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Exhibit 1.1
RES-CARE, INC.
2,591,000 SHARES
OF
COMMON STOCK
UNDERWRITING AGREEMENT
April 15, 1997
X. X. Xxxxxxxx & Co., L.L.C.
Xxxxxxxxxx Securities
Equitable Securities Corporation
c/o X. X. Xxxxxxxx & Co., L.L.C.
J. C. Bradford Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Dear Ladies and Gentlemen:
Res-Care, Inc., a Kentucky corporation (the "Company"), and certain
shareholders of the Company identified on Schedule I hereto (the "Selling
Shareholders") propose to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you are acting as the representatives (the
"Representatives"), 1,500,000 shares and 1,091,000 shares, respectively, of
common stock, no par value, of the Company (the "Common Stock"). The 2,591,000
shares of Common Stock are referred to herein as the "Firm Shares." Such shares
of Common Stock are to be sold to the Underwriters, acting severally and not
jointly, in such amounts as are set forth in Schedule II hereto opposite the
name of such Underwriter.
The Company also proposes to grant to the Underwriters an option to
purchase up to 388,650 additional shares of Common Stock as provided for in
Section 4 of this Agreement for the purpose of covering over-allotments (the
"Option Shares"). The Firm Shares and the Option Shares purchased pursuant to
this Agreement are herein called the "Shares."
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the several Underwriters that:
(a) The Company meets the requirements for use of, and has filed with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of
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1933, as amended (the "Securities Act"), a registration statement on Form
S-3 (No. 333-23599), including the related preliminary prospectus and may
have filed amendments thereto. Copies of such registration statement and
amendments, and all forms of the related prospectuses contained therein,
have been delivered to you. Such registration statement, including the
prospectus, Part II, the information incorporated by reference, and all
financial schedules and exhibits thereto, as amended at the time when it
shall become effective, together with any registration statement filed by
the Company pursuant to Rule 462(b) of the Securities Act, is herein
referred to as the "Registration Statement," and the prospectus included as
part of the Registration Statement on file with the Commission that
discloses all the information that was omitted from the prospectus on the
effective date pursuant to Rule 430A of the Rules and Regulations (as
defined below) is herein referred to as the "Final Prospectus." The
prospectus included as part of the Registration Statement on the date when
the Registration Statement became effective is referred to herein as the
"Effective Prospectus." Any prospectus included in the Registration
Statement and in any amendment thereto prior to the effective date of the
Registration Statement is referred to herein as a "Preliminary Prospectus."
For purposes of this Agreement, "Rules and Regulations" mean the rules and
regulations adopted by the Commission under either the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus, at
the time of filing thereof, complied with the requirements of the
Securities Act and the Rules and Regulations, and did not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. When the Registration Statement becomes effective and at all
times subsequent thereto up to and including the First Closing Date (as
hereinafter defined), (i) the Registration Statement, the Effective
Prospectus and Final Prospectus and any amendments or supplements thereto
will contain all statements which are required to be stated therein in
accordance with the Securities Act and the Rules and Regulations and will
comply with the requirements of the Securities Act and the Rules and
Regulations, and (ii) neither the Registration Statement, the Effective
Prospectus nor the Final Prospectus nor any amendment or supplement thereto
will include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are made,
not misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use therein
(it being understood that the only information so provided is the
information included in the last paragraph on the cover page, the
stabilization and market-making legends on the inside front cover and under
the caption "Underwriting" in the Effective Prospectus and the Final
Prospectus).
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(c) The documents that are incorporated by reference in any
Preliminary, Effective and Final Prospectus or from which information is so
incorporated by reference, when they become effective or were filed with
the Commission, as the case may be, complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as applicable,
and the Rules and Regulations, and any documents so filed prior to the
termination of this offering and incorporated by reference subsequent to
the effective date of the Registration Statement, shall, when they are
filed with the Commission, conform in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and
the Rules and Regulations.
(d) The Company and each subsidiary of the Company (as used herein,
the term "subsidiary" includes any corporation or other entity in which the
Company or any subsidiary of the Company has an ownership interest) is duly
organized and validly existing and in good standing under the laws of the
respective jurisdictions of their incorporation, with full corporate power
and authority to own their properties and conduct their businesses as now
conducted and are duly qualified or authorized to do business and are in
good standing in all jurisdictions where the failure to so qualify would
have a material adverse effect on the condition (financial or otherwise),
earnings or business affairs or business prospects of the Company and its
subsidiaries, taken as a whole ("Material Adverse Effect"). All of the
Company's subsidiaries are set forth on Exhibit 1(d) hereto.
(e) The outstanding stock of each of the Company's subsidiaries is
duly authorized, validly issued, fully paid and nonassessable. Except with
respect to Youthtrack, Inc. ("Youthtrack") all of the outstanding stock of
each of the Company's subsidiaries is owned by the Company, clear of any
lien, encumbrance, pledge, equity or claim of any kind, except for a pledge
of each subsidiary's capital stock pursuant to the Company's revolving
credit facility. Except as set forth on Exhibit 1(e) hereto, (i) the
Company has no other subsidiaries and is not a partner or joint venturer in
any partnership or joint venture, (ii) the Company's subsidiaries do not
have any outstanding options to purchase or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell any shares of capital stock or an
ownership interest of such subsidiary, and (iii) there are no preemptive
rights or other rights to subscribe for or purchase any shares of the
capital stock or an ownership interest of the Company's subsidiaries. Of
the 1,000 outstanding shares of capital stock of Youthtrack, 800 shares are
owned by the Company, clear of any lien, encumbrance, pledge, equity or
claim of any kind, except for a pledge of each subsidiary's capital stock
pursuant to the Company's revolving credit facility. The ownership of all
of the outstanding stock of each of the Company's subsidiaries is set forth
on Exhibit 1(e) hereto.
(f) After giving effect to the transaction described in footnote one
to the Selected Supplemental Consolidated Financial Data in the Final
Prospectus, the capitalization of the Company as of December 31, 1996, is
as set forth under the caption
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"Capitalization" in the Effective Prospectus and the Final Prospectus, and
the Common Stock conforms to the description thereof contained or
incorporated by reference in the Effective Prospectus and the Final
Prospectus. All the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and non-assessable. None
of the issued shares of capital stock of the Company have been issued in
violation of any preemptive or similar rights. The Shares to be sold by the
Company, upon issuance and delivery and payment therefor in the manner
herein described, will be duly authorized, validly issued, fully paid and
nonassessable. There are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the transfer of, any shares of
Common Stock pursuant to the Company's Amended and Restated Articles of
Incorporation, bylaws or other governing documents or any agreement or
other instrument to which the Company is a party or by which it may be
bound except as described in the Effective Prospectus and the Final
Prospectus. Neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement gives rise
to any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock or any other
securities of the Company. The Underwriters will receive good and
marketable title to the Shares to be issued and delivered hereunder, free
and clear of all liens, encumbrances, claims, security interests,
restrictions, stockholders' agreements and voting trusts whatsoever.
(g) All offers and sales by the Company of its Common Stock prior to
the date hereof were at all relevant times duly registered or the
subject of an available exemption from the registration requirements of
the Securities Act and were duly registered or the subject of an available
exemption from the registration requirements of the applicable state
securities or Blue Sky laws.
(h) The Company has full legal right, power and authority to enter
into this Agreement and to sell and deliver the Shares to the several
Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms (y) except as enforcement of rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or principles of public policy and (z) subject to the qualification
that the enforceability of the Company's obligations hereunder may be
limited by bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws relating to or affecting creditors' rights generally
and by general principles of equity regardless of whether considered in a
proceeding in equity or at law. No consent, approval, authorization or
order of any court or governmental agency or body is required for the
performance of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except such as have been
obtained and such as may be required by the National Association of
Securities Dealers, Inc. ("NASD") or under the Securities Act, or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the several Underwriters. The issue and sale
of the Shares by the Company, the
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Company's 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 and provisions of, or constitute a default by the
Company or any of its subsidiaries under, any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or to which the Company or
any of its subsidiaries or any of their respective properties is subject,
the Amended and Restated Articles of Incorporation or bylaws of the Company
or any of its subsidiaries or any statute or any judgment, decree, order,
rule or regulation of any court or governmental agency or body applicable
to the Company, or any subsidiary or any of their respective properties
which breach, violation or default would have a Material Adverse Effect.
Neither the Company nor any subsidiary is in violation of its Articles of
Incorporation or by-laws or any law, administrative rule or regulation or
arbitrators' or administrative or court decree, judgment or order or in
violation or default (there being no existing state of facts which with
notice or lapse of time or both would constitute a default), in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, deed of trust, mortgage,
loan agreement, note, lease, agreement or other instrument or permit to
which it is a party or by which it or any of its properties is or may be
bound where the consequence of such violation or default would have a
Material Adverse Effect.
(i) The consolidated financial statements (and the related notes) and
the supplemental consolidated financial statements (and the related notes)
of the Company included or incorporated by reference in the Registration
Statement, the Effective Prospectus and the Final Prospectus present fairly
the financial position, results of operations and changes in financial
position and cash flow of the Company and its subsidiaries at the dates and
for the periods to which they relate and have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated. The other financial statements and
schedules and financial and statistical data included or incorporated by
reference in or as schedules to the Registration Statement conform to the
requirements of the Securities Act, the Exchange Act and the Rules and
Regulations and present fairly the information presented therein for the
periods shown. KPMG Peat Marwick LLP, whose reports appear in the Effective
Prospectus and the Final Prospectus, are independent accountants as
required by the Securities Act and the Rules and Regulations.
(j) Subsequent to December 31, 1996, neither the Company nor any
subsidiary has sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, which is not disclosed in
the Effective Prospectus and the Final Prospectus; and subsequent to the
respective dates as of which information is given in the Registration
Statement, the Effective Prospectus and the Final Prospectus, (x) neither
the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any
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material transactions not in the ordinary course of business, and (y) there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock or any material change in the
capital stock, long-term liabilities, obligations under capital leases or
short-term borrowings of the Company and its subsidiaries or any issuance
of options, warrants or rights to purchase the capital stock of the
Company, or any material adverse change, or any development involving a
prospective material adverse change, which would have a Material Adverse
Effect, except in each case as described in or contemplated by the
Effective Prospectus and the Final Prospectus.
(k) Except as described in the Effective Prospectus and Final
Prospectus, there is not pending, or to the knowledge of the Company
threatened, any action, suit, proceeding, inquiry or investigation, to
which the Company, any of its subsidiaries or any of their officers or
directors is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or governmental
agency or body, wherein an unfavorable decision, ruling or finding could
prevent or materially hinder the consummation of this Agreement or which
would have a Material Adverse Effect.
(l) There are no contracts or other documents required to be described
in the Registration Statement, the Effective Prospectus and the Final
Prospectus or to be filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described, incorporated by reference or filed as required. All such
contracts to which the Company or any of its subsidiaries is a party have
been duly authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof. The Company or such subsidiary has
performed all material obligations required to be performed by it, and is
neither in default in any material respect nor has it received notice of
any default or dispute under, any such contract or other material
instrument to which it is a party or by which its property is bound or
affected. To the best knowledge of the Company, no other party under any
such contract or other material instrument to which it is a party is in
default in any material respect thereunder.
(m) Except as described in the Effective Prospectus and the Final
Prospectus, the Company and each of its subsidiaries has good and
marketable title to all real and material personal property owned by them,
free and clear of all liens, charges, encumbrances or defects (collectively
"Liens"), other than liens that are reflected in the financial statements
included in the Effective Prospectus and the Final Prospectus or that do
not materially detract from the value or impair the use of the property
subject thereto; and, except as described in the Effective Prospectus and
the Final Prospectus, the real and personal property and buildings referred
to in the Effective Prospectus and the Final Prospectus which are leased
from others by the Company are held under valid, subsisting and, assuming
due execution and delivery by parties to such leases other than the Company
and its subsidiaries, enforceable leases except as enforceability may be
limited
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by applicable equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect
affecting the enforcement of creditors' rights.
(n) The Company's system of internal accounting controls taken as a
whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection
of errors or irregularities in amounts that would be material in relation
to the Company's financial statements; and, to the best knowledge and
belief of the Company, neither the Company nor any of its subsidiaries nor
any employee or agent of the Company or any subsidiary has made any payment
of funds of the Company or received or retained any funds in violation of
any law, rule or regulation. Neither the Company nor any of its
subsidiaries nor any employee or agent of the Company or any subsidiary has
offered or paid any remuneration (including any kickback, bribe or rebate)
directly or indirectly, overtly or covertly, in cash or in kind to any
person to induce such person to refer an individual to any of the
facilities of the Company or any of its subsidiaries for the furnishing or
arranging for the furnishing of any item or service for which payment may
be made to the Company or any of its subsidiaries under any third party
reimbursement program.
(o) The Company and its subsidiaries have filed all federal, state and
local income and franchise tax returns required to be filed through the
date hereof and have paid all taxes shown as due therefrom except those
taxes being contested in good faith or where the failure to file such
return or to pay such tax would not have a material adverse effect on the
Company and its subsidiaries taken as a whole; and there is no tax
deficiency that has been, nor does the Company or any subsidiary have
knowledge of any tax deficiency which is likely to be, asserted against the
Company or its subsidiaries, which if determined adversely would have a
Material Adverse Effect.
(p) The Company and its subsidiaries operate their respective
businesses in conformity with all applicable statutes, common laws,
ordinances, decrees, orders, rules and regulations of any governmental body
except where the failure to so operate their respective businesses would
not have a Material Adverse Effect. Each of the facilities owned, leased,
operated or managed, directly or indirectly, by the Company and its
subsidiaries is being operated in compliance in all material respects with
all applicable laws, orders, rules or regulations. The Company and each of
its subsidiaries has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("Permits") for each of the
facilities owned, leased, operated or managed, directly or indirectly, by
the Company or a subsidiary, as are necessary to own its respective
properties and to conduct its business in the manner described in the
Effective Prospectus and the Final Prospectus, subject to such
qualifications as may be set forth in the Effective Prospectus and the
Final Prospectus, except where the failure to obtain such a Permit or
Permits in the aggregate would not cause a Material Adverse Effect; the
Company and each of its subsidiaries has fulfilled and performed all of its
material obligations with
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respect to the Permits, and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
result in any other material impairment to the rights of the holder of any
such Permit subject in each case to such qualification as may be set forth
in the Effective Prospectus and the Final Prospectus, except to the extent
that any such revocation, termination or impairment would not have a
Material Adverse Effect. The Company and its subsidiaries are not aware of
any existing or imminent matter which may materially adversely impact the
operations of these facilities other than as specifically disclosed in the
Effective Prospectus and the Final Prospectus.
(q) Neither the Company nor any of its subsidiaries is currently
engaging in any activity, whether alone or in concert with others, which
constitutes a violation of any federal or state laws (including, but not
limited to, federal antifraud and abuse or similar laws pertaining to the
Medicare, Medicaid or any other federal or state health or insurance
program, and federal or state laws pertaining to insurance fraud)
prohibiting fraudulent or abusive practices connected in any way with the
provision of healthcare services or the billing for such services provided
to a beneficiary of any federal or state health or insurance program,
except such violations which in the aggregate would not have a Material
Adverse Effect.
(r) Neither the Company nor any of its subsidiaries have failed to
file with the applicable regulatory authorities any statement, report,
information or form required by any applicable law, regulation or order
except where the failure to so file would not have a Material Adverse
Effect; all such filings or submissions were in compliance with applicable
laws when filed and no deficiencies have been asserted by any regulatory
commission, agency or authority with respect to such filings or
submissions. Neither the Company nor any of its subsidiaries have failed to
maintain in full force and effect any license or permit necessary for the
conduct of its business, or received any notification that any revocation
or limitation thereof is threatened or pending, and, except as disclosed in
the Effective Prospectus and the Final Prospectus, to the knowledge of the
Company, there is not any pending change under any law, regulation, license
or permit which could have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries have received any notice of violation of or
been threatened with a charge of violating and, to the Company's knowledge,
is not under investigation with respect to a possible violation of any
provision of any law, regulation or order.
(s) No labor dispute exists with the Company's employees or with
employees of its subsidiaries which would have a Material Adverse Effect.
The Company is not aware of any existing or imminent labor disturbance by
its employees or by any employees of its subsidiaries which would have a
Material Adverse Effect.
(t) The Company and each of its subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are
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prudent and customary in the businesses in which it is engaged; and neither
the Company nor any of its subsidiaries has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a reasonably comparable cost.
(u) Neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and each of
its subsidiaries has received all material permits, licenses or other
approvals required of it under applicable federal, state and foreign
occupational safety and health and environmental laws and regulations to
conduct its respective businesses, and the Company and each of its
subsidiaries is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not result in a Material Adverse
Effect.
(v) Except where such failures to comply or violations would not in
the aggregate have a material adverse effect on the Company or any of its
subsidiaries, the Company and each of its subsidiaries has complied with
the Immigration Reform and Control Act of 1986 and all regulations
promulgated thereunder ("IRCA") with respect to (i) the completion and
maintenance of Forms 1-9, Employment Eligibility Verification Forms, for
all of its current employees and reverification of the employment status of
any and all employees whose employment authorization documents indicated a
limited period of employment authorization; (ii) with respect to all former
employees who left the Company's or any of its subsidiaries' employment
within three years prior to the date hereof, the Company and each of its
subsidiaries has complied with IRCA with respect to the maintenance of
Forms 1-9 for at least three years or for one year beyond the date of
termination, whichever is later; (iii) the Company and each of its
subsidiaries has had no immigration violations and has employed only
individuals authorized to work in the United States and has never been the
subject of any inspection or investigation relating to its compliance with
or violation of IRCA; and (iv) it has not been warned, fined or otherwise
penalized by reason or any failure to comply with IRCA, and no such
proceeding is pending or threatened.
(w) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it or any of its subsidiaries to
become, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940.
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(x) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company and of the directors officers, employees or agents
of the Company or its subsidiaries have taken and will not take, directly
or indirectly, any action designed to cause or result in, or which has
constituted or which might be expected to constitute, stabilization or
manipulation of the price of the Common Stock.
(y) The Shares have been approved for designation on the National
Association of Securities Dealers Automated Quotation National Market
System upon notice of issuance.
Any certificate signed by any officer of the Company and delivered to you
or to counsel for the Underwriters in connection with the Closing Date (as
hereinafter defined) shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
2. Representations and Warranties of the Selling Shareholders. Each of the
Selling Shareholders, severally and not jointly, represents and warrants to each
Underwriter and agrees as follows that:
(a) Such Selling Shareholder at the First Closing Date or at the
Option Closing Date (as such closing dates are defined herein), as the case
may be, will have valid and marketable title to the Shares set forth in
Schedule I to be sold by such Selling Shareholder, free and clear of any
liens, encumbrances, equities and claims (other than as imposed by the
Securities Act or this Agreement), and full right, power and authority to
effect the sale and delivery of such Shares; and upon the delivery of and
payment for the Shares to be sold by such Selling Shareholder pursuant to
this Agreement, valid and marketable title thereto, free and clear of any
liens, encumbrances, equities and claims, will be transferred to the
Underwriters.
(b) Such Selling Shareholder has duly executed and delivered the
Custodian Agreement and Power of Attorney in the form previously delivered
to the Representatives, appointing Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxx and X.
Xxxxxx Xxxxxxxx, and any one of them, as each Selling Shareholder's
attorneys-in-fact (the "Attorneys-in-Fact") and appointing Piper & Marbury
L.L.P. as custodian (the "Custodian"). The Attorney-in-Fact is authorized
to execute, deliver and perform this Agreement on behalf of such Selling
Shareholder, to deliver the Shares to be sold by such Selling Shareholder
hereunder, to accept payment therefor and otherwise to act on behalf of
such Selling Shareholder in connection with this Agreement. Certificates,
in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, representing the Shares to
be sold by such Selling Shareholder hereunder have been deposited with the
Custodian pursuant to the Custodian Agreement for the purpose of delivery
pursuant to this Agreement. Such Selling Shareholder agrees that the shares
of Common Stock represented by the certificates on deposit with the
Custodian are subject to the interest of the
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Underwriters hereunder, that the arrangements made for such custody and the
appointment of the Attorney-in-Fact are to that extent irrevocable, and
that the obligations of such Selling Shareholder hereunder shall not be
terminated except as provided in this Agreement and the Custodian
Agreement. If such Selling Shareholder should die or become
incapacitated or if any other event should occur, before the delivery of
the Shares of such Selling Shareholder hereunder, the certificates for
such Shares deposited with the Custodian shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as
if such death, incapacity or other event had not occurred, regardless
whether the Custodian or the Attorney-in-Fact shall have received notice
thereof.
(c) Such Selling Shareholder, acting through his duly authorized
Attorney-in-Fact, has duly executed and delivered this Agreement and the
Custody Agreement and Power of Attorney; this Agreement constitutes a
legal, valid and binding obligation of such Selling Shareholder, all
authorizations and consents necessary for the execution and delivery of
this Agreement and the Custodian Agreement and Power of Attorney on
behalf of such Selling Shareholder and for the sale and delivery of the
Shares to be sold by such Selling Shareholder hereunder have been given,
except as may be required by the Securities Act or state securities laws;
and such Selling Shareholder has the legal capacity and full right, power
and authority to execute this Agreement and the Custodian Agreement and
Power of Attorney.
(d) The performance of this Agreement and the Custodian Agreement and
Power of Attorney and the consummation of the transactions contemplated
hereby and thereby by such Selling Shareholder will not result in a breach
or violation of, or conflict with, any of the terms of provisions of, or
constitute a default by such Selling Shareholder under, any indenture,
mortgage, deed of trust, trust (constructive or other), loan agreement,
lease, franchise, license or other agreement or instrument to which such
Selling Shareholder is bound.
(e) For a period of 90 days from the date of the Final Prospectus,
such Selling Shareholder will not, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of any shares
of Common Stock, other than to the Underwriters pursuant to this Agreement,
without the prior written consent of X.X. Xxxxxxxx & Co., L.L.C.
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(f) Such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 of
this Agreement are not true and correct; is familiar with the Registration
Statement, the receipt of a copy of which is hereby acknowledged, and has
no knowlege of any material fact, condition or information not disclosed
in the Effective Prospectus or Final Prospectus which has or may
adversely affect the business of the Company or any of its subsidiaries;
and the sale of the Shares by such Selling Shareholder is not prompted by
any information concerning the Company not set forth in the Effective
Prospectus or Final Prospectus.
(h) At the time the Registration Statement becomes effective (i) such
parts of the Registration Statement and any amendments and supplements
thereto as specifically refer to such Selling Shareholder will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (ii) such parts of the Effective Prospectus and Final
Prospectus as specifically refer to such Selling Shareholder will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory body, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement by such Selling Shareholder, and the
consummation by him of the transactions herein contemplated (other than as
required by the Securities Act, state securities laws and the NASD).
(j) Any certificates signed by or on behalf of such Selling
Shareholder as such and delivered to the Representatives or to counsel for
the Representatives shall be deemed a representation and warranty by such
Selling Shareholder to each Underwriter as to the matters covered thereby.
(k) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder agrees to deliver to you prior to or
at the First Closing Date (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof).
(l) Such Selling Shareholder will not take, directly or indirectly,
any action designed to cause or result in, or which might constitute or be
expected to constitute, stabilization or manipulation of the price of the
Common Stock.
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3. Representations and Warranties of the Underwriters. The Representatives,
on behalf of the several Underwriters, represent and warrant to the Company that
the information set forth (a) on the cover page of the Effective Prospectus with
respect to the public offering price and underwriting discount and (b) under
"Underwriting" in the Effective Prospectus was furnished to the Company by and
on behalf of the Underwriters for use in connection with the preparation of the
Registration Statement and such information is accurate in all material
respects. The Representatives further represent and warrant to the Company that
such Representatives have the authority to act on behalf of the several
Underwriters in connection with this Agreement and the offering contemplated
hereby.
4. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell 1,500,000 shares of Common Stock and
the Selling Shareholders agree to sell the number of shares of Common Stock
as set forth opposite each such Selling Shareholder's name on Schedule I
hereto to each of the Underwriters, and each of the Underwriters, severally
and not jointly, agrees to purchase at a purchase price of $______ per
share, the number of Firm Shares set forth opposite such Underwriter's name
in Schedule II hereto. The Underwriters agree to offer the Firm Shares to
the public as set forth in the Final Prospectus.
(b) The Company hereby grants to the Underwriters an option to
purchase, solely for the purpose of covering over-allotments in the sale of
Firm Shares, all or any portion of the Option Shares at the purchase price
per share set forth above. The option granted hereby may be exercised as to
all or any part of the Option Shares at any time (but only once) within 30
days after the date the Registration Statement becomes effective. The
Underwriters shall not be under any obligation to purchase any Option
Shares prior to the exercise of such option. The option granted hereby may
be exercised by the several Underwriters by the Representatives giving
written notice to the Company setting forth the number of Option Shares to
be purchased and the date and time for delivery of and payment for such
Option Shares and stating that the Option Shares referred to therein are to
be used for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given prior to
the First Closing Date, the date set forth therein for such delivery and
payment shall not be earlier than two full business days thereafter or the
First Closing Date, whichever occurs later. If such notice is given on or
after the First Closing Date, the date set forth therein for such delivery
and payment shall not be earlier than three full business days thereafter.
In either event, the date so set forth shall not be more than 15 full
business days after the date of such notice. The date and time set forth in
such notice is herein called the "Option Closing Date." Upon exercise of
the option, the Company shall become obligated to sell to the Underwriters,
and, subject to the terms and conditions herein set forth, the Underwriters
shall become obligated to purchase, for the account of each Underwriter,
from the
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Company the number of Option Shares specified in such notice. Option Shares
shall be purchased for the accounts of the several Underwriters in
proportion to the number of Firm Shares set forth opposite such
Underwriter's name in Schedule II hereto, except that the respective
purchase obligations of each Underwriter shall be adjusted so that no
Underwriter shall be obligated to purchase fractional Option Shares.
(c) Certificates in definitive form for the Firm Shares which each
Underwriter has agreed to purchase hereunder shall be delivered by or on
behalf of the Company and the Selling Shareholders to the Underwriters for
the account of such Underwriter against payment by such Underwriter or on
its behalf of the purchase price therefor by certified or official bank
check or checks in New York Clearing House (next day) funds to the order of
the Company and the Selling Shareholders, at the offices of X.X. Xxxxxxxx &
Co., L.L.C., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such
other place as may be agreed upon by the Underwriters, the Company and the
Selling Shareholders, at 10:00 A.M., Nashville time, on the third full
business day after this Agreement becomes effective, or, at the election of
the Representatives, on the fourth full business day after this Agreement
becomes effective, if it becomes effective after 4:30 p.m. Eastern time, or
at such other time not later than the seventh full business day thereafter
as the Underwriters and the Company may determine, such time of delivery
against payment being herein referred to as the "First Closing Date." The
First Closing Date and the Option Closing Date are herein individually
referred to as the "Closing Date" and collectively referred to as the
"Closing Dates." Certificates in definitive form for the Option Shares
which each Underwriter shall have agreed to purchase hereunder shall be
similarly delivered on the Option Closing Date. The certificates in
definitive form for the Shares so to be delivered will be in good delivery
form and in such denominations and registered in such names as the
Underwriters request not less than 48 hours prior to the First Closing Date
or the Option Closing Date, as the case may be. Such certificates will be
made available for checking and packaging at a location in New York, New
York as may be designated by you, at least 24 hours prior to the First
Closing Date or the Option Closing Date, as the case may be.
It is understood that you may (but shall not be obligated to) make payment
on behalf of any Underwriter or Underwriters for the Shares to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
5. Offering by the Underwriters. After the Registration Statement becomes
effective, the several Underwriters propose to offer for sale to the public the
Firm Shares and any Option Shares which may be sold at the price and upon the
terms set forth in the Final Prospectus.
6. Covenants of the Company and the Selling Shareholders.
(a) The Company covenants and agrees with each of the Underwriters
that:
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(i) The Company shall use its best efforts to comply with the
provisions of and make all requisite filings with the Commission
pursuant to Rules 424, 430A and 434 of the Rules and Regulations and
to notify you promptly (in writing, if requested) of all such filings.
The Company shall notify you promptly of any request by the Commission
for any amendment of or supplement to the Registration Statement, the
Effective Prospectus or the Final Prospectus or for additional
information; the Company shall prepare and file with the Commission,
promptly upon your reasonable request, any amendments of or
supplements to the Registration Statement, the Effective Prospectus or
the Final Prospectus which, in your opinion, may be necessary or
advisable in connection with the distribution of the Shares; and the
Company shall not file any amendment of or supplement to the
Registration Statement, the Effective Prospectus or the Final
Prospectus which is not approved by you after reasonable notice
thereof, such approval not to be unreasonably withheld or delayed. The
Company shall advise you promptly of the issuance by the Commission or
any State or other regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement, suspending
or preventing the use of any Preliminary Prospectus, the Effective
Prospectus or the Final Prospectus or suspending the qualification of
the Shares for offering or sale in any jurisdiction, or of the
institution of any proceedings for any such purpose; and the Company
shall use its best efforts to prevent the issuance of any stop order
or other such order and, should a stop order or other such order be
issued, to obtain as soon as possible the lifting thereof.
(ii) The Company will take or cause to be taken all necessary
action and furnish to whomever you direct such information as may be
reasonably required in qualifying the Shares for offering and sale
under the securities or Blue Sky laws of such jurisdictions as the
Underwriters may designate provided, however, that the Company shall
not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or take any action that
would subject the Company to general service of process in any
jurisdiction where it would not be so subject as of the date of this
Agreement. In each jurisdiction in which the Shares have been so
qualified, the Company will make and file such statements and reports
as are required by the laws of such jurisdiction to continue such
qualifications in effect for as long as may be reasonably necessary to
complete the distribution in such jurisdictions.
(iii) Within the time during which a Final Prospectus relating to
the Shares is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as
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then amended or supplemented would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing,
not misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Final Prospectus to comply
with the Securities Act, the Company shall promptly notify you and
shall amend the Registration Statement or supplement the Final
Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(iv) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies of the
Registration Statement (three of which shall be signed and shall be
accompanied by all exhibits, each Preliminary Prospectus, the
Effective Prospectus and the Final Prospectus, and all amendments and
supplements thereto, including any prospectus or supplement prepared
after the effective date of the Registration Statement, in each case
as soon as available and in such quantities as the Underwriters may
reasonably request.
(v) The Company will (A) deliver to you at such office or offices
as you may designate as many copies of the Preliminary Prospectus and
Final Prospectus as you may reasonably request, and (B) for such
period as prospectuses are required to be delivered, send to the
Underwriters as many additional copies of the Final Prospectus and any
supplement thereto as you may reasonably request.
(vi) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the
Securities Act as promptly as practicable and in any event no later
than 90 days after the end of its fiscal quarter in which the first
anniversary of the effective date of the Registration Statement
occurs, an earnings statement satisfying the provisions of Section
11(a) of the Securities Act covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement.
(vii) The Company will apply the net proceeds from the sale of
the Shares as set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(viii) During a period of five years from the effective date of
the Registration Statement or such longer period as the Underwriters
may reasonably request, the Company will furnish to the
Representatives copies of all reports and other communications
(financial or other) furnished by the Company to its stockholders and,
as soon as available, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission or any
national securities exchange on which any class of securities of the
Company may be listed.
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(ix) The Company will, from time to time, after the effective
date of the Registration Statement file with the Commission such
reports as are required by the Securities Act and the Exchange Act,
and with state securities commissions in states where the Shares have
been sold by you (as you shall have advised the Company in writing)
such reports as are required to be filed by the securities acts and
the regulations of those states.
(x) Except pursuant to this Agreement, in connection with an
acquisition by the Company made in the ordinary course of business in
which restricted securities are issued as consideration by the Company
or with the written consent of X.X. Xxxxxxxx & Co., L.L.C., for a
period of 90 days from the date of the Final Prospectus, the Company
agrees that it will not, and the Company has provided agreements
executed by each of the existing stockholders of the Company providing
that for a period of 90 days from the date of the Final Prospectus
such person or entity will not, offer for sale, sell (other than
pursuant to the exercise of options granted pursuant to existing
employee benefit plans and agreements, other existing compensation
agreements and existing stock options), grant any options (other than
pursuant to existing employee benefit plans and agreements, other
compensation agreements and existing stock options), rights or
warrants with respect to any shares of Common Stock, securities
convertible into common stock or any other capital stock of the
Company, or otherwise dispose of, directly or indirectly, any shares
of Common Stock or such other securities or capital stock.
(xi) Neither the Company nor any of its subsidiaries nor any of
their directors, officers or affiliates will take, directly or
indirectly, any action designed to cause or result in, or which might
constitute or be expected to constitute, stabilization or manipulation
of the price of the Common Stock.
(b) Each of the Selling Shareholders covenants and agrees with the
Underwriters that:
(i) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or which might
constitute or be expected to constitute, stabilization or manipulation
of the price of the Common Stock.
7. Expenses. The Company agrees with the several Underwriters that (a)
whether or not the transactions contemplated in this Agreement are consummated
or this Agreement becomes effective or is terminated, the Company will pay all
fees and expenses incident to the performance of its obligations hereunder,
including, but not limited to, (i) the Commission's registration fee (which
shall be shared pro rata with the Selling Shareholders), (ii) the expenses of
printing and distributing the Registration Statement (including the financial
statements therein and all amendments and exhibits thereto), each Preliminary
Prospectus, the Effective Prospectus, the Final Prospectus, any amendments or
supplements thereto, and this Agreement and other underwriting documents,
including Underwriter's Questionnaires, Underwriter's Powers of
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Attorney, Blue Sky Memoranda and Agreements Among Underwriters, (iii) fees and
expenses of accountants and counsel for the Company, (iv) expenses of
qualification of the Shares under state Blue Sky and securities laws, including
the fees and disbursements of counsel to the several Underwriters in connection
therewith, (v) filing fees paid or incurred by the several Underwriters in
connection with filings with the NASD, (vi) any applicable listing fees, (vii)
all travel, lodging and reasonable living expenses incurred by the Company in
connection with marketing, dealer and other meetings attended by the Company and
the Underwriters in marketing the Shares, (viii) the costs and charges of the
Company's transfer agent and registrar and the cost of preparing the
certificates for the Shares, and (ix) all other costs and expenses incident to
the performance of its obligations hereunder not otherwise provided for in this
Section; (b) all out-of-pocket expenses, including counsel fees, disbursements
and expenses, incurred by the several Underwriters in connection with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this Agreement, will be borne and paid
by the Company if the sale of the Shares provided for herein is not consummated
by reason of the termination by the Company pursuant to Section 15(a)(i) of this
Agreement, or if terminated by the Underwriters pursuant to Section 15(b)(ii) of
this Agreement, or because any other condition to the Underwriters' obligation
hereunder is not fulfilled. The Company shall not in any event be liable to any
of the Underwriters for loss of anticipated profits from the transactions
contemplated by this Agreement.
8. Conditions of the Underwriters' Obligations. The respective obligations
of the several Underwriters to purchase and pay for the Firm Shares shall be
subject to the accuracy of the representations and warranties of the Company and
the Selling Shareholders herein as of the date hereof and as of the Closing Date
as if made on and as of the Closing Date, to the accuracy, in all material
respects, of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Shareholders of all of their covenants and agreements hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 5:30 P.M., Washington,
D.C. time, on the day following the date of this Agreement, or such later
time and date as shall have been consented to by the Underwriters and all
filings required by Rule 424, Rule 430A and Rule 434 of the Rules and
Regulations shall have been made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened or,
to the knowledge of the Company or the Underwriters, shall be contemplated
by the Commission; any request of the Commission for additional information
(to be included in the Registration Statement or the Final Prospectus or
otherwise) shall have been complied with to your satisfaction; and the
NASD, upon review of the terms of the public offering of the Shares, shall
not have objected to such offering, such terms or the Underwriters'
participation in the same.
(b) No Underwriter shall have advised the Company that the
Registration Statement, Preliminary Prospectus, the Effective Prospectus or
Final Prospectus, or any
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amendment or any supplement thereto, contains an untrue statement of fact
which, in your reasonable judgment, is material, or omits to state a fact
which, in your reasonable judgment, is material and is required to be
stated therein or necessary to make the statements therein not misleading,
and the Company shall not have cured such untrue statement of fact or
stated a statement of fact required to be stated therein.
(c) The Underwriters shall have received an opinion, dated the Closing
Date, from Xxxx, Weitkamp, Schell, Xxx & Vice, Kentucky counsel for the
Company to the effect that:
(i) The Company has been duly organized and is validly existing
as a corporation under the laws of the Commonwealth of Kentucky with
corporate power and authority to own its properties and conduct its
business as now conducted, and is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions where
the failure to so qualify could have a material adverse effect upon
the Company and its subsidiaries taken as a whole.
(ii) After giving effect to the transactions described in
footnote one to the Selected Supplemental Consolidated Financial Data
in the Final Prospectus, as of the dates specified therein, the
Company had authorized and issued capital stock as set forth under the
caption "Capitalization" in the Final Prospectus. All of the shares of
Common Stock have been duly authorized and are, or upon issuance
thereof and payment therefor as herein provided will be validly
issued, fully paid and non-assessable; such shares will not have been
issued in violation of or subject to any preemptive rights provided
for by law or by the Company's Amended and Restated Articles of
Incorporation.
(iii) Each of the Company's subsidiaries is validly existing and
in good standing under the laws of the state of its incorporation,
with power and authority to own its properties and conduct its
business as now conducted, and is duly qualified or authorized to do
business and is in good standing in all other jurisdictions where the
failure to so qualify could have a material adverse effect upon the
business of the Company and its subsidiaries taken as a whole. The
outstanding shares of the capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and owned of record and, to such counsel's
knowledge, beneficially by the Company as set forth on Exhibit 1(e)
hereto, free and clear of all liens, encumbrances, equities and
claims. To the knowledge of such counsel, no options or warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into any shares of capital
stock or of ownership interests in any of the Company's subsidiaries
are outstanding.
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(iv) No consent, approval, authorization or order of any federal
court or Kentucky governmental agency or body is required for the
performance of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, except such as
have been obtained under the Securities Act and such as may be
required by the NASD and under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
several Underwriters. The performance of this Agreement by the Company
and the consummation by the Company of the transactions contemplated
hereby will not result in a breach or violation by the Company of any
of the terms or provisions of, or constitute a default by the Company
under, any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument known to such counsel to which the
Company or any subsidiary is a party or to which the Company or any
subsidiary or their respective properties is subject and which is
described in, or filed as an exhibit to, the Registration Statement,
the Amended and Restated Articles of Incorporation or bylaws of the
Company, any subsidiary, any statute, or any judgment, decree, order,
rule or regulation known to such counsel of any court or governmental
agency or body applicable to the Company or any of its subsidiaries or
their properties.
(v) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to
be sold by it to the several Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and legally binding obligation of
the Company enforceable against the Company in accordance with its
terms, (y) except as enforcement of rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws or principles of public policy, (z) subject to the qualification
that the enforceability of the Company's obligations hereunder may be
limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws relating to or affecting creditors' rights generally, by
general principles of equity regardless of whether considered in a
proceeding in equity or at law and by general principles of equity
(including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief)
regardless of whether considered in a proceeding at law or in equity.
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(d) The Underwriters shall have received an opinion, dated the Closing
Date, from Piper & Marbury L.L.P., counsel for the Company and the Selling
Shareholders to the effect that:
(i) The Shares to be sold by the Company, upon issuance thereof
and payment therefor as herein provided will be validly issued, fully
paid and non-assessable; such Shares will not have been issued in
violation of or subject to any preemptive rights provided for by law
or by the Company's Amended and Restated Articles of Incorporation.
All offers and sales of the Company's Common Stock during the past
three fiscal years were at all relevant times duly registered
or exempt from the registration requirements of the Securities Act
and were duly registered or the subject of an exemption from the
registration requirements of applicable state securities or Blue Sky
laws.
(ii) No consent, approval, authorization or order of any federal
court or Kentucky governmental agency or body is required for the
performance of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, except such as
have been obtained under the Securities Act and such as may be
required by the NASD and under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
several Underwriters. The performance of this Agreement by the Company
and the consummation by the Company of the transactions contemplated
hereby will not result in a breach or violation by the Company of any
of the terms or provisions of, or constitute a default by the Company
under, any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument known to such counsel to which the
Company or any subsidiary is a party or to which the Company or any
subsidiary or their respective properties is subject and which is
described in, or filed as an exhibit to, the Registration Statement,
the Amended and Restated Articles of Incorporation or bylaws of the
Company, any subsidiary, any statute, or any judgment, decree, order,
rule or regulation known to such counsel of any court or governmental
agency or body applicable to the Company or any of its subsidiaries or
their properties.
(iii) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to
be sold by it to the several Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and legally binding obligation of
the Company enforceable against the Company in accordance with its
terms, (y) except as enforcement of rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws or principles of public policy, (z) subject to the qualification
that the enforceability of the Company's obligations hereunder may be
limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance, fraudulent
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transfer or other similar laws relating to or affecting creditors'
rights generally, by general principles of equity regardless of
whether considered in a proceeding in equity or at law and by general
principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief)
regardless of whether considered in a proceeding at law or in equity.
(iv) Except as described in the Effective Prospectus and the
Final Prospectus, there is not pending, or to the knowledge of such
counsel threatened, any action, suit, proceeding, inquiry or
investigation, to which the Company or any of its subsidiaries is a
party, or to which the property of the Company or any of its
subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the
Company or any of its subsidiaries, would have a Material Adverse
Effect.
(v) To the knowledge of such counsel, no default exists, and no
event has occurred which with notice or after the lapse of time to
cure or both, would constitute a default, in the due performance and
observance by the Company of any term, covenant or condition of any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or to which they or their
properties is subject and which is described as an exhibit to, the
Registration Statement, or of the Articles of Incorporation or bylaws
of the Company or any of its subsidiaries where such default would
have a Material Adverse Effect.
(vi) The Registration Statement and all post effective amendments
thereto filed prior to the Closing Date have become effective under
the Securities Act, and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted
or are threatened, pending or contemplated by the Commission and all
filings required by Rule 424, Rule 430A and Rule 434 of the Rules and
Regulations have been made; the Registration Statement, the Effective
Prospectus and Final Prospectus, and any amendments or supplements
thereto, and the documents incorporated by reference therein, as of
their respective effective or issue dates, complied as to form in all
material respects with the requirements of the Securities Act and the
Rules and Regulations; the descriptions in the Registration Statement,
the Effective Prospectus and the Final Prospectus of statutes,
regulations, government reimbursement programs, legal and governmental
proceedings, and contracts and other documents are accurate in all
material respects and present fairly the information required to be
shown; and such counsel do not know of any pending or threatened legal
or governmental proceedings, statutes or regulations required to be
described in the Final Prospectus which are not described as required
nor of any contracts or documents of a character required
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to be described in the Registration Statement or the Effective
Prospectus or the Final Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required.
(vii) To the knowledge of such counsel, neither the Company nor
any of its subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any of its subsidiaries or any decree of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries which violation would have a Material Adverse
Effect.
(viii) The statements under "Business--Contracts," "--Government
Regulation and Reimbursement," "--Legal Proceedings" and "Description
of Capital Stock" included or incorporated by reference in the Final
Prospectus, insofar as they are descriptions or summaries of
contracts, agreements or other legal documents, or refer to statements
of law or legal conclusions (except for statements of law or legal
conclusions involving laws of jurisdictions other than the State of
Maryland or the federal law of the United States of America, as to
which no opinion need be expressed), are accurate in all material
respects and present fairly the information required by the Securities
Act to be shown.
(ix) This Agreement and the Custodian Agreement and Power of
Attorney have been duly executed and delivered by or on behalf of each
of the Selling Shareholders and constitute valid and binding
agreements of such Selling Shareholders in accordance with their
terms, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect affecting the enforcement of
creditors' rights, and except as rights to indemnify may be limited by
federal or state securities laws or the public policy underlying such
laws.
(x) The sale of the Shares to be sold by each Selling Shareholder
hereunder and the compliance by such Selling Shareholder with all of
the provisions of this Agreement, the Custodian Agreement and the
Power of Attorney and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default under
any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which such
Selling Shareholder is a party or by which such Selling Shareholder is
bound or to which any of the property or assets of such Selling
Shareholder is subject, or any statute, order, rule or regulation of
any court or governmental agency or body known to such counsel to be
applicable to such Selling Shareholder or the property of such Selling
Shareholder.
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(xi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Shares to be sold by each Selling Shareholder hereunder, except which
have been duly obtained and in full force and effect, such as have
been obtained under the Securities Act and such as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters, as to
which such counsel need express no opinion.
(xii) Each of the Selling Shareholders has the full right, power
and authority to sell, transfer and deliver such Shares pursuant to
this Agreement. By delivery of a certificate or certificates therefor,
the Selling Shareholders will transfer to the Underwriters valid and
marketable title to such shares, free and clear of any pledge, lien,
security interest, charge, claim, equity, or encumbrance of any kind.
(xiii) The Company and each of its subsidiaries has corporate
power and all such Permits as are required under such federal and
state health care laws as specifically regulate the operation of the
facilities, owned, leased or managed by the Company or any subsidiary,
to own their respective properties and to conduct their respective
businesses as now being conducted as described in the Effective
Prospectus and the Final Prospectus and, with respect to those
facilities owned, leased or managed by the Company or any subsidiary
that participate in Medicare, Medicaid or both, to receive
reimbursement thereunder and, to our knowledge, have all other Permits
as are necessary under applicable law to own their respective
properties and to conduct their respective businesses as now being
conducted as described in the Effective Prospectus and the Final
Prospectus, except where the failure to have such Permits would not
have a Material Adverse Effect.
(xiv) To the knowledge of such counsel, after reasonable inquiry,
neither the Company nor any of its subsidiaries is currently engaging
in any activity, whether alone or in concert with others, which
constitutes a violation of any federal or state laws (including, but
not limited to, federal antifraud and abuse or similar laws pertaining
to the Medicare, Medicaid or any other federal or state health or
insurance program, and federal or state laws pertaining to insurance
fraud) prohibiting fraudulent or abusive practices connected in any
way with the provision of healthcare services or the billing for such
services provided to a beneficiary of any federal or state health or
insurance program, except such violations which in the aggregate would
not have a Material Adverse Effect.
(e) The Underwriters shall have received an opinion, dated the Closing
Date, from Xxxxx X. Xxxxxx, General Counsel to the Company and counsel to
the Selling Shareholders to the effect that:
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(i) The Company and each of its subsidiaries has corporate power
and all such Permits as are required under such federal and state
health care laws as specifically regulate the operation of the
facilities, owned, leased or managed by the Company or any subsidiary,
to own their respective properties and to conduct their respective
businesses as now being conducted as described in the Effective
Prospectus and the Final Prospectus and, with respect to those
facilities owned, leased or managed by the Company or any subsidiary
that participate in Medicare, Medicaid or both, to receive
reimbursement thereunder and, to our knowledge, have all other Permits
as are necessary under applicable law to own their respective
properties and to conduct their respective businesses as now being
conducted as described in the Effective Prospectus and the Final
Prospectus, except where the failure to have such Permits would not
have a Material Adverse Effect.
(ii) To the knowledge of such counsel, after reasonable inquiry,
neither the Company nor any of its subsidiaries is currently engaging
in any activity, whether alone or in concert with others, which
constitutes a violation of any federal or state laws (including, but
not limited to, federal antifraud and abuse or similar laws pertaining
to the Medicare, Medicaid or any other federal or state health or
insurance program, and federal or state laws pertaining to insurance
fraud) prohibiting fraudulent or abusive practices connected in any
way with the provision of healthcare services or the billing for such
services provided to a beneficiary of any federal or state health or
insurance program, except such violations which in the aggregate would
not have a Material Adverse Effect.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of officers of the Company and its subsidiaries, of the Selling
Shareholders and of government officials, and Piper & Marbury L.L.P., in
rendering its opinion, may rely on opinions of the Company's General Counsel and
Xxxx, Weitkamp, Schell, Xxx & Vice, each as counsel to the Company and the
Selling Shareholders. In addition to the matters set forth above, such opinions
shall also include a statement to the effect that the limitations inherent in
the independent verification of factual matters and the character of
determinations involved in the registration process are such that such counsel
has not verified, and is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Effective Prospectus or the Final Prospectus. Such
counsel participated in the preparation of the Registration Statement and the
Effective Prospectus and the Final Prospectus, however, during the course of
which, among other things, such counsel has examined various documents and other
papers and participated in conferences with representatives of the Company, with
the representatives of the Company's independent public accountants, and with
your representatives and your counsel, at which conferences the contents of the
Registration Statement, the Effective Prospectus and the Final Prospectus and
related matters were discussed. On the basis of the information that was
developed in the course of such counsel's above-described participation, such
counsel has no reason to believe that the Registration Statement at
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the time it became effective 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 Effective Prospectus
or the Final Prospectus on the date of filing thereof or at the Time of Delivery
included 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, in light of the circumstances in which they were made, not misleading
(except that such counsel expresses no opinion or belief as to financial and
other financial or statistical data and related schedules which are or should be
included in the Registration Statement or the Effective Prospectus or the Final
Prospectus).
You acknowledge that as used in the opinions rendered pursuant to
paragraphs (c), (d) and (e), "known to such counsel," "to such counsel's
knowledge" and any similar phrase shall refer solely to the current, actual
knowledge, acquired during the course of such counsel's representation of the
Company and the Selling Shareholders, of those attorneys of the firm who have
rendered legal services in connection with such representation (excluding any
lawyers whose involvement has been limited to reviewing these opinions as part
of the firm's opinion review procedure). In addition to the matters set forth
above, such opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel which leads them to believe that the
Registration Statement, the Effective Prospectus and the Final Prospectus or any
amendment or supplement thereto, or any document incorporated by reference
therein, contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements, schedules and other financial information included
therein).
(f) The Underwriters shall have received an opinion or opinions, dated
the Closing Date, of Bass, Xxxxx & Xxxx PLC, counsel for the several
Underwriters, with respect to the Registration Statement and the Final
Prospectus, and such other related matters as the Underwriters may require,
and the Company shall have furnished to such counsel such documents as they
may reasonably request for the purpose of enabling them to pass upon such
matters.
(g) The Underwriters shall have received from KPMG Peat Marwick LLP, a
letter dated the date hereof and, at the Closing Date, a second letter
dated the Closing Date, in form and substance satisfactory to the
Underwriters, stating that they are independent public accountants with
respect to the Company within the meaning of the Securities Act and the
applicable Rules and Regulations, and to the effect that:
(i) In their opinion, the consolidated financial statements and
schedules and the supplemental financial statements and schedules
examined by them and included or incorporated by reference in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
published Rules and Regulations and are presented in accordance with
generally accepted accounting principles; and they
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have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of any interim
consolidated financial statements, selected financial data and/or
condensed financial statements derived from audited financial
statements of the Company;
(ii) The selected supplemental consolidated financial information
included in the Preliminary Prospectus and the Final Prospectus under
the captions "PROSPECTUS SUMMARY" and "SELECTED SUPPLEMENTAL
CONSOLIDATED FINANCIAL DATA" for the five years ended December 31,
1996, agrees with the corresponding amounts in the audited or
unaudited supplemental consolidated financial statements included or
incorporated by reference in the Final Prospectus or previously
reported by them;
(iii) On the basis of a reading of the latest available interim
consolidated financial statements (unaudited) of the Company and its
subsidiaries, a reading of the minute books of the Company and its
subsidiaries, inquiries of officials of the Company responsible for
financial and accounting matters and other specified procedures, all
of which have been agreed to by the Underwriters, nothing came to
their attention that caused them to believe that:
(A) at a specified date not more than five days prior to the
date of delivery of such respective letter, there was any decline
in total assets, decline in shareholders' equity or increase in
long-term liabilities of the Company and its subsidiaries, in
each case as compared with amounts shown in the latest balance
sheets included in the Final Prospectus, except in each case for
changes, decreases or increases which the Final Prospectus
discloses have occurred or may occur or which are described in
such letters; and
(B) for the period from the closing date of the latest
statements of operations included in the Final Prospectus to a
specified date not more than five days prior to the date of
delivery of such respective letter, there were any decreases in
total net revenues or net income of the Company, in each case as
compared with the corresponding period of the preceding year,
except in each case for decreases which the Final Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information specified by you which are derived from the
general accounting records of the Company, which appear in the Final
Prospectus and have compared and agreed such amounts, percentages and
financial information with the
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accounting records of the Company or to analyses and schedules
prepared by the Company from its detailed accounting records.
In the event that the letters to be delivered referred to above set forth
any such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that the Underwriters shall have determined,
after discussions with officers of the Company responsible for financial and
accounting matters and with KPMG Peat Marwick, that such changes, decreases or
increases as are set forth in such letters do not reflect a material adverse
change in the total assets, shareholders' equity or long-term debt of the
Company as compared with the amounts shown in the latest balance sheets of the
Company included in the Final Prospectus, or a material adverse change in total
net revenues or net income, of the Company, in each case as compared with the
corresponding period of the prior year.
(h) There shall have been furnished to you a certificate, dated the
Closing Date and addressed to you, signed by the Chief Executive Officer
and by the Executive Vice President of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been initiated or are pending, or to their knowledge,
threatened under the Securities Act;
(iii) all filings required by Rule 424, Rule 430A and Rule 434 of
the Rules and Regulations have been made;
(iv) the signatories of said certificate have carefully examined
the Registration Statement, the Effective Prospectus and the Final
Prospectus, and any amendments or supplements thereto, and such
documents do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(v) since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement, the Effective Prospectus or
the Final Prospectus which has not been so set forth.
(i) The representations and warranties of each Selling Shareholder in
Section 2 of this Agreement shall be true and correct as of the Closing
Date and such Selling Shareholders shall deliver to the Representatives a
certificate to that effect, dated the
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Closing Date, signed by such Selling Shareholder or his or its duly
appointed attorney-in-fact.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement, the Effective Prospectus and the Final
Prospectus, and except as stated therein, the Company and its subsidiaries
have not sustained material loss or interference with their respective
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any court or governmental action, order or decree, or become a party to or
the subject of any litigation which is material to the Company or its
subsidiaries, nor shall there have been any material adverse change, or any
development involving a prospective material adverse change, in the
business, key personnel, financial position, capitalization, net worth or
results of operations of the Company and its subsidiaries, which loss,
interference, litigation or change, in your reasonable judgment shall
render it unadvisable to proceed with the delivery of the Shares.
All such opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
their counsel. The Company shall furnish to the Underwriters such conformed
copies of such opinions, certificates, letters and documents in such quantities
as the Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for the Option Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Shares, except that all references to
the "Closing Date" shall be deemed to refer to the Option Closing Date, if it
shall be a date other than the Closing Date.
9. Condition of the Company's and the Selling Shareholders' Obligations.
The obligations hereunder of the Company and the Selling Shareholders are
subject to the condition set forth in Section 8(a) hereof.
10. Indemnification and Contribution.
(a) The Company and each of Xxxxx X. and Xxxxxxxx X. Xxxxxxx, Xxxxxx
X. Xxxxx and X. Xxxxxx Xxxxxxxx, jointly and severally, agrees to indemnify
and hold harmless each Underwriter, and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement made by the Company in Section 1 hereof. The Company and each of
the Selling Shareholders, jointly and severally, agrees to indemnify and
hold harmless each Underwriter, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, against any
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losses, claims, damages or liabilities, joint or several, to which such
Underwriter or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement thereto, or
in any Blue Sky application or other written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or
all of the Shares under the securities laws thereof (a "Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus or any amendment
or supplement thereto or any Blue Sky Application a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company and the Selling Shareholders will not be liable
in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus, the Effective Prospectus or Final
Prospectus or such amendment or such supplement or any Blue Sky Application
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein. Each of the
Selling Shareholders, severally and not jointly, agrees to indemnify and
hold harmless each Underwriter, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement made by the Selling Shareholders in Section 2 hereof.
In addition to its other obligations under this Section 10(a), the
Company and the Selling Shareholders agree that, as an interim measure
during the pendency of any claims, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, or any inaccuracy in the representations and
warranties of the Company or the Selling Shareholders herein or failure to
performs its or their obligations hereunder, all as described in this
Section 10(a), it will reimburse each Underwriter on a quarterly basis for
all reasonable legal or other expenses incurred in connection with
investigating or defending any such claims, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's or
the Selling Shareholders' obligation to reimburse each Underwriter for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so
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held to have been improper, each Underwriter shall promptly return it to
the Company or the Selling Shareholders. Notwithstanding the foregoing, the
liability of any Selling Shareholder shall be limited to the total net
proceeds received from the Underwriters by such Selling Shareholder in
connection with the sale of Shares hereunder.
The foregoing indemnity agreement is subject to the condition that,
insofar as it relates to any such untrue statement, alleged untrue
statement, omission or alleged omission made in a Preliminary Prospectus
but eliminated or remedied in the Effective or Final Prospectus, such
indemnity agreement shall not inure to the benefit of any Underwriter from
whom the person asserting any loss, liability, claim or damage purchased
the Shares (or to the benefit of any person who controls such Underwriter)
if a copy of the Effective Prospectus or Final Prospectus was not furnished
to such person at or prior to the time such action is required by the
Securities Act.
(b) Each Underwriter will indemnify and hold harmless each of the
Selling Shareholders and the Company, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Effective Prospectus or Final Prospectus, or any amendment or supplement
thereto, or any Blue Sky Application, or arise out of or are based upon the
omission or the alleged omission to state in the Registration Statement,
any Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
any amendment or supplement thereto or any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for
use therein (it being understood that the only information so provided is
the information included in the last paragraph on the cover page and under
the caption "Underwriting" in any Preliminary Prospectus and in the
Effective Prospectus and the Final Prospectus); and will reimburse any
legal or other expenses reasonably incurred by any Selling Shareholder or
the Company or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, including governmental
proceedings, such indemnified party will, if a claim in respect thereof is
to be made against the indemnifying
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party under this Section 10 notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 10. 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; 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 10 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation except that you shall have the right to employ separate
counsel if, in your reasonable judgment, it is advisable for you and any
other Underwriters to be represented by separate counsel, and in that event
the fees and expenses of separate counsel shall be paid by the Company and
the Selling Shareholders.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 10 is for any reason held to be unavailable
to the Underwriters, the Company or the Selling Shareholders or is
insufficient to hold harmless an indemnified party, then the Company and
the Selling Shareholders shall contribute to the damages paid by the
several Underwriters, and the several Underwriters shall contribute to the
damages paid by the Company and the Selling Shareholders; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative
benefits received by each party from the offering of the Shares (taking
into account the portion of the proceeds of the offering realized by each),
the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, the Selling
Shareholders and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the Underwriters were treated as one entity for such
purpose). No Underwriter or person controlling such Underwriter shall be
obligated to make contribution hereunder which in the aggregate exceeds the
underwriting discount applicable to the Shares purchased by such
Underwriter under this Agreement, less the aggregate amount of any damages
which such Underwriter and its controlling persons have otherwise been
required to pay in respect of the same or any similar claim. The
Underwriters' obligations to contribute hereunder are several in proportion
to their respective underwriting obligations and not joint. For purposes of
this Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as such Underwriter,
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and each director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, shall have
the same rights to contribution as the Company.
(e) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is a
party or is (or would be, if a claim were to be made against such
indemnified party) entitled to indemnity hereunder, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
11. Default of Underwriters. If any Underwriter defaults in its obligation
to purchase Shares hereunder and if the total number of Shares which such
defaulting Underwriter agreed but failed to purchase is ten percent or less of
the total number of Shares to be sold hereunder, the non-defaulting Underwriters
shall be obligated severally to purchase (in the respective proportions which
the number of Shares set forth opposite the name of each non-defaulting
Underwriter in Schedule II hereto bears to the total number of Shares set forth
opposite the names of all the non-defaulting Underwriters), the Shares which
such defaulting Underwriter or Underwriters agreed but failed to purchase. If
any Underwriter so defaults and the total number of Shares with respect to which
such default or defaults occur is more than ten percent of the total number of
Shares to be sold hereunder, and arrangements satisfactory to the other
Underwriters and the Company for the purchase of such Shares by other persons
(who may include the non-defaulting Underwriters) are not made within 36 hours
after such default, this Agreement, insofar as it relates to the sale of the
Shares, will terminate without liability on the part of the non-defaulting
Underwriters or the Company except for (i) the provisions of Section 10 hereof,
and (ii) the expenses to be paid or reimbursed by the Company pursuant to
Section 7. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 11. Nothing herein shall
relieve a defaulting Underwriter from liability for its default.
12. Default by the Selling Shareholders. If the Selling Shareholders shall
fail to sell and deliver the number of Firm Shares or Option Shares, as the case
may be, that the Selling Shareholders are obligated to sell, the Representatives
may, at their option, by notice to the Company, either (a) require the Company
to sell and deliver such number of shares of Common Stock as to which the
Selling Shareholders have defaulted, or (b) elect to purchase the Firm Shares
and the Option Shares that the Company and the non-defaulting Selling
Shareholders have agreed to sell pursuant to this Agreement. In the event of a
default under this Section that does not result in the termination of this
Agreement, either the Representatives or the Company shall have the right to
postpone the First Closing Date or Option Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. No action
taken pursuant to this Section shall relieve the Company or the Selling
Shareholder so defaulting from liability, if any, in respect of such default.
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13. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Selling
Shareholders and the Company, its officers and the several Underwriters set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors or any Underwriter or any controlling person, (ii) any termination of
this Agreement and (iii) delivery of and payment for the Shares.
14. Effective Date. This Agreement shall become effective at whichever of
the following times shall first occur: (i) at 11:30 A.M., Washington, D.C. time,
on the next full business day following the date on which the Registration
Statement becomes effective or (ii) at such time after the Registration
Statement has become effective as the Underwriters shall release the Firm Shares
for sale to the public; provided, however, that the provisions of Sections 7,
10, 13 and 14 hereof shall at all times be effective. For purposes of this
Section 14, the Firm Shares shall be deemed to have been so released upon the
release by the Underwriters of telegrams or other notifications offering the
Firm Shares for sale to securities dealers, whichever may occur first.
15. Termination.
(a) The Company's obligations under this Agreement may be terminated
by the Company by notice to the Underwriters (i) at any time before it
becomes effective in accordance with Section 14 hereof, or (ii) in the
event that the condition set forth in Section 9 shall not have been
satisfied at or prior to the First Closing Date.
(b) This Agreement may be terminated by the Underwriters by notice to
the Company (i) at any time before it becomes effective in accordance with
Section 14 hereof; (ii) in the event that at or prior to the First Closing
Date the Company or any Selling Shareholder shall have failed, refused or
been unable to perform any agreement on its part to be performed hereunder
or any other condition to the obligations of the Underwriters hereunder is
not fulfilled; (iii) if at or prior to the Closing Date trading in
securities on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or minimum or maximum
prices shall have been established on either of such Exchanges or such
market, or a banking moratorium shall have been declared by Federal or
state authorities; (iv) if at or prior to the Closing Date trading in
securities of the Company shall have been suspended; or (v) if there shall
have been such a material change in general economic, political or
financial conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in your reasonable
judgment, makes it impractical to proceed with the delivery of the Shares.
(c) Termination of this Agreement pursuant to this Section 15 shall be
without liability of any party to any other party other than as provided in
Sections 7 and 10 hereof.
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16. Notices. All communications hereunder shall be in writing and, if sent
to any of the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to X. X. Xxxxxxxx & Co., L.L.C., X. X. Xxxxxxxx Financial
Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxx XX, or if sent to the Company shall be mailed, delivered or telegraphed
and confirmed in writing to the Company at 00000 Xxxx Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx.
17. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company, the Selling Shareholders and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the representations and warranties of the Company and the Selling Shareholders
contained in this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the
Securities Act, and (ii) the indemnities by the Underwriters shall also be for
the benefit of the directors of the Company, officers of the Company who have
signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Securities Act. No purchaser of
Shares from any Underwriter will be deemed a successor because of such purchase.
The validity and interpretation of this Agreement shall be governed by the laws
of the State of Tennessee. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. You hereby represent and
warrant to the Company that you have authority to act hereunder on behalf of the
several Underwriters, and any action hereunder taken by you will be binding upon
all the Underwriters.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company, each of
the Selling Shareholders and each of the several Underwriters.
Very truly yours,
RES-CARE, INC.
By:_________________________________________
Title: President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the SELLING SHAREHOLDERS
date first above written.
By:_________________________________________
X. X. Xxxxxxxx & Co., L.L.C. Attorney-in-fact
Xxxxxxxxxx Securities
Equitable Securities Corporation
By: X. X. Xxxxxxxx & Co., L.L.C.
for themselves and as Representatives
of the Several Underwriters
By: _________________________________
Title: Partner
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SCHEDULE I
SELLING SHAREHOLDERS
Number of Shares
Name Being Offered
---- ----------------
Xxxxx X. Xxxxxxx................................................. 225,000
Xxxxxxxx X. Xxxxxxx.............................................. 225,000
Xxxxxx X. Xxxxx.................................................. 65,000
E. Xxxxxx Xxxxxxx................................................ 100,092
Xxxxx X. Xxxxxx.................................................. 50,000
Xxxxxx Xxxxxx.................................................... 10,000
Xxxxx X. Xxxxxxx................................................. 19,250
Xxxxx X. Xxxxxxx................................................. 5,000
Xxxxxxx X. Xxxxxxxxx............................................. 227,722
Xxxxxx Xxxxxx.................................................... 30,000
Xxxxxxx X. Xxxxxx................................................ 10,000
Xxxxxx X. Xxxxxxxx............................................... 123,936
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SCHEDULE II
UNDERWRITERS
Number of
Firm Shares to
Underwriter Be Purchased
----------- --------------
X. X. Xxxxxxxx & Co., L.L.C. ....................................
Xxxxxxxxxx Securities............................................
Equitable Securities Corporation.................................
---------
Total 2,591,000
=========
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