EXHIBIT 1.1
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PSYCHIATRIC SOLUTIONS, INC.
(a Delaware corporation)
3,500,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: September 14, 2005
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PSYCHIATRIC SOLUTIONS, INC.
(a Delaware corporation)
3,500,000 Shares of Common Stock
(Par Value $0.01 Per Share)
UNDERWRITING AGREEMENT
September 14, 2005
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Citigroup Global Markets Inc.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
PSYCHIATRIC SOLUTIONS, INC., a Delaware corporation (the "COMPANY"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("XXXXXXX XXXXX") and each of the other Underwriters named in
Schedule A hereto (collectively, the "UNDERWRITERS," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx and Citigroup Global Markets Inc. ("CITIGROUP")
are acting as representatives (in such capacity, the "REPRESENTATIVES"), with
respect to (i) the sale by the Company and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $0.01 per share, of the Company ("COMMON STOCK") set forth in
Schedule A hereto and (ii) the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 525,000 additional shares of Common Stock to cover
overallotments, if any. The aforesaid 3,500,000 shares of Common Stock (the
"INITIAL SECURITIES") to be purchased by the Underwriters and all or any part of
the 525,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "OPTION SECURITIES") are hereinafter called, collectively, the
"SECURITIES."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S 3 (No. 333-127085), including
the related prospectus or preliminary prospectuses, covering the registration of
the Securities in accordance with Rule 415 under the Securities Act of 1933, as
amended (the "1933 ACT"). Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus supplement in
accordance with the provisions of Rule 430A ("RULE 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 ACT REGULATIONS")
and paragraph (b) of Rule 424 ("RULE 424(B)") of the 1933 Act Regulations. The
information included in such prospectus supplement that was omitted from such
registration statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as "RULE 430A INFORMATION." Any
prospectus supplement that omitted the Rule 430A Information that was used after
effectiveness of the registration statement and prior to the execution and
delivery of this Agreement, including all documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act and the accompanying
Base Prospectus (defined below), is herein called a "PRELIMINARY PROSPECTUS
SUPPLEMENT." Such registration statement, including the exhibits and any
schedules thereto, at the time it became effective, and including the Rule 430A
Information and all documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act and the accompanying Base Prospectus, is
herein called the "REGISTRATION STATEMENT." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"RULE 462(B) REGISTRATION STATEMENT," and after such filing the term
"REGISTRATION STATEMENT" shall include the Rule 462(b) Registration Statement.
"BASE PROSPECTUS" means each prospectus included in the Registration Statement
at the Effective Time (as defined below). The final prospectus in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities, including the Base Prospectus and all documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, is herein
called the "PROSPECTUS SUPPLEMENT." For purposes of this Agreement, all
references to the Registration Statement, any Preliminary Prospectus Supplement,
the Prospectus Supplement or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(i) The Registration Statement and the Prospectus Supplement,
with respect to, among other things, the Securities has (i) been prepared
by the Company in conformity in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations, (ii) been filed with the
Commission under the 1933 Act and (iii) with respect to the Registration
Statement, become effective under the 1933 Act. Copies of such Registration
Statement and each of the amendments thereto have been delivered by the
Company to you as the Representatives of the Underwriters. As used in this
Agreement, "EFFECTIVE TIME" means the date and the time as of which the
Registration Statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "EFFECTIVE DATE"
means the date of each Effective Time.
(ii) In the case of the Registration Statement, the conditions
for the use of Form S-3, as set forth in the General Instructions thereto
have been satisfied.
(iii) The Commission has not issued any order preventing or
suspending the use of the Registration Statement.
(iv) The Registration Statement conforms, and the Prospectus
Supplement and any further amendments or supplements to the Registration
Statement or the Prospectus Supplement will, when they become effective or
are filed with the
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Commission, as the case may be, conform in all material respects to the
requirements of the 1933 Act and the 1933 Act Regulations and do not and
will not, as of the Effective Date (as to the Registration Statement and
any amendment thereto) and as of its date, the Closing Date and any Date of
Delivery (as to the Prospectus Supplement and any amendment or supplement
thereto) contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that no
representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus Supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in
the Registration Statement (or any amendment thereto), including the Rule
430A Information, or any Preliminary Prospectus Supplement or the
Prospectus Supplement (or any amendment or supplement thereto).
(v) The documents incorporated by reference in the Prospectus
Supplement and Registration Statement, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the rules
and regulations thereunder (the "EXCHANGE ACT RULES") and the 1933 Act
Regulations, and, when read together with other information in the
Prospectus Supplement, none of such documents contained an untrue statement
of a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were
made, not misleading; and any further documents so filed and incorporated
by reference in each Prospectus Supplement, when such documents are filed
with the Commission, will conform in all material respects to the
requirements of the Exchange Act, the Exchange Act Rules and the 1933 Act
Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading in light of the circumstances in which they were made.
(vi) Neither the Company nor any of its subsidiaries have paid or
agreed to pay to any person any compensation for soliciting another to
purchase the Securities (except as contemplated by this Agreement).
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification, except such failures to qualify as are not, either
individually or in the aggregate, material to the Company and its
subsidiaries, taken as a whole, affecting the condition, financial or
otherwise, results of operations, business or prospects of the Company and
its subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), and has
all corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged.
(viii) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant,
condition or other obligation contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets
is subject, except for such violations or defaults that do not have a
Material Adverse Effect,
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or (iii) is in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject or has failed to obtain or maintain any license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except for such violations or defaults that do not have a
Material Adverse Effect.
(ix) The Company has an authorized capitalization as set forth in
the Prospectus Supplement (and on the Closing Date (as defined in Section
2(c) will have the authorized capitalization so set forth in the Prospectus
Supplement as of that date) under the captions "Capitalization,"
"Description of Common Stock," and "Description of Preferred Stock." All of
the issued shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; and all of the
issued shares of capital stock of each subsidiary of the Company listed on
Exhibit D hereto (each a "Significant Subsidiary") have been duly
authorized and validly issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims, other than liens, encumbrances, equities or claims under the
Company's existing credit facility, and none of such shares of capital
stock were issued in violation of preemptive or other similar rights
arising by operation of law, under the charter and bylaws (or similar
organizational documents) of the Company or any of its subsidiaries or
under any agreement to which the Company or any of its subsidiaries is a
party or otherwise.
(x) The Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided in this
Agreement, will be duly and validly issued, fully paid and non-assessable.
The Securities conform to the description thereof in the Prospectus
Supplement in all material respects.
(xi) The Company has all requisite corporate power and authority
to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(xii) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby
(i) will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, except for such conflicts, breaches, violations or defaults that
do not have a Material Adverse Effect or for which a waiver or consent has
been obtained, (ii) will not result in any violation of the provisions of
the charter or by-laws of the Company or any of its subsidiaries or (iii)
will not violate any applicable statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets, except for
such conflicts, breaches, violations or defaults that do not have a
Material Adverse Effect; and except for filings with NASDAQ, the National
Association of Securities Dealers, Inc. (the "NASD") and under the 1933
Act, the Exchange Act and applicable state or foreign securities laws in
connection with the purchase and distribution of the Securities by the
Underwriters, no consent, approval, authorization or order of, or filing,
registration or qualification with, any such court or
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governmental agency or body is required for the execution of this Agreement
by the Company and the consummation of the transactions contemplated hereby
other than such consents, approvals, authorizations, orders, filings,
registrations or qualifications the failure to make or obtain would not
have a Material Adverse Effect.
(xiii) There are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xiv) Except as set forth or incorporated by reference in the
Prospectus Supplement, the Company has not sold or issued any shares of
Common Stock during the six-month period preceding the date of the
Prospectus Supplement, including any sales pursuant to Regulation D or
Regulation S of the 1933 Act, other than shares issued pursuant to employee
benefit plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(xv) The historical financial statements of the Company
(including the related notes and supporting schedules) included in or
incorporated by reference in the Registration Statement and the Prospectus
Supplement present fairly in all material respects the financial condition
and results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(xvi) The historical financial statements of Ramsay Youth
Services, Inc. ("RAMSAY") (including the related notes and supporting
schedules) incorporated by reference in the Registration Statement and the
Prospectus Supplement present fairly in all material respects the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(xvii) The historical financial statements of Northern Healthcare
Associates and Subsidiaries ("NORTHERN HEALTHCARE") (including the related
notes and supporting schedules) incorporated by reference in the
Registration Statement and the Prospectus Supplement present fairly in all
material respects the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(xviii) The historical financial statements of Behavioral
Healthcare Services and subsidiaries ("ARDENT BEHAVIORAL") (including the
related notes and supporting schedules) included in or incorporated by
reference in the Registration Statement and the Prospectus Supplement
present fairly in all material respects the financial condition and results
of operations of the entities purported to be shown thereby, at the dates
and for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(xix) The selected financial data set forth under the caption
"Selected Financial and Operating Data" in the Prospectus Supplement fairly
present in
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all material respects, on the basis stated in the Prospectus Supplement,
the information included therein; the pro forma financial statements
included in the Prospectus Supplement include assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related
pro forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma financial
statements included in the Prospectus Supplement, the pro forma financial
statements included in the Prospectus Supplement comply as to form with the
applicable accounting requirements of Regulation S-X under the 1933 Act and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements.
(xx) The other financial data, operating data and statistical
information and data included in or incorporated by reference in the
Registration Statement and the Prospectus Supplement is presented fairly in
all material respects and, to the extent derived therefrom, has been
prepared on a basis consistent with such financial statements and the books
and records of the Company and its subsidiaries.
(xxi) Ernst & Young LLP, who has certified certain historical
financial statements of the Company and Ardent Behavioral, whose reports
are incorporated by reference in the Registration Statement and Prospectus
Supplement and who has delivered (a) the initial letters referred to in
Sections 5(e)(i) and 5(e)(iii) hereof, and (b) the bring-down letters
referred to in Section 5(f)(i) and 5(f)(iii) hereof, is an independent
public accounting firm as required by the 1933 Act and the 1933 Act
Regulations during the periods covered by the financial statements on which
it reported that were or are incorporated by reference in the Registration
Statement and Prospectus Supplement.
(xxii) Deloitte & Touche LLP, who has certified certain
historical financial statements of Ramsay, whose report is incorporated by
reference in the Registration Statement and Prospectus Supplement, is an
independent public accounting firm as required by the 1933 Act and the 1933
Act Regulations during the periods covered by the financial statements on
which it reported that were or are incorporated by reference in the
Registration Statement and Prospectus Supplement.
(xxiii) Xxxxxxxx & Company, LLP, who has certified certain
historical financial statements of Northern Healthcare, whose report is
incorporated by reference in the Registration Statement and Prospectus
Supplement and who has delivered (a) the initial letter referred to in
Section 5(e)(ii) hereof, and (b) the bring-down letter referred to in
Section 5(f)(ii) hereof, are independent public accountants during the
periods covered by the financial statements on which it reported that were
or are incorporated by reference in the Registration Statement and
Prospectus Supplement.
(xxiv) The Company and each Significant Subsidiary (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls that provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial statements
and to maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
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(xxv) Since the date as of which information is given or
incorporated by reference in the Preliminary Prospectus Supplement through
the date hereof, and except as may otherwise be disclosed in the Prospectus
Supplement (exclusive of any amendment or supplement thereto), neither the
Company nor any subsidiary has (i) issued or granted any securities, other
than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations
that were incurred in the ordinary course of business, (iii) entered into
any transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(xxvi) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the subject
that, if determined adversely to the Company or any of its subsidiaries,
would reasonably be likely to have a Material Adverse Effect, and to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(xxvii) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights and licenses necessary for the conduct of
their respective businesses and have no reason to believe that the conduct
of their respective businesses will conflict with, and have not received
any notice of any claim of conflict with, any such rights of others, except
for such conflicts that do not or would not have a Material Adverse Effect.
(xxviii) The Company and each of its subsidiaries have good and
marketable title to all real property and good title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or incorporated by
reference in the Registration Statement and Prospectus Supplement
(exclusive of any amendment or supplement thereto) and such as do not
materially affect the value of the property of the Company and its
subsidiaries taken as a whole and do not materially interfere with the use
made and proposed to be made of such property by the Company or any of its
subsidiaries; and all real property and buildings held under lease by the
Company or any of its subsidiaries are held by them under valid, subsisting
and enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company or any of its subsidiaries.
(xxix) No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company or
any of its subsidiaries on the other hand, which is required to be
described or incorporated by reference in the Prospectus Supplement or
filed or incorporated by reference as exhibits in the Registration
Statement that is not described in the Prospectus Supplement or filed or
incorporated by reference as exhibits in the Registration Statement.
(xxx) The Company and each of its subsidiaries has filed all
federal, state and local income and franchise tax returns required to be
filed through the date hereof and has paid all taxes due thereon, and no
tax deficiency has been determined adversely to the Company or any of its
subsidiaries that has had (nor does the Company
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or any subsidiary have any knowledge of any tax deficiency that, if
determined adversely to the Company or any of its subsidiaries, might have)
a Material Adverse Effect.
(xxxi) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
customary for companies engaged in similar businesses in similar
industries.
(xxxii) No labor disturbance by the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company or any
of its subsidiaries, is imminent that could be expected to have a Material
Adverse Effect.
(xxxiii) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of its subsidiaries would have any
liability; neither the Company nor any of its subsidiaries has incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect
to the termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"CODE"); and each "pension plan" for which the Company or any of its
subsidiaries would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(xxxiv) Set forth on Exhibit B hereto is a list of each employee
pension or benefit plan with respect to which the Company or any
corporation considered an affiliate of the Company within the meaning of
Section 407(d)(7) of ERISA is a party in interest or disqualified person.
(xxxv) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(xxxvi) Except for such matters as would not, individually or in
the aggregate, either result in a Material Adverse Effect or require
disclosure in the Prospectus Supplement, the Company and its subsidiaries
(or, to the knowledge of the Company, any of their predecessors in
interest) (1) are conducting and have conducted their businesses,
operations and facilities in compliance with Environmental Law (as defined
below); (2) possess, and are in compliance with, any and all permits,
licenses or registrations required under Environmental Law ("ENVIRONMENTAL
PERMITS"); (3) will not require material expenditures to maintain such
compliance with Environmental Law or their Environmental Permits or to
remediate, clean up, xxxxx or remove any Hazardous Substance (as defined
below); and (4) are not subject to any pending or, to the best knowledge of
the Company and its subsidiaries, threatened claim or other legal
8
proceeding under any Environmental Laws against the Company or its
subsidiaries, and have not been named as a "potentially responsible party"
under or pursuant to any Environmental Law. As used in this paragraph,
"ENVIRONMENTAL LAW" means any and all applicable federal, state, local and
foreign laws, ordinances, regulations and common law, or any administrative
or judicial order, consent, decree or judgment thereof, relating to
pollution or the protection of human health or the environment, including,
without limitation, those related to (i) emissions, discharges, releases or
threatened releases of, or exposure to, Hazardous Substances, (ii) the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, or (iii) the
investigation, remediation or cleanup of any Hazardous Substances. As used
in this paragraph, "HAZARDOUS SUBSTANCES" means pollutants, contaminants or
hazardous, dangerous, toxic, biohazardous or infectious substances,
materials or wastes or any other chemical substance regulated under
Environmental Laws.
(xxxvii) Except as set forth or incorporated by reference in the
Prospectus Supplement (exclusive of any amendment or supplement thereto),
neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any other person who has a direct or indirect ownership or
control interest in the Company or any of its subsidiaries or who is an
officer, director, agent or managing employee of the Company or any of its
subsidiaries (1) has engaged in any activities which are prohibited, or are
cause for criminal or civil penalties and/or mandatory or permissive
exclusion from Medicare or Medicaid, under Section 1320a-7, 1320a-7a,
1320a-7b, or 1395nn of Title 42 of the United States Code, the federal
TRICARE statute, the Federal False Claims Act 31 U.S.C. Section 3729-3733,
or the regulations promulgated pursuant to such statutes or regulations or
related state or local statutes or by generally recognized professional
standards of care or conduct, except for such activities as would not,
individually or in the aggregate, result in a Material Adverse Effect; (2)
has had a civil monetary penalty assessed against it under Section 1128A of
the Social Security Act ("SSA"); (3) is currently excluded from
participation under the Medicare program or a Federal Health Care Program
(as that term is defined in SSA Section 1128(B)(f)); or (4) has been
convicted (as that term is defined in 42 C.F.R. Section 1001.2) of any of
the categories of offenses described in SSA Section 1128(a) and (b)(1), (2)
and (3).
(xxxviii) Neither the Company nor any subsidiary is, or, after
giving effect to the offering and sale of the Securities as described in
the Prospectus Supplement, will be required to register as an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(xxxix) Prior to the date hereof, neither the Company and its
subsidiaries nor any of their respective affiliates nor any person acting
on its or their behalf (other than you, as to whom the Company and its
subsidiaries make no representation) has taken nor will take any action
that is designed to or that has constituted or that might have been
expected to cause or result in stabilization or manipulation of the price
of any security of the Company or its subsidiaries to facilitate the sale
or resale of the Common Stock.
(xl) The minute books and records of the Company relating to
proceedings of its shareholders, board of directors and committees of its
board of directors made available to Weil, Gotshal & Xxxxxx LLP, counsel
for the Underwriters, are the original minute books and records or are
true, correct and complete copies thereof,
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with respect to all proceedings of said shareholders, board of directors
and committees since July 6, 2005, through the date hereof. In the event
that definitive minutes have not been prepared with respect to any
proceedings of such shareholders, board of directors or committees, the
Company has provided Weil, Gotshal & Xxxxxx LLP with originals or true,
correct and complete copies of draft minutes or written agendas relating
thereto, which drafts and agendas, if any, reflect all events that occurred
in connection with such proceedings.
(xli) The statements set forth in (i) the Prospectus Supplement
under the caption "Description of Common Stock" and (ii) Item 1 of Part I
of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2004 under the caption "Regulation and Other Factors," in each
case as amended and supplemented by statements contained in the Prospectus
Supplement or documents incorporated by reference in the Prospectus
Supplement insofar as it purports to constitute a summary of the terms of
the Common Stock and regulations affecting the Company are accurate in all
material respects.
(xlii) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or 15(d) of the Exchange Act. All
reports filed by the Company with the Commission pursuant to Section 13 or
15(d) of the Exchange Act comply as to form in all material respects with
the Exchange Act and the Exchange Act Rules.
(xliii) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the
Exchange Act), which (i) are designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported and
is made known to the Company's principal executive officer and its
principal financial officer by others within those entities, particularly
during the periods in which the periodic reports required under the
Exchange Act are being prepared; (ii) have been evaluated for effectiveness
as of the end of the last fiscal quarter; and (iii) are effective in all
material respects to perform the functions for which they were established.
(xliv) Based on the evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant deficiency in
the design or operation of internal controls which could adversely affect
the Company's ability to record, process, summarize and report financial
data or any material weaknesses in internal controls; or (ii) any fraud,
whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls.
(xlv) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to material
weaknesses.
(xlvi) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their capacities
as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and
the rules and regulations promulgated in connection therewith (the
"SARBANES OXLEY ACT"), including Section 402 related to loans and Section
302 and 906 related to certifications.
10
(xlvii) Except as disclosed or incorporated by reference in the
Prospectus Supplement, there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid claim
against the Company or any Underwriter for a brokerage commission, finder's
fee or other like payment in connection with this offering.
(xlviii) The Securities have been approved for listing subject to
notice of issuance on the NASDAQ National Market.
(xlix) The market-related and industry data included or
incorporated by reference in the Prospectus Supplement and the Registration
Statement are based upon estimates by the Company derived from sources that
the Company believes to be reliable and accurate.
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at $47.86 per share that proportion of the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial Securities, subject, in each case, to such
adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company grants to the Underwriters, severally
and not jointly, an option to purchase up to 525,000 shares of Common Stock at
$47.86 per share. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for the
purpose of covering overallotments, which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "DATE OF DELIVERY") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Weil,
Gotshal & Xxxxxx LLP, 000 Xxxxx
00
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon
by the Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "CLOSING DATE").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to one or more bank accounts designated by the Company against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Each of the Representatives, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Date or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriters from their respective obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Date or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Date or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
(a) Covenants of the Company. The Company covenants with each
Underwriter as follows:
(i) No Advisory or Fiduciary Relationship. The Company
acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the public
offering price of the Securities and any related discounts and commissions,
is an arm's-length commercial transaction between the Company, on the one
hand, and the several Underwriters, on the other hand, (ii) in connection
with the offering contemplated hereby and the process leading to such
transaction each Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, or its stockholders,
creditors, employees or any other party, (iii) no Underwriter has assumed
or will assume an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any
obligation to the Company with respect to the offering contemplated hereby
except the obligations
12
expressly set forth in this Agreement, (iv) the Underwriters and their
respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, and (v) the
Underwriters have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Company has
consulted its own legal, accounting, regulatory and tax advisors to the
extent it deemed appropriate.
(ii) Compliance with Regulations and Commission Requests. The
Company, subject to Section 3(a)(iii), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives
promptly, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus Supplement or any amended Prospectus
Supplement shall have been filed, (ii) of the receipt of any comments from
the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus
Supplement or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will use its reasonable
efforts to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof.
(iii) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus
Supplement, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(iv) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S T.
(v) Delivery of Prospectus Supplements. The Company has delivered
to each Underwriter, without charge, as many copies of each Preliminary
Prospectus Supplement as such Underwriter reasonably requested, and the
Company
13
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus Supplement is required to be
delivered under the 1933 Act, such number of copies of the Prospectus
Supplement (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus Supplement and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S T.
(vi) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus Supplement. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus Supplement in order that the Prospectus
Supplement will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus Supplement in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(a)(iii), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or
the Prospectus Supplement comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(vii) Blue Sky Qualifications. The Company will use its
reasonable best efforts, in cooperation with the Underwriters, to qualify
the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective date
of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(viii) Rule 158. The Company will timely file such reports
pursuant to the Exchange Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated by,
the last paragraph of Section 11(a) of the 1933 Act.
(ix) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectus Supplement under "Use of Proceeds."
(x) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market.
14
(xi) Stabilization. Neither the Company nor any of its
subsidiaries will take, directly or indirectly, any action designed to or
which has constituted or which might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(xii) Restriction on Sale of Securities. During a period of 75
days from the date hereof, the Company will not, without the prior written
consent of the Representatives, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant for the
sale of, or otherwise dispose of or transfer any shares of Common Stock or
any securities convertible into or exchangeable or exercisable for Common
Stock or file any registration statement under the 1933 Act with respect to
any of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the
Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of
a security outstanding on the date hereof and referred to or incorporated
by reference in the Prospectus Supplement, (C) any shares of Common Stock
issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to or incorporated by
reference in the Prospectus Supplement or (D) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend
reinvestment plan; the Company will cause each person identified on
Schedule B hereto to furnish to the Representatives, prior to the Closing
Date, a letter or letters, substantially in the form of Exhibit C hereto
(the "LOCK-UP LETTER AGREEMENT").
(xiii) Reporting Requirements. The Company, during the period
when the Prospectus Supplement is required to be delivered under the 1933
Act, will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by the
Exchange Act and the Exchange Act Rules.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(a)(vii) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of a blue sky survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
Preliminary Prospectus Supplement and of the Prospectus Supplement and any
amendments or
15
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the blue sky survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) investor presentations on any "ROAD SHOW" undertaken in connection with the
marketing of the offering of the Stock, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, provided that the cost of
any aircraft chartered in connection with the road show shall be the sole
obligation of the Underwriters, (x) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities and (xi)
the fees and expenses incurred in connection with the inclusion of the
Securities in the Nasdaq National Market; provided that except as set forth in
this Section 4, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on
Securities which they may sell and the expense of advertising any offering of
the Securities made by the Underwriters.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the Underwriters for all of
their out of pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) The Prospectus Supplement shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in either the
Registration Statement or the Prospectus Supplement or otherwise shall have been
complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Securities, the
Registration Statement and the Prospectus Supplement, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all documents
and information that it may reasonably request to enable them to pass upon such
matters.
(c) Xxxxxx Xxxxxxx Xxxxxx & Xxxxx PLLC shall have furnished to the
Underwriters its written opinion, or letter or letters, as counsel to the
Company, addressed to the Underwriters and dated the Closing Date and each Date
of Delivery, substantially in the form of Exhibit A hereto.
(d) The Underwriters shall have received from Weil, Gotshal & Xxxxxx
LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and each Date of Delivery, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus Supplement and other
related matters as the Underwriters may
16
reasonably require, and the Company shall have furnished to such counsel such
documents as it reasonably requests for the purpose of enabling them to pass
upon such matters.
(e) At time of the execution of this Agreement, the Underwriters shall
have received from:
(i) Ernst & Young LLP, a letter with respect to the financial
information of the Company, included in or incorporated by reference in the
Prospectus Supplement, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof
(A) confirming that it is an independent public accounting firm within the
meaning of the 1933 Act and is in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (B) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given or
incorporated by reference in the Prospectus Supplement, as of a date not
more than five days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings;
(ii) Xxxxxxxx & Company, LLP, a letter with respect to the
financial information of Northern Healthcare, incorporated by reference in
the Prospectus Supplement, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof
(A) confirming that they are independent public accountants with respect to
Northern Healthcare, (B) stating, as of the date hereof, the conclusions
and findings of such firm with respect to the financial information and
other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings;
(iii) Ernst & Young LLP, a letter with respect to the financial
information of Ardent Behavioral, included in or incorporated by reference
in the Prospectus Supplement, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof
(A) confirming that it is an independent public accounting firm within the
meaning of the 1933 Act and is in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (B) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given or
incorporated by reference in the Prospectus Supplement, as of a date not
more than five days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings; and
(f) With respect to the letters referred to in the immediately
preceding paragraph and delivered to the Underwriters concurrently with the
execution of this Agreement (each, an "INITIAL LETTER"), the Underwriters shall
have received a letter (each, a "BRING-DOWN LETTER") addressed to the
Underwriters and dated as of the Closing Date and each Date of Delivery from:
(i) Ernst & Young LLP, with respect to the financial information
of the Company, included in or incorporated by reference in the Xxxxxxxxxx
00
Xxxxxxxxxx, (X) confirming that it is an independent public accounting firm
within the meaning of the 1933 Act and is in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (B) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given or incorporated by reference in the Prospectus
Supplement, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect
to the financial information and other matters covered by the initial
letter and (C) confirming in all material respects the conclusions and
findings set forth in the initial letter;
(ii) Xxxxxxxx & Company, LLP, with respect to the financial
information of Northern Healthcare, incorporated by reference in the
Prospectus Supplement, (A) confirming that they are independent public
accountants with respect to Northern Healthcare, (B) stating, as of the
date of the bring-down letter, the conclusions and findings of such firm
with respect to the financial information and other matters covered by the
initial letter;
(iii) Ernst & Young LLP, with respect to the financial
information of Ardent Behavioral, included in or incorporated by reference
in the Prospectus Supplement, (A) confirming that it is an independent
public accounting firm within the meaning of the 1933 Act and is in
compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission, (B)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given or incorporated by reference
in the Prospectus Supplement, as of a date not more than five days prior to
the date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters covered by
the initial letter and (C) confirming in all material respects the
conclusions and findings set forth in the initial letter; and
(g) The Company shall have furnished to the Representatives a
certificate from the Company, dated the Closing Date and each Date of Delivery,
signed by its Chief Executive Officer and Chief Accounting Officer stating, as
applicable, that:
(i) The representations, warranties and agreements of the Company
contained herein, as applicable, are true and correct in all material
respects (except with respect to representations, warranties and agreements
already qualified by materiality ) as if made on and as of the Closing Date
and such Date of Delivery (other than to the extent any such representation
or warranty is made expressly to a certain date), and the Company has
performed all covenants and agreements and satisfied all conditions (after
giving effect to all materiality qualifiers herein) on their part to be
performed or satisfied hereunder, to the extent a party hereto, at or prior
to the Closing Date and the Date of Delivery; and the conditions set forth
in Section 5 have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus Supplement (exclusive of any amendment or supplement
thereto) and, in their opinion (A) as of the Effective Date, the
Registration Statement did not include, and as of its date, the Closing
Date and as of the Date of Delivery, the Prospectus Supplement did not
include any untrue statement of a material fact and did not omit to
18
state a material fact required to be stated therein or necessary (in the
case of the Prospectus Supplement in the light of the circumstances under
which made) to make the statements therein not misleading, and (B) since
the Effective Date no event has occurred which should have been set forth
in an amendment to the Registration Statement or supplement to the
Prospectus Supplement.
(h) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus Supplement (exclusive of any
amendment or supplement thereto) (i) any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth, incorporated by reference or contemplated
in the Prospectus Supplement (exclusive of any amendment or supplement thereto)
or (ii) since such date there shall not have been any change in the capital
stock or increase in the long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth, incorporated by reference or
contemplated in the Prospectus Supplement (exclusive of any amendment or
supplement thereto), the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material and adverse
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities being delivered on the Closing Date or any
subsequent Date of Delivery on the terms and in the manner contemplated herein
and in the Prospectus Supplement (exclusive of any amendment or supplement
thereto).
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded to the Company's debt
securities by any "nationally recognized statistical rating organization" (as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
1933 Act Regulations) and (ii) no such organization shall have publicly
announced that it is under surveillance or review with negative implications,
its rating of any of the Company's debt securities.
(j) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representative may reasonably request.
(k) The Representatives shall have received a certificate from the
Company, at the time of the execution of this Agreement and on the Closing Date,
signed by the Chief Accounting Officer of the Company, in respect of the
financial data contained in footnote (1) to the Unaudited Pro Forma Condensed
Combined Income Statements relating to Brentwood Behavioral Health
("Brentwood"), Northern Healthcare (under the column entitled "Heartland") and
each of the hospitals consolidated under the column "Non-Significant
Acquisitions" stating, as applicable, that:
(1) The financial statements attached to the certificate are, in
fact, a true and accurate copy of the financial data for Brentwood,
Northern Healthcare and each of the hospitals consolidated under the column
"Non-Significant Acquisitions" used to create the data contained in
footnote (1) to the Unaudited Pro Forma Condensed Combined Income
Statements (the "FINANCIAL STATEMENTS");
19
(2) As a member of management of Brentwood, Northern Healthcare
and each of the hospitals consolidated under the column "Non-Significant
Acquisitions," he is responsible for the fair presentation of its financial
statements and he believes the statements of financial position and results
of operations are fairly presented in all material respects in conformity
with accounting principles generally accepted in the United States applied
on a basis consistent with that of the preceding periods;
(3) There are no material unadjusted audit differences identified
during the current audit and pertaining to the period presented;
(4) No plans or intentions exist that may materially affect the
carrying value or classification of assets and liabilities;
(5) There are no material transactions that have not been
properly recorded in the accounting records underlying the Financial
Statements;
(6) There were no material weaknesses in internal control as of
December 31, 2004, including any for which he believes the cost of
corrective actions exceeds the benefits and there have been no significant
changes in internal control since December 31, 2004;
(7) No events or transactions have occurred since December 31,
2004 or are pending that would have a material effect on the financial
statements at that date or for the period then ended, or that are of such
significance in relation to the affairs of Brentwood, Northern Healthcare
or each of the hospitals consolidated under the column "Non-Significant
Acquisitions" to require mention in a note to the Financial Statements or
the pro forma financial statements contained in the Prospectus Supplement
in order to make them not misleading regarding the respective financial
position, results of operations, or cash flows of Brentwood, Northern
Healthcare or each of the hospitals consolidated under the column
"Non-Significant Acquisitions."
(l) At the date of this Agreement, the Representatives shall have
received an agreement substantially in the form of Exhibit C hereto signed by
the persons listed on Schedule B hereto.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, as such term is defined in
Rule 501(b) under the 1933 Act (each, an "AFFILIATE"), its selling agents and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
or the omission or alleged omission therefrom of a
20
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any Preliminary
Prospectus Supplement or the Prospectus Supplement (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any Preliminary Prospectus Supplement or the Prospectus Supplement (or any
amendment or supplement thereto).
(b) Indemnification of the Company, Directors and Officers. Each
Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information or any Preliminary Prospectus Supplement or the Prospectus
Supplement (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such Preliminary Prospectus Supplement or the
Prospectus Supplement (or any amendment or supplement thereto). The Company
acknowledges that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities and the first and second sentences of
the first paragraph under the caption "Commissions and Discounts" in the
"Underwriting" section of the Prospectus Supplement constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus Supplement
or the Prospectus Supplement (or any amendment or supplement thereto).
21
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by the
Representatives, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) or 6(b) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this
22
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus Supplement, bear to the aggregate initial public offering price
of the Securities as set forth on the cover of the Prospectus Supplement.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company and (ii) delivery of
and payment for the Securities.
23
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Date (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus Supplement,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (v) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail on the Closing Date or a subsequent Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "DEFAULTED SECURITIES"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24 hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the non
defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Date, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non defaulting Underwriter.
24
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Date, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either the (i) Representatives or (ii) the
Company shall have the right to postpone the Closing Date or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus
Supplement or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, New York, New York 10080, Attention: Xxxxx Xxxxxx; notices to the
Company shall be directed to it at 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxx, Esq. (Fax: (615)
000-0000), with copy to Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, PLLC, 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxx X. Xxxxx III, Esq.
(Fax: (000) 000-0000).
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon each of the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 16. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
PSYCHIATRIC SOLUTIONS, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CITIGROUP GLOBAL MARKETS INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Authorized Signatory
For themselves and as Representatives
of the other Underwriters named in
Schedule A hereto.
26
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated...................... 1,190,000
Citigroup Global Markets Inc. ....... 680,000
Xxxxxxx Xxxxx & Associates, Inc. .... 510,000
X.X. Xxxxxx Securities Inc. ......... 510,000
Banc of America Securities LLC....... 340,000
Avondale Partners, LLC............... 170,000
Xxxxxxxx Inc. ....................... 100,000
---------
Total............................. 3,500,000
=========
Sch A-1
SCHEDULE B
List of Persons Subject to Lock-Up Letter Agreement
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx X. Xxxxxx
Xxxxxxxxxxx Xxxxx, Jr
Xxxxxx X. Xxxxxxx
Xxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxx III
Xxxxxxx X. Xxxxxx, MD
Xxxxx X. Xxxx
Sch B-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(c)
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx PLLC shall have furnished to the Underwriters, its
opinion as counsel to the Company, addressed to the Representatives and dated
the Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Company is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, is duly qualified to do business
and is in good standing as a foreign corporation in the states set forth on
Schedule A hereto, and has all corporate power and authority necessary to
own or hold its properties and to conduct the business in which it is
engaged.
(ii) The Company has an authorized capitalization as set forth in the Prospectus
Supplement, and all of the issued and outstanding shares of Common Stock of
the Company have been duly authorized by the Company and are validly
issued, fully paid and non-assessable; and all of the Securities to be
issued by the Company have been duly authorized and, upon payment and
delivery in accordance with the Underwriting Agreement, will be validly
issued by the Company, fully paid and non-assessable; and all of the issued
and outstanding shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares), to the best
of such counsel's knowledge, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims,
other than liens, encumbrances, equities or claims under the Company's
Second Amended and Restated Credit Agreement, dated as of July 1, 2005,
among the Company, as borrower, the subsidiaries of the Company identified
therein as guarantors, the lenders party thereto, Citicorp North America,
Inc., as term loan facility administrative agent and Bank of America, N.A.,
as revolving credit facility administrative agent, and none of such shares
of capital stock were issued in violation of preemptive or other similar
rights arising by operation of law, under the charter and bylaws (or
similar organizational documents) of the Company or any of its subsidiaries
or, to the best of such counsel's knowledge, under any agreement to which
the Company or any of its subsidiaries is a party or otherwise.
(iii) To the knowledge of such counsel, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any of the Securities pursuant to the Company's charter or by
laws or any agreement or other instrument, except as set forth or
incorporated by reference in the Prospectus Supplement and other than those
which have been waived by the holders thereof; and, to the knowledge of
such counsel, except as set forth or incorporated by reference in the
Prospectus Supplement, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of
or ownership interests in the Company are outstanding.
(iv) The Company has all requisite corporate power and authority to enter into
the Underwriting Agreement. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
Exhibit A-1
(v) To the knowledge of such counsel, the Company is not a party to any
agreement that would require registration under the 1933 Act of stock or
other securities by any person or entity.
(vi) The Company is eligible to use a Form S-3 Registration Statement in
connection with the registration of the Securities under the 1933 Act.
(vii) The Registration Statement was declared effective under the 1933 Act as of
3:00 p.m. Eastern Time on September 2, 2005, the Prospectus Supplement will
be filed with the Commission pursuant to subparagraph (5) of Rule 424(b)
under the 1933 Act, on September 15, 2005 and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose is pending or
threatened by the Commission.
(viii) The Registration Statement and the Prospectus Supplement and any further
amendments or supplements thereto made by the Company prior to the date
hereof (other than the contents of the financial statements and related
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(ix) The statements included in the Prospectus Supplement under the captions
"Description of Common Stock" and "Description of Preferred Stock" insofar
as such statements constitute matters of law, summaries of legal matters,
the Company's charter or by-law provisions, documents or legal proceedings,
or legal conclusions, have been reviewed by such counsel and fairly present
and summarize, in all material respects, the matters referred to therein.
(x) No consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or
agency, is required for (i) the execution, delivery and performance of the
Underwriting Agreement by the Company, (ii) the issuance and delivery of
the Securities by the Company or (iii) the consummation of the transactions
contemplated by the Underwriting Agreement and by the Prospectus
Supplement, except such as have been obtained or made by the Company, and
such as may be required by the NASD and under applicable state securities
or blue sky laws, as to which such counsel need express no opinion.
(xi) The execution and delivery of the Underwriting Agreement by the Company and
the performance by the Company of its obligations thereunder, including the
issuance and delivery of the Securities, and the consummation of the
transactions contemplated thereby (i) do not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any of the agreements filed as an exhibit to the Company's
Form 10-K for the year ended December 31, 2004, Form 10-Q for the quarter
ended March 31, 2005 and Form 10-Q for the quarter ended June 30, 2005 or
the Registration Statement except for such conflicts, breaches, violations
or defaults that do not have a Material Adverse Effect, (ii) do not result
in any violation of the provisions of the charter or by-laws of the Company
and (iii) do not violate any applicable statute, order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets, except for such violations that do not have a Material Adverse
Effect.
Exhibit A-2
(xii) The Company is not, and after receipt of payment for the Securities and
the use of proceeds therefrom, will not be required to register as, an
"investment company" within the meaning of the Investment Company Act.
(xiii) To the best of such counsel's knowledge and except as described in the
Prospectus Supplement, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, is likely to have a Material Adverse Effect, and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date and each
subsequent Date of Delivery, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as counsel to the
Company and its subsidiaries in connection with the preparation of the
Registration Statement and the Prospectus Supplement and the documents
incorporated by reference therein, and (y) based on the foregoing, no facts have
come to the attention of such counsel that cause it to believe that (i) the
Registration Statement (including the documents incorporated by reference
therein), on the effective date thereof, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements contained therein not misleading, or (ii)
the Prospectus Supplement (including the documents incorporated by reference
therein), as of its date and as of the Closing Date and such Date of Delivery,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need make no statement). The
foregoing statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus Supplement.
Exhibit A-3
Exhibit B
EMPLOYEE PENSION OR BENEFIT PLANS
Psychiatric Solutions, Inc. Retirement Savings Plan
MetLife Dental Plan
Hartford Basic Group Term Life & AD&D
Hartford Optional Life & AD&D
Hartford Long Term Disability
Flexible Spending Accounts - Unreimbursed Medical & Dependent Care
PSI Medical Plan with BCBS
VSP Vision Plan
EAP - LifeServices EAP
Riveredge Health Plan with BCBS
Riveredge Dental Plan with Guardian
Riveredge Basic Group Term Life & AD&D with Hartford
Riveredge Optional Life & AD&D with Hartford
Riveredge Disability Plan with Unum
Premier Behavioral Solutions, Inc. Medical Plan - Kaiser/Hawaii
Premier Behavioral Solutions, Inc. Medical Plan - BC/BS of Michigan
Premier Behavioral Solutions, Inc. Medical Plan - COSVI (Puerto Rico)
PSI Medical Plan with Kaiser - California facilities
PSI Medical Plan with Southern Health - Charlottesville, VA
Short Term Disability with Allstate
Accident with Allstate
Critical Illness with Allstate
Exhibit B-1
Exhibit C
Form of Lockup Agreement
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Citigroup Global Markets Inc.,
as Representatives of the several
Underwriters to be named in the
within mentioned Underwriting Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Psychiatric Solutions, Inc.
Ladies and Gentlemen:
The undersigned, a stockholder, an officer and/or director of Psychiatric
Solutions, Inc., a Delaware corporation (the "COMPANY"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("XXXXXXX XXXXX") and Citigroup Global Markets Inc. ("CITIGROUP") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with the
Company providing for the public offering of shares (the "SECURITIES") of the
Company's common stock, par value $0.01 per share (the "COMMON STOCK"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder, an officer and/or director of the Company, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned agrees with each underwriter to be named in
the Underwriting Agreement that, during a period (the "LOCK-UP PERIOD") of 75
days from the date of the Underwriting Agreement the undersigned will not,
without the prior written consent of Xxxxxxx Xxxxx and Citigroup, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file, or cause to be filed, any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing (collectively, the "LOCK-UP SECURITIES") or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Lock-Up Securities, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned may, without the prior written
consent of the Underwriters, sell or otherwise dispose of common stock pursuant
to a 10b5-1 plan, if any, from and after 30 days from the date the undersigned's
10b5-1 plan goes into effect.
Exhibit C-1
It is understood that if the Company notifies you that it does not intend
to proceed with the offering of the Securities, if the Underwriting Agreement
does not become effective or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Securities, the undersigned will be
released from its obligations under this Lock-up Agreement.
Very truly yours,
Signature:
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Print Name:
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Exhibit C-2
Exhibit D
SIGNIFICANT SUBSIDIARIES
1. Psychiatric Solutions Hospitals, Inc.
2. Premier Behavioral Solutions, Inc.
3. Ardent Health Services, Inc.
Exhibit D-1
