EXHIBIT (10)
EXECUTION COPY
PRIME MEDICAL SERVICES, INC.
$100,000,000
8 3/4% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
March 24, 1998
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Prudential Securities Incorporated
X.X. Xxxxxxxx & Co.
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Ladies and Gentlemen:
Prime Medical Services, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to you (the "Initial Purchasers")
$100,000,000 in aggregate principal amount of its 8 3/4% Senior Subordinated
Notes due 2008 (the "Notes"). The Notes will be fully and unconditionally
guaranteed (the "Subsidiary Guarantees" and, collectively with the Notes, the
"Securities") on an unsecured senior subordinated basis, jointly and
severally, by each domestic subsidiary of the Company listed on the signature
page hereto (the "Subsidiary Guarantors" and, together with the Company, the
"Issuers"). The Securities are to be issued pursuant to an indenture, to be
dated as of March 27, 1998 (the "Indenture"), by and among the Company, the
Subsidiary Guarantors and State Street Bank and Trust Company of Missouri,
N.A. (the "Trustee"). As used in this Agreement, references to the "Issuers"
shall mean the Company and the Subsidiary Guarantors.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Issuers
that you will offer and sell the Securities purchased by you hereunder in
accordance with Section 3 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum, dated March 4, 1998 (the
"Preliminary Memorandum") and a final offering memorandum, dated March 24,
1998, 1998 (the "Final Memorandum"). Each of the Preliminary Memorandum and
the Final Memorandum sets forth certain information concerning the Issuers and
the Securities. The Issuers hereby confirm that they have authorized the use
of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and
sale of the Securities by the Initial Purchasers in the manner and to the
persons contemplated herein and therein. Unless stated to the contrary, all
references herein to the Final Memorandum are to the Final Memorandum at the
time of execution and delivery of this Agreement (the "Execution Time") and
are not meant to include any amendment or supplement, or any information
incorporated by reference therein, subsequent to the Execution Time.
The Initial Purchasers and certain of their direct and indirect
transferees will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Issuers will agree to
use their best efforts to commence an offer to exchange the Securities for 8%
Senior Subordinated Notes due 2008 (the "Exchange Securities") that have been
registered under the Securities Act, that do not accrue Liquidated Damages (as
defined in the Registration Rights Agreement), and that otherwise are
identical in all respects to the Securities, or to cause a shelf registration
statement to become effective under the Securities Act relating to the resale
of the Securities by the holder thereof and to remain effective for the period
designated in the Registration Rights Agreement.
1. REPRESENTATIONS AND WARRANTIES. The Issuers jointly and severally
represent and warrant to each Initial Purchaser as follows:
(a) The Preliminary Memorandum, at the date thereof, did not contain
any 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. The Final Memorandum, at the date
hereof, does not, and at the Closing Date (as defined below) will not (and any
amendment or supplement thereto, at the date thereof and at the Closing Date,
will not), contain any 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; provided, however that
the Issuers make no representation or warranty as to the information relating to
the Initial Purchasers contained in or omitted from the Preliminary Memorandum
or the Final Memorandum, or any amendment or supplement thereto, in reliance
upon and in conformity with information furnished in writing to the Issuers by
or on behalf of the Initial Purchasers specifically for inclusion therein.
(b) Neither the Issuers, nor any of their "Affiliates" (as defined in
Rule 501(b) of Regulation D under the Securities Act ("Regulation D")), nor any
person acting on their behalf has, directly or indirectly, made offers or sales
of any security, or solicited offers to buy any security, under circumstances
that would require the registration of the Securities under the Securities Act.
Neither the Issuers, nor any of their Affiliates, nor any person acting on their
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behalf has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of the
Securities, provided, that the Issuers make no representation in this sentence
regarding the Initial Purchasers, their affiliates or any person acting on their
behalf. The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act. The Final Memorandum and each amendment or supplement
thereto, as of its date, contains the information specified in Rule 144A(d)(4)
under the Securities Act. The Issuers have been advised by the National
Association of Securities Dealers, Inc. Private Offerings, Resales and Trading
through the Automated Linkages Market ("PORTAL") that the Securities have been
designated PORTAL eligible securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc.
(c) None of the Issuers nor any of their respective affiliates or any
person acting on its or their behalf (other than the Initial Purchasers or their
respective affiliates, as to whom the Issuers make no representation) has
engaged or will engage in any directed selling efforts within the meaning of
Regulation S under the Securities Act ("Regulation S") with respect to the
Securities. The Securities offered and sold in reliance on Regulation S have
been and will be offered and sold only in offshore transactions. The sale of
the Securities pursuant to Regulation S is not part of a plan or scheme to evade
the registration provisions of the Securities Act. No registration under the
Securities Act of the Securities is required for the sale of the Securities to
the Initial Purchasers as contemplated hereby or for the Exempt Resales (as
defined below) assuming the accuracy of, and compliance with, the Initial
Purchasers' representations, warranties and agreements set forth in this
Agreement. The Securities sold pursuant to Regulation S will initially be
represented by a temporary global security as required by Rule 903 of Regulation
S.
(d) None of the Issuers is, or will be after giving effect to the
offering and sale of the Securities and the application of the proceeds
therefrom as described in the Final Memorandum, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(e) Assuming (i) that the representations and warranties and covenants
of the Initial Purchasers contained in Section 3 hereof are true and correct and
(ii) that the Initial Purchasers comply with their agreements contained in this
Agreement, (A) registration under the Securities Act of the Securities or
qualification of the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), is not required in connection with the offer and
sale of the Securities to the Initial Purchasers in the manner contemplated by
the Final Memorandum and this Agreement and (B) initial resales of the
Securities by the Initial Purchasers on the terms and in the manner set forth in
the Final Memorandum and Section 3 hereof will be exempt from the registration
requirements of the Securities Act.
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(f) Since the respective dates as of which information is given in the
Preliminary Memorandum and the Final Memorandum, except as otherwise stated
therein, (i) there has been no material adverse change in the condition
(financial or otherwise), results of operations, affairs or business prospects
of the Company and its subsidiaries considered as a whole, whether or not
arising in the ordinary course of business and (ii) there have been no material
transactions entered into by the Company or any of its subsidiaries that are
material to the Company and its subsidiaries considered as a whole
(collectively, a "Material Adverse Change").
(g) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the state of its incorporation
with corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Preliminary Memorandum and the Final
Memorandum; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which the
conduct of its business requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not, singly or in
the aggregate, reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), results of operations, affairs or business
prospects of the Company and its subsidiaries considered as a whole (a "Material
Adverse Effect").
(h) All of the issued and outstanding capital stock of the Company at
September 30, 1997, was as set forth in the "Actual" column under the caption
"Capitalization" in the Preliminary Memorandum and the Final Memorandum. All of
the outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. Attached as Schedule A
hereto is a complete and accurate list of each subsidiary of the Company. Each
of the subsidiaries of the Company has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
organization, has the requisite power and authority to own, lease and operate
its properties and conduct its business as described in the Preliminary
Memorandum and the Final Memorandum and is duly qualified as a foreign
organization to transact business and is in good standing in each jurisdiction
in which the conduct of its business requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not,
singly or in the aggregate, reasonably be expected to have a Material Adverse
Effect. All of the issued and outstanding capital stock, other voting
securities or membership interests of each subsidiary has been duly authorized
and validly issued and is fully paid and nonassessable, and, except as described
in the Preliminary Memorandum and the Final Memorandum, all shares of capital
stock, other voting securities or membership interests of each subsidiary that
are owned by the Company, directly or through subsidiaries, are owned free and
clear of any mortgage, pledge, lien, encumbrance, claim or equity.
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(i) This Agreement has been duly authorized, executed and delivered by
the Issuers and constitutes the valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms, except that (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(j) The Notes have been duly authorized by the Company, and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with this
Agreement, will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, and will be
entitled to the benefits of the Indenture, except that enforcement thereof may
be subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(k) The Subsidiary Guarantees set forth in the Indenture have been
duly authorized by each Subsidiary Guarantor and when the Indenture has been
duly executed and delivered by the Issuers and the Trustee and the Notes have
been executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in accordance
with this Agreement, the Subsidiary Guarantees will constitute the valid and
binding obligation of the Subsidiary Guarantors enforceable against the
Subsidiary Guarantors in accordance with their terms and will be entitled to the
benefits of the Indenture except that enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
(l) The Indenture has been duly authorized by the Issuers. When the
Securities are delivered and paid for pursuant to this Agreement on the Closing
Date, the Indenture will have been duly executed and delivered by the Issuers
and, assuming the due execution and delivery thereof by the Trustee, will
constitute a valid and binding agreement of the Issuers, enforceable against the
Issuers in accordance with its terms, except that enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is
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considered in a proceeding in equity or at law).
(m) The Exchange Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered, will be validly issued and
outstanding, and will constitute the valid and binding obligations of the
Issuers, entitled to the benefits of the Indenture and enforceable against the
Issuers in accordance with their terms, except that enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(n) The Registration Rights Agreement has been duly authorized by the
Issuers, and when duly executed and delivered by the Issuers (assuming the due
execution and delivery by the Initial Purchasers), will constitute a valid and
binding agreement of the Issuers, enforceable against the Issuers in accordance
with its terms except that (i) enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
(ii) the enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public policies
underlying such laws.
(o) The execution, delivery and performance of this Agreement, the
Indenture and the Registration Rights Agreement by the Issuers, and the
consummation 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 either 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 properties or assets of the
Company or any of its subsidiaries are subject, nor will such actions result in
any violation of the provisions of the charter, by-laws or other constituent
documents of the Company or any of its subsidiaries or any statute to which they
may be subject or any 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 to the extent any such conflict,
breach, violation or default, singly or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect); and except for such consents,
approvals, authorizations, orders, filings, registrations or qualifications (i)
as may be required under applicable state securities and Blue Sky laws in
connection with the purchase and distribution of the Securities by the Initial
Purchasers, (ii) as set forth in the Registration Rights Agreement or (iii) the
absence or failure of which, singly or in the aggregate, would not
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have a Material Adverse Effect, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Indenture and the Registration Rights Agreement by the Issuers, the consummation
of the transactions contemplated hereby and thereby, and the issuance and sale
of the Securities and Exchange Securities by the Issuers.
(p) Neither the Company nor any of its subsidiaries is in breach or
violation of any of the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement 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 properties or assets of the Company
or any of its subsidiaries are subject, nor is the Company or any of its
subsidiaries in violation of the provisions of its respective charter, by-laws
or other constituent documents, or, to the Company's knowledge, any statute or
any judgment, order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company, any of its subsidiaries or any of
their properties or assets (except to the extent any such conflict, breach,
violation or default is cured at or prior to the Closing Date and within the
grace period applicable thereto or would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect).
(q) As of the Closing Date, the Securities and the Indenture will
conform in all material respects to the descriptions thereof contained in the
Final Memorandum. As of the Closing Date, the provisions of the Registration
Rights Agreement, to the extent that such provisions are summarized in the Final
Memorandum, will conform in all material respects to the descriptions thereof
contained in the Final Memorandum.
(r) Except as set forth in the Registration Rights Agreement, there
are no contracts, agreements or understandings between the Company or any of its
subsidiaries and any person granting such person the right to require the
Company or any of its subsidiaries to file a registration statement under the
Securities Act with respect to any securities owned or to be owned by such
person or to require the Company or any of its subsidiaries to include such
securities in any securities being registered pursuant to any registration
statement filed by the Company or any of its subsidiaries under the Securities
Act.
(s) Except as set forth in the Preliminary Memorandum and the Final
Memorandum, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Issuers, threatened against or affecting the Company or any of
its subsidiaries, which would reasonably be expected to result in a Material
Adverse Change or, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the offering of the
Securities.
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(t) The Company and each of its subsidiaries has good and indefeasible
title in fee simple to all real property and good and indefeasible title to all
personal property owned by it and necessary in the conduct of the business of
the Company or such subsidiary, in each case free and clear of all liens,
encumbrances and defects except (i) such as are referred to in the Final
Memorandum or (ii) such as do not materially and adversely affect the value of
such property to the Company or such subsidiary, and do not interfere with the
use made and proposed to be made of such property by the Company or such
subsidiary to an extent that such interference would, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect. All leases
to which the Company or any of its subsidiaries is a party are valid and
binding, and no default has occurred or is continuing thereunder, except for
such matters which could not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect or materially and adversely affect the
offering of the Securities, and the Company and its subsidiaries enjoy peaceful
and undisturbed possession under all such leases to which any of them is a party
as lessee (with such exceptions as do not interfere with the use made by the
Company or such subsidiary to an extent that such interference would reasonably
be expected to have a Material Adverse Effect). The Company and its
subsidiaries possess adequate certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, and except as set forth
in the Final Memorandum, neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which proceedings would, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(u) Each of KPMG Peat Marwick LLP and Xxxxxx Xxxxxxxx LLP, who have
certified certain financial statements of the Company and its subsidiaries
included in the Final Memorandum, are independent public accountants within the
meaning of the Securities Act and the rules and regulations thereunder. The
financial statements included in the Preliminary Memorandum and the Final
Memorandum present fairly in all material respects the consolidated financial
position of (i) the Company and its subsidiaries, on a consolidated basis, and
(ii) Lithotripters, Inc. ("Lithotripters"), in each case as at the dates
indicated and the results of their respective operations and the changes in
their consolidated financial position for the periods specified; said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved, except as
indicated therein, and comply as to form in all material respects with the
requirements applicable to such financial statements included in registration
statements under the Securities Act. The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting
8
principles and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
The pro forma financial statements included in the Preliminary
Memorandum and the Final Memorandum have been prepared on a basis consistent
with the historical financial statements of the Company and its subsidiaries
and give effect to the assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly in all material respects
the historical and proposed transactions contemplated by the Preliminary
Memorandum and the Final Memorandum; and such pro forma financial statements
comply as to form in all material respects with the requirements applicable to
pro forma financial statements included in registration statements on Form S-1
under the Securities Act. The other pro forma financial and statistical
information and data included in the Preliminary Memorandum and the Final
Memorandum are, in all material respects, fairly presented and prepared on a
basis consistent with the pro forma financial statements.
The historical and pro forma financial statements included in the
Preliminary Memorandum and the Final Memorandum constitute all of the
financial statements that would be required to be included in a registration
statement filed by the Issuers on Form S-1 under the Securities Act.
(v) Neither the Company nor any of its subsidiaries is now or, after
giving effect to the issuance of the Securities, and the application of the
proceeds thereof, will be (i) insolvent, (ii) left with unreasonably small
capital with which to engage in its anticipated businesses or (iii) incurring
debts beyond its ability to pay such debts as they become due.
(w) Except as set forth in the Final Memorandum, and except as would
not reasonably be expected to have a Material Adverse Effect, the Company and
its subsidiaries own, or otherwise possess the right to use, all patents,
trademarks, service marks, trade names and copyrights, all applications and
registrations for each of the foregoing, and all other proprietary rights and
confidential information used in the conduct of their respective businesses as
currently conducted; and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware, of any infringement of or conflict
with the rights of any third party with respect to any of the foregoing which,
singly or in the aggregate, would reasonably be expected to have a Material
Adverse Effect.
(x) The Company and its subsidiaries are (i) in compliance with any
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and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(y) No labor problem or disturbance with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Issuers, is
threatened which, singly or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(z) Except as set forth in the Final Memorandum, neither the Company
nor any of its subsidiaries, nor, to any Issuers' knowledge, any director,
officer, agent, employee, stockholder or other person, in any such case, acting
on behalf of the Company or any of its subsidiaries, has used any corporate
funds during the last five years for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
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, as amended; or made any bribe, payoff, influence
payment, kickback or other payment that is unlawful.
(aa) Neither the Company nor any of its subsidiaries has taken, and
none of them will take, any action that would cause this Agreement or the
issuance or sale of the Securities and Exchange Securities to violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System.
(ab) The Company and its subsidiaries have complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida) relating to doing business with the Government of Cuba or with persons
or affiliates located in Cuba.
(ac) Other than as set forth on Schedule B hereto, neither the Company
nor any subsidiary is a party to any contract or agreement that would be
required to be filed with the Commission as an exhibit to a registration
statement on Form S-1 pursuant to entries (2), (4) and (10) of the Exhibit Table
of Item 601 of Regulation S-K under the Securities Act.
(ad) No Issuer or Affiliate of any Issuer has sold, offered for sale
or solicited offers to buy or otherwise negotiated in respect of any security
(as defined in the
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Securities Act) in a transaction would require the registration under the
Securities Act of the Securities.
(ae) Neither the Company nor any subsidiary is a "public utility" or
a "holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
2. PURCHASE AND SALE. On the basis of the representations and warranties
contained in, and subject to the terms and conditions of, this Agreement, the
Issuers agree to sell to the Initial Purchasers and each of the Initial
Purchasers agrees to purchase the aggregate principal amount of Securities set
forth opposite its name as shown in Schedule C hereto, at a purchase price equal
to 99.5% of the principal amount thereof.
The Issuers shall not be obligated to deliver any of the Securities
to be delivered except upon payment for all the Securities to be purchased as
provided herein.
3. SALE AND RESALE OF THE SECURITIES BY THE INITIAL PURCHASER. Each
of the Initial Purchasers represents and warrants to the Issuers and agrees
that:
(a) It, its affiliates and any person acting on its or their behalf
will offer the Securities to be purchased hereunder for resale only upon the
terms and conditions set forth in this Agreement and in the Final Memorandum.
(b) It, its affiliates and any person acting on its or their behalf
(i) will not solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the meaning of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act, and (ii) will solicit offers for the Notes
only from, and will offer, sell or deliver (the "Exempt Resales") the
Securities, as part of its initial offering, only to the following persons (each
an "Eligible Purchaser") (A) persons whom such Initial Purchaser reasonably
believes to be qualified institutional buyers ("QIBs") as defined in Rule 144A
under the Securities Act, as such rule may be amended from time to time ("Rule
144A") or, if any such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only when such person has
represented to such Initial Purchaser that each such account is a QIB, to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A and (B) persons who are not U.S. persons (as defined in Regulation S)
outside the United States in offshore transactions in reliance on Regulation S.
(c) With respect to Securities sold in reliance on Regulation S, (i)
neither such Initial Purchaser nor any of its affiliates nor anyone acting on
its behalf has offered
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or sold, or will offer or sell, any Securities by means of any directed selling
efforts (as defined in Rule 902 of Regulation S) in the United States, (ii) at
or prior to confirmation of all sales of Securities made in reliance on
Regulation S, it will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases the Securities
from it during the restricted period a confirmation or notice to substantially
the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of a distribution thereof at any time or (ii) otherwise
until 40 days after the later of the date of the commencement of the
offering and the closing date, except in either case in accordance with an
exemption from or in a transaction not subject to the Securities Act.
Terms used above have the meanings given them by Regulation S."
The sale of the Securities to non-U.S. persons in offshore transactions is not
part of a plan or scheme to avoid the registration requirements of the
Securities Act.
(d) (i) It has not solicited, and will not solicit, offers to purchase
any of the Securities from, (ii) it has not sold, and will not sell, any of the
Securities to, and (iii) it has not distributed, and will not distribute, the
Preliminary Memorandum or the Final Memorandum to, any person or entity in any
jurisdiction outside of the United States except, in each case, in compliance in
all material respects with all applicable laws of such jurisdiction. For
purposes of this Agreement, "United States" means the United States of America,
its territories, its possessions (including the Commonwealth of Puerto Rico),
and other areas subject to its jurisdiction.
(e) Unless prohibited by applicable law, (i) it will furnish to each
person to whom it offers any Securities, a copy of the Preliminary Memorandum
(as amended or supplemented) or Final Memorandum or (unless delivery of such
Preliminary Memorandum is required by applicable law) shall inform each such
person that a copy of such Preliminary Memorandum or the Final Memorandum will
be available upon request and (ii) it will furnish to each person to whom it
sells Securities a copy of the Final Memorandum (as then amended or supplemented
by applicable law) and shall inform each such person that a copy of such Final
Memorandum will be available upon request.
(f) The information set forth under the caption "Plan of Distribution"
in the Preliminary Memorandum and in the Final Memorandum was furnished to the
Company by and on behalf of the Initial Purchasers for use in connection with
the preparation of the Preliminary Memorandum and the Final Memorandum and is
correct in all material respects.
12
4. DELIVERY OF AND PAYMENT FOR THE NOTES. Delivery of and payment
for the Securities shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:00 A.M., New York City time, on March 27, 1998,
or at such other date or place as shall be determined by agreement between the
Initial Purchasers and the Company. This date and time are sometimes referred
to as the "Closing Date." On the Closing Date, the Issuers shall deliver or
cause to be delivered the Securities to the Initial Purchasers for the account
of the Initial Purchasers against payment to or upon the order of the Company of
the purchase price by wire transfer in federal (immediately available same-day)
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
the Initial Purchasers hereunder. Upon delivery, the Securities shall be in
definitive fully registered form and registered in the name of Cede & Co., as
nominee of the Depository Trust Company ("DTC"), or such other name or names and
in such denominations as the Initial Purchasers shall request in writing not
less than one business day prior to the Closing Date. For the purpose of
expediting the checking and packaging of the Securities, the Issuers shall make
the Securities available for inspection by the Initial Purchasers in New York,
New York, not later than 5:00 P.M., New York City time, on the business day
prior to the Closing Date.
5. FURTHER AGREEMENTS OF THE ISSUERS. The Issuers jointly and
severally agree with each Initial Purchaser as set forth below in this Section
5:
(a) The Issuers will furnish to the Initial Purchasers, without
charge, as many copies of the Final Memorandum and any supplements and
amendments thereto as they may reasonably request.
(b) Prior to making any amendment or supplement to the Preliminary
Memorandum or the Final Memorandum, the Issuers shall furnish a copy thereof to
the Initial Purchasers and counsel to the Initial Purchasers and will not effect
any such amendment or supplement to which the Initial Purchasers shall
reasonably object by written notice to the Company after a reasonable period to
review.
(c) If, at any time prior to completion of the initial distribution of
the Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for the
Initial Purchasers or counsel for the Issuers, to amend or supplement the Final
Memorandum in order that the Final Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in light of the circumstances
existing at the time it is delivered to a purchaser, or if it is necessary to
amend or supplement the Final Memorandum to comply with applicable law, the
Issuers will promptly prepare such amendment or supplement as may be necessary
to correct such untrue statement or omission or so that the Final Memorandum,
13
as so amended or supplemented, will comply with applicable law and furnish to
the Initial Purchasers such number of copies of such amendment or supplement as
they may reasonably request. Each Initial Purchaser agrees upon receipt of
written notice from the Issuers to suspend use of the Final Memorandum until the
Issuers have amended or supplemented the Final Memorandum.
(d) Except during any period in which the Issuers are subject to
Section 13 or 15(d) of the Exchange Act of 1934, as amended (the "Exchange
Act"), and are in compliance with the filing requirements of the Exchange Act,
the Issuers will furnish to holders of the Securities and prospective purchasers
of Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information, if any, required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
(e) So long as the Securities and Exchange Securities are outstanding,
the Issuers will furnish to the Initial Purchasers copies of any annual reports,
quarterly reports and current reports filed with the Securities and Exchange
Commission ("SEC") on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the SEC, and such other documents, reports and information
as shall be furnished by the Issuers to the Trustee or to the holders of the
Securities and Exchange Securities pursuant to the Indenture.
(f) The Issuers will use their best efforts to qualify the Securities
for sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers reasonably designate and to continue such qualifications in
effect so long as reasonably required for the distribution of the Securities.
Notwithstanding the foregoing, the Issuers shall not be obligated to qualify as
a foreign corporation in any jurisdiction in which they are not so qualified or
to file a general consent to service of process or to subject themselves to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
(g) The Issuers will use their best efforts to permit the Securities
to be designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL market and to permit the Securities to be eligible for
clearance and settlement through DTC.
(h) Except following the effectiveness of any Registration Statement
(as defined in the Registration Rights Agreement) and except for such offers as
may be made as a result of, or subsequent to, filing such Registration Statement
or amendments thereto prior to the effectiveness thereof, the Issuers will not,
and will cause their affiliates not to, solicit any offer to buy or offer to
sell the Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner
14
involving a public offering within the meaning of Section 4(2) of the Securities
Act.
(i) The Company will apply the net proceeds from the sale of the
Securities as set forth in the Final Memorandum.
(j) The Issuers will take such steps as shall be necessary to ensure
that neither the Company nor any of its subsidiaries shall become (i) an
"investment company" within the meaning of the Investment Company Act, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(k) The Company and its subsidiaries will not, and will cause their
affiliates not to, take any action that would require the registration under the
Securities Act of the Securities (other than pursuant to the Registration Rights
Agreement) including, without limitation, (i) engaging in any directed selling
efforts (within the meaning of Regulation S) during any applicable restricted
period or (ii) offering any other securities in a manner that would be
integrated with the transactions contemplated hereby.
(l) Prior to the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement if, in the
reasonable judgment of the Initial Purchasers, the Initial Purchasers or any of
their affiliates are required to deliver an offering memorandum in connection
with sales of, or market-making activities with respect to, the Securities, (A)
the Issuers will periodically amend or supplement the Final Memorandum so that
the information contained in the Final Memorandum complies with the requirements
of Rule 144A of the Securities Act, (B) the Issuers will amend or supplement the
Final Memorandum when necessary to reflect any material changes in the
information provided therein so that the Final Memorandum will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances existing
as of the date the Final Memorandum is so delivered, not misleading and (C) the
Issuers will provide the Initial Purchasers with copies of each such amended or
supplemented Final Memorandum, as the Initial Purchasers may reasonably request.
The Issuers hereby expressly acknowledge that the indemnification and
contribution provisions of Section 8 hereof are specifically applicable and
relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 5(l).
(m) The Issuers will use commercially reasonable best efforts to
satisfy the closing conditions set forth in Section 7 hereof.
15
6. EXPENSES. The Issuers, jointly and severally, agree to pay (a)
the costs incident to the authorization, issuance, sale and delivery of the
Securities and Exchange Securities and any issue or stamp taxes payable in that
connection; (b) the costs incident to the preparation and printing of the
Preliminary Memorandum, the Final Memorandum and any amendments, supplements and
exhibits thereto; (c) the costs of distributing the Preliminary Memorandum, the
Final Memorandum and any amendment or supplement thereto; (d) the fees and
expenses of qualifying the Securities and Exchange Securities under the
securities laws of the several jurisdictions as provided in Section 5(f) and of
preparing, printing and distributing a Blue Sky Memorandum (including reasonable
related fees and expenses of counsel to the Initial Purchasers); (e) the cost of
printing the Securities and the Exchange Securities; (f) the fees and expenses
of the Trustee and any agent of the Trustee and, if required by the Trustee, the
fees and disbursements of any counsel for the Trustee in connection with the
Indenture and the Securities and Exchange Securities; (g) any fees paid to
rating agencies in connection with the rating of the Securities and Exchange
Securities; (h) the costs and expenses of DTC and its nominee, including its
book-entry system; (i) all expenses and listing fees incurred in connection with
the application for quotation of the Securities on the PORTAL market; and (j)
all other costs and expenses incident to the performance of the obligations of
the Issuers under this Agreement. Except as specifically provided in Section
6(d) and Section 10 hereof, the Initial Purchasers shall pay their own costs and
expenses, including, without limitation, the fees and disbursements of their
counsel.
7. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of
the Initial Purchasers to purchase the Securities shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Issuers contained herein at the Execution Time and the Closing Date,
to the accuracy in all material respects of the statements of the Issuers made
in any certificates of the Issuers pursuant to the provisions hereof, to the
performance by the Issuers of their obligations hereunder in all material
respects and to the following additional conditions:
(a) The Initial Purchasers shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Final Memorandum or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, is material
or omits to state a fact which, in the opinion of such counsel, is material and
is necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) The Final Memorandum shall have been printed and copies
distributed to the Initial Purchasers as soon as practicable but in no event
later than two Business Days following the date of this Agreement or at such
later date and time as to which the Initial
16
Purchasers may agree, and no stop order suspending the qualification or
exemption from qualification of the Securities in any jurisdiction referred to
in Section 5(f) shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect; no action, suit or proceeding shall
have been commenced and be pending against or affecting or, to the knowledge of
the Company, threatened against, the Company or any of its subsidiaries before
any court or arbitrator or any governmental body, agency or official that,
singly or in the aggregate, would reasonably be expected to result in a Material
Adverse Effect; and no stop order shall have been issued by the SEC or any
governmental agency of any jurisdiction referred to in Section 5(f) preventing
the use of the Final Memorandum, or any amendment or supplement thereto, or
which would reasonably be expected to have a Material Adverse Effect.
(d) Since the dates as of which information is given in the Final
Memorandum and other than as set forth in the Final Memorandum, (i) there shall
not have been any Material Adverse Change, or any development that is reasonably
likely to result in a Material Adverse Change, or any material change in the
long-term debt, or material increase in the short-term debt, from that set forth
in the Final Memorandum; (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company on any class of its capital stock;
(iii) the Company and its subsidiaries shall not have incurred any liabilities
or obligations, direct or contingent, that are material, individually or in the
aggregate, to the Company and its subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Final Memorandum.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by (i) Xx. Xxxxxx Xxxxxxx,
Chief Executive Officer and (ii) Xxxxxx Xxxxxxxx, Chief Financial Officer,
confirming that (A) such officers have participated in conferences with other
officers and representatives of the Issuers, representatives of the independent
public accountants of the Issuers and representatives of counsel to the Issuers
at which the contents of the Final Memorandum and related matters were discussed
and (B) the matters set forth in paragraphs (b), (c) and (d) of this Section 7
are true and correct as of the Closing Date.
(f) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Securities, the Exchange
Securities, the
17
Indenture, the Registration Rights Agreement, the Final Memorandum and all other
legal matters relating to this Agreement and the transactions contemplated
hereby and thereby, shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Issuers shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
(g) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the Issuers
incorporated in Delaware, New York and Texas, shall have furnished to the
Initial Purchasers its written opinion (containing customary limitations and
approvals that shall be reasonably satisfactory in all material respects to the
Initial Purchasers' counsel), addressed to the Initial Purchasers and dated the
Closing Date, substantially in the form of Exhibit B attached hereto.
(h) Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, counsel for Lithotripters, shall
have furnished to the Initial Purchasers its written opinion, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially in the form of Exhibit C
attached hereto.
(i) The Initial Purchasers shall have received opinions of counsel for
the Subsidiary Guarantors organized in the states of Nevada, New Jersey, Alabama
and California, addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial Purchasers,
substantially in the form of Exhibit D hereto.
(j) You shall have received on the Closing Date an opinion of Xxxxxx &
Xxxxxxx, counsel for the Initial Purchasers, dated the Closing Date and
addressed to you, in form and substance reasonably satisfactory to you.
(k) The Issuers and the Trustee shall have entered into the Indenture
and the Initial Purchasers shall have received copies, conformed as executed,
thereof.
(l) The Issuers and the Initial Purchasers shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have received
executed counterparts.
(m) At the Execution Time and at the Closing Date, KPMG Peat Marwick
LLP and Xxxxxx Xxxxxxxx LLP shall have furnished to the Initial Purchasers a
letter or letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, confirming that they are independent accountants within the meaning
of the Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants (the "AICPA") and otherwise
reasonably
18
satisfactory in form and substance to the Initial Purchasers and their counsel.
(n) (i) The Company and its subsidiaries shall not have sustained
since the date of the latest financial statements included in the Final
Memorandum losses or interferences with their businesses, taken as a whole, 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 or contemplated in the Final Memorandum and (ii)
since such date there shall not have been any change in the capital stock or
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 or its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Final Memorandum, the effect of which, in any such case
described in clause (i) or (ii), is, in the reasonable judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities being delivered
on the Closing Date on the terms and in the manner contemplated herein and in
the Final Memorandum.
(o) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or The NASDAQ Stock Market's National
Market or in the over-the-counter market shall have been suspended or materially
limited, or minimum prices shall have been established on such exchange by the
SEC, or by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or Texas or New York State authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the
reasonable judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Securities being delivered on the
Closing Date on the terms and in the manner contemplated herein and in the Final
Memorandum.
(p) As of the Closing Date, no "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act (i) will have imposed (or will have informed the
Company or any Subsidiary Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Company's or any Subsidiary
Guarantor's retaining any rating assigned to the Company or any Subsidiary
Guarantor, any securities of the Company or any Subsidiary Guarantor or (ii)
will have indicated
19
to the Company or any Subsidiary Guarantor that it is considering (a) the
downgrading, suspension, or withdrawal of, or any review for a possible change
that does not indicate the direction of the possible change in, any rating so
assigned or (b) any change in the outlook for any rating of the Company, any
Subsidiary Guarantor or any securities of the Company or any Subsidiary
Guarantor.
(q) Xxxxxx & Xxxxxxx shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 7 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(r) Prior to the Closing Date, the Issuers shall have furnished to the
Initial Purchasers such further information, certificates and documents as the
Initial Purchasers may reasonably request.
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 Initial Purchasers.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuers jointly and
severally agree to indemnify and hold harmless the Initial Purchasers, the
directors, officers, employees and agents (including, without limitation,
attorneys) of the Initial Purchasers and each person who controls any Initial
Purchaser within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law 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 a material fact contained in the Preliminary
Memorandum, the Final Memorandum or any information provided by the Issuers to
any holder or prospective purchaser of Notes pursuant to Section 5(e), or in any
amendment thereof or supplement thereto, 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, in the light of the
circumstances under which they were made, not misleading, and agree to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Issuers will not be liable in any such case to any such indemnified party to the
extent that any such loss, claim, damage, liability or action arises
20
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission relating to such Initial Purchaser made in the
Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Issuers by or on behalf of any Initial Purchaser specifically
for inclusion therein; provided, that the indemnification contained in this
paragraph (a) with respect to the Preliminary Memorandum shall not inure to the
benefit of the Initial Purchasers (or to the benefit of any person controlling
the Initial Purchasers) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Securities by the Initial Purchasers to any
person if a copy of the Final Memorandum shall not have been delivered or sent
to such person and each untrue statement of a material fact contained in, and
each omission or alleged omission of a material fact from, such Preliminary
Memorandum was corrected in the Final Memorandum and it shall have been
determined that any Initial Purchaser and each person, if any, who controls such
Initial Purchaser would not have incurred such losses, claims, damages,
liabilities and expenses had the Final Memorandum been delivered or sent. The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) Each Initial Purchaser agrees severally and not jointly to
indemnify and hold harmless the Issuers, their directors, officers, employees
and agents (including, without limitation, attorneys), and each person who
controls the Issuers within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Issuers to
each Initial Purchaser, but only with reference to written information relating
to such Initial Purchaser furnished to the Issuers by or on behalf of the
Initial Purchaser specifically for inclusion in the Preliminary Memorandum or
the Final Memorandum (or in any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability which any Initial
Purchaser may otherwise have. The Issuers and the Initial Purchasers
acknowledge that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 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 this
Section 8, notify the indemnifying party in writing of the commencement thereof,
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the loss or
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than
21
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ not more than one separate
counsel, and the indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent any indemnified party would, in the opinion of
legal counsel to the indemnified party, present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have been informed in writing by legal counsel that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Issuers
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Issuers and by
the Initial Purchasers from the offering of the Securities; provided, however,
that in no case shall any Initial Purchaser be responsible for any amount in
excess of the purchase discount, commission and fees applicable to the
Securities purchased by such Initial Purchaser hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Issuers and the Initial Purchasers shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
22
fault of the Issuers and of the Initial Purchaser in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuers shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts, commissions and fees received by the
Initial Purchasers from the Issuers in connection with the purchase of the
Securities hereunder. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Issuers or the Initial Purchasers. The Issuers and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Issuers within the meaning
of either the Securities Act or the Exchange Act and each partner, officer,
director, employee and agent of the Issuers shall have the same rights to
contribution as the Issuers, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. TERMINATION. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Securities if, prior to
that time, any of the events described in Sections 7(n) or 7(o) shall have
occurred or if the Initial Purchasers shall decline to purchase the Securities
for any reason permitted under this Agreement.
10. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If (a) the
Issuers shall fail to tender the Securities for delivery to the Initial
Purchasers otherwise than for any reason permitted under this Agreement or (b)
the Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement, the Issuers shall reimburse the Initial
Purchasers for the reasonable fees and expenses of their counsel and for such
other reasonable out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Securities, and
upon demand the Issuers shall pay the full amount thereof to the Initial
Purchasers.
11. DEFAULT BY AN INITIAL PURCHASER. If any one or more of the
several Initial Purchasers shall fail or refuse to purchase Securities (the
"Default Securities") that it or they have agreed to purchase hereunder on the
Closing Date, and the aggregate principal amount of Default
23
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase does not exceed 10% of the aggregate principal
amount of the Securities to be purchased on such date, each non-defaulting
Initial Purchaser shall be obligated to purchase an aggregate amount of the
Default Securities equal to the proportion that the aggregate principal amount
of Securities set forth opposite its name on Schedule C bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Initial Purchasers. No action taken pursuant to this Section 11
shall relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to NationsBanc Xxxxxxxxxx Securities LLC, 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000-0000, Attention: Xxxxxx Xxxxxxxx,
with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx X. Xxxxxxxxx;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Final
Memorandum, Attention: Xxxxxx Xxxxxxxx, with a copy to Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P., 1900 Frost Bank Plaza, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxx
00000, Attention: Xxxxxxx X. XxXxxx.
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Issuers shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Initial Purchasers.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Issuers
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Issuers contained
in this Agreement shall also be deemed to be for the benefit of directors,
officers, employees and agents (including, without limitation, attorneys) of the
Initial Purchasers and the person or persons, if any, who control an Initial
Purchasers within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Issuers,
officers, employees and agents (including, without limitation, attorneys) of the
Issuers and any person controlling any of the Issuers within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 12, any legal or equitable right, remedy or claim under or in
24
respect of this Agreement or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Issuers and the Initial Purchasers contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
15. DEFINITION OF "BUSINESS DAY." For purposes of this Agreement,
"business day" means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature page follows]
25
If the foregoing correctly sets forth the agreement between the
Issuers and the Initial Purchaser, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
PRIME MEDICAL SERVICES, INC.
By:
---------------------------------------
Name:
Title:
PRIME MEDICAL OPERATING, INC.
By:
---------------------------------------
Name:
Title:
PRIME MANAGEMENT, INC.
By:
---------------------------------------
Name:
Title:
PRIME CARDIAC REHABILITATION SERVICES, INC.
By:
---------------------------------------
Name:
Title:
PRIME DIAGNOSTIC SERVICES, INC.
By:
--------------------------------------
Name:
Title:
PRIME LITHOTRIPSY SERVICES, INC.
By:
--------------------------------------
Name:
Title:
PRIME KIDNEY STONE TREATMENT, INC.
By:
--------------------------------------
Name:
Title:
PRIME DIAGNOSTIC CORP. OF FLORIDA
By:
--------------------------------------
Name:
Title:
PRIME LITHOTRIPTER OPERATIONS, INC.
By:
--------------------------------------
Name:
Title:
PRIME PRACTICE MANAGEMENT, INC.
By:
--------------------------------------
Name:
Title:
TEXAS LITHO, INC.
By:
--------------------------------------
Name:
Title:
R.R. LITHO, INC.
By:
--------------------------------------
Name:
Title:
OHIO LITHO, INC.
By:
--------------------------------------
Name:
Title:
ALABAMA RENTAL STONE INSTITUTE, INC.
By:
--------------------------------------
Name:
Title:
SUN MEDICAL TECHNOLOGIES, INC.
By:
--------------------------------------
Name:
Title:
SUN ACQUISITION, INC.
By:
--------------------------------------
Name:
Title:
LITHOTRIPTERS, INC.
By:
--------------------------------------
Name:
Title:
PRIME MEDICAL MANAGEMENT, L.P.
By:
--------------------------------------
Name:
Title:
PROSTATHERAPIES, INC.
By:
--------------------------------------
Name:
Title:
FASTSTART, INC.
By:
-------------------------------------
Name:
Title:
NATIONAL LITHOTRIPTERS ASSOCIATION, INC.
By:
-------------------------------------
Name:
Title:
MEDTECH INVESTMENTS, INC.
By:
-------------------------------------
Name:
Title:
EXECUTIVE MEDICAL ENTERPRISES, INC.
By:
-------------------------------------
Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
---------------------------------------
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
---------------------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:
---------------------------------------
Name:
Title:
X. X. XXXXXXXX & CO.
By:
---------------------------------------
Name:
Title:
EXHIBIT A
Registration Rights Agreement
EXHIBIT B
Form of Opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
EXHIBIT C
Form of Opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx
EXHIBIT D
Form of Local Counsel Opinion
SCHEDULE A
Subsidiaries
Name Jurisdiction of Incorporation or Organization
---- ---------------------------------------------
Alabama Renal Stone Institute, Inc. Alabama
Executive Medical Enterprises, Inc. Delaware
FastStart, Inc. North Carolina
Lithotripters, Inc. North Carolina
MedTech Investments, Inc. North Carolina
National Lithotripters Association, Inc. North Carolina
Ohio Litho, Inc. Delaware
Prime Cardiac Rehabilitation Services, Inc. Delaware
Prime Diagnostic Corp. of Florida Delaware
Prime Diagnostic Services, Inc. Delaware
Prime Kidney Stone Treatment, Inc. New Jersey
Prime Lithotripsy Services, Inc. New York
Prime Lithotripter Operations, Inc. New York
Prime Management, Inc. Nevada
Prime Medical Management, L.P. Delaware
Prime Medical Operating, Inc. Delaware
Prime Practice Management, Inc. New York
Prostatherapies, Inc. Delaware
R.R. Litho, Inc. Texas
Sun Acquisition, Inc. California
Sun Medical Technologies, Inc. California
Texas Litho, Inc. Delaware
SCHEDULE B
MATERIAL CONTRACTS
1. Prime Medical Services, Inc. 1993 Stock Option Plan
2. First Amendment to the Prime Medical Services, Inc. 1993 Stock Option Plan
3. Second Amendment to the Prime Medical Services, Inc. 1993 Stock Option Plan
4. Rights Agreement dated October 18, 1993 between Prime Medical Services,
Inc. and American Stock Transfer and Trust Company
5. Form of Indemnification Agreement dated October 11, 1993 between Prime
Medical Services, Inc. and certain of its officers and directors
6. Partnership Agreement of Metro Atlanta Stonebusters, G.P.
7. Management Agreement dated July 28, 1994 between the Alabama Renal Stone
Institute, Inc. and Alabama Kidney Stone Foundation, Inc.
8. Asset Purchase Agreement dated August 30, 1994 between Prime Lithotripter
Operations, Inc. and Alabama Lithotripsy Joint Venture
9. Asset Purchase Agreement dated August 30, 1994 between Prime Lithotripter
Operations, Inc. and Baptist Medical Center-Montclair
10. Promissory Note dated August 30, 1994 issued by Prime Lithotripter
Operations, Inc. to Baptist Medical Center-Montclair
11. Management Agreement dated August 30, 1994 between Prime Lithotripter
Operations, Inc. and Alabama Lithotripsy Associates, Inc.
12. Security Agreement dated August 30, 1994 between Prime Lithotripter
Operations, Inc. and Baptist Medical Center-Montclair
13. Amended and Restated Joint Venture Agreement dated April, 1989 between
Prime Diagnostic Imaging Services, Inc. and The Shasta Diagnostic Imaging
Medical Group
14. Loan Agreement dated November 28, 1994 between Prime Medical Services,
Inc., The First National Bank of Boston, NationsBank of Texas, N.A. and The
First National Bank of Boston, as agent
15. First Amendment to Loan Agreement dated August 17, 1995 between Prime
Medical Services, Inc. and The First National Bank of Boston, as agent
16. Amended and Restated Loan Agreement dated April 26, 1996 between Prime
Medical Services, Inc., The First National Bank of Boston, NationsBank of
Texas, N.A. and The First National Bank of Boston, as agent
17. Second Amended and Restated Loan Agreement between Prime Medical Services,
Inc., The First National Bank of Boston, N.A. and NationsBank of Texas,
N.A., as agent
18. Promissory Note dated March 31, 1997 issued by Prime Medical Services, Inc.
to NationsBank of Texas, N.A., as agent
19. Promissory Note dated March 31, 1997 issued by Prime Medical Services, Inc.
to NationsBank of Texas, N.A.
20. Promissory Note dated March 31, 1997 issued by Prime Medical Services, Inc.
to NationsBank of Texas, N.A., as agent
21. Operating Agreement for Southern California Stone Center, L.L.C.
22. Lease Agreement dated July 1, 1995 between Kidney Stone Center of South
Florida, L.C. and Xxxxxxxx and Xxxxx Kidney Stone Center of South Florida,
P.A.
23. Employment Agreement dated October 27, 1995 between Prime Medical Services,
Inc. and Xxxx X. Xxxxxxx
24. Employment Agreement dated May 1, 1996 between Prime Medical Services, Inc.
and Xxxxxx Xxxxxxx, M.D., X.X.
25. Employment Agreement dated April 1, 1997 between Prime Medical Services,
Inc. and Xxxxxxx Xxxxx
26. Stock Purchase Agreement dated April 26, 1996 between Prime Medical
Services, Inc.; Lithotripters, Inc.; Xxxxxxx X. Xxxxxx, M.D.; Xxxxxxxx X.
Xxxxx, M.D.; Xxx X. Xxxxx, M.D.; Xxxxxx X. Xxxxxx, M.D.; Xxxxxx X. Xxxxxx;
Xxxxxxx X. Xxxx; Estate of H. Xxxxxx Xxxxxx, III; Xxxxxxx X. Xxxxxxx;
Xxxxxx Xxxxxxx, M.D.; Xxxxxxx X. Xxxxx, M.D.; and W. Xxxx Xxxxx
27. Registration Rights Agreement dated April 26, 1996 between Prime Medical
Services, Inc.; Lithotripters, Inc.; Xxxxxxx X. Xxxxxx, M.D.; Xxxxxxxx X.
Xxxxx, M.D.; Xxx X. Xxxxx, M.D.; Xxxxxx X. Xxxxxx, M.D.; Xxxxxx X. Xxxxxx;
Xxxxxxx X. Xxxx; Estate of H. Xxxxxx Xxxxxx, III; Xxxxxxx X. Xxxxxxx;
Xxxxxx Xxxxxxx, M.D.; Xxxxxxx X. Xxxxx, M.D.; and W. Xxxx Xxxxx
28. Partnership Interest Purchase Agreement dated May 1, 1997 among Prime
Lithotripter Operations, Inc., Tenn-Ga Stone Group Two, L. P., NGST, Inc.
and all the shareholders of NGST, Inc.
29. Stock Purchase Agreement dated June 1, 1997 between Sun Medical
Technologies, Inc. and Executive Medical Enterprises, Inc.
30. Contribution Agreement dated October 8, 1997 between Prime Medical
Services, Inc. and AK Associates
31. Employment Agreement dated October 8, 1997 by and between Xxxxxxxx Xxxxxxxx
and AK Associates, L.L.C.
32. Employment Agreement dated October 8, 1997 by and between Xxxxxx Xxxxxxx
and AK Associates, L.L.C.
SCHEDULE C
PRIME MEDICAL SERVICES, INC.
Initial Purchaser Amount
----------------- ------
NationsBanc Xxxxxxxxxx Securities LLC .......................$ 35,000,000.00
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation .........$ 35,000,000.00
Prudential Securities Incorporated ..........................$ 18,888,889.00
X.X. Xxxxxxxx & Co. .........................................$ 11,111,111.00
Total ..................................................$100,000,000.00
===============
