3,000,000 Shares
SPECIALTY CARE NETWORK, INC.
Common Stock, par value $.001 per share
UNDERWRITING AGREEMENT
----------------------
, 1997
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CREDIT SUISSE FIRST BOSTON CORPORATION
EQUITABLE SECURITIES CORPORATION
XXXXXX BROTHERS INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010
Dear Sirs:
1. Introductory. Specialty Care Network, Inc., a Delaware
corporation ("Company"), proposes to issue and sell 3,000,000 shares of its
Common Stock, par value $.001 per share ("Securities") and the stockholders
listed in Schedule A hereto ("Selling Stockholders") propose severally to sell
an aggregate of 280,400 outstanding shares of the Securities (such 3,280,400
shares of Securities being hereinafter referred to as the "Firm Securities").
The Company also proposes to issue and sell to the Underwriters, at the option
of the Underwriters, an aggregate of not more than 450,000 additional shares
("Optional Securities") of its Securities as set forth below. The Firm
Securities and the Optional Securities are herein collectively called the
"Offered Securities". The Company and the Selling Stockholders hereby agree with
the several Underwriters named in Schedule B hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company and the
Selling Stockholders. (a) The Company represents and warrants to, and agrees
with, the several Underwriters that:
(i) A registration statement (No. 333-17627) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("Commission") and either
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(A) has been declared effective under the Securities Act of 1933
("Act") and is not proposed to be amended or (B) is proposed to be
amended by amendment or post-effective amendment. If such registration
statement ("initial registration statement") has been declared
effective, either (A) an additional registration statement ("additional
registration statement") relating to the Offered Securities may have
been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)")
under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration statement
and, if applicable, the additional registration statement or (B) such
an additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon
filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant to
the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "Effective Time" with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (A) if the Company has advised the Representatives that
it does not propose to amend such registration statement, the date and
time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (B) if the Company has advised the Representatives that it proposes
to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the
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Commission. If an additional registration statement has not been filed
prior to the execution and delivery of this Agreement but the Company
has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are herein referred
to collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
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material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (B)
on the Effective Date of the Additional Registration Statement (if
any), each Registration Statement conformed, or will conform, in all
respects to the requirements of the Act and the Rules and Regulations
and did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and (C) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules
and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(c).
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
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Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and
the Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(iv) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus; each subsidiary of the Company is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification; all of the issued
and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(v) Each physician practice with which the Company is
affiliated through a service agreement is listed on Schedule C hereto.
Such physician practices are referred to herein individually as an
"Affiliated Practice" and collectively as the "Affiliated Practices",
and such service agreements are referred to herein individually as a
"Service Agreement". Each of the Affiliated Practices has been duly
organized and is existing in good standing, with power and authority
(corporate and other) to own its properties and conduct its business as
presently conducted. Each Service Agreement has been duly authorized,
executed and delivered by the parties thereto and constitutes a valid
and legally binding agreement of the parties thereto, enforceable
against the parties thereto in accordance with its terms.
(vi) The Offered Securities and all other outstanding shares
of capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when the
Offered Securities to be issued and sold by the Company hereunder have
been delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will have
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been, validly issued, fully paid and nonassessable, and the Offered
Securities conform or will conform to the description thereof contained
in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Securities.
(vii) Except for this Agreement, 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 the transactions contemplated hereby.
(viii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(ix) The Offered Securities have been approved for listing on
the Nasdaq Stock Market's National Market, subject to notice of
issuance.
(x) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities, except
such as have been obtained and made under the Act and such as may be
required under state securities laws.
(xi) The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Company or
any subsidiary of the Company or any of their properties, or any
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agreement or instrument to which the Company or any such subsidiary is
a party or by which the Company or any such subsidiary is bound or to
which any of the properties of the Company or any such subsidiary is
subject, or the charter or by-laws of the Company or any such
subsidiary.
(xii) This Agreement has been duly authorized, executed and
delivered by the Company.
(xiii) Except as disclosed in the Prospectus, the Company, its
subsidiaries and the Affiliated Practices have good and marketable
title to all real properties and all other properties and assets owned
by them, in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with
the use made or to be made thereof by them; and except as disclosed in
the Prospectus, the Company, its subsidiaries and the Affiliated
Practices hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
(xiv) The Company, its subsidiaries and the Affiliated
Practices possess adequate certificates (including certificates of
need), authorities, licenses or permits issued by appropriate
governmental agencies or bodies necessary to conduct the businesses now
operated by them (including, without limitation, such as are required
(x) under such federal and state healthcare laws, statutes and
regulations as are applicable to the Company, its subsidiaries and the
Affiliated Practices, (y) in the case of the Affiliated Practices, to
receive reimbursement under Medicare/Medicaid and (z) under such
insurance laws and regulations as are applicable to the Company, its
subsidiaries and the Affiliated Practices) and have not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority, license or permit that, if determined
adversely to the Company, any of its subsidiaries or any of the
Affiliated Practices, as the case may be, would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
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(xv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(xvi) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(xvii) Neither the Company, any of its subsidiaries nor any of
the Affiliated Practices is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), owns or operates any
real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
pending investigation which might lead to such a claim.
(xviii) There are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries, any of the
Affiliated Practices or any of their respective properties that, if
determined adversely to the Company, any of its subsidiaries or any of
the Affiliated Practices, as the case may be, would individually or in
the aggregate have a material adverse effect on the condition
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(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole, or would materially
and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in
the context of the sale of the Offered Securities; and no such actions,
suits or proceedings are threatened or, to the Company's knowledge,
contemplated.
(xix) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the entities to which such financial statements relate as of the dates
shown and their results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis; the assumptions used in preparing the
pro forma financial statements included in each Registration Statement
and the Prospectus provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate
effect to those assumptions and the pro forma columns therein reflect
the proper application of those adjustments to the corresponding
historical financial statement amounts; and the financial information
for the combined Predecessor Practices (as defined in the Prospectus)
included in each Registration Statement and the Prospectus reflect an
accurate summation of the applicable historical financial data of the
Predecessor Practices.
(xx) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements of the Company included in the
Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries, taken as a whole,
and, except as disclosed in or contemplated by the Prospectus, there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock; and, except as
disclosed in the Prospectus, there has been no material adverse change,
nor any development or event involving a prospective material adverse
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change, in the condition (financial or other), business, properties or
results of operations of any Affiliated Practice since the date of the
latest audited financial statements of such Affiliated Practice or the
predecessor to such Affiliated Practice, as the case may be, included
in the Prospectus.
(xxi) There are no material Medicare, Medicaid, managed care
or other third party payor recoupment being sought, threatened,
requested or claimed against the Company, any of its subsidiaries, any
of the Affiliated Practices or any physician-owner or
physician-employee of any of the Affiliated Practices.
(xxii) Neither the Company, any of its subsidiaries nor any of
the Affiliated Practices is in, or operates in, violation of any
healthcare law, ordinance, administrative or governmental rule or
regulation including, without limitation, those relating to
reimbursement by government agencies, fraudulent or wrongful xxxxxxxx,
and legislation commonly referred to as the "Xxxxx" legislation, and
those prohibiting fee-splitting or fees for the referral of patients.
(xxiii) Neither the Company nor any of its subsidiaries (x)
employs any of the physician-owners or physician-employees of any of
the Affiliated Practices, (y) exercises any influence or control over
the practice of medicine by any such physicians or (z) represents to
the public that it offers medical services.
(xxiv) The Company and each of the Affiliated Practices
maintains medical malpractice insurance. Such insurance is adequate in
accordance with customary industry practice, and all such insurance is
outstanding and duly in force.
(xxv) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
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(i) Such Selling Stockholder has and on the First Closing Date
(as defined herein) will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by such Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for the Offered
Securities on such Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Offered Securities to be
delivered by such Selling Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the Rules and Regulations and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (C) on
the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to
the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required)
at the Effective Date of the Additional Registration Statement in which
the Prospectus is included, each Registration Statement and the
Prospectus will conform, in all respects to the requirements of the Act
and the Rules and Regulations, and neither of such documents includes,
or will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of
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this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules
and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(c).
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company and each
Selling Stockholder agree, severally and jointly, to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company and each Selling Stockholder, at a purchase price of $ per share,
that number of Firm Securities (rounded up or down, as determined by Credit
Suisse First Boston Corporation ("Credit Suisse First Boston") in its
discretion, in order to avoid fractions) obtained by multiplying 3,000,000 Firm
Securities in the case of the Company and the number of Firm Securities set
forth opposite the name of such Selling Stockholder in Schedule A hereto, in the
case of a Selling Stockholder, in each case by a fraction the numerator of which
is the number of Firm Securities set forth opposite the name of such Underwriter
in Schedule B hereto and the denominator of which is the total number of Firm
Securities.
Certificates in negotiable form for the Offered Securities to
be sold by the Selling Stockholders hereunder have been placed in custody, for
delivery under this Agreement, under custody agreements (each, a "Custody
Agreement" and collectively, the "Custody Agreements") made with , as
custodian ("Custodian"). Each Selling Stockholder agrees that the shares
represented by the certificates held in custody for the Selling Stockholders
under such Custody Agreements are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Selling Stockholders for such
custody are to that extent irrevocable, and that the obligations of the Selling
Stockholders shall
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not be terminated by operation of law, whether by the death of any individual
Selling Stockholder or the occurrence of any other event, or in the case of a
trust, by the death of any trustee or trustees or the termination of such trust.
If any individual Selling Stockholder or any such trustee or trustees should
die, or if any other such event should occur, or if any of such trusts should
terminate, before the delivery of the Offered Securities hereunder, certificates
for such Offered Securities shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such death or other event
or termination had not occurred, regardless of whether or not the Custodian
shall have received notice of such death or other event or termination.
The Company and the Custodian will deliver the Firm Securities
to the Representatives for the accounts of the Underwriters, against payment of
the purchase price in funds available on the same day by wire transfer to the
account of in the case of 3,000,000 shares of Firm Securities and in
the case of 280,400 shares of Firm Securities, in each case at a bank acceptable
to Credit Suisse First Boston or by official Federal Reserve Bank check or
checks drawn to the order of in the case of 3,000,000 shares of Firm
Securities and in the case of 280,400 shares of Firm Securities
at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx at 9:00 A.M., New York time, on , or at such other time not later than
seven full business days thereafter as Credit Suisse First Boston and the
Company determine, such time being herein referred to as the "First Closing
Date". The certificates for the Firm Securities so to be delivered will be in
such form, in such denominations and registered in such names as Credit Suisse
First Boston requests and will be made available for checking and packaging at
the above office of Xxxxxxx Xxxxxxx & Xxxxxxxx at least 24 hours prior to the
First Closing Date.
In addition, upon written notice from Credit Suisse First
Boston given to the Company from time to time not more than 30 days subsequent
to the date of the Prospectus, the Underwriters may purchase all or less than
all of the Optional Securities at the purchase price per Security to be paid for
the Firm Securities. The Company agrees to sell to the Underwriters the number
of shares of Optional Securities specified in such notice and the Underwriters
agree, severally and not jointly, to purchase such Optional Securities. Such
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Optional Securities shall be purchased for the account of each Underwriter in
the same proportion as the number of shares of Firm Securities set forth
opposite such Underwriter's name bears to the total number of shares of Firm
Securities (subject to adjustment by Credit Suisse First Boston to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by Credit Suisse First Boston
to the Company.
Each time for the delivery of and payment for the Optional
Securities, being herein referred to as an "Optional Closing Date", which may be
the First Closing Date (the First Closing Date and each Optional Closing Date,
if any, being sometimes referred to as a "Closing Date"), shall be determined by
Credit Suisse First Boston but shall be not later than five full business days
after written notice of election to purchase Optional Securities is given. The
Company will deliver the Optional Securities being purchased on each Optional
Closing Date to the Representatives for the accounts of the several
Underwriters, against payment of the purchase price in funds available on the
same day by wire transfer to the account of at a bank acceptable to Credit
Suisse First Boston or by official Federal Reserve Bank check or checks drawn to
the order of , at the above office of Xxxxxxx Xxxxxxx & Xxxxxxxx.
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in such form, in such denominations and registered in such
names as Credit Suisse First Boston requests upon reasonable notice prior to
such Optional Closing Date and will be made available for checking and packaging
at the above office of Xxxxxxx Xxxxxxx & Xxxxxxxx at a reasonable time in
advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Offered Securities for sale to the
public as set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling
Stockholders. The Company agrees with the several Underwriters and the Selling
Stockholders that:
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(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to
by Credit Suisse First Boston, subparagraph (4)) of Rule 424(b) not
later than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifteenth business
day after the Effective Date of the Initial Registration Statement. The
Company will advise Credit Suisse First Boston promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to
register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by Credit Suisse First Boston.
(b) The Company will advise Credit Suisse First Boston
promptly of any proposal to amend or supplement the initial or any
additional registration statement as filed or the related prospectus or
the Initial Registration Statement, the Additional Registration
Statement (if any) or the Prospectus and will not effect such amendment
or supplementation without Credit Suisse First Boston's consent; and
the Company will also advise Credit Suisse First Boston promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
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(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify Credit Suisse First Boston of such
event and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither Credit Suisse First Boston's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (four of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as delivery of a prospectus relating to the Offered Securities is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, the Prospectus and all amendments and
supplements to such documents, in each case in such quantities as
Credit Suisse First Boston requests. The Prospectus shall be so
17
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or
the Effective Time of the Initial Registration Statement. All other
documents shall be so furnished as soon as available. The Company will
pay the expenses of printing and distributing to the Underwriters all
such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
Credit Suisse First Boston designates and will continue such
qualifications in effect so long as required for the distribution.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Representatives (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the Commission under the Securities Exchange Act
of 1934 or mailed to stockholders, and (ii) from time to time, such
other information concerning the Company as Credit Suisse First Boston
may reasonably request.
(h) The Company and each Selling Stockholder agree with the
several Underwriters that the Company and such Selling Stockholder will
pay all expenses incident to the performance of the obligations of the
Company and such Selling Stockholders, as the case may be, under this
Agreement and will jointly and severally reimburse the Underwriters (if
and to the extent incurred by them) for any filing fees and other
expenses (including fees and disbursements of counsel) incurred by them
in connection with qualification of the Offered Securities for sale and
determination of their eligibility for investment under the laws of
such jurisdictions as Credit Suisse First Boston designates and the
printing of memoranda relating thereto, for the filing fee of the
National Association of Securities Dealers, Inc. relating to the
Offered Securities, for any travel expenses of the Company's officers
and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the
Offered Securities, for any transfer taxes on the sale by the Selling
18
Stockholders of the Offered Securities to the Underwriters and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(i) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not, and,
prior to the First Closing Date, the Company will obtain written
agreements from its directors and officers and from [CSFB STILL
CONSIDERING] to the effect that they will not, offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act relating to,
any additional shares of its Securities or securities convertible into
or exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposal or filing, without the prior written consent of Credit Suisse
First Boston, except (i) subsequent sales of Offered Securities, (ii)
issuances of unregistered Securities by the Company in connection with
affiliations with physicians and physician practices and (iii)
issuances of Securities by the Company pursuant to the exercise of
employee stock options outstanding on the date of the initial public
offering of the Offered Securities.
(j) Each Selling Stockholder agrees, for a period of 180 days
after the date of the initial public offering of the Offered
Securities, not to offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any additional shares of the
Securities or securities convertible into or exchangeable or
exercisable for any shares of Securities, or publicly disclose the
intention to make any such offer, sale, pledge or disposal, without the
prior written consent of Credit Suisse First Boston.
(k) Each Selling Stockholder agrees to deliver to Credit
Suisse First Boston, attention: Transactions Advisory Group on or prior
to the First Closing Date a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof).
19
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be purchased
on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Ernst & Young LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company and the Predecessor
Practices, inquiries of officials of the Company and the
Affiliated Practices who have responsibility for financial and
20
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements included in
the Registration Statements do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations or
any material modifications should be made to such unaudited
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheet
of the Company read by such accountants, and at a subsequent
specified date not more than five days prior to the date of
this Agreement, there was any change in the capital stock of
the Company, increase in short-term indebtedness or long-term
debt of the Company and its consolidated subsidiaries or
decrease in consolidated net current assets or net assets of
the Company, as compared with amounts shown on the latest
balance sheet of the Company included in the Prospectus; or
(C) for the period from the closing date of the
latest statement of operations or income, as the case may be,
of the Predecessor Practices included in the Prospectus to the
closing date of the latest available statement of operations
of the Affiliated Practices read by such accountants, and for
the period from the closing date of the latest statement of
operations or income, as the case may be, of the Predecessor
Practices included in the Prospectus to a specified date not
more than three days prior to the date of this Agreement,
there were any decreases in the net practice revenue or income
from continuing operations of the combined Affiliated
Practices as compared with the net practice revenue and income
from continuing operations of the combined Predecessor
Practices in the corresponding period of the previous year.
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter;
21
(iv) they have reviewed the unaudited pro forma
financial data included in the Registration Statements, and on
the basis of such review, inquiries of officials of the
Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that the unaudited pro
forma financial data included in the Registration Statements
do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X under the Act or Commission Staff Accounting Bulletin No.
48 and that the pro forma adjustments have not been properly
applied to the historical amounts; and
(v) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and
other financial information contained in the Registration
Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Company and
its subsidiaries or the Predecessor Practices subject to the
internal controls of the Company's or the Predecessor
Practices' accounting system, as the case may be, or are
derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages
and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statements" shall mean the
22
Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectus" shall mean the prospectus included in the
Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by Credit Suisse First Boston. If the Effective
Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by Credit Suisse First Boston. If
the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority in
interest of the Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
23
surveillance or review its rating of any debt securities of the Company
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the
Company, to the effect that:
(i) the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification;
(ii) the Offered Securities delivered on such Closing
Date and all other outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the
Securities;
(iii) except as disclosed in the Prospectus, there
are no contracts, agreements or understandings known to such
counsel between the Company and any person granting such
24
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(iv) the Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940.
(v) no consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance
or sale of the Offered Securities, except such as have been
obtained and made under the Act and such as may be required
under state securities laws;
(vi) the execution, delivery and performance of this
Agreement, and the issuance and sale of the Offered
Securities, will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental
agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject,
or the charter or by-laws of the Company or any such
subsidiary;
(vii) the Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
25
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and
each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; such counsel have no reason to believe that any
part of a Registration Statement or any amendment thereto, as
of its effective date or as of such Closing Date, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statements
and Prospectus of statutes, legal and governmental proceedings
and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel
do not know of any legal or governmental proceedings required
to be described in a Registration Statement or the Prospectus
which are not described as required or of any contracts or
documents of a character required to be described in a
Registration Statement or the Prospectus or to be filed as
exhibits to a Registration Statement which are not described
and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or
other financial data contained in the Registration Statements
or the Prospectus;
26
(viii) This Agreement has been duly authorized,
executed and delivered by the Company; and
(ix) each Service Agreement has been duly authorized,
executed and delivered by the Company and, assuming the due
authorization, execution and delivery thereof by the other
Parties thereto, constitutes a valid and legally binding
agreement of the Parties thereto, enforceable against the
Parties thereto in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(e) The Representatives shall have received the opinion
contemplated in the Power of Attorney executed and delivered by each
Selling Stockholder and an opinion, dated such Closing Date, of Xxxxxx,
Xxxxx & Xxxxxxx LLP, to the effect that:
(i) each Selling Stockholder had valid and
unencumbered title to the Offered Securities delivered by such
Selling Stockholder on such Closing Date and had full right,
power and authority to sell, assign, transfer and deliver the
Offered Securities delivered by such Selling Stockholder on
such Closing Date hereunder; and the several Underwriters have
acquired valid and unencumbered title to the Offered
Securities purchased by them from the Selling Stockholders on
such Closing Date hereunder;
(ii) no consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required to be obtained or made by any Selling Stockholder
for the consummation of the transactions contemplated by the
Custody Agreement or this Agreement in connection with the
sale of the Offered Securities sold by the Selling
Stockholders, except such as have been obtained and made under
the Act and such as may be required under state securities
laws;
27
(iii) the execution, delivery and performance of the
Custody Agreement and this Agreement and the consummation of
the transactions therein and herein contemplated will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body
or any court having jurisdiction over any Selling Stockholder
or any of their properties or any agreement or instrument to
which any Selling Stockholder is a party or by which any
Selling Stockholder is bound or to which any of the properties
of any Selling Stockholder is subject;
(iv) the Power of Attorney and related Custody
Agreement with respect to each Selling Stockholder has been
duly authorized, executed and delivered by such Selling
Stockholder and constitute valid and legally binding
obligations of each Selling Stockholder enforceable in
accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing; and
(v) this Agreement has been duly authorized, executed
and delivered by each Selling Stockholder.
(f) The Representatives shall have received an opinion, dated
such Closing Date, of Baker, Donelson, Bearman & Xxxxxxxx, special
healthcare counsel for the Company, to the effect set forth in Exhibit
A hereto.
(g) The Representatives shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
28
(h) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice-President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time the Prospectus
was printed and distributed to any Underwriter; and, subsequent to the
date of the most recent financial statements of the Company in the
Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(i) The Representatives shall have received a letter, dated
such Closing Date, of Ernst & Young LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection.
The Company and the Selling Stockholders will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. Credit Suisse First Boston may in its
sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder, whether in respect
of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims, damages
29
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below.
(b) The Selling Stockholders, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by the
Selling Stockholders specifically for use therein, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
30
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by the Selling Stockholders
consists of the following information in the Prospectus furnished on behalf of
each Selling Stockholder: the information under the caption "Principal and
Selling Stockholders", but only to the extent the information relates to Selling
Stockholders.
(c) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company and each Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or such Selling Stockholder
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company and each Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the last paragraph at the
bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments, stabilizing and possible
market making on the inside front cover page, the concession and reallowance
figures appearing in the fifth paragraph under the caption "Underwriting" and
the information contained in the sixth paragraph under the caption
"Underwriting".
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a), (b) or (c) above, notify the indemnifying party of the
31
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (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 from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
32
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling
Stockholders under this Section shall be in addition to any liability which the
Company and the Selling Stockholders may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
33
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date,
Credit Suisse First Boston may make arrangements satisfactory to the Company and
the Selling Stockholders for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Offered Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default and
the aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to Credit Suisse First Boston, the Company and the
Selling Stockholders for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders, except as provided in Section 9 (provided
that if such default occurs with respect to Optional Securities after the First
Closing Date, this Agreement will not terminate as to the Firm Securities or any
Optional Securities purchased prior to such termination). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Selling Stockholders, of the Company or its officers and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to
34
Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 6(c), the Company and the Selling
Stockholders will, jointly and severally, reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives, c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue, New York, N.Y. 10010, Attention: Investment Banking
Department -- Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 00 Xxxxx Xxxx., Xxxxx
000, Xxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxx, or, if sent to the Selling
Stockholders or any of them, will be mailed, delivered or telegraphed and
confirmed to at ; provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective personal
representatives and successors and the officers and directors and controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder.
12. Representation of Underwriters. The Representatives will
act for the several Underwriters in connection with this financing, and any
action under this Agreement taken by the Representatives jointly or by Credit
35
Suisse First Boston will be binding upon all the Underwriters.
will act for the Selling Stockholders in connection with such
transactions, and any action under or in respect of this Agreement taken by
will be binding upon all the Selling Stockholders.
13. 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.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
36
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
SPECIALTY CARE NETWORK, INC.
By.........................
Title:
XXXXXXX X. XXXXXX, M.D.
XXXXX X. XXXXXXXXX, M.D.
D. XXXXXXXXX XXXX, M.D.
XXXXXXX X. XXXXXXXXX, M.D.
XXXXXX X. XXXXX, M.D.
XXXXXX X. XXXX, M.D.
XXXX X. XXXXX, M.D.
XXXXXX X. XXXXX, M.D.
W.XXXXXX XXXXXXXX, M.D.
XXXXXXX X. XXXXXXXXX, M.D.
XXXXXXX X. XXXXXX, M.D.
XXXXXXX X. XXXXXX, M.D.
XXXXX X. XXXXXX, M.D.
C. XXXXXXXXX XXXXXX, XX., M.D.
XXXXXX X. XXXXXX, M.D.
XXXX X. XXXXXXX, M.D.
By.........................
Title: Attorney-in-Fact
The foregoing Underwriting
Agreement is hereby confirmed and
accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON
CORPORATION
EQUITABLE SECURITIES
CORPORATION
37
XXXXXX BROTHERS INC.
By CREDIT SUISSE FIRST
BOSTON CORPORATION
By..........................
Title:
SCHEDULE A
Number of
Firm Securities
Selling Stockholder to be Sold
------------------- ----------
Xxxxxxx X. Xxxxxx, M.D. 24,000
Xxxxx X. Xxxxxxxxx, M.D. 3,600
D. Xxxxxxxxx Xxxx, M.D. 15,500
Xxxxxxx X. Xxxxxxxxx, M.D. 4,700
Xxxxxx X. Xxxxx, M.D. 10,300
Xxxxxx X. Xxxx, M.D. 24,000
Xxxx X. Xxxxx, M.D. 8,300
Xxxxxx X. Xxxxx, M.D. 24,000
W. Xxxxxx Xxxxxxxx, M.D. 24,000
Xxxxxxx X. Xxxxxxxxx, M.D. 7,600
Xxxxxxx X. Xxxxxx, M.D. 51,000
Xxxxxxx X. Xxxxxx, M.D. 24,000
Xxxxx X. Xxxxxx, M.D. 10,300
C. Xxxxxxxxx Xxxxxx, Xx., M.D. 24,000
Xxxxxx X. Xxxxxx, M.D. 24,000
Xxxx X. Xxxxxxx, M.D. 1,100
SCHEDULE B
Number of
Firm Securities
---------------
Underwriter
-----------
CREDIT SUISSE FIRST BOSTON CORPORATION................
EQUITABLE SECURITIES CORPORATION......................
XXXXXX BROTHERS INC...................................
---------------
Total...................... ===============
SCHEDULE C
Greater Chesapeake Orthopaedic Associates, L.L.C.
Princeton Orthopaedic Associates II, P.A.
Reconstructive Orthopaedic Associates II, P.C.
TOC Specialists, P.L.
Vero Orthopaedics II, P.A.
EXHIBIT A
[TO COME]
