LLP, with respect to the financial
information of Northern Healthcare, incorporated by reference in the
Prospectus, (A) confirming that they are independent public accountants
with respect to Northern Healthcare, (B) stating, as of the date of the
bring-down letter, the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter; and
(iv) Xxxxx Xxxxxx and Company LLC, with respect to the
financial information of Brentwood, incorporated by reference in the
Prospectus, (A) confirming that they are independent public accountants
within the meaning of the 1933 Act and is in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (B) stating, as of
the date of the bring-down letter, the conclusions and findings of such
firm with respect to the financial information and other matters
covered by the initial letter.
(g) The Company shall have furnished to the Representatives a
certificate from the Company, dated the Closing Date and each Date of Delivery,
signed by its Chief Executive Officer and Chief Accounting Officer stating, as
applicable, that:
(i) The representations, warranties and agreements of the
Company contained herein, as applicable, are true and correct in all
material respects (except with respect to representations, warranties
and agreements already qualified by materiality) as if made on and as
of the Closing Date and such Date of Delivery (other than to the extent
any such representation or warranty is made expressly to a certain
date), and the Company has performed all covenants and agreements and
satisfied all conditions (after giving effect to all materiality
qualifiers herein) on their part to be performed or satisfied
hereunder, to the extent a party hereto, at or prior to the Closing
Date and the Date of Delivery; and the conditions set forth in Section
5 have been fulfilled; and
20
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement did not include, and as of its date, the
Closing Date and as of the Date of Delivery, the Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary (in
the case of the Prospectus in the light of the circumstances under
which made) to make the statements therein not misleading, and (B)
since the Effective Date no event has occurred which should have been
set forth in an amendment to the Registration Statement or supplement
to the Prospectus.
(h) Each Selling Stockholder participating in a sale of the Securities
on the Closing Date or any subsequent Date of Delivery (or the Custodian or the
attorney-in-fact on behalf of the Selling Stockholders) shall have furnished to
the Underwriters on the Closing Date and each Date of Delivery a certificate,
dated the Closing Date or such Date of Delivery, signed by, or on behalf of,
such Selling Stockholder (or the attorney-in-fact) stating that the
representations, warranties and agreements of such Selling Stockholder contained
herein are true and correct (after giving effect to all materiality qualifiers
herein) as of the Closing Date or that Date of Delivery (other than to the
extent any such representation or warranty is made expressly to a certain date),
and that the Selling Stockholders have complied in all material respects with
all agreements contained herein to be performed by the Selling Stockholders at
or prior to the Closing Date or that Date of Delivery.
(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus (i) any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth, incorporated by reference or
contemplated in the Prospectus or (ii) since such date there shall not have been
any change in the capital stock or increase in the long-term debt of the Company
or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth, incorporated by reference or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities being delivered on the Closing
Date or any subsequent Date of Delivery on the terms and in the manner
contemplated herein and in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
1933 Act Regulations and (ii) no such organization shall have publicly announced
that it is under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities
(k) At the date of this Agreement, the Representatives shall have
received an agreement substantially in the form of Exhibit C hereto signed by
the persons listed on Schedule C hereto.
21
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, as such term is defined in
Rule 501(b) under the 1933 Act (each, an "AFFILIATE"), its selling agents and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Company and the Selling Stockholders;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter, its Affiliates and selling agents
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in
the manner set forth in clauses (a)(i), (ii) and (iii) above, but, solely with
respect to the Selling Stockholders that are not Management Selling
Stockholders, only
22
with reference to written information furnished to the Company by or on behalf
of such Selling Stockholder expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information, or any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto); provided,
however, that the liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 6 and
Section 7 hereof shall be limited to an amount equal to the public offering
price of the Securities sold by such Selling Stockholder to the Underwriters.
(c) Indemnification of the Company, Directors and Officers and the
Selling Stockholders. Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, and each Selling Stockholder against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto) or such Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto). The
Company and each Selling Stockholder acknowledge that the statements set forth
in the last paragraph of the cover page regarding delivery of the Securities and
the first and second sentences of the first paragraph under the caption
"Commissions and Discounts" in the "Underwriting" section of the Prospectus are
correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement (or any amendment
thereto) or such Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or 6(b)
above, counsel to the indemnified parties shall be selected by the
Representatives, and, in the case of parties indemnified pursuant to Section
6(c) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or
23
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) or 6(b) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Stockholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus bear to the aggregate initial public offering price
of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such 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 or the Selling Stockholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
24
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, 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 any Selling Stockholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling Stockholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Stockholders with respect to contribution.
Section 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Stockholders submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of any Underwriter or its Affiliates or selling agents, any person controlling
any Underwriter, its officers or directors, any person controlling the Company
or any person controlling any Selling Stockholder and (ii) delivery of and
payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Stockholders, at any time at
or prior to Closing Date (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
25
of the Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq National Market, or if trading generally
on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(v) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail on the Closing Date or a subsequent Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(i) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Date, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Date, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell
26
the relevant Option Securities, as the case may be, either the (i)
Representatives or (ii) the Company and any Selling Stockholder shall have the
right to postpone the Closing Date or the relevant Date of Delivery, as the case
may be, 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. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
Section 11. Default by one or more of the Selling Stockholders or the
Company
(a) If a Selling Stockholder shall fail on the Closing Date or at a
subsequent Date of Delivery to sell and deliver the number of Securities which
such Selling Stockholder or Selling Stockholders are obligated to sell
hereunder, and neither the Company nor the remaining Selling Stockholders
exercise the right hereby granted to increase, pro rata or otherwise, the number
of Securities to be sold by them hereunder to the total number to be sold by all
Selling Stockholders as set forth in Schedule B hereto, then the Underwriters
may, at option of the Representatives, by notice from the Representatives to the
Company and the non-defaulting Selling Stockholders, either (i) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect or (ii) elect to purchase the Securities which the non-defaulting Selling
Stockholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Stockholder so defaulting
from liability, if any, in respect of such default.
In the event of a default by any Selling Stockholder as referred to in
this Section 11, each of the Representatives, the Company and the non-defaulting
Selling Stockholders shall have the right to postpone the Closing Date or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
(b) If the Company shall fail on the Closing Date or at a subsequent
Date of Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any nondefaulting party; provided, however, that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant
to this Section shall relieve the Company from liability, if any, in respect of
such default.
Section 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives at 4 World Financial Center, New York, New York
10080, Attention ; notices to the Company shall be directed to it
at 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000 Xxxxxxxx, Xxxxxxxxx 00000, Attention:
Xxxxx Xxxxxx (Fax: (000) 000-0000), with copy to Xxxxxx Xxxxxxx Xxxxxx & Xxxxx,
PLLC, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention:
Xxxxxxxxxxx X. Xxxxxx, Esq. (Fax: (000) 000-0000); and notices to the Selling
Stockholders shall be directed to the address of such Selling Stockholder set
forth on Schedule B hereto or to such other address as such Selling Stockholder
notifies the Underwriters, the Representatives and the Company of in writing in
accordance with the provisions of this Section 12.
Section 13. Parties. This Agreement shall inure to the benefit of and
be binding upon each of the Underwriters, the Company and the Selling
Stockholders and their respective
27
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and the Selling Stockholders and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 17. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Stockholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters,
the Company and the Selling Stockholders in accordance with its terms.
Very truly yours,
PSYCHIATRIC SOLUTIONS, INC.
By:
-----------------------------------------
Title:
By:
-----------------------------------------
As Attorney-in-Fact acting on behalf of
the Selling Stockholders named in
Schedule B hereto.
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CITIGROUP GLOBAL MARKETS INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By ________________________________
Authorized Signatory
For themselves and as Representatives of
the other Underwriters named in
Schedule A hereto.
29
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated........................................................
Citigroup Global Markets Inc. ..................................................
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Banc of America Securities LLC
Avondale Partners, LLC
X.X. Xxxxxx Securities Inc.
Xxxxx Xxxxxxx & Co.
Xxxxxxxx Inc. -----------------
Total.................................................................. 3,000,000
=================
Sch A-1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- ------------------------
PSYCHIATRIC SOLUTIONS, INC. 2,850,000 435,000
Xxxx X. Xxxxxx 100,837 N/A
c/o Psychiatric Solutions, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Xxxx X. Xxxxxxx 40,163 N/A
c/o Psychiatric Solutions, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Xxxxxx X. Xxxxxxx 9,000 N/A
X.X. Xxx 000
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxx X. Xxxxx N/A 15,000
United Biosource Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Total............................... 3,000,000 450,000
Sch B-1
SCHEDULE C
List of Persons Subject to Lock-Up Letter Agreement
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx Xxxxx, Jr
Xxxxxx X. Xxxxxxx
Xxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxx III
Xxxxxxx X. Xxxxxx, MD
Sch C-1
