EXHIBIT 1.1
MedE America Corporation
4,166,667 Shares
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Xxxxx & Company, L.L.C.,
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
MedE America Corporation, a Delaware corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 4,166,667 shares of common stock, $.01 par value ("Common
Stock") of the Company (said shares to be issued and sold by the Company being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase up to 625,000 additional shares
of Common Stock to cover over-allotments (the "Option Securities"; the Option
Securities, together with the Underwritten Securities, being hereinafter called
the "Securities"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. Certain terms used herein
are defined in Section 17 hereof.
As part of the offering contemplated by this Agreement,
Xxxxxxx Xxxxx Xxxxxx has agreed to reserve out of the Shares set forth opposite
its name on the Schedule I to this Agreement, up to 5% of the Underwritten
Securities, for sale to the Company's employees, officers, and directors and
other parties associated with the Company (collectively, "Participants"), as set
forth in the Prospectus under the heading "Underwriting" (the "Directed Share
Program"). The Shares to be sold by Xxxxxxx
Xxxxx Barney pursuant to the Directed Share Program (the "Directed Shares") will
be sold by Xxxxxxx Xxxxx Xxxxxx pursuant to this Agreement at the public
offering price. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the business day on which this Agreement is executed
will be offered to the public by Xxxxxxx Xxxxx Barney as set forth in the
Prospectus.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a registration
statement (file number 333-55977) on Form S-1, including a related preliminary
prospectus, for registration under the Act of the offering and sale of the
Securities. The Company has filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission either (1) prior to the
Effective Date of such registration statement, a further amendment to such
registration statement (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in accordance
with Rules 430A and 424(b). In the case of clause (2), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Prospectus. As
filed, such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification (which agreement shall not be unreasonably withheld),
shall be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and when
the Prospectus is first filed (if required) in accordance with Rule 424(b) and
on the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a "settlement
date"), the Prospectus (and any supplements thereto) will, comply in all
material respects with the applicable requirements of the Act and the rules
thereunder; on the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, except for Rule 430A
pricing information; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not, include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the
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circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and its Subsidiaries (as defined herein) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized with
full corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such qualification,
except where the failure as to due qualification to do business would not have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) (a "Material Adverse Effect");
(d) All the outstanding shares of capital stock of the Subsidiaries have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the Company
directly free and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances;
(e) The Company's authorized equity capitalization is as set forth in the
Prospectus; the capital stock of the Company conforms in all material respects
to the description thereof contained in the Prospectus; the outstanding shares
of Common Stock have been duly and validly authorized and issued and are fully
paid and nonassessable; the Securities have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be fully paid and nonassessable; the Securities are duly
listed, and admitted and authorized for trading, subject to official notice of
issuance and evidence of satisfactory distribution, on the Nasdaq National
Market; the certificates for the Securities are in valid and sufficient form;
the holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities except
for such rights of WCAS Capital Partners II, L.P. as have been effectively
waived; and, except as set forth in the Prospectus, 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;
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(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required; and
the statements in the Prospectus under the headings "Risk Factors -- Proposed
Healthcare Data Confidentiality Legislation," "Business -- Government
Regulation" and "Business -- Legal Proceedings" fairly summarize the matters
therein described.
(g) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal and state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
principles of equity.
(h) The Company is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the transactions
contemplated herein, except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in the
manner contemplated herein and in the Prospectus.
(j) Neither the issue and sale of the Securities nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation of or the
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Subsidiaries pursuant to, (i) the charter or by-laws of the
Company or the Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or the
Subsidiaries are a party or bound or to which its or their property is subject,
or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or the Subsidiaries, of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or the Subsidiaries or any of its or their
properties, except as to clauses (ii) and (iii) where such breach, violation,
lien, charge or encumbrance would not have a Material Adverse Effect,
individually or in the aggregate.
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(k) No holders of securities of the Company have rights to the registration
of such securities under the Registration Statement except for such rights of
WCAS Capital Partners II, L.P. as have been effectively waived.
(l) The consolidated historical financial statements and schedules of the
Company and its consolidated Subsidiaries included in the Prospectus and the
Registration Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as of the dates
and for the periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Consolidated Financial Data" in the
Prospectus and Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included therein. The
pro forma financial statements included in the Prospectus and the Registration
Statement 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 give appropriate effect to
those assumptions, and the 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 and the Registration
Statement. The pro forma financial statements included in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the pro
forma adjustments have been properly applied to the historical amounts in the
compilation of those statements.
(m) No action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or the
Subsidiaries or its or their property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) could reasonably be expected to
have a Material Adverse Effect.
(n) Each of the Company and the Subsidiaries owns or leases all such
properties as are necessary to the conduct of its operations as presently
conducted.
(o) Neither the Company nor the Subsidiaries is in violation or default of
(i) any provision of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or the Subsidiaries or any of its or their
properties, as applicable, except
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as to clauses (ii) and (iii) where such violation or default would not have a
Material Adverse Effect, individually or in the aggregate.
(p) Deloitte & Touche LLP and KPMG Peat Marwick LLP, each of whom have
certified certain financial statements of the Company and its consolidated
Subsidiaries and delivered their reports with respect to the audited
consolidated financial statements and schedules included in the Prospectus, each
are independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(q) There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance by the Company or sale by the Company of the
Securities.
(r) The Company has filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a Material Adverse Effect)
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect.
(s) No labor problem or dispute with the employees of the Company or the
Subsidiaries exists or is threatened or imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of any of its or
the Subsidiaries' principal suppliers, contractors or customers, that could have
a Material Adverse Effect.
(t) The Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged; all
policies of insurance and fidelity or surety bonds insuring the Company or the
Subsidiaries or their respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and the Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; and there are no claims by the Company or the Subsidiaries under any
such policy or instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause; neither the Company nor the
Subsidiaries have been refused any insurance coverage sought or applied for; and
neither the Company nor the Subsidiaries have any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.
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(u) The Subsidiaries are not currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on
the Subsidiaries' capital stock, from repaying to the Company any loans or
advances to the Subsidiaries from the Company or from transferring any of the
Subsidiaries' property or assets to the Company, except as described in or
contemplated by the Prospectus.
(v) The Company and the Subsidiaries possess all licenses, certificates,
permits and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective businesses,
and neither the Company nor the Subsidiaries have received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(w) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(x) The Company has not taken, directly or indirectly, any action designed
to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
(y) The Company and the Subsidiaries are (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except where such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth in the Prospectus, neither the Company nor the Subsidiaries have been
named as a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
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(z) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and the Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect.
(aa) Each of the Company and the Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx xxx
Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and the Subsidiaries are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. The Company and the Subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(ab) MedE America of Ohio, an Ohio corporation, Healthcare Interchange,
Inc. and Wellmark, Incorporated, a Delaware corporation, are the only
subsidiaries of the Company (the "Subsidiaries").
(ac) The Company and the Subsidiaries own, possess, license or have other
rights to use, on reasonable terms, all patents, patent applications, trade and
service marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the "Intellectual Property") material to the conduct of
the Company's business as now conducted or as proposed in the Prospectus to be
conducted. Except as set forth in the Prospectus under the caption
"Business--Intellectual Property" or as would not have a Material Adverse
Effect, (a) other than rights granted by the Company in its ordinary course of
business, there are no rights of third parties in Intellectual Property owned by
the Company; (b) there is no material infringement by third parties as to
Intellectual Property owned by the Company; (c) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim against the
Company by others challenging the Company's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim against the Company; (d) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (e) there is no pending
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or, to the Company's knowledge, threatened action, suit, proceeding or claim
against the Company by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim; (f) there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned by the Company
or that interferes with the issued or pending patents to any such Intellectual
Property; and (g) there is no prior art of which the Company is aware that may
render any U.S. patent held by the Company invalid or any U.S. patent
application held by the Company unpatentable which has not been disclosed to the
U.S. Patent and Trademark Office.
(ad) The statements contained in the Prospectus under the captions "Risk
Factors--Dependence on Intellectual Property; Risk of Infringement,"
"Business--Intellectual Property" and "Business -- Legal Proceedings," insofar
as such statements summarize legal matters, agreements, documents, or
proceedings discussed therein, are accurate and fair summaries of such legal
matters, agreements, documents or proceedings.
(ae) Except as disclosed in the Registration Statement and the Prospectus,
the Company (i) does not have any material lending or other relationship with
any bank or lending affiliate of an Underwriter and (ii) does not intend to use
any of the proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of an Underwriter.
(af) The statements contained in the Prospectus under the captions "Risk
Factors--Year 2000 Compliance," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Year 2000 Compliance" and
"Business--Year 2000 Compliance," are accurate and fair summaries of the
Company's efforts to address the risk that the computer hardware and software
used by them may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December 31, 1999
(the "Year 2000 Problem") and the Company is in compliance with the directives
of the Commission's Release No. 33-7558 relating to Year 2000 compliance.
(ag) Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
Furthermore, the Company represents and warrants to Xxxxxxx Xxxxx Barney
that (i) the Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any
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preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that (ii) no
authorization, approval, consent, license, order, registration or qualification
of or with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed shares are offered
outside the United States.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell
to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $ per share,
the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not
jointly, up to 625,000 Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be exercised
in whole or in part at any time (but not more than once) on or before the
30th day after the date of the Prospectus upon written or telegraphic
notice by the Representatives to the Company setting forth the number of
shares of the Option Securities as to which the several Underwriters are
exercising the option and the settlement date. The number of Option
Securities to be purchased by each Underwriter shall be the same percentage
of the total number of shares of the Option Securities to be purchased by
the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on_______,
1999, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be
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made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives on the
date specified by the Representatives (which date shall be reasonably agreed
upon by the Company and the Representative, but in any event within three
Business Days after exercise of said option) for the respective accounts of the
several Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the
Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b),
the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (2) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been filed
with the Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or
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for any additional information, (5) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will (1) notify the
Representatives of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section
5, an amendment or supplement which will correct such statement or omission
or effect such compliance; and (3) supply any supplemented Prospectus to
you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and the Subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any supplement
thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities; provided
that in no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(f) The Company will not, without the prior written consent of Xxxxxxx
Xxxxx Xxxxxx Inc., sell, offer to sell, solicit an offer to purchase,
contract to sell, grant any option to sell, pledge or otherwise dispose of,
or file (or
12
participate in the filing of) a registration statement (other than a
Registration Statement on Form S-8 or S-4) with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable
for such capital stock, or publicly announce an intention to effect any
such transaction, for a period of 180 days after the date of the Final
Prospectus, other than shares of Common Stock disposed of as bona fide
gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on the Nasdaq National Market; (vi)
any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification); (vii) any
filings required to be made with the National Association of Securities
Dealers, Inc. (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers
of the Securities; (ix) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel)
for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder.
13
(i) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required
by the National Association of Securities Dealers, Inc. (the "NASD") or the
NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the
Registration Statement. Xxxxxxx Xxxxx Barney will notify the Company as to
which Participants will need to be so restricted. The Company will direct
the transfer restrictions upon such period of time.
(j) The Company agrees to pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program
and stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company shall have caused Reboul, MacMurray, Xxxxxx, Xxxxxxx &
Kristol, counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in
14
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure as to due qualification to do business would not have a
Material Adverse Effect, individually or in the aggregate.
(ii) all the outstanding shares of capital stock of each of the
Subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company directly free and clear of any
perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interest, claim, lien or
encumbrance;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable;
the Securities have been duly and validly authorized, and, when issued
and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance and evidence of satisfactory distribution,
on the Nasdaq National Market; the certificates for the Securities are
in valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities from the Company except for
such rights of WCAS Capital Partners II, L.P. as have been effectively
waived; and, except as set forth in the Prospectus, 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) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or the Subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and to the knowledge of such
counsel, there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements included in the
Prospectus under the headings "Risk Factors -- Proposed Healthcare
Data Confidentiality Legislation," "Risk Factors--Dependence on
Intellectual Property; Risk of Infringement," "Business -- Government
Regulation," "Business -- Legal Proceedings" and "Business-
15
-Intellectual Property" fairly summarize the legal matters therein
described;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and
other financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the rules and
regulations thereunder; and such counsel has no reason to believe that
on the Effective Date or at the Execution Time the Registration
Statement contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus
as of its date and on the Closing Date included or includes any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each
case, other than the financial statements and other financial
information contained therein, as to which such counsel need express
no opinion);
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be, an "investment company"
as defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the
16
charter or by-laws of the Company or the Subsidiaries, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or the Subsidiaries are a
party or bound or to which its or their property is subject, however,
the opinion in this section (ix)(ii) may be based upon the knowledge
of such counsel with respect to any such agreement, obligation,
condition, covenant or instrument which is not otherwise disclosed in,
or filed as an exhibit to, the Registration Statement, or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable
to the Company or the Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or the Subsidiaries or
any of their properties; and
(x) to the knowledge of such counsel, no holders of securities of
the Company have rights to the registration of such securities under
the Registration Statement except for such rights of WCAS Capital
Partners II, L.P. as have been effectively waived and the rights of
Medic Computer Systems, Inc., which rights will not be effective until
the exercise of its warrant at least 180 days following the sale of
the Securities to the Underwriters.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Delaware and New York or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Xxxxx Xxxxxxxxxx LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and addressed to the Representatives, with respect to the issuance and
sale of the Securities, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
17
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no Material Adverse Effect.
(e) The Representatives shall have received letters addressed to you
dated the date hereof and the Closing Date from Deloitte & Touche LLP and
KPMG Peat Marwick LLP, each independent certified public accountants,
substantially in the forms heretofore approved by you.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (e) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and the Subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(g) The Securities shall have been listed and admitted and authorized
for trading on the Nasdaq National Market and satisfactory evidence of such
actions shall have been provided to the Representatives.
(h) At or prior to the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from each officer, director and certain stockholders of
the Company, whose aggregate holdings of Common Stock represent ______
shares of Common Stock (___% of the total outstanding Common Stock),
addressed to the Representatives.
18
(i) The Company shall have provided evidence to the Underwriters, in
form and substance satisfactory to the Representatives, that concurrently
with the Closing (i) the Senior Subordinated Note and the Credit Facility
(as such terms are defined in the Prospectus) will be repaid in full in the
manner set forth in the Prospectus under the heading "Use of Proceeds" and
(ii) the Recapitalization (as defined in the Prospectus) will be completed.
(j) The Company shall have provided evidence to the Underwriters, in
form and substance satisfactory to the Representatives, that the Amended
Credit Facility has been executed on the terms set forth in the Prospectus.
(k) The Company shall have provided evidence to the Underwriters, in
form and substance satisfactory to the Representatives, that the Company's
Certificate of Incorporation has been amended to provide for the issuance
of up to 5,000,000 shares of Preferred Stock as set forth in the Prospectus
under the headings "Risk Factors--Potential Adverse Effect of Anti-Takeover
Provisions," "Description of Capital Stock" and "Description of Capital
Stock--Preferred Stock."
(l) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancelation shall be
given to the Company in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, at 1301 Avenue of the Americas, New York, New York, on the
Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Xxxxxxx Xxxxx Xxxxxx on demand
for all out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
19
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for
the registration of the Securities as originally filed or in any amendment
thereof, or in any Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein; provided further, that with respect to
any untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall
not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the securities
concerned, to the extent that any such loss, claim, damage or liability of
such Underwriter occurs under the circumstance where it shall have been
determined by a court of competent jurisdiction by final and nonappealable
judgment that (w) the Company had previously furnished copies of the
Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such
securities to such person, a copy of the Prospectus. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) The Company agrees to indemnify and hold harmless Xxxxxxx Xxxxx
Xxxxxx and each person, if any, who controls Xxxxxxx Xxxxx Barney within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act ("Xxxxxxx Xxxxx Xxxxxx Entities"), from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) caused by any
untrue statement or alleged untrue
20
statement of a material fact contained in the prospectus wrapper material
prepared by or with the consent of the Company for distribution in foreign
jurisdictions in connection with the Directed Share Program attached to the
Prospectus or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement therein, when considered in
conjunction with the Prospectus or any applicable preliminary prospectus,
not misleading; (ii) caused by the failure of any Participant to pay for
and accept delivery of the shares which immediately following the effective
of the Registration Statement, were subject to a properly confirmed
agreement to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program, provided that, the Company
shall not be responsible under this subparagraph (iii) for any losses,
claim, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or gross
negligence of Xxxxxxx Xxxxx Xxxxxx Entities.
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but
only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities, the legend in block
capital letters on page 2 related to stabilization, syndicate covering
transactions and penalty bids and, under the heading "Underwriting" or
"Plan of Distribution," (i) the sentences related to concessions and
reallowances and (ii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Prospectus and
the Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus.
(d) The Company hereby confirms that at its request Xxxxxxx Xxxxx
Barney has without compensation acted as "qualified independent
underwriter" (in such capacity, the "QIU") within the meaning of Rule 2720
of the Conduct Rules of the National Association of Securities Dealers,
Inc. ("Rule 2720") in connection with the offering of the Offered
Securities. The Company agrees to indemnify and hold harmless the QIU, the
directors, officers, employees and agents of the QIU and each person who
controls the QIU within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any
21
untrue statement or alleged untrue statement of a material fact contained
in the registration statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any Preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the QIU through the
Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(e) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a), (b), (c) or (d)
above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a), (b), (c) or
(d) above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would, under any
applicable standard of professional conduct as determined by such
indemnified party, present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a
22
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding. It is understood, however,
that the Company shall, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the fees and expenses of only one separate firm of attorneys (in addition
to any local counsel) at any time for all such Underwriters and controlling
persons, which firm shall be designated in writing by Xxxxxxx Xxxxx Xxxxxx.
Notwithstanding anything contained herein to the contrary, if indemnity may
be sought pursuant to Section 8(b) hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local
counsel) for Xxxxxxx Xxxxx Barney for the defense of any losses, claims,
damages and liabilities arising out of the Directed Share Program, and all
persons, if any, who control Xxxxxxx Xxxxx Xxxxxx within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act.
(f) In the event that the indemnity provided in paragraph (a), (b),
(c) or (d) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on
the other from the offering of the Securities; provided, however, that in
no case shall (i) any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder or (ii) the QIU in its capacity as "qualified independent
underwriter" (within the meaning of Rule 2720) be responsible for any
amount in excess of the compensation received by the QIU for acting in such
capacity. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Underwriters severally
shall contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any
23
other relevant equitable considerations. Benefits received by the Company
shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Prospectus. Benefits received by the QIU in its capacity as "qualified
independent underwriter" shall be deemed to be equal to the compensation
received by the QIU for acting in such capacity. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (f), no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee
and agent of an Underwriter shall have the same rights to contribution as
such Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (f).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations
under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Securities set forth opposite the names of
all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any
24
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior
to such time (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have
been established on such Exchange or National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or
war, or other calamity or crisis the effect of which on financial markets
is such as to make it, in the sole judgment of the Representatives,
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Prospectus (exclusive of any supplement
thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements
of the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company
or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Barney General Counsel
(fax no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx
Xxxxx Xxxxxx, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to (000) 000-0000 and confirmed to it at 00 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxx Xxxx 00000, attention of the Legal
Department.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
25
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus included
in the Registration Statement at the Effective Date that omits Rule 430A
Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include
26
any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxxxx Xxxxx Barney Inc.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company and the several Underwriters.
Very truly yours,
MedE America Corporation
By:
-------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
By: Xxxxxxx Xxxxx Barney Inc.
By:
--------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
29
SCHEDULE I
Number of
Underwritten Securities
Underwriters to be Purchased
------------ ---------------
Xxxxxxx Xxxxx Xxxxxx Inc.............................
Bear, Xxxxxxx & Co. Inc. ............................
Xxxxxxx Xxxxx & Company, L.L.C.......................
-----------------------
Total.............................. -----------------------
[Form of Lock-Up Agreement] EXHIBIT A
[Letterhead of officer, director or shareholder of
Corporation]
MEDE AMERICA CORPORATION
Initial Public Offering of Common Stock
June ___, 1998
Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxx Xxxxx Xxxxxx & Company, LLC
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between MEDE AMERICA
Corporation, a Delaware corporation (the "Company"), and each of you as
Underwriters named therein, relating to an underwritten initial public offering
of Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxx Xxxxxx Inc., sell, offer to sell, solicit an offer to purchase,
contract to sell, grant any option to sell, pledge or otherwise dispose of, or
file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
such capital stock, or publicly announce an intention to effect any such
transaction, for a period of 180 days after the date of the Final Prospectus,
other than shares of Common Stock disposed of as bona fide gifts approved by
Xxxxx Xxxxxx Inc.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
----------------------------------
Stockholder Name
By: ------------------------------
Name:
Title:
Address:
