DRAFT 10/17/97
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2,000,000 Shares*
PRIORITY HEALTHCARE CORPORATION
Class B Common Stock
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UNDERWRITING AGREEMENT
St. Petersburg, Florida
, 1997
Xxxxxxx Xxxxx & Associates, Inc.
Wheat, First Securities, Inc.
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Priority Healthcare Corporation, an Indiana corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell an aggregate of 2,000,000 shares of Class B Common Stock, $.01
par value per share (the "Class B Common Stock"), of the Company, to the several
Underwriters named in Schedule I hereto (the "Underwriters"), subject to the
terms and conditions stated herein (such 2,000,000 aggregate shares to be sold
by the Company are hereinafter referred to as the "Firm Shares"). In addition,
the Company has agreed to sell to the Underwriters, upon the terms and
conditions set forth herein, up to an additional 300,000 shares (the "Additional
Shares") of the Class B Common Stock to cover over-allotments by the
Underwriters, if any. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
Bindley Western Industries, Inc. ("BWI") owns all of the issued and
outstanding shares of Class A Common Stock of the Company and is entering into
this Agreement as an inducement to the Underwriters.
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters, on whose behalf you are acting, in connection with
the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 (File No. 333-34463), including a
prospectus subject to completion, relating to the Shares. Such registration
statement, as amended at the time when it becomes effective and as thereafter
amended by post-effective amendment, is referred to in this Agreement as the
"Registration Statement." The prospectus in the form included in the
Registration Statement, or, if the prospectus included in the Registration
Statement omits
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* Plus an additional 300,000 shares subject to Underwriters' over-allotment
option
information in reliance upon Rule 430A under the Act and such information is
included in a prospectus filed with the Commission pursuant to Rule 424(b) under
the Act or as part of a post-effective amendment to the Registration Statement
after the Registration Statement becomes effective, the prospectus as so filed,
is referred to in this Agreement as the "Prospectus." If the Company elects to
rely on Rule 434 under the Act, all references to the Prospectus shall be deemed
to include, without limitation, the form of prospectus and the term sheet
contemplated by Rule 434, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the Act (the "Rule 434 Prospectus"). If
the Company files another registration statement with the Commission to register
a portion of the Shares pursuant to Rule 462(b) under the Act (the "Rule 462
Registration Statement"), then any reference to "Registration Statement" herein
shall be deemed to include the registration statement on Form S-1 (File No. 333-
34463) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the Act. The prospectus subject to
completion in the form included in the Registration Statement at the time of the
initial filing of such Registration Statement with the Commission and as such
prospectus is amended from time to time until the date of the Prospectus are
collectively referred to in this Agreement as the "Prepricing Prospectus."
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
the Firm Shares to the Underwriters and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees, severally and
not jointly, to purchase from the Company at a purchase price of $_____ per
Share (the "purchase price per Share"), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
The Company hereby also agrees to sell to the Underwriters, and upon
the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right for 30 days from the date of the
Prospectus to purchase from the Company up to 300,000 Additional Shares at the
purchase price per Share for the Firm Shares. The Additional Shares may be
purchased solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the Firm Shares. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
the number of Additional Shares (subject to such adjustments as you may
determine to avoid fractional shares) which bears the same proportion to the
total number of Additional Shares to be purchased by the Underwriters as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto bears to the total number of Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx, at 10:00 a.m., St. Petersburg, Florida time, on
___________, 1997 (the "Closing Date"). The place of closing for the Firm Shares
and the Closing Date may be varied by agreement between the Representative and
the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Xxxxxxx
Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, at
10:00 a.m., Florida time, on such date or dates (the "Additional Closing Date")
(which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than three nor later than ten business days after
the giving of the notice hereinafter referred to) as shall be specified in a
written notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. Such notice may be given to the Company by you at any time
within 30 days after the date of the Prospectus. The place of closing for the
Additional Shares and the Additional Closing Date may be varied by agreement
between you and the Company.
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Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., Florida time, not later than the second
full business day preceding the Closing Date or the Additional Closing Date, as
the case may be. Such certificates shall be made available to you in St.
Petersburg, Florida for inspection and packaging not later than 9:30 a.m.,
Florida time, on the business day immediately preceding the Closing Date or the
Additional Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Additional Closing Date, as the case
may be, against payment of the purchase price therefor by certified or official
bank check or checks payable in New York Clearing House (next day) funds.
Payment for the Firm Shares sold by the Company hereunder shall be delivered by
the Representative to the Company.
5. Covenants and Agreements of the Company and BWI. (a) The Company
covenants and agrees with the several Underwriters as follows:
(i) The Company will use its best efforts to cause
the Registration Statement and any amendments thereto to become
effective, if it has not already become effective, and will advise you
promptly and, if requested by you, will confirm such advice in writing
(i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) if Rule 430A
under the Act is employed, when the Prospectus has been timely filed
pursuant to Rule 424(b) under the Act, (iii) of any request by the
Commission for amendments or supplements to the Registration Statement,
any Prepricing Prospectus or the Prospectus or for additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation of any proceeding for such purposes and
(v) within the period of time referred to in Section 5(e) below, of any
change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of any
event that comes to the attention of the Company that makes any
statement made in the Registration Statement or the Prospectus (as then
amended or supplemented) untrue in any material respect or that
requires the making of any additions thereto or changes therein in
order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or any other law.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time. If the Company elects to rely on
Rule 434 under the Act, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus (including copies of a term
sheet that complies with the requirements of Rule 434 under the Act),
in such number as the Underwriters may reasonably request, and file
with the Commission in accordance with Rule 424(b) of the Act the form
of Prospectus complying with Rule 434(b)(2) of the Act before the close
of business on the first business day immediately following the date
hereof. If the Company elects not to rely on Rule 434 under the Act,
the Company will provide the Underwriters with copies of the form of
Prospectus, in such number as the Underwriters may reasonably request,
and file with the Commission such Prospectus in accordance with Rule
424(b) of the Act before the close of business on the first business
day immediately following the date hereof.
(ii) The Company will furnish to you, without
charge, two signed duplicate originals of the Registration Statement as
originally filed with the Commission and of each amendment thereto,
including financial statements and all exhibits thereto, and will also
furnish to you, without charge, such number of conformed copies of the
Registration Statement as originally filed and of each amendment
thereto as you may reasonably request.
(iii) The Company will not file any Rule 462
Registration Statement or any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus unless (A) you
shall have previously been advised thereof and been given a reasonable
opportunity to review such filing, amendment or supplement, and (B) you
have not reasonably objected to such filing, amendment or supplement
after being so advised.
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(iv) Prior to the execution and delivery of this
Agreement, the Company has delivered or will deliver to you, without
charge, in such quantities as you have requested or may hereafter
reasonably request, copies of each form of the Prepricing Prospectus.
The Company consents to the use, in accordance with the provisions of
the Act and with the securities or Blue Sky laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by
dealers, prior to the date of the Prospectus, of each Prepricing
Prospectus so furnished by the Company.
(v) As soon after the execution and delivery of
this Agreement as is practicable and thereafter from time to time for
such period as in the reasonable opinion of counsel for the
Underwriters a prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or a dealer, and for so long a
period as you may request for the distribution of the Shares, the
Company will deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as they may reasonably request. The Company
consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale
of the Shares and for such period of time thereafter as the Prospectus
is required by the Act to be delivered in connection with sales by any
Underwriter or dealer. If at any time prior to the later of (i) the
completion of the distribution of the Shares pursuant to the offering
contemplated by the Registration Statement or (ii) the expiration of
prospectus delivery requirements with respect to the Shares under
Section 4(3) of the Act and Rule 174 thereunder, any event shall occur
that in the judgment of the Company or in the opinion of counsel for
the Underwriters is required to be set forth in the Prospectus (as then
amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with the Act or any other
law, the Company will forthwith prepare and, subject to Sections 5(a)
and 5(c) hereof, file with the Commission and use its best efforts to
cause to become effective as promptly as possible an appropriate
supplement or amendment thereto, and will furnish to each Underwriter
who has previously requested Prospectuses, without charge, a reasonable
number of copies thereof.
(vi) The Company will cooperate with you and
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as you may reasonably designate and will file such
consents to service of process or other documents as may be reasonably
necessary in order to effect and maintain such registration or
qualification for so long as required to complete the distribution of
the Shares; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general
service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now
so subject. In the event that the qualification of the Shares in any
jurisdiction is suspended, the Company shall so advise you promptly in
writing.
(vii) The Company will make generally available
to its security holders a consolidated earnings statement (in form
complying with the provisions of Rule 158), which need not be audited,
covering a twelve-month period commencing after the effective date of
the Registration Statement and the Rule 462 Registration Statement, if
any, and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(viii) During the period ending three years from
the date hereof, the Company will furnish to you and, upon your
request, to each of the other Underwriters, (i) as soon as available, a
copy of each proxy statement, quarterly or annual report or other
report of the Company mailed to stockholders or filed with the
Commission, the National Association of Securities Dealers, Inc. (the
"NASD") or The Nasdaq Stock Market or any securities exchange and (ii)
from time to time such other information concerning the Company as you
may reasonably request.
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(ix) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof (except
pursuant to a termination under Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any inability,
failure or refusal on the part of the Company to perform in all
material respects any agreement herein or to comply in all material
respects with any of the terms or provisions hereof or to fulfill in
all material respects any of the conditions of this Agreement, the
Company agrees to reimburse you and the other Underwriters for all
out-of-pocket expenses (including travel expenses and reasonable fees
and expenses of counsel for the Underwriters but excluding wages and
salaries paid by you) reasonably incurred by you in connection
herewith.
(x) The Company will apply the net proceeds from
the sale of the Shares to be sold by it hereunder in accordance in all
material respects with the statements under the caption "Use of
Proceeds" in the Prospectus.
(xi) If Rule 430A under the Act is employed, the
Company will timely file the Prospectus pursuant to Rule 424(b) under
the Act.
(xii) For a period of 180 days after the date of
the Prospectus first filed pursuant to Rule 424(b) under the Act,
without your prior written consent, the Company will not, directly or
indirectly, issue, sell, offer or contract to sell or otherwise dispose
of or transfer any shares of Class B Common Stock or securities
convertible into or exchangeable or exercisable for shares of Class B
Common Stock (collectively, "Company Securities") or any rights to
purchase Company Securities, except to the Underwriters pursuant to
this Agreement and except for grants of options pursuant to the
Company's 1997 Stock Option and Incentive Plan described in the
Prospectus.
(xiii) Prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company will furnish
to you, as promptly as possible, copies of any unaudited interim
consolidated financial statements of the Company and its subsidiaries
for any period subsequent to the periods covered by the financial
statements appearing in the Prospectus.
(xiv) The Company will comply with all provisions of
any undertakings contained in the Registration Statement.
(xv) The Company will not at any time, directly or
indirectly take any action designed, or which might reasonably be
expected to cause or result in, or which will constitute, stabilization
or manipulation of the price of the shares of Class B Common Stock to
facilitate the sale or resale of any of the Shares.
(xvi) The Company will use its best efforts to
qualify or register its Class B Common Stock for sale in non-issuer
transactions under (or obtain exemptions from the application of) the
Blue Sky laws of each state where necessary to permit market making
transactions and secondary trading, and will comply with such Blue Sky
laws and will continue such qualifications, registrations and
exemptions in effect for a period of five years after the date hereof.
(xvii) The Company will timely file with the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ/NMS") all documents and notices required by the
NASDAQ/NMS of companies that have or will issue securities that are
traded in the over-the-counter market and quotations for which are
reported by the NASDAQ/NMS.
(b) BWI covenants and agrees with the several Underwriters
that, in the event of a Distribution by BWI (as defined in the
Prospectus), BWI will structure the conversion of options to purchase
BWI common stock into options to purchase Class B Common Stock of the
Company, in accordance with "EITF 90-9", so that such conversion will
not result in a charge to earnings of the Company.
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6. Representations and Warranties.
6.1 Of the Company. The Company hereby, represents and
warrants to each Underwriter on the date hereof, and shall be deemed to
represent and warrant to each Underwriter on the Closing Date and the Additional
Closing Date, that:
(a) The Company satisfies all of the requirements of the Act
for use of Form S-1 for the offering of Shares contemplated hereby.
Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424(a) under the Act, complied when
so filed in all material respects with the provisions of the Act,
except that this representation and warranty does not apply to
statements in or omissions from such Prepricing Prospectus (or any
amendment or supplement thereto) made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through you
expressly for use therein. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus.
(b) The Registration Statement (including any Rule 462
Registration Statement), in the form in which it becomes effective and
also in such form as it may be when any post-effective amendment
thereto shall become effective, and the Prospectus, and any supplement
or amendment thereto when filed with the Commission under Rule 424(b)
under the Act, will comply in all material respects with the provisions
of the Act and will not at any such times contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not apply
to statements in or omissions from the Registration Statement or the
Prospectus (or any amendment or supplement thereto) made in reliance
upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of any Underwriter
through you expressly for use therein.
(c) The capitalization of the Company is and will be as set
forth in the Prospectus as of the date set forth therein. BWI owns all
the issued and outstanding shares of Class A Common Stock of the
Company. All the outstanding shares of Class A Common Stock of the
Company have been, and as of the Closing Date will be, duly authorized
and validly issued, are fully paid and nonassessable and are free of
any preemptive or similar rights; except as set forth in the
Prospectus, the Company is not a party to or bound by any outstanding
options, warrants, or similar rights to subscribe for, or contractual
obligations to issue, sell, transfer or acquire, any of its capital
stock or any securities convertible into or exchangeable for any of
such capital stock; the Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor
in accordance with the terms hereof will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; the
capital stock of the Company conforms to the description thereof in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto); and the delivery of certificates for the Shares
against payment therefor pursuant to the terms of this Agreement, will
pass valid title to the Shares, free and clear of any claim,
encumbrance or defect in title, to the several Underwriters) purchasing
such shares in good faith and without notice of any lien, claim or
encumbrance. The certificates for the Shares are in valid and
sufficient form.
(d) Each of the Company and its subsidiaries is a
corporation duly organized and validly existing as a corporation in
good standing under the laws of the state of its incorporation with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth,
results of operations or prospects of the Company and its subsidiaries
(a "Material Adverse Effect").
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(e) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are owned by the Company free and
clear of any security interests, liens, encumbrances, equities or
claims. The Company does not have any subsidiaries and does not own a
material interest in or control, directly or indirectly, any other
corporation, partnership, joint venture, association, trust or other
business organization, except those subsidiaries set forth in Exhibit
21 to the Registration Statement. As used in this Agreement,
subsidiaries shall mean direct and indirect subsidiaries of the
Company.
(f) There are no legal or governmental proceedings pending
or, to the best knowledge of the Company, threatened, against the
Company or its subsidiaries or to which the Company or its subsidiaries
or any of their properties are subject, that are required to be
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) but are not described as required.
Except as described in the Prospectus, there is no action, suit,
inquiry, proceeding, or investigation by or before any court or
governmental or other regulatory or administrative agency or commission
pending or, to the best knowledge of the Company, threatened, against
or involving the Company or its subsidiaries, which might individually
or in the aggregate prevent or adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse Effect,
nor is there any basis for any such action, suit, inquiry, proceeding,
or investigation. There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act. All
such contracts to which the Company or any of its subsidiaries is a
party have been duly authorized, executed and delivered by the Company
or the applicable subsidiary, constitute valid and binding agreements
of the Company or the applicable subsidiary and are enforceable against
the Company or the applicable subsidiary in accordance with the terms
thereof, and neither the Company or the applicable subsidiary, nor to
the best of the Company's knowledge, any other party, is in breach of
or default under any of such contracts.
(g) Neither the Company nor any of its subsidiaries is (i)
in violation of (aa) its articles of incorporation or bylaws or (bb)
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of its subsidiaries the violation of
which would have a Material Adverse Effect or (cc) of any decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries; or (ii) in default in any material
respect in the performance of any obligation, agreement or condition
contained in (aa) any bond, debenture, note or any other evidence of
indebtedness, or (bb) any material agreement, indenture, lease or other
material instrument to which the Company or any of its subsidiaries is
a party or by which any of their properties may be bound; and there
does not exist any state of facts which constitutes an event of default
on the part of the Company or any of its subsidiaries as defined in
such documents or which, with notice or lapse of time or both, would
constitute such an event of default.
(h) The Company's execution and delivery of this Agreement
and the performance by the Company of its obligations under this
Agreement have been duly and validly authorized by the Company, and
this Agreement has been duly executed and delivered by the Company, and
this Agreement constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general equitable principles and public policy
exceptions.
(i) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor
the consummation by the Company of the transactions contemplated hereby
or thereby (i) requires any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may be required for the registration of the Shares
under the Act, the registration of the Class B Common Stock under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
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compliance with the securities or Blue Sky laws of various
jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement and except for the NASD's clearance of
the underwriting terms of the offering contemplated hereby as required
under the NASD's Rules of Fair Practice), (ii) conflicts with or will
conflict with or constitutes or will constitute a breach of, or a
default under, the articles of incorporation or bylaws of the Company
or any agreement, indenture, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which any of its
properties may be bound, (iii) violates any statute, law, regulation,
ruling, filing, judgment, injunction, order or decree applicable to the
Company or any of its subsidiaries or any of their properties, or (iv)
results in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company.
(j) Except as described in the Prospectus, neither the
Company or any of its subsidiaries or BWI has outstanding and at the
Closing Date (and the Additional Closing Date, if applicable) will not
have outstanding any options to purchase, or any warrants to subscribe
for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Class B Common
Stock or any such warrants or convertible securities or obligations. No
holder of securities of the Company has rights to the registration of
any securities of the Company as a result of or in connection with the
filing of the Registration Statement or the consummation of the
transactions contemplated hereby that have not been satisfied or
heretofore waived in writing.
(k) Price Waterhouse LLP, the certified public accountants
who have certified the financial statements filed as part of the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), are independent public accountants as required by
the Act.
(l) The financial statements, together with related
schedules and notes, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly
the financial position, results of operations and changes in financial
position of the Company on the basis stated in the Registration
Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except
as disclosed therein; and the other financial and statistical
information and data set forth in the Registration Statement and
Prospectus (and any amendment or supplement thereto) is accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company. No other financial
statements or schedules are required to be included in the Registration
Statement.
(m) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to
the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), (i) neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any transaction which
is not in the ordinary course of business or which could result in a
material reduction in the future earnings of the Company; (ii) neither
the Company nor any of its subsidiaries has sustained any material loss
or interference with its business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by
insurance; (iii) neither the Company nor any of its subsidiaries has
paid or declared any dividends or other distributions with respect to
its capital stock and the Company is not in default under the terms of
any class of capital stock of the Company or any outstanding debt
obligations; (iv) there has not been any change in the authorized or
outstanding capital stock of the Company or any material change in the
indebtedness of the Company (other than in the ordinary course of
business); and (v) there has not been any material adverse change, or
any development involving or which may reasonably be expected to
involve a potential future material adverse change, in the condition
(financial or otherwise), business, properties, net worth, result of
operations or prospects of the Company.
(n) Each of the Company and its subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims,
8
security interests or other encumbrances except (i) such as are
described in the financial statements included in, or elsewhere in, the
Prospectus or (ii) such as are not materially burdensome and do not
interfere in any material respect with the use of the property or the
conduct of the business of the Company. All property (real and
personal) held under lease by the Company and its subsidiaries is held
by it under valid, subsisting and enforceable leases with only such
exceptions as in the aggregate are not materially burdensome and do not
interfere in any material respect with the conduct of the business of
the Company or its subsidiaries.
(o) The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the
Shares other than the Prepricing Prospectus, the Prospectus, or other
offering material, if any, as permitted by the Act.
(p) The Company has not taken, directly or indirectly, any
action which constituted, or any action designed, or which might
reasonably be expected to cause or result in or constitute, under the
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
or for any other purpose.
(q) The Company is not an "investment company," an
"affiliated person" of, or "promoter" or "principal underwriter" for an
investment company within the meaning of the Investment Company Act of
1940, as amended.
(r) Each of the Company and its subsidiaries has all
permits, licenses, franchises, approvals, consents and authorizations
of governmental or regulatory authorities (hereinafter "permit" or
"permits") as are necessary to own its properties and to conduct its
business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus, except where the
failure to have obtained any such permit has not and will not have a
Material Adverse Effect; each of the Company and its subsidiaries has
fulfilled and performed in all material respects all of its obligations
with respect to each such permit and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination of any such permit or result in any other material
impairment of the rights of the holder of any such permit, subject in
each case to such qualification as may be set forth in the Prospectus;
and, except as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any of
its subsidiaries.
(s) Each of the Company and its subsidiaries has complied
and will comply with wage and hour determinations issued by the U.S.
Department of Labor under the Service Contract Act of 1965 and the Fair
Labor Standards Act in paying its employees' salaries, fringe benefits,
and other compensation for the performance of work or other duties in
connection with contracts with the U.S. government, except where the
failure to comply has not had and will not have a Material Adverse
Effect. Each of the Company has complied and will comply in all
material respects with the terms of all certifications and
representations made to the U.S. government in connection with the
submission of any bid or proposal or any contract. The Company has
complied and will comply with the requirements of the American with
Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the
Employee Retirement Income Security Act, the Civil Rights Act of 1964
(Title VII), as amended, the Age Discrimination in Employment Act and
other applicable federal and state employment and labor laws, except
where the failure to comply has not had and will not have a Material
Adverse Effect.
(t) The Company, and its subsidiaries, maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
9
(u) Neither the Company, at any time, nor any of its
subsidiaries, since each has been held as a subsidiary of the Company,
has, directly or indirectly, (i) made any unlawful contribution to any
candidate for political office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
federal, state or foreign governmental official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof or applicable foreign jurisdictions.
(v) Each of the Company and its subsidiaries has obtained
all required permits, licenses, and other authorizations, if any, which
are required under federal, state, local and foreign statutes,
ordinances and other laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants,
chemicals, or industrial, hazardous, or toxic materials or wastes into
the environment (including, without limitation, ambient air, surface
water, ground water, land surface, or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, hazardous, or toxic materials or wastes, or
any regulation, rule, code, plan, order, decree, judgment, injunction,
notice, or demand letter issued, entered, promulgated, or approved
thereunder ("Environmental Laws"), except where the failure to obtain
any such permit, license or other authorization has not resulted in and
will not result in a Material Adverse Effect. Each of the Company and
its subsidiaries is in material compliance with all terms and
conditions of all required permits, licenses, and authorizations, and
are also in material compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in the Environmental
Laws. There is no pending or, to the best knowledge of the Company
after due inquiry, threatened civil or criminal litigation, notice of
violation, or administrative proceeding relating in any way to the
Environmental Laws (including but not limited to notices, demand
letters, or claims under the Resource Conservation and Recovery Act of
1976, as amended ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Emergency Planning and Community Right to Know Act of 1986, as amended
("EPCRA"), the Clean Air Act, as amended ("CAA"), or the Clean Water
Act, as amended ("CWA") and similar federal, foreign, state, or local
laws) involving the Company or any of its subsidiaries. There have not
been and there are not any past, present, or foreseeable future events,
conditions, circumstances, activities, practices, incidents, actions,
or plans which may interfere with or prevent continued compliance, or
which may give rise to any common law or legal liability, or otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing,
study, or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling, or the emission, discharge, release, or threatened release
into the environment, of any pollutant, contaminant, chemical, or
industrial, hazardous, or toxic material or waste, including, without
limitation, any liability arising, or any claim, action, demand, suit,
proceeding, hearing, study, or investigation which may be brought,
under RCRA, CERCLA, EPCRA, CAA, CWA or similar federal, foreign, state
or local laws.
(w) The Company owns and has full right, title and interest
in and to, or has valid licenses to use, each material trade name,
trademark or service xxxx under which the Company conducts all or any
material part of its business, and the Company has created no lien or
encumbrance on, or granted any right or license with respect to, any
such trade name, trademark or service xxxx; there is no claim pending
against the Company with respect to any trade name, trademark or
service xxxx and the Company has not received notice or otherwise
become aware that any trade name, trademark or service xxxx which it
uses or has used in the conduct of its business infringes upon or
conflicts with the rights of any third party.
(x) All offers, sales, conversions and redemptions of the
Company's capital stock and other securities through the date hereof
were made in compliance with the Act and all other applicable state and
federal laws or regulations.
(y) The Shares have been duly authorized for trading on the
NASDAQ/NMS under the symbol "PHCC," subject to notice of issuance of
the Shares being sold by the Company, and upon
10
consummation of the offering contemplated hereby the Company will be in
compliance with the designation and maintenance criteria applicable to
Nasdaq National Market issuers.
(z) All federal, state, local and foreign tax returns
required to be filed by or on behalf of the Company and its
subsidiaries (and their predecessors) with respect to all periods ended
prior to the date of this Agreement have been filed (or are the subject
of valid extension) with the appropriate federal, state, local and
foreign authorities and all such tax returns, as filed, are accurate in
all material respects. All federal, state, local and foreign taxes
(including estimated tax and sales tax payments) required to be shown
on all such tax returns or claimed to be due from or with respect to
the business of the Company and its subsidiaries (and their
predecessors) have been paid or reflected as a liability on the
financial statements of the Company for appropriate periods, except for
those taxes or claims therefor which are being contested by the Company
in good faith and for which appropriate reserves are reflected in the
Company's financial statements. Except as disclosed in the Prospectus,
all deficiencies asserted as a result of any federal, state, local or
foreign tax audits have been paid or finally settled and no issue has
been raised in any such audit which, by application of the same or
similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so audited. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax
return for any period. On the Closing Date, and Additional Closing
Date, if any, all stock transfer and other taxes which are required to
be paid in connection with the sale of the shares to be sold by the
Company to the Underwriters will have been fully paid by the Company
and all laws imposing such taxes will have been complied with.
(aa) Except as set forth in the Prospectus, there are no
transactions with "affiliates" (as defined in Rule 405 promulgated
under the Act) or any officer, director or security holder of the
Company (whether or not an affiliate) which are required by the Act and
the applicable rules and regulations thereunder to be disclosed in the
Registration Statement.
(bb) Except for the Distribution by BWI (as defined in the
Prospectus), the Company has procured the written agreement of each of
the Company's officers, directors, and BWI not to (i) directly or
indirectly sell, offer or contract to sell or otherwise dispose of or
transfer any shares of capital stock or securities of the Company
convertible into or exchangeable or exercisable for Class B Common
Stock, including, but not limited to, shares that may be received as
part of the Distribution (collectively, "Company Securities") owned or
controlled by such persons now or hereafter or any rights to purchase
Company Securities for a period of 180 days after the date of the
Prospectus first filed pursuant to Rule 424(b) under the Act (the
"Restriction Period"), without your prior written consent, or (ii)
exercise or seek to exercise or effectuate in any manner any rights of
any nature that such persons have or may hereafter have to require the
Company to register under the Act any such person's sale, transfer or
other disposition of any Company Securities or other securities of the
Company held by any such persons, or to otherwise participate as a
selling securityholder in any manner in any registration effected by
the Company under the Act, including the registration to which this
Agreement relates, before the expiration of the Restriction Period.
(cc) Neither the Company nor any of its subsidiaries (i)
conduct business or have affiliates which conduct business in or with
Cuba, (ii) plan to commence doing business in or with Cuba after the
effective date of the Registration Statement or (iii) are required by
Florida law to report a material change in information previously
reported to the State of Florida regarding business conducted in or
with Cuba.
(dd) No officer, director, nominee for director or
shareholder of the Company has a direct or indirect affiliation or
association with any member of the National Association of Securities
Dealers, Inc. (the "NASD").
6.2 Of BWI. BWI hereby, represents and warrants to each
Underwriter on the date hereof, and shall be deemed to represent and warrant to
each Underwriter on the Closing Date and the Additional Closing Date, that:
11
(a) BWI owns all the issued and outstanding shares of Class
A Common Stock of the Company. To the best knowledge of BWI, (i) all
the outstanding shares of Class A Common Stock of the Company have
been, and as of the Closing Date will be, duly authorized and validly
issued, are fully paid and nonassessable and are free of any preemptive
or similar rights; (ii) except as set forth in the Prospectus, the
Company is not a party to or bound by any outstanding options,
warrants, or similar rights to subscribe for, or contractual
obligations to issue, sell, transfer or acquire, any of its capital
stock or any securities convertible into or exchangeable for any of
such capital stock; (iii) the Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor
in accordance with the terms hereof will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; the
capital stock of the Company conforms to the description thereof in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto); and (iv) the delivery of certificates for the
Shares against payment therefor pursuant to the terms of this
Agreement, will pass valid title to the Shares, free and clear of any
claim, encumbrance or defect in title, to the several Underwriters)
purchasing such shares in good faith and without notice of any lien,
claim or encumbrance. The certificates for the Shares are in valid and
sufficient form.
(b) BWI is a corporation duly organized and validly existing
as a corporation in good standing under the laws of the state of its
incorporation with full corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register
or qualify does not have a material adverse effect, on the condition
(financial or otherwise), business, properties, net worth, results of
operations or prospects of BWI and its subsidiaries ("BWI Material
Adverse Effect").
(c) There are no legal or governmental proceedings pending
or, to the best knowledge of the BWI, threatened, against the Company
or its subsidiaries or BWI or to which the Company or its subsidiaries
or BWI or any of their properties are subject, that are required to be
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) but are not described as required.
Except as described in the Prospectus, there is no action, suit,
inquiry, proceeding, or investigation by or before any court or
governmental or other regulatory or administrative agency or commission
pending or, to the best knowledge of BWI, threatened, against or
involving the Company or its subsidiaries or BWI, which might
individually or in the aggregate prevent or adversely affect the
transactions contemplated by this Agreement or result in a Material
Adverse Effect, nor is there any basis for any such action, suit,
inquiry, proceeding, or investigation. To the best knowledge of BWI,
there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or
to be filed as an exhibit to the Registration Statement that are not
described or filed as required by the Act. To the best knowledge of
BWI, all such contracts to which the Company or any of its subsidiaries
is a party have been duly authorized, executed and delivered by the
Company or the applicable subsidiary, constitute valid and binding
agreements of the Company or the applicable subsidiary and are
enforceable against the Company or the applicable subsidiary in
accordance with the terms thereof, and neither the Company or the
applicable subsidiary, nor any other party, is in breach of or default
under any of such contracts.
(d) BWI's execution and delivery of this Agreement and the
performance by BWI of its obligations under this Agreement have been
duly and validly authorized by BWI, and this Agreement has been duly
executed and delivered by BWI, and this Agreement constitutes a valid
and legally binding agreement of BWI, enforceable against BWI in
accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to or affecting enforcement
of creditors' rights generally or by general equitable principles and
public policy exceptions.
12
(e) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by BWI nor the
consummation by BWI of the transactions contemplated hereby or thereby
(i) requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as
may be required for the registration of the Shares under the Act, the
registration of the Class B Common Stock under the Exchange Act, as
amended, and compliance with the securities or Blue Sky laws of various
jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement and except for the NASD's clearance of
the underwriting terms of the offering contemplated hereby as required
under the NASD's Rules of Fair Practice), (ii) conflicts with or will
conflict with or constitutes or will constitute a breach of, or a
default under, the articles of incorporation or bylaws of BWI or any
agreement, indenture, lease or other instrument to which BWI is a party
or by which any of its properties may be bound, (iii) violates any
statute, law, regulation, ruling, filing, judgment, injunction, order
or decree applicable to BWI or any of its properties, or (iv) results
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of BWI.
(f) Except as described in the Prospectus, BWI does not have
outstanding and at the Closing Date (and the Additional Closing Date,
if applicable) will not have outstanding any options to purchase, or
any warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any
shares of Class B Common Stock or any such warrants or convertible
securities or obligations. No holder of securities of the Company has
rights to the registration of any securities of the Company as a result
of or in connection with the filing of the Registration Statement or
the consummation of the transactions contemplated hereby that have not
been satisfied or heretofore waived in writing.
(g) To the best knowledge of BWI, all federal, state, local
and foreign tax returns required to be filed by or on behalf of the
Company and its subsidiaries (and their predecessors) with respect to
all periods ended prior to the date of this Agreement have been filed
(or are the subject of valid extension) with the appropriate federal,
state, local and foreign authorities and all such tax returns, as
filed, are accurate in all material respects. All federal, state, local
and foreign taxes (including estimated tax and sales tax payments)
required to be shown on all such tax returns or claimed to be due from
or with respect to the business of the Company and its subsidiaries
(and their predecessors) have been paid or reflected as a liability on
the financial statements of the Company for appropriate periods, except
for those taxes or claims therefor which are being contested by the
Company in good faith and for which appropriate reserves are reflected
in the Company's financial statements. All deficiencies asserted as a
result of any federal, state, local or foreign tax audits have been
paid or finally settled and no issue has been raised in any such audit
which, by application of the same or similar principles, reasonably
could be expected to result in a proposed deficiency for any other
period not so audited. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any federal,
state, local or foreign tax return for any period. On the Closing Date,
and Additional Closing Date, if any, all stock transfer and other taxes
which are required to be paid in connection with the sale of the shares
to be sold by the Company to the Underwriters will have been fully paid
by the Company and all laws imposing such taxes will have been complied
with.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof and of any Prepricing Prospectus to the Underwriters and
dealers; (ii) the printing and delivery (including, without limitation, postage,
air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Prospectus, each Prepricing Prospectus, the Blue
Sky memoranda, the Master Agreement Among Underwriters, this Agreement, the
Selected Dealers Agreement and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws or Blue Sky laws,
13
including the reasonable attorneys' fees and out-of-pocket expenses of the
counsel for the Underwriters in connection therewith; (iv) the filing fees
incident to securing any required review by the NASD of the terms of the sale of
the Shares and the reasonable fees and disbursements of the Underwriters'
counsel relating thereto; (v) the cost of preparing stock certificates; (vi) the
costs and charges of any transfer agent or registrar; (vii) the cost of the tax
stamps, if any, in connection with the issuance and delivery of the Shares to
the respective Underwriters; (viii) all other fees, costs and expenses referred
to in Item 13 of the Registration Statement, (ix) the transportation, lodging,
graphics and other expenses incidental to the Company's preparation for and
participation in the "roadshow" for the offering contemplated hereby, and (x)
all other costs and expenses incident to the performance of the obligations of
the Company hereunder which are not otherwise specifically provided for in this
Section 7. Notwithstanding the foregoing, in the event that the proposed
offering is terminated for the reasons set forth in Section 5(i) hereof, the
Company agrees to reimburse the Underwriters as provided in Section 5(i).
8. Indemnification and Contribution. Subject to the limitations in
this paragraph below, each of the Company and BWI, jointly and severally, agrees
to indemnify and hold harmless you and each other Underwriter, the directors,
officers, employees and agents of each Underwriter, and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses, including, without limitation, reasonable costs of
investigation and attorneys' fees and expenses (collectively, "Damages") arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or 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,
except to the extent that any such Damages arise out of or are based upon an
untrue statement or omission or alleged untrue statement or omission which has
been made therein or omitted therefrom in reliance upon and in conformity with
the information furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith, or (ii) any
inaccuracy in or breach of the representations and warranties of the Company or
BWI contained herein or any failure of the Company or BWI to perform its
obligations hereunder or under law; provided, however, that with respect to any
untrue statement or omission made in any Prepricing Prospectus, the indemnity
agreement contained in this paragraph shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any such losses, claims, damages or liabilities
purchased the Shares concerned if both (y) a copy of the Prospectus was not sent
or given to such person at or prior to the written confirmation of the sale of
such Shares to such person as required by the Act, and (z) the untrue statement
or omission in the Prepricing Prospectus was corrected in the Prospectus.
In addition to its other obligations under this Section 8, each of the
Company and BWI, jointly and severally, agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
inaccuracy in the representations and warranties of the Company herein or
failure to perform their obligations hereunder, all as set forth in this Section
8, it will reimburse each Underwriter on a quarterly basis for all reasonable
legal or other out-of-pocket expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligation of the Company and BWI to reimburse each
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, each Underwriter shall promptly return it to the person(s) from whom
it was received, together with interest compounded daily determined on the basis
of the base lending rate announced from time to time by Chase Manhattan Bank,
N.A. (the "Prime Rate"). Any such interim reimbursement payments which are not
made to the Underwriters within 30 days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
jointly and severally against the Company and BWI, such Underwriter or such
controlling person shall promptly notify in writing the party(s) against whom
indemnification is being sought (the "indemnifying party" or "indemnifying
parties"), and such indemnifying party(s) shall assume the defense thereof,
including the employment of counsel reasonably acceptable to such Underwriter or
such controlling person
14
and payment of all fees and expenses. Such Underwriter or any such controlling
person shall have the right to employ separate counsel (but the Company and BWI
shall not be liable for the fees and expenses of more than one counsel) in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the indemnifying party(s) has (have) agreed in writing to pay
such fees and expenses, (ii) the indemnifying party(s) has (have) failed to
assume the defense and employ counsel reasonably acceptable to the Underwriter
or such controlling person or (iii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying party(s), and such Underwriter or such
controlling person shall have been advised by its counsel that one or more legal
defenses may be available to the Underwriter which may not be available to the
Company or BWI, or that representation of such indemnified party and any
indemnifying party(s) by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party(s) shall not have
the right to assume the defense of such action on behalf of such Underwriter or
such controlling person (notwithstanding its (their) obligation to bear the fees
and expenses of such counsel)). The indemnifying party(s) shall not be liable
for any settlement of any such action effected without its (their) written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, the indemnifying party(s) agrees
to indemnify and hold harmless any Underwriter and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment, but in the case of a judgment only to the extent stated
in the immediately preceding paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless BWI and the Company, its directors, and its officers who sign the
Registration Statement, and any person who controls BWI or the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company and BWI to each
Underwriter, but only with respect to information furnished in writing by or on
behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action or claim shall be brought or asserted against
BWI or the Company, any of its directors, any such officers, or any such
controlling person based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Underwriter pursuant to this
paragraph, such Underwriter shall have the rights and duties given to the
Company and BWI by the preceding paragraph (except that if the Company and BWI
shall have assumed the defense thereof such Underwriter shall not be required to
do so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and BWI and the Company, its directors, any such
officers, and any such controlling persons shall have the rights and duties
given to the Underwriters by the immediately preceding paragraph.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever to an indemnified party under the first
or fifth paragraph of this Section 8 in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and BWI on the one hand and the
Underwriters on the other hand from the offering of the Shares 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 and
BWI on the one hand and the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and BWI 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, in each case as set forth in the table on the cover page of the
Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company or the Underwriters from the offering of the
Shares shall include the net proceeds (before deducting expenses) received by
the Company , and the underwriting discounts and commissions received by the
Underwriters, from the sale of
15
such Additional Shares, in each case computed on the basis of the respective
amounts set forth in the notes to the table on the cover page of the Prospectus.
The relative fault of the Company and BWI on the one hand and the Underwriters
on the other hand 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 on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and BWI and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8 was determined by
a pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed 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 to contribute pursuant to this Section 8 are several in proportion
to the respective numbers of Firm Shares set forth opposite their names in
Schedule I hereto (or such numbers of Firm Shares increased as set forth in
Section 10 hereof) and not joint.
Notwithstanding the second paragraph of this Section 8, any losses,
claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 8 shall be paid
by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred. The indemnity, contribution and
reimbursement agreements contained in this Section 8 and the representations and
warranties of the Company and BWI set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter,
the Company, its directors or officers or any person controlling the Company,
(ii) acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to BWI, the Company, its directors or officers,
or any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second paragraph of this
Section 8, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration tribunal. In
the event the party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be limited to
the operation of the interim reimbursement provisions contained in the second
and fifth paragraphs of this Section 8, and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which is
created by the provisions of the second paragraph of this Section 8.
Notwithstanding the preceding paragraphs of this Section 8, if the
Distribution has been consummated, then the Underwriters must first proceed
against the Company for indemnification and contribution before proceeding
against BWI (it being understood, however, that (i) in such circumstances, the
Underwriters shall not be obligated to first exhaust all remedies against the
Company before proceeding against BWI; and (ii) in circumstances where such
Damages arise as a result of statements, facts, representations or warranties of
BWI, such Underwriters may first proceed against BWI.)
16
9. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective
not later than 12:00 noon, New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you,
and all filings required by Rules 424(b), 430A and 462 under the Act
shall have been timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock of the Company or any material change in the
indebtedness (other than in the ordinary course of business) of the
Company, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no material oral or written agreement or
other transaction shall have been entered into by the Company which is
not in the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings of
the Company, (iii) no loss or damage (whether or not insured) to the
property of the Company shall have been sustained which had or could
reasonably be expected to have a Material Adverse Effect, (iv) no legal
or governmental action, suit or proceeding affecting the Company or any
of its properties which is material to the Company or which affects or
could reasonably be expected to affect the transactions contemplated by
this Agreement shall have been instituted or threatened, and (v) there
shall not have been any material change in the condition (financial or
otherwise), business, management, results of operations or prospects of
the Company or its subsidiaries which makes it impractical or
inadvisable in your judgment to proceed with the public offering or
purchase the Shares as contemplated hereby.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxx & Xxxxxxx, counsel
to the Company, to the effect that:
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the
State of Indiana, with full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is
duly registered or otherwise qualified to conduct its business
as a foreign corporation and is in good standing in each
jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where the failure to so register or
qualify does not have a Material Adverse Effect.
(ii) Each of the subsidiaries is a corporation
duly organized and validly existing in good standing under the
laws of the jurisdiction of its organization, with full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment
or supplement thereto); and is duly registered and qualified
to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where the failure to so register or
qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net
worth or results of operation of the Company and the
subsidiaries taken as a whole; and all of the outstanding
shares of capital stock of each of the subsidiaries have been
duly authorized and validly issued, and are fully paid and
nonassessable, and are owned by the Company directly, or
indirectly through one of the other subsidiaries, free and
clear of any perfected security interest, or to the best
knowledge of such counsel after reasonable inquiry, any other
security interest, lien, adverse claim, equity or other
encumbrance.
(iii) The authorized and the outstanding capital
stock of the Company conforms in all (material) respects to
the description thereof contained in the Prospectus under the
captions "Capitalization" and "Description of Capital Stock."
Except as set forth in the Prospectus, to the
17
best of such counsel's knowledge, the Company is not a party
to or bound by any outstanding options, warrants or similar
rights to subscribe for, or contractual obligations to issue,
sell, transfer or acquire, any of its capital stock or any
securities convertible into or exchangeable for any of such
capital stock.
(iv) All shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued
and sold by the Company hereunder, have been duly authorized
and validly issued, are fully paid and nonassessable and are
free of any preemptive or, to the best knowledge of such
counsel, similar rights that entitle or will entitle any
person to acquire any Shares upon the issuance thereof by the
Company, and no such rights will exist as of the Closing Date.
(v) All offers and sales of the Company's
securities have been made in compliance in all material
respects with the registration requirements of the Act and
other applicable state securities laws or regulations or
applicable exemptions therefrom.
(vi) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof,
(A) such Shares will be validly issued, fully paid and
nonassessable and free of any preemptive or, to the best
knowledge of such counsel, similar rights that entitle or will
entitle any person to acquire any Shares upon the issuance
thereof by the Company, and (B) good, valid and marketable
title to such Shares issued hereunder, free and clear of any
claim, encumbrance or defect in title of any nature (other
than any arising by or through the Underwriters), will pass to
each Underwriter that has purchased any portion of such Shares
in good faith and without knowledge of any such claim,
encumbrance or defect.
(vii) The form of certificates for the Shares
conforms in all material respects to the requirements of the
applicable corporate laws of the State of Indiana.
(viii) The Registration Statement has become
effective under the Act and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose are pending before or contemplated by the
Commission.
(ix) The Company has all requisite corporate power
and authority to enter into this Agreement and to issue, sell
and deliver the Shares to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal
and binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other
similar laws relating to or affecting enforcement of
creditors' rights generally or by general equitable
principles, and except to the extent enforceability of the
provisions relating to indemnity and contribution for
liabilities under the Act may be limited by or under the Act,
or by public policy.
(x) Neither the Company nor any of the subsidiaries
is in violation of its certificate of incorporation or bylaws,
and, to the best knowledge of such counsel, the Company is not
in default in the performance of any obligation, agreement or
condition contained in any bond, indenture, note or other
evidence of indebtedness or any other agreement or obligation
of the Company, where the default would have, individually or
in the aggregate, a Material Adverse Effect.
(xi) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this
Agreement, compliance by the Company with all provisions
hereof nor consummation by the Company of the transactions
contemplated hereby (A) conflicts or will
18
conflict with or constitutes or will constitute a breach of,
or a default under, the certificate of incorporation or bylaws
of the Company or any material agreement, indenture, lease or
other instrument known to such counsel to which the Company is
a party or by which any of its properties is bound, (B)
creates or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company, or (C) violates or will result in any violation of
any existing law, statute, regulation, ruling (assuming
compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree which is known to
such counsel and applicable to the Company or any of its
properties.
(xii) No consent, approval, authorization or
other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental
body, agency or official is required on the part of the
Company (except such as have been obtained under the Act or
such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Shares)
for the valid issuance and sale of the Shares to the
Underwriters under this Agreement.
(xiii) The Registration Statement and the
Prospectus and any supplements or amendments thereto (except
for the financial statements and the notes thereto and the
schedules and other financial and statistical data included
therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the
requirements of the Act. Without limiting the generality of
the foregoing, any Rule 434 Prospectus conforms in all
material respects with the requirements of Rule 434 under the
Act.
(xiv) To the best knowledge of such counsel, (A)
there are no legal or governmental proceedings pending or
threatened against the Company or to which the Company or any
of its properties is subject, that are required to be
described in the Registration Statement or Prospectus (or any
amendment or supplement thereto) that are not described as
required therein, and (B) there are no agreements, contracts,
indentures, leases or other instruments that are required to
be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement
that are not described or filed as required, as the case may
be.
(xv) The properties described in the Prospectus as
held under lease by the Company are held under duly executed
leases.
(xvi) Such counsel has reviewed all agreements,
contracts, indentures, leases or other documents or
instruments described or referred to in the Registration
Statement and the Prospectus (other than routine contracts
entered into by the Company for the purchase of materials or
the sale of products entered into in the normal course of
business, although such counsel has reviewed the forms of such
routine contracts), and such agreements, contracts (and forms
of contracts), indentures, leases or other documents or
instruments are fairly summarized or disclosed in all material
respects therein, and filed as exhibits thereto as required,
and such counsel does not know of any agreements, contracts,
indentures, leases or other documents or instruments required
to be so summarized or disclosed or filed which have not been
so summarized or disclosed or filed.
(xvii) The descriptions in the Prospectus of
statutes, regulations or legal or governmental proceedings,
insofar as they purport to summarize certain of the provisions
thereof, are accurate and fairly present the information
required to be presented by the Act and the rules and
regulations thereunder.
(xviii) The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended.
19
In rendering such opinion, counsel may rely, to the extent
they deem such reliance proper, upon an opinion or opinions, each dated
the Closing Date, of other counsel as to matters governed by the laws
of jurisdictions other than the United States or the State of Indiana
provided that (1) each such local counsel is acceptable to you and your
counsel, (2) counsel shall state in their opinion that they believe
that they and you are justified in relying thereon, and (3) such
reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to you and is in form and
substance satisfactory to you. In rendering such opinion, counsel may
rely, to the extent they deem such reliance proper, as to matters of
fact upon certificates of officers of the Company and of government
officials, provided that counsel shall state their belief that they and
you are justified in relying thereon. Copies of all such certificates
shall be furnished to you and your counsel on the Closing Date.
In rendering such opinion, in each case where such opinion is
qualified by "the best knowledge of such counsel" or "known to such
counsel", such counsel may rely as to matters of fact upon certificates
of executive and other officers and employees of the Company as you and
such counsel shall deem are appropriate and such other procedures as
you and such counsel shall mutually agree; provided, however, in each
such case, such counsel shall state that it has no knowledge contrary
to the information contained in such certificates or developed by such
procedures and knows of no reason why you should not reasonably rely
upon the information contained in such certificates or developed by
such procedures. Such counsel may state in such opinion that its
knowledge is limited to the knowledge of its attorneys and other
representatives and employees that have given attention to the
Company's matters in connection with the transactions contemplated by
this Agreement.
In addition to the opinion set forth above, such counsel shall state
that during the course of their participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto, nothing
has come to the attention of such counsel which has caused them to believe or
given them reason to believe that the Registration Statement or the Prospectus
or any amendment thereto (except for the financial statements and other
financial and statistical information contained therein or omitted therefrom as
to which no opinion need be expressed), at the date thereof, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Registration Statement or the Prospectus as of the date of the opinion
(except as aforesaid), contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxx & Xxxxxxx, as
special FDA counsel to the Company, substantially to the effect that
the FDA would not require the Company to file a New Drug Application
with respect to its Priority Pharmacy Division.
(e) You shall have received on the Closing Date (and the
Additional Closing, if any) an opinion of the General Counsel to BWI,
to the effect that the Company has such permits, licenses, franchises,
approvals, consents and authorizations of governmental or regulatory
authorities ("Permits"), as are necessary for the Company to own its
properties and to conduct its business in the manner described in the
Prospectus, except where the failure to have such Permits would not
individually or in the aggregate have a Material Adverse Effect; the
Company and its subsidiaries have performed all of their material
obligations with respect to such Permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or result in any other material impairment of
the rights of the holder of any such Permit; such Permits contain no
restrictions that are materially burdensome to the Company; and the
Company is not in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or of any
decree of any court or governmental agency or body having jurisdiction
over the Company except where such violation does not and will not have
a Material Adverse Effect.
20
(f) You shall have received on the Closing Date an opinion
of Xxxxxxxxx Traurig Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx, P.A., as counsel
for the Underwriters, dated the Closing Date with respect to the
issuance and sale of the Shares, the Registration Statement and other
related matters as you may reasonably request, and the Company and its
counsel shall have furnished to your counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(g) You shall have received letters addressed to you and
dated the date hereof and the Closing Date (and the Additional Closing
Date, if any) from (i) the firm of Price Waterhouse LLP, independent
certified public accountants, and (ii) the Chief Financial Officer of
the Company, substantially in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall be pending or, to the knowledge of the Company,
shall be threatened or contemplated by the Commission at or prior to
the Closing Date; (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of the
Shares under the securities or Blue Sky laws of any jurisdiction shall
be in effect and no proceeding for such purpose shall be pending or, to
the knowledge of the Company, threatened or contemplated by the
Commission or the authorities of any jurisdiction; (iii) any request
for additional information on the part of the staff of the Commission
or any such authorities shall have been complied with to the
satisfaction of the staff of the Commission or such authorities; (iv)
after the date hereof no amendment or supplement to the Registration
Statement or the Prospectus shall have been filed unless a copy thereof
was first submitted to you and you did not object thereto in good
faith; and (v) all of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all respects
on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other
officers as are acceptable to you) to the effect set forth in this
Section 9(f) and in Sections 9(b) and 9(g) hereof.
(i) The Company shall not have failed in any material
respect at or prior to the Closing Date to have performed or complied
with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing
Date.
(j) The Company shall have furnished or caused to have been
furnished to you such further certificates and documents as you shall
have reasonably requested.
(k) At or prior to the Closing Date, you shall have received
the written commitment of each of the Company's officers and directors,
and BWI, not to (i) except for the Distribution by BWI, directly or
indirectly sell, offer or contract to sell, or otherwise dispose of or
transfer any shares of capital stock or securities of the Company
convertible into or exchangeable or exercisable for Class B Common
Stock (collectively, "Company Securities") owned or controlled by such
persons now or hereafter or any rights to purchase Company Securities,
for a period of 180 days after the date of the Prospectus first filed
pursuant to Rule 424(b) under the Act (the "Restriction Period"),
without your prior written consent, or (ii) exercise or seek to
exercise or effectuate in any manner any rights of any nature that such
persons have or may hereafter have to require the Company to register
under the Act any such person's sale, transfer or other disposition of
any Company Securities or other securities of the Company held by any
such persons, or to otherwise participate as a selling securityholder
in any manner in any registration effected by the Company under the
Act, including the registration to which this Agreement relates, before
the expiration of the Restriction Period.
(l) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate
Financing Department of the NASD confirming that such Department has
determined to raise no objections with respect to the fairness or
reasonableness of the underwriting terms and arrangements of the
offering contemplated hereby.
21
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (e) shall be dated as
of the Additional Closing Date and the opinions called for by paragraphs (c) and
(d) shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the parties
hereto, and (b) release of notification of the effectiveness of the Registration
Statement by the Commission; provided, however, that the provisions of Sections
7, and 8 shall at all times be effective.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Firm Shares, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I hereto bears to the aggregate number
of Firm Shares set forth opposite the names of all non-defaulting Underwriters
or in such other proportion as you may specify in the Agreement Among
Underwriters, to purchase the Firm Shares which such defaulting Underwriter or
Underwriters agreed, but failed or refused to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares and arrangements satisfactory
to you and the Company for the purchase of such Firm Shares are not made within
48 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
which does not result in termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven (7) days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, in your sole judgment,
(i) trading in the Company's Class B Common Stock shall have been suspended by
the Commission or the NASDAQ/NMS, (ii) trading in securities generally on the
New York Stock Exchange, American Stock Exchange or NASDAQ/NMS shall have been
suspended or materially limited, or minimum or maximum prices shall have been
generally established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by any such exchange or by order of
the Commission or any court or other governmental authority, (iii) a general
moratorium on commercial banking activities shall have been declared by either
federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions or
other material event the effect of which on the financial markets of the United
States is such as to make it, in your judgment, impracticable or inadvisable to
market the Shares or to enforce contracts for the sale of the Shares. Notice of
such cancellation shall be promptly given to the Company and its counsel by
telegraph, telecopy or telephone and shall be subsequently confirmed by letter.
22
12. Information Furnished by the Underwriters. The Company
acknowledges that (i) the paragraph immediately following footnote (3) on the
cover page of the Prospectus, and (ii) the third and seventh paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you or on your behalf as such information is referred to in Sections
6(a), 6(b) and 9 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5 and 11
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company to the office of the
Company at 000 Xxxx Xxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxxxx Xxxxxxx, Xxxxxxx
00000; Attention: Xxxxxx X. Xxxxx (with copy to Xxxxx & Xxxxxxx, 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000; Attention: Xxxxx X.
Xxxxxxxxx, Esq.), if to BWI, to the office of BWI at 00000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000. Attention: Xxxxxxx X. XxXxxxxxx,
or (iii) if to you, as Representative of the Underwriters, to Xxxxxxx Xxxxx &
Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxxx X. Ascari, Managing Director (with copy to Xxxxxxxxx Xxxxxxx
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx, P.A., 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx
00000; Attention: Xxxxxxx X. Xxxxx, Esq.).
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, and its respective directors and officers and
BWI.
14. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of Florida without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company, BWI and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect to any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
23
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
PRIORITY HEALTHCARE CORPORATION
By:
------------------------------------
Xxxxxx X. Xxxxx
President and Chief Executive Officer
BINDLEY WESTERN INDUSTRIES, INC.
By:
------------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
CONFIRMED as of the date first above
mentioned, on behalf of the
Representatives and the other several
Underwriters named in Schedule I hereto.
By:
-------------------------------------
24
SCHEDULE I
Number of
Name Firm Shares
--------------------------------------------------------------- -----------
Xxxxxxx Xxxxx & Associates, Inc................................
Wheat, First Securities, Inc...................................
---------------................................................
---------------................................................
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TOTAL..........................................................
