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EXHIBIT 1.1
________________ Shares
Province Healthcare Company
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
_____________, 1998
BT Alex. Xxxxx Incorporated
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company, LLC
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Province Healthcare Company, a Delaware corporation (the "Company"),
and certain stockholders of the Company (the "Selling Stockholders") propose to
sell to the several underwriters (the "Underwriters") named in Schedule I hereto
for whom you are acting as representatives (the "Representatives") an aggregate
of ______________ shares of the Company's Common Stock, $0.01 par value (the
"Firm Shares"), of which ___________ shares will be sold by the Company and
______________ shares will be sold by the Selling Stockholders. The respective
amounts of the Firm Shares to be so purchased by the several Underwriters are
set forth opposite their names in Schedule I hereto, and the respective amounts
to be sold by the Selling Stockholders are set forth opposite their names in
Schedule II hereto. The Company and the Selling Stockholders are sometimes
referred to herein collectively as the "Sellers." The Company also proposes to
sell at the Underwriters' option an aggregate of up to ____________ additional
shares of the Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company and the Selling
Stockholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the
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numbers of Firm Shares set forth opposite their respective names in Schedule I,
plus their pro rata portion of the Option Shares if you elect to exercise the
over-allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
(a) The Company represents and warrants to each of the
Underwriters as follows:
(i) A registration statement on Form S-1 (File No. 333-
___________) with respect to the Shares has been carefully prepared by
the Company in conformity with the requirements of the Securities Act
of 1933, as amended (the "Act"), and the Rules and Regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission. Copies
of such registration statement, including any amendments thereto, the
preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements
and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule
462(b) of the Act, herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in
reliance upon Rule 430A and contained in the Prospectus referred to
below, has become effective under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date
of this Agreement. "Prospectus" means (a) the form of prospectus first
filed with the Commission pursuant to Rule 424(b) or (b) the last
preliminary prospectus included in the Registration Statement filed
prior to the time it becomes effective or filed pursuant to Rule 424(a)
under the Act that is delivered by the Company to the Underwriters for
delivery to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein
referred to as a "Preliminary Prospectus." Any reference herein to any
Prospectus shall be deemed to include any supplements or amendments
thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the termination of
the offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. The Company is duly qualified and is active on the records
of the Corporation Division of the State of Oregon and is duly
qualified and in good standing as a foreign corporation authorized to
do business in each other jurisdiction in
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which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the earnings,
business, assets, operations, condition (financial or other) or
prospects for the business, assets, operations, condition (financial or
other) of the Company and its Subsidiaries (as defined), taken as a
whole (such effect is referred to herein as a "Material Adverse
Effect").
(iii) All of the consolidated corporations, partnerships
(including, without limitation, general, limited and limited liability
partnerships) and limited liability companies in which the Company has
a direct or indirect ownership interest are listed in Schedule III to
this Agreement (collectively, the "Subsidiaries"). Each Subsidiary that
is a corporation (a "Corporate Subsidiary") has been duly organized and
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, or if such Corporate Subsidiary
is incorporated in the State of Oregon, such Corporate Subsidiary is
active on the records of the Corporate Division of the State of Oregon,
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement. Each Corporate Subsidiary is duly qualified and in good
standing as a foreign corporation authorized to do business in each
other jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect.
All of the outstanding shares of capital stock of each Corporate
Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable, were not issued in violation of or subject to any
preemptive or similar rights, and, except as set forth on Schedule
1(a)(iii), are owned by the Company directly, or indirectly through one
of the other Subsidiaries, free and clear of all security interests,
liens, encumbrances and equities and claims; and no options, warrants
or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock
or ownership interests in any Corporate Subsidiary are outstanding.
(iv) Each Subsidiary that is a partnership (a "Partnership")
has been duly organized, is validly existing as a partnership in good
standing under the laws of its jurisdiction of organization and has the
partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement. Each Partnership is duly qualified and in good standing as a
foreign partnership authorized to do business in each other
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect.
The capital contributions with respect to the outstanding units of each
Partnership have been made to the Partnership. Except as set forth in
Schedule 1(a)(iv), the general and limited partnership interests
therein held directly or indirectly by the Company are owned free and
clear of all security interests, liens, encumbrances and equities and
claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into ownership interests in any Partnership are
outstanding. Each partnership agreement pursuant to which the Company
or a Subsidiary
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holds an interest in a Partnership is in full force and effect and
constitutes the legal, valid and binding agreement of the parties
thereto, enforceable against such parties in accordance with the terms
thereof, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally. There has been no material breach of or
default under, and no event which with notice or lapse of time would
constitute a material breach of or default under, such partnership
agreements by the Company or any Subsidiary or, to the Company's
knowledge, any other party to such agreements.
(v) Each Subsidiary that is a limited liability company (an
"LLC") has been duly organized, is validly existing as a limited
liability company in good standing under the laws of its jurisdiction
of organization and has the limited liability company power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement. Each LLC is duly
qualified and in good standing as a foreign limited liability company
authorized to do business in each other jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would
not have a material adverse effect on the earnings, business,
management, properties, assets, rights, operations, condition
(financial or other) or prospects of the Company and its Subsidiaries,
taken as a whole. The capital contributions with respect to the
outstanding membership interests of each LLC have been made to the LLC.
All outstanding membership interests in the LLCs were issued and sold
in compliance with the applicable operating agreements or such LLCs and
all applicable federal and state securities laws, and, except as set
forth in Schedule 1(a)(v), the membership interests therein held
directly or indirectly by the Company are owned free and clear of all
security interests, liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into
ownership interests in any LLC are outstanding. Each operating
agreement pursuant to which the Company or a Subsidiary holds a
membership interest in an LLC is in full force and effect and
constitutes the legal, valid and binding agreement of the parties
thereto, enforceable against such parties in accordance with the terms
thereof, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally. There has been no material breach of or
default under, and no event which with notice or lapse of time would
constitute a material breach of or default under, such operating
agreements by the Company or any Subsidiary or, to the Company's
knowledge, any other party to such agreements.
(vi) Except to the extent disclosed in the Prospectus, each of
the hospitals described in the Prospectus as owned or leased by the
Company is owned or leased and operated by a Subsidiary in which the
Company directly or indirectly owns at least 80% of the outstanding
ownership interests. Except as disclosed in the Prospectus, there are
no consensual encumbrances or restrictions on the ability of any
Subsidiary (i) to pay any dividends or make any distributions on such
Corporate Subsidiary's capital stock, such Partnership's partnership
interests or such LLC's membership interests or to pay any
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indebtedness owed to the Company or any other Subsidiary, (ii) to make
any loans or advances to, or investments in, the Company or any other
Subsidiary, or (iii) to transfer any of its property or assets to the
Company or any other Subsidiary.
(vii) The outstanding shares of Common Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have
been duly authorized and when issued and paid for as contemplated
herein will be validly issued, fully paid and non-assessable; and no
preemptive rights of stockholders exist with respect to any of the
Shares or the issue and sale thereof. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock.
(viii) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the
Shares conform in all material respects to the description thereof
contained in the Registration Statement. The form of certificates for
the Shares conforms in all material respects to the corporate law of
the jurisdiction of the Company's incorporation.
(ix) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement conforms, and the Prospectus and any amendments
or supplements thereto will conform, to the requirements of the Act and
the Rules and Regulations. The Registration Statement and any amendment
thereto do not contain, and will not contain, any untrue statement of a
material fact and do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue
statement of material fact and do not omit, and will not omit, to state
any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company
makes no representations or warranties as to information contained in
or omitted from the Registration Statement or the Prospectus, or any
such amendment or supplement, 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 use in the
preparation thereof.
(x) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as set
forth in the Registration Statement, present fairly the financial
position and the results of operations and cash flows of the Company
and the consolidated Subsidiaries, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have
been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments
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necessary for a fair presentation of results for such periods have been
made. The summary financial and statistical data included in the
Registration Statement presents fairly the information shown therein
and such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of the
company. The pro forma financial statements and other pro forma
financial information included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been properly compiled
on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(xi) Ernst & Young LLP and KPMG Peat Marwick LLP, who have
certified certain of the financial statements filed with the Commission
as part of the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(xii) There is no action, suit, claim or proceeding pending
or, to the knowledge of the Company, overtly threatened against the
Company or any of the Subsidiaries before any court or administrative
agency or otherwise which if determined adversely to the Company or any
of its Subsidiaries would reasonably be expected to, individually or in
the aggregate, result in a Material Adverse Effect or to prevent the
consummation of the transactions contemplated hereby, except as set
forth in the Registration Statement.
(xiii) The Company and the Subsidiaries have good and
marketable title to all of the material properties and assets reflected
in the financial statements (or as described in the Registration
Statement) hereinabove described, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in such
financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company and the Subsidiaries
occupy their leased properties under valid and binding leases
conforming in all material respects to the description thereof set
forth in the Registration Statement; provided, however, that the
Company makes no representations or warranties regarding the validity
or enforceability of any purchase options for leased premises.
(xiv) The Company and the Subsidiaries have filed all Federal,
State, material local and material foreign income tax returns which
have been required to be filed and have paid all taxes indicated by
said returns and all assessments received by them or any of them to the
extent that such taxes have become due, other than taxes being
contested in good faith by appropriate proceedings. All tax liabilities
have been adequately provided for in the financial statements of the
Company.
(xv) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any
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material adverse change or any development that would reasonably be
expected to, individually or in the aggregate, result in a Material
Adverse Effect, whether or not occurring in the ordinary course of
business, and there has not been any material transaction entered into
or any material transaction that is probable of being entered into by
the Company or the Subsidiaries, other than transactions in the
ordinary course of business and changes and transactions described in
the Registration Statement, as it may be amended or supplemented. The
Company and the Subsidiaries have no material contingent obligations
which are not disclosed in the Company's financial statements which are
included in the Registration Statement.
(xvi) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be, in
violation of or in default under its Charter or By-Laws or other
organizational agreement or under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or
by which it, or any of its properties, is bound, except for such
violations or defaults which would not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect.
The execution and delivery of this Agreement and the consummation of
the transactions herein contemplated and the fulfillment of the terms
hereof will not conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any Subsidiary is a party, or of the Charter or by-laws of
the Company or any order, rule or regulation applicable to the Company
or any Subsidiary of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction,
except for such conflicts, breaches or defaults which would not
reasonably be expected to, individually or in the aggregate, result in
a Material Adverse Effect.
(xvii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such additional
steps as may be necessary to qualify the Shares for public offering by
the Underwriters under state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(xviii) Each of the Company and its Subsidiaries owns or
possesses adequate rights to use all material patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade
names and copyrights described or referred to in the Prospectus as
owned or used by it or which are necessary for the conduct of its
business as described in the Prospectus. Neither the Company nor any of
the Subsidiaries has infringed, or received notice of any infringement
of, any patents, patent rights, trade names, trademarks or copyrights,
except for any infringement which has been settled and except for such
infringements which would not reasonably be expected to, individually
or in the aggregate, result in a Material Adverse Effect. The Company
knows of no material
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infringement by others of patents, patent rights, trade names,
trademarks or copyrights owned by or licensed to the Company or any
Subsidiary.
(xix) Neither the Company, nor to the Company's best
knowledge, any of its affiliates, has taken or may take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares. The Company
acknowledges that the Underwriters may engage in passive market making
transactions in the Shares on the Nasdaq National Market in accordance
with Regulation M under the Exchange Act.
(xx) Neither the Company nor any Subsidiary is, nor will the
Company nor any Subsidiary become upon the sale of the Shares and the
application of the proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds," an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(xxi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxii) 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 industries.
(xxiii) 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 would have any liability
which would reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect; the Company has not
incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to 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 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.
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(xxiv) The Company's Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is listed on The Nasdaq National
Market and the Company has taken no action designed to, or likely to
have the effect or, terminating the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the Nasdaq
National Market, nor has the Company received any notification that the
Commission or the NASD is contemplating terminating such registration
or listing. The Company has filed in a timely manner all reports and
other information required to be filed with the Commission pursuant to
the Exchange Act since the Company has been subject to the reporting
requirements of the Exchange Act. The Shares have been approved for
listing, subject to notice of issuance, on the Nasdaq National Market.
(xxv) To the best of the Company's knowledge, no officer,
director or securityholder of the Company has an "association" or
"affiliation" with any member of the National Association of Securities
Dealers, Inc. ("NASD"), within the meaning of Article III, Section 44
of the Rules of Fair Practice of the NASD. The Company does not have an
"association" or "affiliation" with any member of the NASD, within the
meaning of Article III, Section 44 of the Rules of Fair Practice of the
NASD.
(xxvi) Each of the parties to the Amended and Restated Plan
and Agreement of Merger, dated as of January 15, 1998 (the "Merger
Agreement"), by and between the Company and Principal Hospital Company,
an Oregon corporation, had, at the time of the execution and delivery
of the Merger Agreement and at all times through and including the
consummation of the transactions contemplated thereby, full legal
right, power and authority to enter into the Merger Agreement and to
perform the transactions contemplated thereby. The Merger Agreement was
duly authorized, executed and delivered by each of the parties thereto;
the performance of the Merger Agreement and the consummation of the
transactions therein contemplated did not result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or require the consent or approval of any person or entity
under, (i) any bond, debenture, note or other evidence of indebtedness,
or under any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which any
of the parties to the Merger Agreement is or was a party or by which
any of such parties or their respective properties is or was bound,
(ii) the charter or bylaws of any of the parties to the Merger
Agreement, or (iii) any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over any of the parties
to the Merger Agreement or over their respective properties, except for
such consents or approvals as have been duly and timely received or
obtained and except for such breaches, violations or defaults which
would not reasonably be expected to, individually or in the aggregate,
result in a Material Adverse Effect. No consent, approval,
authorization or order of or qualification with any court, government
or governmental agency or body, domestic or foreign, having
jurisdiction over any of the parties to the Merger Agreement or over
their respective properties is or was required for the execution and
delivery of the Merger Agreement and the consummation of the
transactions contemplated thereby, except for such consents, approvals,
authorizations, orders or qualifications as have been duly and timely
received
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or obtained. The merger contemplated by the Merger Agreement has been
duly and validly consummated and has become effective under applicable
law. The transactions contemplated by the Merger Agreement constitute
an entirely tax free reorganization under Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the "Code"), and otherwise
did not require the Company to recognize gain under the Code.
(xxvii) The Company and its Subsidiaries have operated and
currently operate their business in conformity with all applicable
laws, rules and regulations of each jurisdiction in which it is
conducting business, except where the failure to so be in compliance
would not reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect. The Company and each of the
Subsidiaries holds all material certificates, consents, exemptions,
orders, licenses, authorizations, accreditations, permits or other
approvals or rights from all governmental authorities, all
self-regulatory organizations, all governmental and private accrediting
bodies and all courts and other tribunals (collectively, "Permits")
which are necessary to own their properties and to conduct their
businesses, including, without limitation, such Permits as are required
(i) under such federal and state healthcare laws as are applicable to
the Company and the Subsidiaries and (ii) with respect to those
facilities operated by the Company or any Subsidiary that participate
in Medicare and/or Medicaid, to receive reimbursement thereunder,
except for such failures to have Permits which would not reasonably be
expected to, individually or in the aggregate, result in a Material
Adverse Effect. The Company and each of the Subsidiaries have fulfilled
and performed all of their material obligations with respect to such
Permits, and no event or change in condition has occurred which allows,
or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of
the holder of any such Permit, except as to such qualifications as may
be set forth in the Prospectus and except for such failures which would
not reasonably be expected to, individually or in the aggregate, result
in a Material Adverse Effect. During the period for which financial
statements are included in the Prospectus, denials by third party
payers of claims for reimbursement for services rendered by the Company
have not had a Material Adverse Effect, and any such denials are either
under appeal or the Company has ceased seeking reimbursement for the
services or supplies to which they relate.
(xxviii) The accounts receivable of the Company and its
Subsidiaries have been and will continue to be adjusted to reflect
reimbursement policies of third party payors such as Medicare,
Medicaid, MediCal, Blue Cross/Blue Shield, private insurance companies,
health maintenance organizations, preferred provider organizations,
managed care systems and other third party payors. The accounts
receivable relating to such third party payors do not and shall not
exceed amounts the Company and its Subsidiaries are entitled to
receive, subject to adjustments to reflect reimbursement policies of
third party payors and normal discounts in the ordinary course of
business.
(xxix) None of the Company nor any of its officers, directors
or stockholders, or to the knowledge of the Company, any employee or
other agent of the Company, has engaged on behalf of the Company in any
of the following: (i) knowingly and willfully
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making or causing to be made a false statement or representation of a
material fact in any applications for any benefit or payment under the
Medicare or Medicaid program or from any third party (where applicable
federal or state law prohibits such payments to third parties); (ii)
knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining
rights to any benefit or payment under the Medicare or Medicaid program
or from any third party (where applicable federal or state law
prohibits such payments to third parties); (iii) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment under the Medicare
or Medicaid program or from any third party (where applicable federal
or state law prohibits such payments to third parties) on its own
behalf or on behalf of another, with intent to secure such benefit or
payment fraudulently; (iv) knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback, bribe
or rebate), directly or indirectly overtly or covertly, in cash or in
kind (a) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by Medicare or Medicaid
or any third party (where applicable federal or state law prohibits
such payments to third parties), or (b) in return for purchasing,
leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service, or item for which
payment may be made in whole or in part by Medicare or Medicaid or any
third party (where applicable federal or state law prohibits such
payments to third parties); provided, however, that it is agreed and
understood that (x) from time to time the Company settles, without
admitting liability, claims made by governmental authorities which
allege conduct which may be deemed to violate clause (i) or (ii) above;
(y) such settlements have not been, individually or in the aggregate,
material; and (z) such claims and settlements do not constitute a
breach of the representations and warranties contained in this
paragraph (xxix).
(xxx) Neither the Company nor any of its Subsidiaries has
failed to file with applicable regulatory authorities any statement,
report, information or form required by any applicable law, regulation
or order, except where the failure to be so in compliance would not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, all such filings or submissions were in
material compliance with applicable laws when filed and no material
deficiencies have been asserted by any regulatory commission, agency or
authority with respect to any such filings or submissions.
(xxxi) The property, assets and operations of the Company and
the Subsidiaries comply in all material respects with all applicable
federal, state or local law, common law, doctrine, rule, order, decree,
judgment, injunction, license, permit or regulation relating to
environmental matters (the "Environmental Laws"). None of the property,
assets or operations of the Company and the Subsidiaries is the subject
of any material federal, state or local investigation evaluating
whether any remedial action is needed to respond to a release into the
environment of any substance regulated by, or form the basis of
liability under, any Environmental Laws (a "Hazardous Material"), or is
in
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contravention of any Environmental Law. Neither the Company nor any
Subsidiary has received any notice or claim, nor are there pending or,
to the Company's knowledge, threatened lawsuits against them with
respect to violations of an Environmental Law or in connection with the
release of any Hazardous Material into the environment. Neither the
Company nor any Subsidiary has any material contingent liability in
connection with any release of Hazardous Material into the environment.
(b) Each of the Selling Stockholders severally represents and
warrants as follows:
(i) Such Selling Stockholder now has and at the Closing Date
will have good and marketable title to the Firm Shares to be sold by
such Selling Stockholder, free and clear of any liens, encumbrances,
equities and claims whatsoever, and full right, power and authority to
effect the sale and delivery of such Firm Shares; and upon the delivery
of, against payment for, such Firm Shares pursuant to this Agreement,
the Underwriters will acquire good and marketable title thereto, free
and clear of any liens, encumbrances, equities and claims.
(ii) Such Selling Stockholder has duly executed and delivered
a power of attorney (the "Power of Attorney"), in the form heretofore
delivered to the Representatives, appointing Xxxxxx X. Xxxx and Xxxxxxx
X. Xxxx, as such Selling Stockholders' attorneys-in-fact
("Attorney-in-Fact"), with authority to execute, deliver and perform on
behalf of such Selling Stockholder this Agreement and a custody
agreement ("Custody Agreement") in the form heretofore delivered to the
Representatives, with the Company, as custodian (the "Custodian"). Such
Selling Stockholder has full right, power and authority to execute and
deliver the Power of Attorney and to authorize the execution of this
Agreement and the Custody Agreement and to perform its obligations
under such agreements. The execution and delivery of this Agreement and
the consummation by such Selling Stockholder of the transactions herein
contemplated and the fulfillment by such Selling Stockholder of the
terms hereof will not require any consent, approval, authorization or
other order of any court, regulatory body, administrative agency or
other governmental body (except as may be required under the Act, or
state securities or Blue Sky laws) and will not result in a breach of
any of the terms and provisions of, or constitute a default under,
organizational documents of such Selling Stockholder, if not an
individual, or an indenture, mortgage, deed of trust or other agreement
or instrument to which such Selling Stockholder is a party, or of any
order, rule or regulation applicable to such Selling Stockholder of any
court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(iii) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to, or which has
constituted, or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of the Common Stock
of the Company and, other than as permitted by the Act, the Selling
Stockholder will not distribute any prospectus or other offering
material in connection with the offering of the Shares.
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(iv) The information pertaining to such Selling Stockholder in
the Prospectus is complete and accurate in all material respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set
forth, the Sellers agree to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a price
of $____________ per share, the number of Firm Shares set forth
opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 9 hereof. The obligations of the
Company and each of the Selling Stockholders shall be several and not
joint.
(b) Certificates in negotiable form for the total number of
the Shares to be sold hereunder by the Selling Stockholders have been
placed in custody with the Custodian pursuant to the Custody Agreement
executed by the Attorney-in-Fact on behalf of each Selling Stockholder
for delivery of all Firm Shares to be sold hereunder by the Selling
Stockholders. Each of the Selling Stockholders specifically agrees that
the Firm Shares represented by the certificates held in custody for the
Selling Stockholders under the Custody Agreement are subject to the
interests of the Underwriters hereunder, that the arrangements made by
the Selling Stockholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminable by any act or deed of the Selling
Stockholders (or by any other person, firm or corporation including the
Company, the Custodian or the Underwriters) or by operation of law
(including the death of an individual Selling Stockholder or the
dissolution of a corporate Selling Stockholder) or by the occurrence of
any other event or events, except as set forth in the Custody
Agreement. If any such event should occur prior to the delivery to the
Underwriters of the Firm Shares hereunder, certificates for the Firm
Shares shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such event has not occurred. The
Custodian is authorized to receive and acknowledge receipt of the
proceeds of sale of the Shares held by it against delivery of such
Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be
made in immediately available funds by wire transfer to separate
accounts designated by the Company, one established in the name of the
Company for the shares sold by it and one established in the name of
the Company, "as Custodian" for the shares to be sold by the Selling
Stockholders, in each case against delivery of certificates therefor to
the Representatives for the several accounts of the Underwriters. Such
payment and delivery are to be made at the offices of BT Alex. Xxxxx
Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000 at 10:00 a.m.,
Baltimore time, on the third business day after the date of this
Agreement or at such other time and date not later than five business
days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as
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the "Closing Date." (As used herein, "business day" means a day on
which the New York Stock Exchange is open for trading and on which
banks in New York are open for business and are not permitted by law or
executive order to be closed.) The certificates for the Firm Shares
will be delivered in such denominations and in such registrations as
the Representatives requests in writing not later than the second full
business day prior to the Closing Date, and will be made available for
inspection by the Representatives at least one business day prior to
the Closing Date.
(d) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company hereby grants an option to the several
Underwriters to purchase the Option Shares at the price per share as
set forth in the first paragraph of this Section 2. The option granted
hereby may be exercised in whole or in part by giving written notice
(i) at any time before the Closing Date and (ii) only once thereafter
within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting
forth the number of Option Shares as to which the several Underwriters
are exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined
by the Representatives but shall not be earlier than three nor later
than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of
the option is three days before the Closing Date, the notice of
exercise shall set the Closing Date as the Option Closing Date. The
number of Option Shares to be purchased by each Underwriter shall be in
the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such
Underwriter bears to the Total number of Firm Shares, adjusted by you
in such manner as to avoid fractional shares. The option with respect
to the Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters.
You, as Representatives of the several Underwriters, may cancel such
option at any time prior to its expiration by giving written notice of
such cancellation to the Company. To the extent, if any, that the
option is exercised, payment for the Option Shares shall be made on the
Option Closing Date in immediately available funds by wire transfer to
the account(s) designated by the Company against delivery of
certificates therefor at the offices of BT Alex. Xxxxx Incorporated, 0
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem
it advisable to do so. The Firm Shares are to be initially offered to
the public at the public offering price set forth in the Prospectus.
The Representatives may from time to time thereafter change the public
offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the
Underwriters will offer them to the public on the foregoing terms.
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It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the
Shares in accordance with a Master Agreement Among Underwriters entered
into by you and the several other Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
(a) The Company covenants and agrees with the several
Underwriters that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely
file with the Commission under Rule 424(b) of the Rules and Regulations
a Prospectus in a form approved by the Representatives containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, (B) not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is
not substantially in compliance with the Rules and Regulations and (C)
file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment thereto
shall have become effective, (B) of receipt of any written comments
from the Commission, provided that the Company shall request any oral
comments of the Commission to be provided in writing, (C) of any
request of the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional material
information, and (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
use of the Prospectus or of the institution of any proceedings for that
purpose. The Company will use its reasonable best efforts to prevent
the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof,
if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have
designated in writing and will make such applications, file such
documents, and furnish such information as may be reasonably required
for that purpose, provided the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time,
prepare and file such statements, reports, and other documents, as are
or may be required to continue such qualifications in effect for so
long a period (not to
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exceed nine months) as the Representatives may reasonably request for
distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company
will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as many
copies of the Prospectus in final form, or as thereafter amended or
supplemented, as the Representatives may reasonably request. The
Company will deliver to the Representatives at or before the Closing
Date, one signed and four conformed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of
copies of the Registration Statement (including such number of copies
of the exhibits filed therewith that may reasonably be requested), and
of all amendments thereto, as the Representatives may reasonably
request.
(v) The Company will comply in all material respects with the
Act and the Rules and Regulations, and the Securities Exchange Act of
1934 (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur
as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at
any time to amend or supplement the Prospectus to comply with any law,
the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to
the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration
Statement, an earning statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement, which
earning statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(vii) The Company will, for a period of two years from the
Closing Date, deliver to the Representatives copies of annual reports
and copies of all other documents, reports and information furnished by
the Company to its stockholders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Securities Exchange Act of 1934, as amended.
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(viii) No offering, sale, short sale or other disposition of
any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of Common
Stock or derivative of Common Stock (or agreement for such) will be
made for a period of 90 days after the date of this Agreement, directly
or indirectly, by the Company otherwise than hereunder or with the
prior written consent of BT Alex. Xxxxx Incorporated, except for grants
of options pursuant to the Company's 1997 Long-Term Incentive Plan, as
amended.
(ix) The Company will use its reasonable best efforts to list,
subject to notice of issuance, the Shares on the Nasdaq National
Market.
(x) The Company has caused each officer and director and
specific shareholders of the Company identified to the Company to
furnish to you, on or prior to the date of this agreement, a letter or
letters, in form and substance satisfactory to the Underwriters,
pursuant to which each such person shall agree not to offer, sell, sell
short or otherwise dispose (except bona fide gifts and transfers to
affiliates as specifically provided in such letters) of any shares of
Common Stock of the Company or other capital stock of the Company, or
any other securities convertible, exchangeable or exercisable for
Common Shares or derivative of Common Shares owned by such person or
request the registration for the offer or sale of any of the foregoing
(or as to which such person has the right to direct the disposition of)
for a period of 90 days after the date of this Agreement, directly or
indirectly, except with the prior written consent of BT Alex. Xxxxx
Incorporated ("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its sale of
the Shares substantially as set forth in the Prospectus.
(xii) The Company shall endeavor in the future to conduct its
business in such a manner so as to ensure that the Company or any of
the Subsidiaries to will not be an "investment company" or an entity
"controlled" by an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act").
(xiii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(xiv) Until its completion of participation in the
distribution, the Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company for the applicable
restricted period required by Regulation M under the Securities Act.
(b) Each of the Selling Stockholders covenants and agrees with the
several Underwriters that:
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(i) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other capital stock of the
Company or other securities convertible, exchangeable or exercisable
for Common Stock or derivative of Common Stock owned by the Selling
Stockholder or request for the registration for the offer or sale of
any of the foregoing (or as to which the Selling Stockholder has the
right to direct the disposition of) will be made for a period of 90
days after the date of this Agreement, directly or indirectly, by such
Selling Stockholder otherwise than hereunder or with the prior written
consent of BT Alex. Xxxxx Incorporated.
(ii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance
Act of 1983 with respect to the transactions herein contemplated, each
of the Selling Stockholders agrees to deliver to you prior to or at the
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(iii) Such Selling Stockholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements
of counsel for the Company; the cost of printing and delivering to, or
as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, the Listing Application, the
Blue Sky Survey and any supplements or amendments thereto; the filing
fees of the Commission; the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc.
(the "NASD") of the terms of the sale of the Shares; the Listing Fee of
the Nasdaq National Market; and the expenses, including the reasonable
fees and disbursements of counsel for the Underwriters not to exceed
$5,000, incurred in connection with the qualification of the Shares
under State securities or Blue Sky laws. To the extent, if at all, that
any of the Selling Stockholders engage special legal counsel to
represent them in connection with this offering, the fees and expenses
of such counsel shall be borne by such Selling Stockholder. Any
transfer taxes imposed on the sale of the Shares to the several
Underwriters will be paid by the Sellers pro rata. The Sellers shall
not, however, be required to pay for any of the Underwriters expenses
(other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall
not be consummated because the conditions in
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Section 6 hereof are not satisfied, or because this Agreement is
terminated by the Representatives pursuant to Section 11(b)(i), (iv) or
(vi) hereof, or by reason of any failure, refusal or inability on the
part of the Company or the Selling Stockholders to perform any
undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on its part to be performed, unless such
failure to satisfy said condition or to comply with said terms be due
to the default or omission of any Underwriter, then the Company shall
reimburse the several Underwriters for reasonable out-of-pocket
expenses, including reasonable fees and disbursements of counsel,
reasonably incurred in connection with investigating, marketing and
proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Company and the Selling Stockholders
shall not in any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits from the sale by them
of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the
Option Closing Date are subject to the accuracy, as of the Closing Date
or the Option Closing Date, as the case may be, of the representations
and warranties of the Company and the Selling Stockholders contained
herein, and to the performance by the Company and the Selling
Stockholders of its covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made, and any request of the Commission for additional
material information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company or
the Selling Stockholders, shall be contemplated by the Commission and
no injunction, restraining order, or order of any nature by a Federal
or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, a Professional Limited Liability Company
("Xxxxxx Xxxxxxx"), counsel for the Company and the Selling
Stockholders, dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Underwriters (and stating that it may be
relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is
existing as a corporation in good standing under the General
Corporation Law of the State of Delaware. The Company is duly
qualified to transact business as a foreign corporation in the
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states of Oregon and Tennessee, and is active on the records
of the Corporation Division of the state of Oregon and is in
good standing in the state of Tennessee.
(ii) The Company has the corporate power to own or
lease its properties and conduct its business as described in
the Registration Statement.
(iii) Each of the Corporate Subsidiaries has been
duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or
lease its properties and conduct its business as described in
the Registration Statement; each of the Corporate Subsidiaries
are duly qualified to transact business as a foreign
corporation and in good standing in those states listed on a
Schedule thereto; and the outstanding shares of capital stock
of each of the Corporate Subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Corporate
Subsidiary; and, to the best of such counsel's knowledge, the
outstanding shares of capital stock of each of the
Subsidiaries is owned free and clear of all liens,
encumbrances and equities and claims, and no options, warrants
or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in the
Corporate Subsidiaries are outstanding.
(iv) Each of the Partnerships has been duly organized
and is an existing partnership in good standing under the laws
of the jurisdiction of its organization, with the power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified to conduct its
business; each of the Partnerships is in good standing as a
foreign partnership in those states listed on a schedule
thereto; to the best of such counsel's knowledge, the
partnership interests in the Partnerships held directly or
indirectly by the Company are free and clear of all liens,
encumbrances and equities and claims, and no options, warrants
or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any
ownership interests in the Partnerships are outstanding.
(v) Each of the LLCs has been duly organized and is
an existing limited liability company in good standing under
the laws of the jurisdiction of its organization, with the
power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified to conduct its
business; each of the LLCs is in good standing as a foreign
limited liability company in those states listed on a schedule
thereto; to the best of such counsel's knowledge, the
membership interests in the LLCs held directly or indirectly
by the Company are free and clear of all liens, encumbrances
and equities and claims, and no options, warrants or other
rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any ownership
interests in the LLCs are outstanding.
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(vi) The issuance of the Shares to be sold on the
date hereof pursuant to the Underwriting Agreement has been
duly authorized by the Company and when appropriate
certificates representing those Shares are duly countersigned
by the Company's transfer agent and registrar (or other
similar action is taken by the Company's transfer agent and
registrar with regard to electronic transfer of such Shares)
and delivered against payment of the agreed consideration
therefor in accordance with this Agreement, those Shares will
be validly issued, fully paid and nonassessable. Such counsel
may assume for purposes of the foregoing opinion that in the
case of each such share issuance and transfer, the shares were
represented by a share certificate in the form of the specimen
certificate filed as an exhibit to the Registration Statement.
The Shares conform in all material respects to the description
of the terms thereof contained in the Registration Statement
and the Prospectus under the heading "Description of Capital
Stock." The issuance of those Shares is not subject to any
preemptive rights under the terms of the General Corporation
Law of the State of Delaware, under the Company's Certificate
of Incorporation or bylaws, or under any contractual
provisions of which such counsel has knowledge. To such
counsel's knowledge, no holder of securities of the Company
has the right, which has not been satisfied or effectively
waived, to have any Common Shares or other securities of the
Company included in the Registration Statement or the right,
as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common
Stock or other securities of the Company. The form of
certificate evidencing the Shares, a specimen of which is
filed as an exhibit to the Registration Statement, complies
with all applicable requirements of the General Corporation
Law of the State of Delaware.
(vii) The Company's authorized capital stock is as
set forth under the caption "Capitalization" in the
Prospectus. The issued and outstanding shares of the Company's
Common Stock have been duly authorized and validly issued and
are fully paid and non-assessable. None of the issued shares
of capital stock of the Company has been issued in violation
of any statutory preemptive rights of shareholders. For
purposes of this opinion, such counsel may assume that in the
case of each share issuance and transfer, the shares were
represented by a share certificate which complied with all
applicable requirements imposed by law, by the Company's
certificate of incorporation and bylaws and by any applicable
resolutions by the Company's board of directors, that such
certificate was properly signed and authenticated and that
payment for such shares was received by the Company.
(viii) A member of the Commission's staff has advised
such counsel by telephone that the Commission's Division of
Corporation Finance pursuant to authority delegated to it by
the Commission, has entered an order declaring the
Registration Statement effective under the Securities Act (the
"Effective Date") and such counsel has no knowledge that any
stop order suspending its
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effectiveness has been issued or that any proceedings for that
purpose are pending before, or overtly threatened by, the
Commission.
(ix) The Company was not required to obtain any
consent, approval, authorization or order of any governmental
agency or body or, to such counsel's knowledge, court for the
issuance, delivery and sale by the Company of the Shares, the
execution, delivery and performance of the Underwriting
Agreement and the consummation by the Company of the
transactions contemplated thereby, except for the order by the
Commission declaring the Registration Statement effective.
(x) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the
Company or any of the Subsidiaries except as set forth in the
Prospectus.
(xi) Such counsel is not aware that the Company or
any of the Subsidiaries is in violation of its certificate or
articles of incorporation or bylaws, or other organizational
documents or is in default in the performance of any material
obligation, agreement or condition contained in any evidence
of indebtedness, except as may be disclosed in the Prospectus.
(xii) To such counsel's knowledge in the course of
their representation, none of the Company or any of the
Subsidiaries is in violation of any material Health Care Laws
applicable to the Company or any of the Subsidiaries or of any
decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries. To
such counsel's knowledge, the Company and its Subsidiaries are
not in violation of applicable state licensure, Medicare or
Medicaid requirements, which violation is likely to have a
Material Adverse Effect.
(xiii) The Company and each of the Subsidiaries have
all necessary Permits (except where the failure to have such
Permits, individually or in the aggregate, would not have a
material adverse effect on the business, operations or
financial condition of the Company and the Subsidiaries taken
as a whole), to own their respective properties and to conduct
their respective businesses as now being conducted, and as
described in the Registration Statement and Prospectus,
including, without limitation, such Permits as are required
(a) under Health Care Laws and (b) with respect to those
facilities owned or operated by the Company or any Subsidiary
that participate in Medicare and/or Medicaid, to receive
reimbursement thereunder.
(xiv) The descriptions of statutes, regulations and
documents under the captions "The Company," "The
Recapitalization and the Merger," "Risk Factors -- Effect of
Reimbursement and Payment Policies; Health Care Reform
Legislation," "Risk Factors -- Health Care Regulation,"
"Business -- Reimbursement,"
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"Business -- Health Care Reform, Regulation and Licensing,"
"Management -- Employment Agreements," "Management--Long-Term
Incentive Plan," "Certain Relationships and Related
Transactions," "Description of Capital Stock," and "Shares
Eligible for Future Sale -- Registration Rights Agreement," in
the Prospectus have been reviewed by such counsel and fairly
summarize such statutes and regulations in all material
respects.
(xv) The Registration Statement, the Prospectus, and
each amendment or supplement thereto comply as to form in all
material respects with the requirements of the Act and the
applicable rules and regulations thereunder (except that such
counsel need express no opinion as to the financial statements
and related schedules therein).
(xvi) Such counsel has no knowledge about any
contract, lease or other legal document to which the Company
or a Subsidiary is a party or to which any of their property
is subject that has caused such counsel to conclude that such
contract, lease or other document is required to be described
in the Prospectus but is not so described or is required to be
filed as an exhibit to the Registration Statement but has not
been so filed.
(xvii) The Company has corporate power to enter into
this Agreement and to issue, sell and deliver the Shares to
the Underwriters as provided herein. This Agreement has been
duly authorized, executed and delivered by the Company.
(xviii) The Company's execution and delivery of this
Agreement and the consummation of the transactions herein
contemplated do not and will not (a) violate the Charter or
by-laws of the Company, (b) breach, or result in a default
under, any existing obligation of the Company under any of the
agreements filed as exhibits to the Registration Statement
(provided, that such counsel need not express an opinion as to
compliance with any financial test or cross-default provision
in any such agreement); (c) to such counsel's knowledge,
violate or conflict with any applicable statute, rule or
regulation or, to such counsel's knowledge, any judgment,
decree or order of any court or governmental agency or body
(except that such counsel need not express an opinion as to
compliance with any disclosure requirement or any prohibition
against fraud or misrepresentation or as to whether
performance of the indemnification or contribution provisions
of this Agreement would be permitted); or (d) to such
counsel's knowledge, result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or
asset of the Company or the Subsidiaries, respectively.
(xix) The Company is not, and after giving effect to
the offering and sale of the Shares and the application of the
net proceeds therefrom as described in the Prospectus, will
not be an "investment company" as such term is defined in the
1940 Act.
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(xx) Each of the parties to the Amended and Restated
Plan and Agreement of Merger, dated as of January 15, 1998
(the "Merger Agreement"), by and between the Company and
Principal Hospital Company, an Oregon corporation, had, at the
time of the execution and delivery of the Merger Agreement and
at all times through and including the consummation of the
transactions contemplated thereby, the corporate power to
enter into the Merger Agreement and to consummate the
transactions contemplated thereby. The Merger Agreement has
been duly authorized by all necessary corporate action on the
part of each of the parties thereto and was duly executed and
delivered by each of the parties thereto. The execution and
delivery of the Merger Agreement and the consummation of the
transactions therein contemplated did not and will not (a)
violate the Charter or by-laws of the Company, (b) breach, or
result in a default under, any existing obligation of the
Company under any of the agreements filed as an exhibit to the
Registration Statement (provided, that such counsel need not
express an opinion as to compliance with any financial test or
cross-default provision in any such agreement); (c) to such
counsel's knowledge, violate or conflict with any applicable
statute, rule or regulation, or, to such counsel's knowledge,
judgment, decree or order of any court or governmental agency
or body; or (d) to such counsel's knowledge, result in the
creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or the
Subsidiaries, respectively, except for such consents or
approvals as have been duly and timely received or obtained.
The merger contemplated by the Merger Agreement has become
effective under applicable law.
(xxi) Except as disclosed in the Prospectus, such
counsel is not aware of any holder of any security of the
Company or any other person who has the right, contractual or
otherwise, to have any securities of the Company included in
the Registration Statement, except for any such rights as
shall have been complied with or waived.
(xxii) This Agreement has been duly authorized,
executed and delivered on behalf of the Selling Stockholders.
(xxiii) Each Selling Stockholder has full legal
right, power and authority, and any approval required by law
(other than as required by State securities and Blue Sky laws
as to which such counsel need express no opinion), to sell,
assign, transfer and deliver the portion of the Shares to be
sold by such Selling Stockholder.
(xxiv) The Custody Agreement and the Power of
Attorney executed and delivered by or on behalf of each
Selling Stockholder is valid and binding.
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(xxv) The Underwriters (assuming that they are bona
fide purchasers within the meaning of the Uniform Commercial
Code) have acquired good and marketable title to the Shares
being sold by each Selling Stockholder on the Closing Date,
and the Option Closing Date, as the case may be, free and
clear of all liens, encumbrances, equities and claims.
For purposes of this opinion, the term "Health Care Laws"
shall mean those statutes, rules and regulations, judgments, decrees or
orders which are generally applicable to hospitals and health care
providers as a group as generally described under the headings "Risk
Factors -- Effect of Reimbursement and Payment Policies; Health Care
Reform Legislation," "Risk Factors -- Health Care Regulation,"
"Business -- Reimbursement" and "Business -- Health Care Reform,
Regulation and Licensing" in the Prospectus, including, without
limitation, (i) health care licensure, permit, certificate of need and
medical waste requirements, (ii) Title XVIII, XVIX and XXI of the
Social Security Act; (iii) the Anti-Kickback Amendments (as defined in
the Prospectus) and the regulations promulgated thereunder, (iv) the
Xxxxx Laws (as defined in the Prospectus) and the regulations
promulgated thereunder, (v) the False Claims Act, (vi) the Health
Insurance Portability and Accountability Act of 1996, (vii) those
applicable to the Company as an operator or hospitals and provider of
healthcare services, and (viii) state statutes, rules and regulations
relating to matters generally similar to (ii) through (vi) above.
In rendering such opinion Xxxxxx Xxxxxxx may rely as to
matters governed by laws of states other than Delaware or Tennessee or
Federal laws on local counsel in such jurisdictions, provided that in
each case Xxxxxx Xxxxxxx shall state that they believe that they and
the Underwriters are justified in relying on such other counsel. In
addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act
(but after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act) 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 therein not misleading, and
(ii) the Prospectus, or any supplement thereto, on the date it was
filed pursuant to the Rules and Regulations and as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue
statement of material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the
circumstances under which they are made, not misleading (except that
such counsel need express no view as to financial statements, schedules
and statistical information therein). With respect to such statement,
Xxxxxx Xxxxxxx may state that their belief is based upon the procedures
set forth therein, but is without independent check and verification.
(c) The Representatives shall have received from Xxxxxx & Bird
LLP, counsel for the Underwriters, an opinion dated the Closing Date or
the Option Closing Date, as the case may be, substantially to the
effect specified in subparagraphs (ii), (vi), (viii), (ix) and (xv) of
Paragraph (b) of this Section 6, and that the Company is validly
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incorporated and validly existing under the laws of the State of
Delaware. In rendering such opinion Xxxxxx & Bird LLP may rely as to
all matters governed other than by the laws of the State of Delaware or
Federal laws on the opinion of counsel referred to in Paragraph (b) of
this Section 6. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel which leads them to believe that
(i) the Registration Statement, or any amendment thereto, as of the
time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act)
as of the Closing Date or the Option Closing Date, as the case may be,
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 therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact, necessary in order to make the
statements, in the light of the circumstances under which they are
made, not misleading (except that such counsel need express no view as
to financial statements, schedules and statistical information
therein). With respect to such statement, Xxxxxx & Bird LLP may state
that their belief is based upon the procedures set forth therein, but
is without independent check and verification.
(d) You shall have received, on each of the dates hereof, the
Closing Date and the Option Closing Date, as the case may be, letters
dated the date hereof, the Closing Date or the Option Closing Date, as
the case may be, in form and substance satisfactory to you, of Ernst &
Young LLP and KPMG Peat Marwick LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that
in their opinion the financial statements and schedules examined by
them and included in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations; and containing
such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial and statistical information
contained in the Registration Statement and Prospectus.
(e) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial
Officer of the Company to the effect that, as of the Closing Date or
the Option Closing Date, as the case may be, on behalf of the Company:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registrations Statement has been issued, and no
proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;
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(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as
of the Closing Date or the Option Closing Date, as the case
may be;
(iii) All filings required to have been made pursuant
to Rules 424 or 430A under the Act have been made;
(iv) As of the effective date of the Registration
Statement, the statements contained in the Registration
Statement were true and correct, and such Registration
Statement and Prospectus did not omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in
such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and
Prospectus, there has not been any material adverse change or
any development involving a prospective material adverse
change in or affecting the earnings, business, assets,
operations, condition (financial or otherwise) or prospects
for the business, assets, operations, condition (financial or
other) of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(f) The Company and the Selling Stockholders shall have
furnished to the Representatives such further certificates and
documents confirming the representations and warranties, covenants and
conditions contained herein and related matters as the Representatives
may reasonably have requested.
(g) The Firm Shares and Option Shares, if any, have been
approved for designation upon notice of issuance on the Nasdaq National
Market.
(h) The Lockup Agreements described in Section 4(a)(x) are in
full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if
they are in all material respects reasonably satisfactory to the
Representatives and to Xxxxxx & Bird LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this
Agreement to be fulfilled, the obligations of the Underwriters
hereunder may be terminated by the Representatives by notifying the
Company and the Selling Stockholders of such termination in writing or
by telegram at or prior to the Closing Date or the Option Closing Date,
as the case may be.
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In such event, the Company, the Selling Stockholders and the
Underwriters shall not be under any obligation to each other (except to
the extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion
of the Shares required to be delivered as and when specified in this
Agreement are subject to the conditions that at the Closing Date or the
Option Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
in effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or any such controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; and will
reimburse each Underwriter and each such controlling person upon demand
for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter
or controlling person is a party to any action or proceeding; provided,
however, that (x) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically
for use in the preparation thereof and (y) the indemnity agreement
provided in this Section 8(a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any losses, claims, damages or liabilities or
actions based upon any untrue statement or alleged untrue statement of
material fact or omission or alleged omission to state therein a
material fact purchased the Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or
alleged omission was corrected had not been sent or given to such
person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of
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noncompliance by the Company with Section 4(d) hereof. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) The Selling Stockholders, severally and not jointly, agree
to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each Underwriter
and each such controlling person upon demand for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss,
claim, damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related to the offering of the Shares,
whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided, however, that (x) the Selling
Stockholders will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to
the Company by or through the Representatives specifically for use in
the preparation thereof and (y) the indemnity agreement provided in
this Section 8(b) with respect to any Preliminary Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting
any losses, claims, damages or liabilities or actions based upon any
untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased
the Shares, if a copy of the Prospectus in which such untrue statement
or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure
is the result of noncompliance by the Company with Section 4(d) hereof;
and provided, further, however, that such Selling Stockholder will be
liable hereunder in such case only if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information
pertaining to such Selling Stockholder, as such, furnished in writing
to the Company by such Selling Stockholder specifically for use in such
registration statement or prospectus. In no event, however, shall the
liability of any Selling Stockholder for indemnification under this
Section 8(b) exceed the proceeds received by such Selling Stockholder
from the Underwriters in the offering. This indemnity agreement will be
in addition to any liability which the Selling Stockholders may
otherwise have.
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(c) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, the Selling
Stockholders and each person, if any, who controls the Company or the
Selling Stockholders within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such
director, officer, Selling Stockholder or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer, Selling Stockholder or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the
extent, that (x) such untrue statement or alleged untrue statement or
omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof and (y) such untrue
statement or alleged untrue statement or omission or alleged omission
was corrected in the Prospectus, if a copy of such Prospectus had not
been sent or given by such Underwriter to the purchaser of the Shares
within the time required by the Act and the Rules and Regulations,
unless such failure is the result of noncompliance by the Company with
Section 4(d) hereof. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing within 60
days. No indemnification provided for in Section 8(a), (b) or (c) or
contribution provided for in Section 8(e) shall be available to any
party who shall fail to give notice as provided in this Section 8(d) if
the party to whom notice was not given was prejudiced in any material
respect by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party
otherwise than on account of the provisions of Section 8(a), (b) (c) or
(e). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any
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such proceeding, any indemnified party shall have the right to retain
its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel reasonably acceptable
to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all
such indemnified parties. Such firm shall be designated in writing by
you in the case of parties indemnified pursuant to Section 8(a) or (b)
and by the Company and the Selling Stockholders in the case of parties
indemnified pursuant to Section 8(c). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its
written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party
will not, without the prior written consent of the indemnified party,
settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (if the indemnified party is a
party to such claim, action or proceeding) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action
or proceeding.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient (other than as a result of the failure
to give notice required by Section 8(d)) to hold harmless an
indemnified party under Section 8(a), (b) or (c) above in respect of
any losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company
and the Selling Stockholders on the one hand and the Underwriters on
the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities, (or actions or proceedings in respect thereof), as well
as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other shall be deemed to be in
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the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company and the Selling Stockholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant
to this Section 8(e) 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 8(e). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, (ii) 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 and (iii) no Selling Stockholder
shall be required to contribute any amount in excess of the proceeds
received by such Selling Stockholder from the Underwriters in the
offering. The Underwriters' obligations in this Section 8(e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 8 and the representations and
warranties of the Company set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or
any persons controlling the Company, (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) any termination of this
Agreement, provided that in the event of termination, the Company shall
not be liable to any of the several Underwriters for damages on account
of loss of anticipated profits from the sale by them of the Shares. A
successor to any Underwriter, or to the Company, its directors or
officers, or any person controlling an Underwriter, the Company or any
Selling Stockholder, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 8.
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9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion
of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of
the Company or a Selling Stockholder), you, as Representatives of the
Underwriters, shall use your reasonable efforts to procure within 36
hours thereafter one or more of the other Underwriters, or any others,
to purchase from the Company and the Selling Stockholders such amounts
as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours
you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option
Shares, as the case may be, agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of shares
with respect to which such default shall occur does not exceed 10% of
the Firm Shares or Option Shares, as the case may be, covered hereby,
the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may
be, which they are obligated to purchase hereunder, to purchase the
Firm Shares or Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate
number of shares of Firm Shares or Option Shares, as the case may be,
with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the
Company and the Selling Stockholders or you as the Representatives of
the Underwriters will have the right, by written notice given within
the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company or of the Selling Stockholders except to
the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date or Option Closing Date, as the case may be, may be
postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes in
the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx
Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx
Xxxxx, IV; with a copy to BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel; if to the Company or to
the Selling
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Stockholders, to Province Healthcare Company, 000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, III.
11. TERMINATION.
This Agreement may be terminated by you by notice to the
Sellers as follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by you for sale by notice to the Underwriters, or
(ii) 11:30 a.m. on the first business day following the date of this
Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the prospectus,
any material adverse change or any development reasonably involving a
prospective material adverse change in or affecting the earnings,
assets, operations, condition (financial or otherwise) or prospects for
the business, assets, operations, condition (financial or other) of the
Company and its Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business, (ii) any outbreak or material
escalation of hostilities or declaration of war or national emergency
or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable
judgment, make it impracticable to market the Shares or to enforce
contracts for the sale of the Shares, or (iii) suspension of trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange,
(iv) the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by United States or
New York State authorities, (vi) the suspension of trading of the
Company's common stock by the Commission on the Nasdaq National Market
or (vii) the taking of any action by any governmental body or agency in
respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the
United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company and the Selling Stockholders and their
respective successors, executors, administrators, heirs and assigns,
and the officers, directors and controlling persons referred to herein,
and no other person will have any right or obligation hereunder. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign merely because of such purchase.
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13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Selling Stockholders and the Underwriters
acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any
Prospectus or the Registration Statement consists of the information
set forth in the last paragraph on the front cover page (insofar as
such information relates to the Underwriters), legends required by Item
502(d) of Regulation S-K under the Act and the information under the
caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or its directors or
officers and (c) delivery of and payment for the Shares under this
Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
[Remainder of Page Intentionally Blank]
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
PROVINCE HEALTHCARE COMPANY
By:
---------------------------------------
Xxxxxx X. Xxxx, Chief Executive Officer
SELLING STOCKHOLDERS ON SCHEDULE II
By:
---------------------------------------
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXX, XXXXX & CO.
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By:
----------------------------------
Authorized Officer
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
BT Alex. Xxxxx Incorporated
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company, LLC
Total Underwriters (___)
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SCHEDULE II
SCHEDULE OF SELLING STOCKHOLDERS
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SCHEDULE III
SCHEDULE OF SUBSIDIARIES
CORPORATE SUBSIDIARIES
Brim Equipment Services, Inc.
Brim Healthcare, Inc.
Brim Hospitals, Inc.
Brim Fifth Avenue, Inc.
Brim Pavilion, Inc.
Brim Outpatient Services, Inc.
Care Health Company, Inc.
InProNet, Inc.
Mexia-Principal, Inc.
Principal Hospital Company of Nevada, Inc.
PHC of Delaware, Inc.
Palestine-Principal G.P. Inc.
Palestine Principal, Inc.
Principal Xxxx Company
Principal Needles, Inc.
The Xxxxxxx Group, Inc.
Brim Services Group, Inc.
Care Management, Inc.
Centennial Health Resources, Inc.
PARTNERSHIP SUBSIDIARIES
Mexia Principal Healthcare, L.P.
Palestine Principal Healthcare, L.P.
Scottsdale Limited Partnership
Xxxxxx Street Surgery Partners Limited Partnership
LLC SUBSIDIARIES
Community Health Partners, L.L.C.
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SCHEDULE 1(a)(iii)
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SCHEDULE 1(a)(iv)
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SCHEDULE 1(a)(v)
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