EXHIBIT 1.1
7,200,000 SHARES
SYMBION, INC.
COMMON STOCK, $0.01 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
____________, 2004
CREDIT SUISSE FIRST BOSTON LLC
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Symbion, Inc., a Delaware corporation ("COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule A
hereto (collectively, the "UNDERWRITERS") 7,200,000 shares ("FIRM SECURITIES")
of its common stock, $0.01 par value ("SECURITIES"), and also proposes to issue
and sell to the Underwriters, at the option of the Underwriters, an aggregate of
not more than 1,080,000 additional shares ("OPTIONAL SECURITIES") of its
Securities as set forth below. The Firm Securities and the Optional Securities
are herein collectively called the "OFFERED SECURITIES." As part of the offering
contemplated by this Agreement, Credit Suisse First Boston LLC (or any
affiliated agents) (collectively, the "DESIGNATED UNDERWRITER") has agreed to
reserve out of the Firm Securities purchased by it under this Agreement, up to
360,000 shares, for sale to the Company's directors, officers, employees and
other parties associated with the Company (collectively, "PARTICIPANTS"), as set
forth in the Prospectus (as defined herein) under the heading "Underwriting"
(the "DIRECTED SHARE PROGRAM"). The Firm Securities to be sold by the Designated
Underwriter pursuant to the Directed Share Program (the "DIRECTED SHARES") will
be sold by the Designated Underwriter pursuant to this Agreement at the public
offering price. Any Directed Shares not subscribed for by the end of the
business day on which this Agreement is executed will be offered to the public
by the Underwriters as set forth in the Prospectus. The Company hereby agrees
with the Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-110555) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("COMMISSION") and either (i)
has been declared effective under the Securities Act of 1933, as
amended ("ACT"), and is not proposed to be amended or (ii) is proposed
to be amended by amendment or post-effective amendment. If such
registration statement ("INITIAL REGISTRATION STATEMENT") has been
declared effective, either (i) an additional registration statement
("ADDITIONAL REGISTRATION STATEMENT") relating to the Offered
Securities may have been filed with
the Commission pursuant to Rule 462(b) ("RULE 462(B)") under the Act
and, if so filed, has become effective upon filing pursuant to such
Rule and the Offered Securities all have been duly registered under the
Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (ii) such an additional
registration statement is proposed to be filed with the Commission
pursuant to Rule 462(b) and will become effective upon filing pursuant
to such Rule and upon such filing the Offered Securities will all have
been duly registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the Company
does not propose to amend the initial registration statement or if an
additional registration statement has been filed and the Company does
not propose to amend it, and if any post-effective amendment to either
such registration statement has been filed with the Commission prior to
the execution and delivery of this Agreement, the most recent amendment
(if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("RULE 462(C)") under the Act or, in the case
of the additional registration statement, Rule 462(b). For purposes of
this Agreement, "EFFECTIVE TIME" with respect to the initial
registration statement or, if filed prior to the execution and delivery
of this Agreement, the additional registration statement means (i) if
the Company has advised the Representatives that it does not propose to
amend such registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (ii) if the Company
has advised the Representatives that it proposes to file an amendment
or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it
proposes to file one, "EFFECTIVE TIME" with respect to such additional
registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "EFFECTIVE DATE" with respect to the initial registration
statement or the additional registration statement (if any) means the
date of the Effective Time thereof. The initial registration statement,
as amended at its Effective Time, including all information contained
in the additional registration statement (if any) and deemed to be a
part of the initial registration statement as of the Effective Time of
the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("RULE
430A(B)") under the Act, is hereinafter referred to as the "INITIAL
REGISTRATION STATEMENT." The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "ADDITIONAL REGISTRATION
STATEMENT." The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"REGISTRATION STATEMENTS" and individually as a "Registration
Statement." The form of prospectus relating to the Offered Securities,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("RULE 424(B)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter
referred to as the "PROSPECTUS." No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (i)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("RULES AND REGULATIONS") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the
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statements therein not misleading and (iii) on the date of this
Agreement, the Initial Registration Statement and, if the Effective
Time of the Additional Registration Statement is prior to the execution
and delivery of this Agreement, the Additional Registration Statement
each conforms, and at the time of filing of the Prospectus pursuant to
Rule 424(b) or (if no such filing is required) at the Effective Date of
the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform,
in all material respects to the requirements of the Act and the Rules
and Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made (in the case of the Prospectus only), not
misleading. If the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
neither of such documents will include any untrue statement of a
material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made (in the case of the
Prospectus only), not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do not
apply to statements in or omissions from a Registration Statement or
the Prospectus based upon written information furnished to the Company
by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
business, condition (financial or otherwise), properties or results of
operations of the Company and the Subsidiaries (as hereinafter defined)
taken as a whole or on the transactions contemplated by this Agreement
(a "MATERIAL ADVERSE EFFECT").
(d) All of the corporations, partnerships and limited
liability companies in which the Company has a direct or indirect
ownership interest and whose accounts are consolidated with those of
the Company for financial reporting purposes (each, individually, a
"SUBSIDIARY", and collectively, the "SUBSIDIARIES") are listed in
Schedule B hereto and the Subsidiaries listed on Exhibit 21.1 to the
Registration Statement constitute all of the Subsidiaries that are
material to the business, condition (financial or otherwise),
properties or results of operations of the Company and the Subsidiaries
taken as a whole or to the transactions contemplated by this Agreement.
(e) Each Subsidiary that is a corporation (each, a "CORPORATE
SUBSIDIARY") has been duly incorporated and is an existing corporation
in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus;
and each Corporate Subsidiary is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect; all of the issued and outstanding capital stock of each
Corporate Subsidiary has been duly authorized and validly issued and is
fully paid and nonassessable; and, except as disclosed in the
Prospectus, the capital stock of each Corporate Subsidiary owned by the
Company, directly or through Subsidiaries, is owned free from liens,
encumbrances and defects.
(f) Each Subsidiary that is a partnership (each, a
"PARTNERSHIP SUBSIDIARY") has been duly organized and is an existing
partnership in good standing under the laws of the
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jurisdiction of its organization, with power and authority (partnership
and other) to own its properties and conduct its business as described
in the Prospectus; and each Partnership Subsidiary is duly qualified to
do business as a foreign partnership in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect; the capital contributions with respect
to the outstanding partnership interests for each Partnership
Subsidiary have been made to the Partnership Subsidiary; and, except as
disclosed in the Prospectus, the partnership interests of each
Partnership Subsidiary owned by the Company, directly or through
Subsidiaries, is owned free from liens, encumbrances and defects. Each
partnership or similar agreement pursuant to which the Company owns an
interest in a Partnership Subsidiary, directly or through Subsidiaries,
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, fraudulent conveyance
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles. There has been no breach
of or default under, and no event which with notice or lapse of time
would constitute a breach of or default under, such agreements by the
Company or any Subsidiary or, to the Company's knowledge, any other
party to such agreements, except as would not, individually or in the
aggregate, have a Material Adverse Effect.
(g) Each Subsidiary that is a limited liability company (each,
an "LLC SUBSIDIARY") has been duly organized and is an existing limited
liability company in good standing under the laws of the jurisdiction
of its organization, with power and authority (limited liability
company and other) to own its properties and conduct its business as
described in the Prospectus; and each LLC Subsidiary is duly qualified
to do business as a foreign limited liability company in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect; the capital contributions
with respect to the outstanding membership interests for each LLC
Subsidiary have been made to the LLC Subsidiary; and, except as
disclosed in the Prospectus, the membership interests of each LLC
Subsidiary owned by the Company, directly or through Subsidiaries, is
owned free from liens, encumbrances and defects. Each operating or
similar agreement pursuant to which the Company owns an interest in an
LLC Subsidiary, directly or through Subsidiaries, 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, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles. There has been no breach of or default under, and
no event which with notice or lapse of time would constitute a breach
of or default under, such agreements by the Company or any Subsidiary
or, to the Company's knowledge, any other party to such agreements,
except as would not, individually or in the aggregate, have a Material
Adverse Effect.
(h) Except as disclosed in the Prospectus, each of the
Facilities (as defined below) described in the Prospectus as owned by
the Company is owned and operated by a Subsidiary in which the Company
directly or indirectly owns more than 50% of the outstanding ownership
interests. Except as disclosed in the Prospectus and as would not,
individually or in the aggregate, have a Material Adverse Effect, there
are no consensual encumbrances or restrictions on the ability of any
Subsidiary (i) to pay any dividends or make any distributions on such
Subsidiary's capital stock, partnership interests or membership
interests, as the case may be, or to pay any 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.
(i) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with this
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Agreement on each Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and nonassessable
and will conform in all material respects to the description thereof
contained in the Prospectus; and the stockholders of the Company have
no preemptive rights with respect to the Offered Securities.
(j) Except as specifically disclosed in the Prospectus, there
are no contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(k) Except as specifically disclosed in the Prospectus, there
are no contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to a Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act.
(l) The Offered Securities have been approved for listing on
The Nasdaq Stock Market's National Market subject to notice of
issuance.
(m) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Offered Securities by
the Company, except such as have been obtained and made under the Act
and the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and such as may be required under state securities laws or the
bylaws or rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD").
(n) This Agreement has been duly authorized, executed and
delivered by the Company.
(o) Except as specifically disclosed in the Prospectus and as
would not, individually or in the aggregate, have a Material Adverse
Effect, the Company and the Subsidiaries (i) have good and marketable
title to all real properties and all other properties and assets owned
by them, in each case free from liens, encumbrances and defects that
would affect the value thereof or interfere with the use made or to be
made thereof by them and (ii) hold any leased real or personal property
under valid and enforceable leases with no exceptions that would
interfere with the use made or to be made thereof by them, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(p) The execution, delivery and performance of this Agreement
and the issuance and sale of the Offered Securities will not (i) result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, (A) any statute, rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
properties, including, without limitation, Health Care Laws (as
hereinafter defined), or (B) any agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or to which any of the properties of the Company or
any such Subsidiary is subject, or (C) the charter or bylaws or other
organizational documents of the Company or any such Subsidiary or (ii)
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or the
Subsidiaries, other than a breach, violation or default in the case of
clause (i)(B) and lien, charge, claim or encumbrance in the case of
clause (ii) that would not, individually or in the aggregate, have a
Material Adverse Effect. The Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by
this Agreement
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For purposes of this Agreement, the term "Health Care Laws"
shall mean those statutes, rules and regulations, judgments, decrees or
orders which are generally applicable to surgery centers, surgical
hospitals and diagnostic centers operating in the United States as
described in the section of the Prospectus captioned "Government
Regulation," including, without limitation, (i) health care licensure,
permit, certificate of need and medical waste requirements, (ii) Titles
XVIII, XIX and XXI of the Social Security Act; (iii) the federal
Physician Self Referral Law, 42 U.S.C. ss. 1395nn and the regulations
promulgated thereunder; (iv) the Health Insurance Portability and
Accountability Act of 1996 (Pub. L. No. 104-191) and the regulations
promulgated thereunder, (v) federal laws and the regulations
promulgated thereunder governing Medicare or Medicaid programs,
including, without limitation, the Medicare and Medicaid Patient and
Protection Act, 42 U.S.C. ss. 1320a-7, (vi) the federal TRICARE
statute, 10 U.S.C. ss. 1071 et seq., (vii) the Federal Civil False
Claims Act, 31 U.S.C. (ss.)(ss.) 3729 et seq., (viii) the Federal
Criminal False Claims Act, 18 U.S.C. (ss.) 287, (ix) the False
Statements Relating to Health Care Matters Act, 18 U.S.C. (ss.) 1035,
(x) the Health Care Fraud Act, 18 U.S.C. (ss.) 1347 and (xi) published
state statutes, rules and regulations concerning matters similar to
(ii) through (x) above.
(q) Except as would not, individually or in the aggregate,
have a Material Adverse Effect, (i) the Company and the Subsidiaries
(A) possess all approvals, certificates, permits, licenses and other
authorizations issued by appropriate governmental agencies,
self-regulatory organizations, governmental and private accrediting
bodies and courts and other tribunals (collectively, the "PERMITS")
necessary to conduct the business now owned, operated or managed by
them, including but not limited to such Permits as are required under
Health Care Laws, (B) have not received any notice of proceedings
relating to the revocation or modification of any such Permits that, if
adversely determined, would adversely affect the Company and (C) have
fulfilled and performed all of their obligations with respect to such
Permits and (ii) no event or change in condition has occurred which
allows, or after notice or lapse of time or both would allow,
revocation or termination thereof or result in any other impairment of
the rights of the holder of any such Permit. Notwithstanding the
foregoing, except as would not, individually or in the aggregate, have
a Material Adverse Effect (i) all surgery center, surgical hospital and
diagnostic center facilities owned, operated or managed by the Company
and the Subsidiaries (the "FACILITIES") (A) are certified for
participation or enrollment in the Medicare and Medicaid programs; (B)
have the benefit of a current and valid provider contract with the
Medicare and Medicaid programs; and (C) are in substantial compliance
with the terms and conditions of participation in the Medicare and
Medicaid programs and have received all approvals or qualifications
necessary for reimbursement, (ii) neither the Company nor any of the
Subsidiaries has received written notice from the regulatory
authorities which enforce the statutory or regulatory provisions in
respect of the Medicare or Medicaid programs of any pending or
threatened investigations, surveys (other than routine surveys) or
decertification proceedings, and neither the Company nor any of the
Subsidiaries has any reason to believe that any such investigations,
surveys or proceedings are pending, threatened or imminent and (iii)
during the period for which financial statements are included in the
Prospectus, there have been no denials by third party payors of claims
for reimbursement for services rendered by the Company.
(r) The accounts receivable of the Company and the
Subsidiaries are recorded based on established billing rates less
estimates for contractual allowances to reflect reimbursement
arrangements with third party payors such as Medicare, Medicaid, 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
the Subsidiaries are entitled to receive, subject to adjustments to
reflect reimbursement arrangements with third party payors and normal
discounts in the ordinary course. Additionally, accounts receivable of
the Company and the Subsidiaries are net of estimated allowances for
doubtful accounts.
(s) None of (i) the Company or any of the Subsidiaries, nor
(ii) to the knowledge of the Company, the Company's or the
Subsidiaries' respective officers, directors, stockholders,
6
employees or other agents, acting in an individual capacity, has
engaged on behalf of the Company or any Subsidiary in any of the
following: (A) knowingly and willfully 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); (B) 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); (C) 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; (D)
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 (1) 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 (2) 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). No individual with an ownership or control interest, as
defined in 42 U.S.C. ss. 1320a-3(a)(3), in the Company or any of the
Subsidiaries, or who is an officer, director or managing employee as
defined in 42 U.S.C. ss. 1320a-5(b), of the Company or any of the
Subsidiaries is a person described in 42 U.S.C. ss. 1320a-7(b)(8)(B).
(t) Except as would not, individually or in the aggregate,
have a Material Adverse Effect, neither the Company nor any of the
Subsidiaries exercises influence or control over the practice of
medicine by any physician or other health care provider in violation of
state laws governing the corporate practice of medicine or other
applicable law.
(u) Except as specifically disclosed in the Prospectus and as
would not, individually or in the aggregate, have a Material Adverse
Effect, there are no recoupments with respect to Medicare, Medicaid, or
any other governmental or private health care payor being (i) sought,
requested or claimed from (A) the Company or any of the Subsidiaries or
(B) to the Company's knowledge, any physician or health care provider
with which the Company or any of the Subsidiaries contracts or (ii)
threatened, to the Company's knowledge, against the Company, any of the
Subsidiaries or any physician or health care provider with which the
Company or any of the Subsidiaries contracts.
(v) Neither the Company nor any of the Subsidiaries is (i) in
violation of its charter or bylaws or in material violation of its
organizational documents or (ii) in violation of any applicable law,
ordinance, administrative or governmental or regulatory rule,
regulation or any order, decree or judgment of any court or
governmental or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries except, in the case of clause (ii),
for any violations which would not, individually or in the aggregate,
have a Material Adverse Effect; and no event of default of the Company
or the Subsidiaries or event that, but for the giving of notice or the
lapse of time or both, would constitute an event of default exists, or
upon consummation of the transactions contemplated by this Agreement,
including, without limitation, the use of proceeds from the sale of the
Offered Securities in the manner contemplated by the description under
the caption "Use of Proceeds" contained in the Prospectus will exist,
under any indenture, mortgage, loan or credit agreement, note, lease,
permit, license or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries is bound or to which any of the properties, assets or
operations of the Company or any of the Subsidiaries is subject, except
for any such events of defaults or events which would not, individually
or in the aggregate, have a Material Adverse Effect. There are no
statutes,
7
regulations, contracts or other documents that are required to be
described in the Registration Statements or the Prospectus or to be
filed as exhibits to the Registration Statements that are not described
or filed as required.
(w) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent that
is reasonably likely to have a Material Adverse Effect.
(x) The Company and the Subsidiaries exclusively own or
possess, or can acquire on reasonable terms, adequate rights to use all
trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual
property and proprietary rights (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, other
than such rights the absence of which would not, individually or in the
aggregate, have a Material Adverse Effect (collectively, the "COMPANY
RIGHTS"). The Company and the Subsidiaries have not infringed or
violated, and are not infringing or violating, the intellectual
property rights of any third party, other than such infringements or
violations which would not, individually or in the aggregate, have a
Material Adverse Effect. Neither the Company nor any of the
Subsidiaries has received any notice of or inquiry as to infringement
of or conflict with asserted rights of any third party, or any notice
of or inquiry as to enforceability or validity, with respect to any
intellectual property rights that, if determined adversely to the
Company or any of the Subsidiaries, would individually or in the
aggregate have a Material Adverse Effect, and they are unaware of any
basis for any such claims. The Company and the Subsidiaries are not
aware that any of the Company Rights are being infringed or violated by
any third party.
(y) Except as would not, individually or in the aggregate,
have a Material Adverse Effect and except as disclosed in the
Prospectus, (i) the properties, assets and operations of the Company
and the Subsidiaries are in compliance with, and hold all permits,
authorizations and approvals required under, all applicable federal,
state, local and foreign environmental laws, rules and regulations,
orders, decrees, judgments, permits, licenses, other binding
requirements, or common law, relating to or addressing the environment
or the health and safety of humans, and to the protection, clean-up, or
restoration of the natural environment and activities or conditions
related thereto, including, without limitation, those relating to the
production, extraction, processing, manufacturing, generation,
handling, disposal, transportation or release of hazardous materials
(collectively, "Environmental Laws"), (ii) with respect to such
properties, assets and operations (including any previously owned,
leased or operated properties, assets or operations with respect to
such prior period of ownership or operation), there are no past,
present or, to the knowledge of the Company, reasonably anticipated
future events, conditions, circumstances, activities, practices,
incidents, actions or plans of the Company or any of the Subsidiaries
that may interfere with or prevent compliance or continued compliance
by the Company and the Subsidiaries with applicable Environmental Laws
and (iii) neither the Company nor any of the Subsidiaries (A) is, to
the knowledge of the Company, the subject of any investigation, (B) has
received any notice or claim (or is aware of any facts that would be
expected to result in any such claim), (C) is bound by any judgment,
decree or order or (D) has entered into any negotiations or agreements
with any third party, in any such case relating to any liability or
potential liability or remedial action or potential remedial action
under Environmental Laws, nor are there any pending, reasonably
anticipated or, to the knowledge of the Company, threatened actions,
suits or proceedings against or affecting the Company, any of the
Subsidiaries or their properties, assets or operations in connection
with any such Environmental Laws. The term "hazardous materials" shall
mean any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances, or wastes) that are
regulated by or form the basis for liability under any applicable
Environmental Laws.
(z) Except as specifically disclosed in the Prospectus, there
are no pending actions, suits or proceedings against or affecting the
Company, any of the Subsidiaries or any of their respective properties
that, if determined adversely to the Company or any of the
Subsidiaries,
8
would individually or in the aggregate have a Material Adverse Effect,
and no such actions, suits or proceedings are, to the Company's
knowledge, threatened or contemplated.
(aa) To the knowledge of the Company, Ernst & Young LLP, which
has certified certain financial statements included in each
Registration Statement and the Prospectus, is an independent public
accountant as required by the Act and the rules and regulations of the
Commission thereunder.
(bb) 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
reasonably intervals and appropriate action is taken with respect to
any differences.
(cc) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the entities presented and their consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis; and the assumptions used
in preparing the pro forma financial statements included in each
Registration Statement and the Prospectus provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts.
(dd) Except as specifically disclosed in the Prospectus, since
the date of the latest audited financial statements included in the
Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and the Subsidiaries taken as a whole,
and, except as disclosed in or contemplated by the Prospectus, there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(ee) Neither the Company nor, to the Company's knowledge, any
of its officers, directors or affiliates has taken or may take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or may constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Offered Securities or otherwise.
(ff) The Company has filed all federal, state and local income
and other material tax returns required to be filed by applicable law
and has paid all taxes shown as due thereunder or provided adequate
reserves for the payment thereof, and the Company has no tax deficiency
that has been or, to its knowledge, might be assessed against the
Company, in each case except as would not, individually or in the
aggregate, have a Material Adverse Effect. All tax liabilities accrued
through the date hereof have been provided for on the books of the
Company except as would not, individually or in the aggregate, have a
Material Adverse Effect.
(gg) Each of the Company and the Subsidiaries are insured with
policies in such amounts and with such deductibles and covering such
risks as the Company reasonably believes to be (i) adequate for the
conduct of its business and the value of its properties and (ii)
customary for companies engaged in the same or similar businesses.
9
(hh) The statistical and market-related data included in each
Registration Statement and the Prospectus are based on or derived from
sources which the Company reasonably and in good faith believes to be
reliable and the statistical and market-related data included in each
Registration Statement and the Prospectus is consistent with the
sources from which it was derived.
(ii) Except as would not, individually or in the aggregate,
have a Material Adverse Effect:
(i) Each employee benefit plan, policy or agreement,
including, without limitation, any "employee benefit plan" as
such term is defined under Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
which is sponsored, maintained or contributed to or required
to be contributed to by the Company (collectively, the
"COMPANY BENEFIT PLANS"), has been operated and administered
in accordance with its terms and applicable laws, including
but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "CODE"). Each of the Company Benefit
Plans that is intended to be "qualified" within the meaning of
Section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from tax under Section 501(a)
of the Code;
(ii) Neither the Company nor any of the Company
Benefit Plans, any trust created thereunder, nor to any
trustee, or administrator thereof has engaged in a transaction
or has taken or failed to take any action in connection with
which the Company could be subject to any liability for either
a civil penalty assessed pursuant to Section 409 or 502(i) of
ERISA or a tax imposed pursuant to Section 4975(a) or (b),
4976 or 4980B of the Code; and
(iii) There are no pending, or, to the to the
knowledge of the Company, threatened or anticipated, claims by
or on behalf of any Company Benefit Plan, by any current or
former employee, consultant, officer or director of the
company (or any beneficiary thereof) under any Company Benefit
Plan.
(jj) Neither the Company nor any person or entity that,
together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code has maintained, contributed
or been obligated to contribute to (i) any plan that is subject to
Title IV of ERISA or Section 412 of the Code or (ii) a "multiemployer
plan" as defined in Section 3(37) of ERISA.
(kk) Each Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and no
authorization, approval, consent, license, order, registration or
qualification of or with any government, governmental instrumentality
or court, other than such as have been obtained, is necessary under the
securities law and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States.
(ll) The Company has not offered, or caused the Underwriters
to offer, any Offered Securities to any person pursuant to the Directed
Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company or (ii) a trade
journalist or publication to write or publish favorable information
about the Company or its products.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not
10
jointly, to purchase from the Company, at a purchase price of $[_____] per
share, the respective numbers of shares of Firm Securities set forth opposite
the names of the Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives,
through the facilities of the Depository Trust Company ("DTC") unless the
Representatives shall otherwise instruct, for the accounts of the Underwriters,
against payment of the purchase price in federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to
Credit Suisse First Boston LLC ("CSFB") drawn to the order of the Company at the
office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, 1301 Avenue of the Americas, New York, New York,
at 10:00 A.M., New York time, on _________, 2004 or at such other time not later
than seven full business days thereafter as CSFB and the Company determine, such
time being herein referred to as the "FIRST CLOSING DATE." For purposes of Rule
15c6-1 under the Exchange Act, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all the Offered Securities sold pursuant
to the offering. The certificates for the Firm Securities so to be delivered
will be in definitive form, in such denominations and registered in such names
as CSFB requests and will be made available for checking and packaging at the
office of DTC or its designated custodian, unless the Representatives shall
otherwise instruct, at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFB given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFB to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFB to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFB
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives, through the facilities of DTC unless the Representatives shall
otherwise instruct, for the accounts of the several Underwriters, against
payment of the purchase price therefor in federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to CSFB
drawn to the order of the Company, at the above office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP.
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFB requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the above
office of DTC or its designated custodian, unless the Representatives shall
otherwise instruct, at a reasonable time in advance of such Optional Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if
11
consented to by CSFB, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement. The Company will
advise CSFB promptly of any such filing pursuant to Rule 424(b). If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities
under the Act but the Effective Time thereof has not occurred as of
such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective
amendment thereto with the Commission pursuant to and in accordance
with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date
of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make
such filing at such later date as shall have been consented to by CSFB.
(b) The Company will advise CSFB promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial
Registration Statement, the Additional Registration Statement (if any)
or the Prospectus and will not effect such amendment or supplementation
without CSFB's consent; and the Company will also advise CSFB promptly
of the effectiveness of each Registration Statement (if its Effective
Time is subsequent to the execution and delivery of this Agreement) and
of any amendment or supplementation of a Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify CSFB of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFB's consent to,
nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"AVAILABILITY DATE" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "AVAILABILITY DATE" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (five of which will include all exhibits),
each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under
the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in
each case in such quantities as CSFB requests. The Prospectus shall be
so furnished on or prior to 3:00 P.M., New York time, on the business
day following the later of the execution and delivery of this Agreement
or the Effective Time of the Initial Registration Statement. All other
documents shall be so furnished as soon as available. The Company will
pay the expenses of printing and distributing to the Underwriters all
such documents.
12
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
CSFB designates and will continue such qualifications in effect so long
as required for the distribution; provided, however, that the Company
will not be required to arrange for the qualification of the Offered
Securities in any jurisdiction in which the Company would be required
to qualify to do business as a foreign corporation or to execute a
general consent to service of process in order to affect such
qualification.
(g) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing
fees and other expenses (including reasonable fees and disbursements of
counsel) incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFB
designates and the printing of memoranda relating thereto, for the
filing fee incident to the review by the NASD of the Offered
Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the
Offered Securities, for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters and for any reasonable
expenses of the QIU (as hereinafter defined) incident to the
performance of the QIU as such.
(h) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to, any additional shares of its Securities or
securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make
any such offer, sale, pledge, disposition or filing, without the prior
written consent of CSFB. The foregoing sentence shall not apply to: (i)
the filing of a registration statement on Form S-8 under the Act
registering securities issuable under any plan in effect on the date
hereof; (ii) the issuance of Securities upon the exercise of an option
or warrant or the conversion of a security outstanding on the date
hereof; (iii) the granting of stock options pursuant to the Company's
existing employee benefit and existing stock option plans (provided
such options do not become exercisable during such 180-day period); and
(iv) the issuance of Securities pursuant to the Company's existing
employee stock purchase plan; provided that, in the case of clauses
(i), (iii) and (iv), the Company shall inform the Underwriters as
promptly as is reasonably practicable.
(i) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date
of the effectiveness of each Registration Statement. The Designated
Underwriter will notify the Company as to which Participants will need
to be so restricted. The Company will direct the transfer agent to
place stop transfer restrictions upon such securities for such period
of time.
(j) The Company will pay all fees and disbursements of counsel
incurred by the Designated Underwriter in connection with the Directed
Share Program and stamp duties, similar taxes or duties or other taxes,
if any, incurred by the Designated Underwriter in connection with the
Directed Share Program. Furthermore, the Company covenants with the
Underwriters that the Company will comply with all applicable
securities and other applicable laws, rules and regulations in each
foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
(k) Upon the written request of CSFB or any Underwriter, the
Company shall (i) furnish to CSFB or such other Underwriter, a
certification, as contemplated by and in compliance with Treasury
regulations Section 1.897-2(h), that as of any Closing Date, the
Offered Securities are not United States real property interests as
defined in Section 897(c)(1) of the Code, (ii) file such certification
with the Internal Revenue Services in the manner and within the time
period specified in Treasury regulations Section 1.897-2(h) and (iii)
promptly after such filing, furnish to CSFB or the Underwriter that has
requested a certificate, as the case may be, proof of such filing.
13
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Ernst & Young LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the consolidated financial
statements examined by them and included in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim consolidated financial information as
described in Statement of Auditing Standards No. 100, Interim
Financial Information, on the unaudited consolidated financial
statements included in the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
consolidated financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial
and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated financial statements
included in the Registration Statements do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited consolidated financial statements for them
to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available consolidated
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated Subsidiaries or,
at the date of the latest available consolidated
balance sheet read by such accountants, there was any
decrease in consolidated total current assets or
total assets, as compared with amounts shown on the
latest consolidated balance sheet included in the
Prospectus; or
(C) for the period from the closing date of the
latest consolidated statement of operations included
in the Prospectus to the closing date of the latest
available statement of operations read by such
accountants there were any decreases, as compared
with the corresponding period of the previous year,
in consolidated revenues, operating income or in the
total or per share amounts of consolidated net
income;
14
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter;
(iv) the pro forma combined condensed financial
statements, together with related notes, forming part of the
Registration Statements and the Prospectus (and any supplement
or amendment thereto) have been prepared consistent with the
historical consolidated financial statements, except for the
pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and present fairly the
historical and proposed transactions contemplated by the
Registration Statements and this Agreement, and nothing came
to their attention that caused them to believe that the pro
forma financial information included in the Registration
Statements does not comply as to form in all material respects
with the accounting requirements of the Securities Act and the
related published rules and regulations or has not been
properly compiled and that the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements.
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and the
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "REGISTRATION STATEMENTS" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "REGISTRATION STATEMENTS"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "PROSPECTUS" shall mean the prospectus
included in the Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by CSFB. If the Effective Time of the Additional
Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred not
later than 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have
been consented to by CSFB. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, shall be contemplated
by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the
15
condition (financial or other), business, properties or results of
operations of the Company and the Subsidiaries taken as one enterprise
which, in the judgment of a majority in interest of the Underwriters
including the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a
majority in interest of the Underwriters including the Representatives,
be likely to prejudice materially the success of the proposed issue,
sale or distribution of the Offered Securities, whether in the primary
market or in respect of dealings in the secondary market; (iv) any
material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange; (v) any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by U.S.
federal or New York authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States or
(viii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, A Professional
Limited Liability Company, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Company is qualified to do business as a
foreign corporation in good standing in the state(s) specified
in a schedule to such opinion which the Company has
represented to such counsel constitute all other jurisdictions
in which it owns or leases property or conducts business;
(ii) Each Corporate Subsidiary listed on Exhibit 21.1
to the Registration Statement is an existing corporation in
good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and each such Corporate Subsidiary is duly
qualified to do business as a foreign corporation in good
standing in the state(s) specified in a schedule to such
opinion which the Company has represented to such counsel
constitute all other jurisdictions in which it owns or leases
property or conducts business; and, to such counsel's
knowledge, except as disclosed in the Prospectus, the capital
stock of each such Corporate Subsidiary owned by the Company,
directly or through Subsidiaries, is owned free from liens,
encumbrances and defects;
(iii) Each Partnership Subsidiary listed on Exhibit
21.1 to the Registration Statement is an existing partnership
in good standing under the laws of the jurisdiction of its
organization, with power and authority (as a partnership and
otherwise) to own its properties and conduct its business as
described in the Prospectus; and each such Partnership
Subsidiary is qualified to do business as a foreign
partnership in good standing in the state(s) specified in a
schedule to such opinion which the Company has represented to
such counsel constitute all other jurisdictions in which it
owns or leases property or conducts business; and, to such
counsel's knowledge, except as disclosed in
16
the Prospectus, the partnership interests of each such
Partnership Subsidiary owned by the Company, directly or
through Subsidiaries, is owned free from liens, encumbrances
and defects;
(iv) Each LLC Subsidiary listed on Exhibit 21.1 to
the Registration Statement is an existing limited liability
company in good standing under the laws of the jurisdiction of
its organization, with power and authority (as a limited
liability company and otherwise) to own its properties and
conduct its business as described in the Prospectus; and each
such LLC Subsidiary is duly qualified to do business as a
foreign limited liability company in good standing in the
state(s) specified in a schedule to such opinion which the
Company has represented to such counsel constitute all other
jurisdictions in which it owns or leases property or conducts
business; and, to such counsel's knowledge, except as
disclosed in the Prospectus, the membership interests of each
such LLC Subsidiary owned by the Company, directly or through
Subsidiaries, is owned free from liens, encumbrances and
defects;
(v) The Offered Securities delivered on such Closing
Date have been duly authorized and, when delivered and paid
for in accordance with this Agreement, will be validly issued,
fully paid and nonassessable and will conform in all material
respects to the description thereof contained in the
Prospectus; all other outstanding shares of the Common Stock
of the Company have been duly authorized and validly issued,
are fully paid and nonassessable and conform in all material
respects to the description thereof contained in the
Prospectus; the Company has the requisite corporate power and
authority to authorize, issue and sell the Offered Securities
as contemplated by this Agreement; and the stockholders of the
Company have no preemptive rights with respect to the Offered
Securities under the Delaware General Corporation Law or any
contract filed as an exhibit to the Registration Statements
or, to such counsel's knowledge, any other agreement or
arrangement to which the Company is a party or by which the
Company is bound;
(vi) Except as disclosed in the Prospectus, to such
counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to each Registration Statement
or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act;
(vii) No consent, approval, authorization or order
of, or filing with, any governmental agency, body or court
having jurisdiction over the Company under United States
federal laws, the laws of the State of Tennessee or the
Delaware General Corporation Law is required for the
consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the
Offered Securities by the Company, except such as have been
obtained and made under the Act and such as may be required
under state securities laws or the bylaws or rules and
regulations of the NASD;
(viii) The execution, delivery and performance by the
Company of this Agreement and the issuance and sale of the
Offered Securities do not (A) result in a breach or violation
of any of the terms and provisions of, or constitute a default
under (1) any statute, rule or regulation or any judgment,
decree or order known to such counsel of any governmental
agency, body or court having jurisdiction over the Company or
any Subsidiary listed on Exhibit 21.1 to the Registration
Statement (each a "LISTED SUBSIDIARY") or any of their
properties, under United States federal laws, the laws of the
State of Tennessee or the General Corporation Law, Limited
Liability Company Act or Revised Uniform Limited Partnership
Act of the State of Delaware, (2) any agreement or
17
instrument filed as an exhibit to the Registration Statement
or (3) the charter, bylaws or other organizational documents
of the Company or any Listed Subsidiary or (B) violate or
conflict with any applicable United States federal or
Tennessee Health Care Laws;
(ix) To such counsel's knowledge, except as
specifically disclosed in the Prospectus, there is no legal or
governmental action, investigation or proceeding pending or
threatened or contemplated against the Company or any Listed
Subsidiary or any of their respective properties that, if
determined adversely to the Company or any Listed Subsidiary,
would, individually or in the aggregate, have a Material
Adverse Effect;
(x) The statements made in the Prospectus under the
caption "Material U.S. Federal Income and Estate Tax
Considerations for Non-U.S. Holders," to the extent that they
purport to constitute summaries of United States federal tax
law and regulations or legal conclusions with respect thereto,
have been reviewed by such counsel and fairly summarize, in
all material respects, the matters described therein;
(xi) Statements made in the Prospectus under the
following captions: (A) "Risk Factors - We depend on payments
from third-party payors, including government health care
programs and managed care organizations. If these payments are
reduced or eliminated, our revenues and profitability could be
adversely affected," (B) "Risk Factors - We may be required to
spend substantial amounts to comply with new legislative and
regulatory initiatives relating to privacy and security of
patient health information and standards for electronic
transactions. In addition, we may experience delays in payment
of claims and increased costs if we fail to comply with these
laws, as well as be subject to substantial fines," (C) "Risk
Factors - Our facilities do not satisfy all of the
requirements for any of the safe harbors under the federal
anti-kickback statute. If we fail to comply with the federal
anti-kickback statute, we could be subject to criminal and
civil penalties, loss of licenses and exclusion from the
Medicare and Medicaid programs, which may result in a
substantial loss of revenues," (D) "Risk Factors - If we fail
to comply with physician self-referral laws as they are
currently interpreted or may be interpreted in the future, or
if other legislative restrictions are issued, we could incur a
significant loss of reimbursement revenues," (E) "Risk Factors
- The recently adopted Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 could restrict our
ability to operate our facilities licensed as hospitals and
could adversely impact our reimbursement revenues," (F) "Risk
Factors - We may be subject to actions for false and other
improper claims," (G) "Risk Factors - If laws governing the
corporate practice of medicine change, we may be required to
restructure some of our relationships, which may result in a
significant loss of revenues and divert other resources," (H)
"Risk Factors - Our stockholder rights plan, provisions of our
certificate of incorporation and bylaws and Delaware law could
prevent or discourage a change in our management or a takeover
you may consider favorable," (I) "Government Regulation -
Licensure and Certificates of Need," (J) "Government
Regulation - Medicare and Medicaid Participation," (K)
"Government Regulation - Antitrust Laws," (L) "Government
Regulation - Medicare Fraud and Abuse and Anti-Referral Laws,"
(M) "Government Regulation - Federal Anti-Referral Laws," (N)
"Government Regulation - False and Other Improper Claims," (O)
"Government Regulation - Health Information Practices," (P)
"Management - Employment Agreements," (Q) "Management -
Compensation Plans," (R) "Related Party Transactions," (S)
"Description of Indebtedness" and (T) "Description of Capital
Stock," to the extent that each purports to constitute a
summary of law or regulations, the contracts specified therein
or the Company's Certificate of Incorporation and Bylaws or,
in any case, legal conclusions with respect thereto, have been
reviewed by such counsel and fairly summarize, in all material
respects, the matters described therein;
18
(xii) To such counsel's knowledge, there are no
legal or governmental proceedings required to be described in
a Registration Statement or the Prospectus which are not
described as required or of any contracts or documents of a
character required to be described in a Registration Statement
or the Prospectus or to be filed as exhibits to a Registration
Statement which are not described and filed as required;
(xiii) The Initial Registration Statement was
declared effective under the Act as of the date and time
specified in such opinion, the Additional Registration
Statement (if any) was filed and became effective under the
Act as of the date and time (if determinable) specified in
such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and,
to the knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and
each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; it being understood that such counsel need not
pass upon or assume any responsibility, explicitly or
implicitly, for the accuracy, completeness or fairness of the
statements contained in the Registrations Statements and the
Prospectus, no facts have come to the attention of such
counsel in the course of such counsel's participation in the
preparation of the Registration Statement and the Prospectus
that cause such counsel to believe that any part of a
Registration Statement or any amendment thereto, as of its
effective date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express
no opinion as to the financial statements, the notes and
schedules thereto or other financial information contained in
the Registration Statements or the Prospectus;
(xiv) This Agreement has been duly authorized,
executed and delivered by the Company; and
(xv) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940.
The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, A Professional Limited
Liability Company described above shall be rendered to the
Representatives at the request of the Company and shall so state
therein. Such opinion will be limited to the laws of the State of
Tennessee, the federal law of the United States and the General
Corporation Law, Limited Liability Company Act and Revised Uniform
Limited Partnership Act of the State of Delaware.
(e) The Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters. In rendering
such opinion, such counsel may rely as to matters involving the
application of laws other than the laws of jurisdictions in which they
are admitted, to the extent such counsel deems proper and to the extent
19
specified in such opinion, if at all, upon the opinion or opinions of
counsel described in Section 6(d).
(f) The Representatives shall have received a certificate,
dated such Closing Date, of the Chief Executive Officer, President or
any Vice President and a principal financial or accounting officer of
the Company in which such officers, to the best of their knowledge
after reasonable investigation, shall state that: the representations
and warranties of the Company in this Agreement are true and correct;
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date; no stop order suspending the effectiveness
of any Registration Statement has been issued and no proceedings for
that purpose have been instituted or are contemplated by the
Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee
in accordance with Rule 111(a) or (b) under the Act, prior to the time
the Prospectus was printed and distributed to any Underwriter; and,
subsequent to the date of the most recent consolidated balance sheet
included in the consolidated financial statements in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and the Subsidiaries taken as a whole except as set forth
in or contemplated by the Prospectus or as described in such
certificate.
(g) The Representatives shall have received a letter, dated
such Closing Date, of Ernst &Young LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection.
(h) On or prior to the date of this Agreement, the
Representatives shall have received lockup letters from each of the
officers, directors, stockholders and securityholders of the Company as
listed on Schedule C hereto, in the form provided by CSFB, and such
letters shall remain in full force and effect on any Closing Date.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFB may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution.
(a)
(a) The Company will indemnify and hold harmless each
Underwriter, its partners, members, directors and officers and each
person, if any, who controls such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of the
Prospectus, or any amendment or supplement thereto, in light of the
circumstances under which they were made) not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of
such documents in reliance upon
20
and in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as
such in subsection (b) below; and provided further that with respect to
any untrue statement or alleged untrue statement in or omission or
alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased the Offered Securities
concerned, to the extent that a Prospectus relating to such Offered
Securities was required to be delivered by such Underwriter under the
Act in connection with such purchase and any such loss, claim, damage
or liability of such Underwriter results from the fact that there was
not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a
copy of the final Prospectus if the Company had previously furnished
copies thereof to such Underwriter as required under this Agreement.
The Company agrees to indemnify and hold harmless the
Designated Underwriter and each person, if any, who controls the
Designated Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (the "DESIGNATED
ENTITIES"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants
in connection with the Directed Share Program or caused by any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; (ii) caused by the failure of any Participant to pay for
and accept delivery of Directed Shares that the Participant agreed to
purchase; or (iii) related to, arising out of, or in connection with
the Directed Share Program, other than losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, its directors and officers and each
person, if any, who controls the Company within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, or any amendment or
supplement thereto, in light of the circumstances under which they were
made) not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished
by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the concession and
reallowance figures appearing in the fourth paragraph under the caption
"Underwriting" and the information contained in (i) the seventh and
fourteenth paragraphs (ii) the last sentence of the fifteenth paragraph
and (iii) the nineteenth paragraph (other than the last three sentences
thereof), under the caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this
Section 7 or Section 9 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under subsection (a) or (b) above
or Section 9, notify the indemnifying party of the commencement
thereof; but the failure to notify the
21
indemnifying party shall not relieve it from any liability that it may
have under subsection (a) or (b) above or Section 9 except to the
extent that it has been materially prejudiced (through the forfeiture
of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have to an indemnified party
otherwise than under subsection (a) or (b) above or Section 9. In case
any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section 7 or Section 9, as the case may be, for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to the last paragraph in Section 7(a) or Section
9 hereof in respect of such action or proceeding, then in addition to
such separate firm for the indemnified parties under the first
paragraph in Section 7(a), the indemnifying party shall be liable for
the reasonable fees and expenses of not more than one separate firm (in
addition to any local counsel) for (i) the Designated Underwriter for
the defense of any losses, claims, damages and liabilities arising out
of the Directed Share Program, and all persons, if any, who control the
Designated Underwriter within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act and (ii) the QIU in its capacity
as a "qualified independent underwriter", and all persons, if any, who
control the QIU within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified
party from all liability on any claims that are the subject matter of
such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of
an indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions
received by the Underwriters. 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 or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The Company and the Underwriters agree that ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated will not receive any additional
benefits hereunder for serving as the QIU in connection with the
offering and sale of the Offered Securities. The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this
22
subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Offered Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has
signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFB may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFB and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 10 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Qualified Independent Underwriter. The Company hereby confirms its
engagement of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated as, and ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated hereby confirms its agreement with
the Company to render services as, a "qualified independent underwriter" within
the meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. with respect to the offering and sale of the Offered
Securities. ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, solely in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "QIU". In addition to and without limitation of the Company's
obligation to indemnify ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated as an
Underwriter, the Company also agrees to indemnify and hold harmless the QIU, its
affiliates (as such term is defined in Rule 501(b) under the Act) and selling
agents and each person, if any, who controls the QIU within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all loss, liability, claim, damage, and expense whatsoever, as incurred,
incurred as a result of the QIU's participation as a "qualified independent
underwriter" within the meaning of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. in connection with the offering
of the Offered Securities, and will reimburse the QIU for any legal or other
expenses reasonably incurred by the QIU in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
23
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 and the
obligations of the Company pursuant to Section 9 shall remain in effect, and if
any Offered Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain in
effect. If the purchase of the Offered Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (iii), (iv), (vi), (vii) or (viii) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
11. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at Symbion, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.; provided, however, that any
notice to an Underwriter pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFB will be binding
upon all the Underwriters.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
24
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
SYMBION, INC.
By:
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chief Executive Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON LLC
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
Acting on behalf of themselves and as
the Representative of the several
Underwriters.
By CREDIT SUISSE FIRST BOSTON LLC
By:
--------------------------------
[Insert title]
25
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SECURITIES
----------- ---------------
Credit Suisse First Boston LLC..............................
Banc of America Securities LLC..............................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated..........
▇▇▇▇▇▇▇▇▇ & Company, Inc....................................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.............................
Total 7,200,000
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