EXHIBIT 1.1
AMERICAN MEDSERVE CORPORATION
5,357,000 Shares Common Stock*
UNDERWRITING AGREEMENT
November ___, 1996
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Equitable Securities Corporation
As Representatives of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. American Medserve Corporation ("COMPANY") a
Delaware corporation, has an authorized capital stock consisting of 1,000,000
shares of Preferred Stock, $.01 par value, none of which were outstanding as of
November ___, 1996 and 30,000,000 shares of Common Stock ("COMMON STOCK"), $.01
par value, of which 5,559,625 shares were outstanding as of such date. The
Company proposes to issue and sell 5,357,000 shares of its authorized but
unissued Common Stock ("FIRM SHARES") to the several underwriters named in
Schedule A as it may be amended by the Pricing Agreement hereinafter defined
("UNDERWRITERS"), who are acting severally and not jointly. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
803,550 additional shares of Common Stock ("OPTION SHARES") as provided in
Section 4 hereof. The Firm Shares and, to the extent such option is exercised,
the Option Shares, are hereinafter collectively referred to as the "SHARES."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon as you
deem advisable after the registration statement hereinafter referred to
becomes effective, if it has not yet become effective, and the Pricing
Agreement hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form
of Exhibit A hereto (the "PRICING
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*Plus an option to acquire up to 803,550 additional shares to cover
overallotments.
AGREEMENT"). The Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication between the Company and the
Representatives and shall specify such applicable information as is indicated
in Exhibit A hereto. The offering of the Shares will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date
of the execution and delivery of the Pricing Agreement, this Agreement shall
be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-11667)
and a related preliminary prospectus with respect to the Shares have
been prepared and filed with the Securities and Exchange Commission
("COMMISSION") by the Company in conformity in all material respects
with the requirements of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
"1933 ACT;" all references herein to specific rules are rules
promulgated under the 0000 Xxx); and the Company has so prepared and has
filed such amendments thereto, if any, and such amended preliminary
prospectuses as may have been required to the date hereof. If the
Company has elected not to rely upon Rule 430A, the Company has prepared
and will promptly file an amendment to the registration statement and an
amended prospectus. If the Company has elected to rely upon Rule 430A,
it will prepare and file a prospectus pursuant to Rule 424(b) that
discloses the information previously omitted from the prospectus in
reliance upon Rule 430A. There have been or will promptly be delivered
to you four signed copies of such registration statement and amendments,
four copies of each exhibit filed therewith, and conformed copies of
such registration statement and amendments (but without exhibits) and of
the related preliminary prospectus or prospectuses and final forms of
prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant
to Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "REGISTRATION
STATEMENT," and the "PROSPECTUS," respectively, except that if any
revised prospectus shall be provided to the Underwriters by the Company
for use in connection with the offering of the Shares which differs from
the Prospectus on file at the Commission at the time the Registration
Statement became or becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule
424(b)), the term Prospectus shall refer to such revised prospectus from
and after the time it was provided to the Underwriters for such use. If
the Company elects to rely on Rule 434 of the 1933 Act, all references
to "Prospectus" shall be deemed to include, without limitation, the form
of prospectus and the term sheet, taken together, provided to the
Underwriters by the Company in accordance with Rule 434 of the 1933 Act
("RULE 434 PROSPECTUS"). Any registration statement (including any
amendment or supplement thereto or information which is deemed part
thereof) filed by the Company under Rule 462(b) ("RULE 462(b)
REGISTRATION
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STATEMENT") shall be deemed to be part of the "Registration Statement"
as defined herein, and any prospectus (including any amendment or
supplement thereto or information which is deemed part thereof) included
in such registration statement shall be deemed to be part of the
"Prospectus," as defined herein, as appropriate. The Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder are hereinafter collectively referred to as the
"EXCHANGE ACT."
(b) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus, and each preliminary
prospectus has conformed in all material respects with the requirements
of the 1933 Act and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading; and when the
Registration Statement became or becomes effective, and at all times
subsequent thereto, up to the First Closing Date or the Second Closing
Date hereinafter defined, as the case may be, the Registration
Statement, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to
the requirements of the 1933 Act, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement thereto, included or
will include any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; PROVIDED, HOWEVER, that
the Company makes no representation or warranty as to information
contained in or omitted from any preliminary prospectus, the
Registration Statement, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for use in the preparation thereof.
(c) The Company and its subsidiaries (as defined in the 0000
Xxx) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective places
of incorporation, with corporate power and authority to own their
properties and conduct their business as described in the Prospectus;
the Company and each of its subsidiaries are duly qualified to do
business as foreign corporations under the corporation law of, and are
in good standing as such in, each jurisdiction in which they own or
lease substantial properties, have an office, or in which substantial
business is conducted and such qualification is required except in any
such case where the failure to so qualify or be in good standing would
not have a material adverse effect upon the Company and its subsidiaries
taken as a whole; and no proceeding of which the Company has knowledge
has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
(d) Except as disclosed in the Registration Statement, the
Company owns directly or indirectly all of the issued and outstanding
capital stock of each of its subsidiaries, free and clear of any claims,
liens, encumbrances or security interests,
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and all of such capital stock has been duly authorized and validly
issued and is fully paid and nonassessable.
(e) The issued and outstanding shares of capital stock of the
Company as set forth in the Prospectus have been duly authorized and
validly issued, are fully paid and nonassessable, and conform to the
description thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued,
delivered and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and will conform to the
description thereof contained in the Prospectus.
(g) The making and performance by the Company of this
Agreement and the Pricing Agreement have been duly authorized by all
necessary corporate action and will not violate any provision of the
Company's charter or bylaws and will not result in the breach, or be in
contravention, of any provision of any agreement, franchise, license,
indenture, mortgage, deed of trust, or other instrument to which the
Company or any subsidiary is a party or by which the Company, any
subsidiary or the property of any of them may be bound or affected, or
any order, rule or regulation applicable to the Company or any
subsidiary of any court or regulatory body, administrative agency or
other governmental body having jurisdiction over the Company or any
subsidiary or any of their respective properties, or any order of any
court or governmental agency or authority entered in any proceeding to
which the Company or any subsidiary was or is now a party or by which it
is bound, except for violations, breaches or contraventions (other than
those related to any provisions of the Company's charter or bylaws)
which would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. No consent, approval, authorization or
other order of any court, regulatory body, administrative agency or
other governmental body is required for the execution and delivery of
this Agreement or the Pricing Agreement or the consummation of the
transactions contemplated herein or therein, except for compliance with
the 1933 Act and blue sky laws applicable to the public offering of the
Shares by the several Underwriters and clearance of such offering with
the National Association of Securities Dealers, Inc. ("NASD"). This
Agreement has been duly executed and delivered by the Company.
(h) Each of the accountants who have expressed their opinions
with respect to the financial statements and schedules in the
Registration Statement are independent accountants as required by the
1933 Act.
(i) The consolidated financial statements and schedules of
the Company included in the Registration Statement present fairly the
consolidated financial position of the Company as of the respective
dates of such financial statements, and the consolidated results of
operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except
as disclosed in the Prospectus. The financial information set forth in
the Prospectus under "Selected Consolidated Financial Information and
Operating Data" presents fairly on the basis stated in the Prospectus,
the information set forth therein.
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The financial statements of G.H.S.C., Inc. and the Contract
Services Division of Xxxxx X. Xxxxx, Inc., Xxxxx Pharmacy, Inc.,
Extended Care Associates, Inc., Good Samaritan Supply Services, Inc.,
Nihan & Xxxxxx, Inc., Pharmed, Inc., Royal Care of America, Inc.,
Sterling Acquisition Partners, Inc., Xxxxxxxxxx Pharmacy - Institutional
Division, Xxxxxxxxxx Drug Company, Inc. and Xxxxxxx Pharmacy and Medical
Supply, Inc. (each, a "COMPLETED ACQUISITION" and, collectively, the
"COMPLETED ACQUISITIONS") included in the Registration Statement present
fairly the financial position of each Completed Acquisition, as
applicable, as of the respective date of such financial statements, and
the results of operations and cash flows of each Completed Acquisition,
as applicable, for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed in the
Prospectus.
The pro forma financial statements and other pro forma
information included in the Prospectus present fairly the information
shown therein, have been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma
information, have been properly compiled on the pro forma basis
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate under the circumstances.
(j) Neither the Company nor any subsidiary is in violation of
its charter or in default under any consent decree, or in default with
respect to any material provision of any lease, loan agreement,
franchise, license, permit or other contract obligation to which it is a
party; and there does not exist any state of facts which constitutes an
event of default as defined in such documents or which, with notice or
lapse of time or both, would constitute such an event of default, in
each case, except for defaults which neither singly nor in the aggregate
are material to the Company and its subsidiaries taken as a whole.
(k) There are no material legal or governmental proceedings
pending, or to the Company's knowledge, threatened to which the Company
or any subsidiary is or may be a party or of which material property
owned or leased by the Company or any subsidiary is or may be the
subject, or related to environmental or discrimination matters which are
not disclosed in the Prospectus, or which question the validity of this
Agreement or the Pricing Agreement or any action taken or to be taken
pursuant hereto or thereto.
(l) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to purchase Common
Stock except as disclosed in the Prospectus. Holders of registration
rights have waived such rights with respect to the offering being made
by the Prospectus.
(m) The Company and each of its subsidiaries have good and
marketable title to all the properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or encumbrance
of any kind except those, if any, reflected in such
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financial statements (or elsewhere in the Prospectus) or which are not
material to the Company and its subsidiaries taken as a whole. The
Company and each of its subsidiaries hold their respective leased
properties which are material to the Company and its subsidiaries taken
as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company and its subsidiaries, taken
as a whole, have not incurred any material liabilities or obligations,
direct or contingent, nor entered into any material transactions not in
the ordinary course of business and there has not been any material
adverse change in their condition (financial or otherwise) or results of
operations nor any material change in their capital stock, short-term
debt or long-term debt.
(p) The Company agrees not to offer, sell, contract to sell
or otherwise dispose of any Common Stock or securities convertible into
Common Stock (except for the issuance of the Additional GTCR Shares and
Common Stock issued pursuant to currently outstanding options, upon
conversion of the Royal Care Note, pursuant to the Good Samaritan
Shareholders Agreement and in connection with possible future
acquisitions) for a period of 180 days after this Agreement becomes
effective without the prior written consent of Xxxxxxx Xxxxx & Company,
L.L.C. In addition, the Company's executive officers, directors and
other stockholders, holding in the aggregate all of the Company's
currently outstanding shares of Common Stock, have agreed not to offer,
sell, contract to sell or otherwise dispose of any Common Stock for a
period of 180 days after this Agreement becomes effective without the
prior written consent of Xxxxxxx Xxxxx & Company, L.L.C.
(q) There is no material document of a character required to
be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not described
or filed as required.
(r) The Company, together with its subsidiaries, owns and
possesses all rights, title and interest in and to, or has duly licensed
from third parties, all patents, patent rights, trade secrets,
inventions, know-how, trademarks, trade names, copyrights, service marks
and other proprietary rights ("TRADE RIGHTS") material to the business
of the Company and each of its subsidiaries taken as a whole. Neither
the Company nor any of its subsidiaries has received any notice of
infringement, misappropriation or conflict from any third party as to
such material Trade Rights which has not been resolved or disposed of
and neither the Company nor any of its subsidiaries has infringed,
misappropriated or otherwise conflicted with material Trade Rights of
any third parties, which infringement, misappropriation or conflict
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would have a material adverse effect upon the condition (financial or
otherwise) or results of operations of the Company and its subsidiaries
taken as a whole.
(s) The conduct of the business of the Company and each of
its subsidiaries is in compliance in all respects with applicable
federal, state, local and foreign laws and regulations, except where the
failure to be in compliance would not have a material adverse effect
upon the condition (financial or otherwise) or results of operations of
the Company and its subsidiaries taken as a whole. Each of the Company
and its subsidiaries has the requisite provider number or other
authorization to xxxx the Medicare program and the respective Medicaid
program in the state or states in which such entity operates. There is
no action pending or, to the Company's knowledge, threatened which could
result in a revocation of any such provider number or authorization or
result in the Company's or any subsidiary's exclusion from the Medicare
or any state Medicaid programs. To the Company's best knowledge, the
Company's and each subsidiary's business practices do not violate any
applicable provisions of federal or state laws governing Medicare or any
state Medicaid programs, including, without limitation, Sections
1320a-7a and 1320a-7b of Title 42 of the United States Code and no
individual with an ownership or control interest, as defined in 42
U.S.C. Section 1320a-3(a)(3), in the Company or any subsidiary, or who
is an officer, director or managing employee as defined in 42 U.S.C.
Section 1320a-5(b), of the Company or any subsidiary is a person
described in 42 U.S.C. Section 1320a-7(b)(8)(B). To the Company's best
knowledge, the Company's and each subsidiary's business practices do not
violate any federal or state laws regarding physician ownership of (or
financial relationship with) and referral to entities providing
healthcare related goods or services, or laws requiring disclosure of
financial interests held by physicians in entities to which they may
refer patients for the provision of health care related goods or
services.
(t) The property, assets and operations of the Company and
the subsidiaries comply in all material respects with all applicable
federal, state and local laws, rules, orders, decrees, judgments,
injunctions, licenses, permits or regulations relating to environmental
matters (the "ENVIRONMENTAL LAWS"), except to the extent that the lack
of compliances with such Environmental Laws would not, singularly or in
the aggregate, have a material adverse effect upon the condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole. To the Company's best knowledge, none of
the Company's or any subsidiary's property, assets or operations is the
subject of any ongoing or proposed remedial action in order to respond
to a release of any substance regulated by or form the basis of
liability under any Environmental Laws (a "HAZARDOUS MATERIAL") into the
environment or is in contravention of any federal, state, local or
foreign law, order or regulation. Neither the Company nor any
subsidiary has received any notice or claim, nor are there any pending
or, to the Company's best knowledge, threatened or reasonably
anticipated lawsuits against it with respect to violations of an
Environmental Law or in condition with the release of any Hazardous
Material into the environment. To the Company's best knowledge, neither
the Company nor any subsidiary has any material contingent liability in
connection with any release of Hazardous Material into the environment.
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(u) All offers and sales of the Company's capital stock prior
to the date hereof were at all relevant times exempt from the
registration requirements of the 1933 Act and were duly registered with
or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws.
(v) The Company has filed all necessary federal and state
income and franchise tax returns and has paid all taxes shown as due
thereon, and there is no tax deficiency that has been, or to the
knowledge of the Company might be, asserted against the Company or any
of its properties or assets that would or could be expected to have a
material adverse affect upon the condition (financial or otherwise) or
results of operations of the Company and its subsidiaries taken as a
whole.
(w) The Company has filed a registration statement pursuant
to Section 12(g) of the Exchange Act to register the Common Stock
thereunder, has filed an application to list the Shares on the Nasdaq
National Market, and has received notification that the listing has been
approved, subject to notice of issuance or sale of the Shares, as the
case may be.
(x) The Company is not, and does not intend to conduct its
business in a manner in which it would become, an "investment company"
as defined in Section 3(a) of the Investment Company Act of 1940, as
amended ("INVESTMENT COMPANY ACT").
(y) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking
and Finance (the "Department"), whichever date is later, or if the
information reported in the Prospectus, if any, concerning the Company's
business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form acceptable
to the Department.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase the Firm Shares from the Company at the price per
share set forth in the Pricing Agreement.
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The obligation of each Underwriter to the Company shall be to purchase from
the Company that number of full shares set forth opposite the name of such
Underwriter in Schedule A hereto. The initial public offering price and the
purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 12) following the date the Registration Statement becomes
effective (or, if the Company has elected to rely upon Rule 430A, the fourth
business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the
third business day if required under Rule 15c6-1 under the Exchange Act) after
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company will deliver to you at the offices of counsel for the
Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by it against payment of the purchase price therefor by delivery of
federal or other immediately available funds, by wire transfer or otherwise, to
the Company. Such time of delivery and payment is herein referred to as the
"First Closing Date." The certificates for the Firm Shares so to be delivered
will be in such denominations and registered in such names as you request by
notice to the Company prior to 10:00 A.M., Chicago Time, on the second full
business day preceding the First Closing Date, and will be made available at the
Company's expense for checking and packaging by the Representatives at 10:00
A.M., Chicago Time, on the business day preceding the First Closing Date.
Payment for the Firm Shares so to be delivered shall be made at the time and in
the manner described above at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 803,550 Option Shares, at the
same purchase price per share to be paid for the Firm Shares, for use solely in
covering any overallotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date, shall not be earlier than three nor later than 10 full business days after
delivery of such notice of exercise. The number of Option Shares to be
purchased by each Underwriter shall be determined by multiplying the number of
Option Shares to be sold by a fraction, the numerator of which is the number of
Firm Shares to be purchased by such Underwriter as set forth opposite its name
in Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at 10:00
A.M., Chicago Time, on the first full business
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day preceding the Second Closing Date. The manner of payment for and
delivery of the Option Shares shall be the same as for the Firm Shares as
specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees
that:
(a) The Company will advise you promptly of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of
the Shares for sale in any jurisdiction or the initiation or threatening
of any proceedings for that purpose, and will also advise you promptly
of any request of the Commission for amendment or supplement of the
Registration Statement, of any preliminary prospectus or of the
Prospectus, or for additional information.
(b) The Company will give you notice of its intention to file
or prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or
any amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use by the Underwriters in
connection with the offering of the Shares which differs from the
prospectus on file at the Commission at the time the Registration
Statement became or becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) and any term
sheet as contemplated by Rule 434) and will furnish you with copies of
any such amendment or supplement a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which you or
counsel for the Underwriters shall reasonably object.
(c) If the Company elects to rely on Rule 434 of the 1933
Act, the Company will prepare a term sheet that complies with the
requirements of Rule 434. If the Company elects not to rely on Rule
434, the Company will provide the Underwriters with copies of the form
of prospectus, in such numbers as the Underwriters may reasonably
request, and file with the Commission such prospectus in accordance with
Rule 424(b) of the 1933 Act by the close of business in New York City on
the second business day immediately succeeding the date of the Pricing
Agreement. If the Company elects to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of Rule 434 Prospectus,
in such numbers as the Underwriters may reasonably request, by the close
of business in New York on the business day immediately succeeding the
date of the Pricing Agreement.
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(d) If at any time when a prospectus relating to the Shares
is required to be delivered under the 1933 Act any event occurs as a
result of which the Prospectus, including any amendments or supplements,
would include an untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
the Prospectus, including any amendments or supplements thereto and
including any revised prospectus which the Company proposes for use by
the Underwriters in connection with the offering of the Shares which
differs from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply
with the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to
deliver a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses
as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the 1933 Act.
(e) Neither the Company nor any of its subsidiaries will,
prior to the earlier of the Second Closing Date or termination or
expiration of the related option, incur any liability or obligation,
direct or contingent, or enter into any material transaction, other than
in the ordinary course of business, except as contemplated by the
Prospectus.
(f) Neither the Company nor any of its subsidiaries will
acquire any capital stock of the Company prior to the earlier of the
Second Closing Date or termination or expiration of the related option
nor will the Company declare or pay any dividend or make any other
distribution upon the Common Stock payable to stockholders of record on
a date prior to the earlier of the Second Closing Date or termination or
expiration of the related option, except in either case as contemplated
by the Prospectus.
(g) Not later than February 16, 1998 the Company will make
generally available to its security holders an earnings statement (which
need not be audited) covering a period of at least 12 months beginning
after the effective date of the Registration Statement, which will
satisfy the provisions of the last paragraph of Section 11(a) of the
1933 Act.
(h) During such period as a prospectus is required by law to
be delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and
all amendments and supplements to any such documents in each case as
soon as available and in such quantities as you may reasonably request,
for the purposes contemplated by the 1933 Act.
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(i) The Company will cooperate with the Underwriters in
qualifying or registering the Shares for sale under the blue sky laws of
such jurisdictions as you designate, and will continue such
qualifications in effect so long as reasonably required for the
distribution of the Shares. The Company shall not be required to
qualify as a foreign corporation or to file a general consent to service
of process in any such jurisdiction where it is not currently qualified
or where it would be subject to taxation as a foreign corporation.
(j) During the period of five years hereafter, the Company
will furnish you upon your written request with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the
Company with the Commission, any securities exchange or the NASD; (ii)
as soon as practicable after the release thereof, of each material press
release in respect of the Company; and (iii) as soon as available, of
each report of the Company mailed to stockholders.
(k) The Company will use the net proceeds received by it from
the sale of the Shares being sold by it in the manner specified in the
Prospectus.
(l) If, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in reliance
upon Rule 430A and/or Rule 434, then immediately following the execution
of the Pricing Agreement, the Company will prepare, and file or transmit
for filing with the Commission in accordance with such Rule 430A, Rule
424(b) and/or Rule 434, copies of an amended Prospectus, or, if required
by such Rule 430A and/or Rule 434, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing all
information so omitted. If required, the Company will prepare and file,
or transmit for filing, a Rule 462(b) Registration Statement not later
than the date of the execution of the Pricing Agreement. If a Rule
462(b) Registration Statement is filed, the Company shall make payment
of, or arrange for payment of, the additional registration fee owing to
the Commission required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National
Market and will file with the Commission in a timely manner all reports
on Form SR required by Rule 463 and will furnish you copies of any such
reports as soon as practicable after the filing thereof.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as
to all of its provisions or is terminated, the Company agrees to pay (i) all
costs, fees and expenses (other than legal fees and disbursements of counsel
for the Underwriters and the expenses incurred by the Underwriters) incurred
in connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution of the Registration Statement,
each preliminary prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein,
this Agreement, the Pricing Agreement and the Blue Sky Memorandum, (ii) all
costs, fees
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and expenses (including legal fees not to exceed $10,000 and disbursements of
counsel for the Underwriters) incurred by the Underwriters in connection with
qualifying or registering all or any part of the Shares for offer and sale
under blue sky laws, including the preparation of a blue sky memorandum
relating to the Shares and clearance of such offering with the NASD; and
(iii) all fees and expenses of the Company's transfer agent, printing of the
certificates for the Shares and all transfer taxes, if any, with respect to
the sale and delivery of the Shares to the several Underwriters.
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm
Shares on the First Closing Date and the Option Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties
on the part of the Company herein set forth as of the date hereof and as of
the First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective
either prior to the execution of this Agreement or not later than 1:00
P.M., Chicago Time, on the first full business day after the date of
this Agreement, or such later time as shall have been consented to by
you but in no event later than 1:00 P.M., Chicago Time, on the third
full business day following the date hereof; and prior to the First
Closing Date or the Second Closing Date, as the case may be, no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or, to the knowledge of the Company or
you, shall be contemplated by the Commission. If the Company has
elected to rely upon Rule 430A and/or Rule 434, the information
concerning the initial public offering price of the Shares and
price-related information shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) within the prescribed period and the
Company will provide evidence satisfactory to the Representatives of
such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance
with the requirements of Rules 430A and 424(b)). If a Rule 462(b)
Registration Statement is required, such Registration Statement shall
have been transmitted to the Commission for filing and become effective
within the prescribed time period and, prior to the First Closing Date,
the Company shall have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the
blue sky laws of such states as shall have been specified by the
Representatives.
(c) The legality and sufficiency of the authorization,
issuance and sale of the Shares hereunder, the validity and form of the
certificates representing the Shares, the execution and delivery of this
Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have
been approved by counsel for the Underwriters exercising reasonable
judgment.
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(d) You shall not have advised the Company that the
Registration Statement or the Prospectus or any amendment or supplement
thereto, contains an untrue statement of fact, which, in the opinion of
counsel for the Underwriters, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to be
stated therein or necessary to make the statements therein not
misleading.
(e) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Company or its subsidiaries, whether or
not arising in the ordinary course of business, which, in the judgment
of the Representatives, makes it impractical or inadvisable to proceed
with the public offering or purchase of the Shares as contemplated
hereby.
(f) The Good Samaritan Consolidation (as defined in the
Registration Statement and Prospectus) shall have occurred.
(g) There shall have been furnished to you, as Representatives of
the Underwriters, on the First Closing Date or the Second Closing Date,
as the case may be, except as otherwise expressly provided below:
(i) An opinion of Xxxxxxx, Carton & Xxxxxxx, counsel for the
Company addressed to the Underwriters and dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Company has been duly qualified to do
business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction where the
ownership or leasing of property, or the conduct of its
business requires such qualification except where the
failure so to qualify would not have a material adverse
effect upon the condition (financial or otherwise) or
results of operations of the Company and its subsidiaries
taken as a whole;
(2) an opinion to the same general effect as clause
(1) of this subparagraph (i) in respect of the following
subsidiaries of the Company: AMC Regional Holdings, Inc.,
Royal Care Holdings, Inc., Nihan & Xxxxxx, Inc.,
Specialized Patient Care Services, Inc., Sterling
Healthcare Services, Inc. and Pharmed Holdings, Inc. (the
"SIGNIFICANT SUBSIDIARIES");
(3) all of the issued and outstanding capital stock
of each Significant Subsidiary of the Company has been
duly authorized, validly issued and is fully paid and
nonassessable, and, except as disclosed in the
Registration Statement, the Company owns of record, either
directly or
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indirectly, all of the outstanding capital stock of each
Significant Subsidiary, and to the best knowledge of such
counsel, such stock is owned free and clear of any claims,
liens, encumbrances or security interests;
(4) the authorized capital stock of the Company, of
which there is outstanding the amount set forth in the
Registration Statement and Prospectus (except for
subsequent issuances, if any, pursuant to stock options or
other rights referred to in the Prospectus), conforms as
to legal matters in all material respects to the
description thereof in the Registration Statement and
Prospectus;
(5) the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is
fully paid and nonassessable;
(6) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly
countersigned by the Company's transfer agent and
delivered to you or upon your order against payment of the
agreed consideration therefor in accordance with the
provisions of this Agreement and the Pricing Agreement,
the Shares represented thereby will be duly authorized and
validly issued, fully paid and nonassessable;
(7) the Registration Statement has become effective
under the 1933 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 have been instituted or are pending or
contemplated under the 1933 Act, and the Registration
Statement (including the information deemed to be part of
the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b) and/or Rule 434, if applicable),
the Prospectus and each amendment or supplement thereto
(except for the financial statements and other statistical
or financial data included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act;
such counsel have no reason to believe that either the
Registration Statement (including the information deemed
to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or Rule 434, if
applicable) or the Prospectus, or the Registration
Statement or the Prospectus as amended or supplemented
(except as aforesaid), as of their respective effective or
issue dates, contained any 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 Prospectus as amended or
supplemented, if applicable, as of the First Closing Date
or the Second Closing Date, as the case may be, contained
any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements
therein not misleading in light of the circumstances under
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which they were made; the statements in the Registration
Statement and the Prospectus summarizing statutes, rules
and regulations are accurate and fairly and correctly
present the information required to be presented by the
1933 Act or the rules and regulations thereunder, in all
material respects and such counsel does not know of any
statutes, rules and regulations required to be described
or referred to in the Registration Statement or the
Prospectus that are not described or referred to therein
as required; and such counsel does not know of any legal
or governmental proceedings pending or threatened required
to be described in the Prospectus which are not described
as required, nor of any contracts or documents of a
character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed,
as required;
(8) the statements under the captions "Management --
Employee Benefit Plans," "-- Compensation Committee
Interlocks and Insider Participation" "Certain
Transactions," "Description of Capital Stock" and "Shares
Eligible for Future Sale" in the Prospectus, insofar as
such statements constitute a summary of documents referred
to therein or matters of law, are accurate summaries and
fairly and correctly present, in all material respects,
the information called for with respect to such documents
and matters;
(9) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have
been duly authorized by all necessary corporate action and
this Agreement and the Pricing Agreement have been duly
executed and delivered by and on behalf of the Company,
and are legal, valid and binding agreements of the
Company, enforceable in accordance with their terms,
except as enforceability of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights and by the
exercise of judicial discretion in accordance with general
principles applicable to equitable and similar remedies
and except as to those provisions relating to indemnities
for liabilities arising under the 1933 Act as to which no
opinion need be expressed; and no approval, authorization
or consent of any public board, agency, or instrumentality
of the United States or of any state or other jurisdiction
is necessary in connection with the issue or sale of the
Shares pursuant to this Agreement (other than under the
1933 Act, applicable blue sky laws and the rules of the
NASD) or the consummation by the Company of any other
transactions contemplated hereby;
(10) the execution and performance of this Agreement
will not contravene any of the provisions of, or result in
a default under, any agreement, franchise, license,
indenture, mortgage, deed of trust, or other instrument
known to such counsel, of the Company or any of its
subsidiaries or by which the property of any of them is
bound and which contravention or default would be material
to the Company and its
-16-
subsidiaries taken as a whole; or violate any of the
provisions of the charter or bylaws of the Company or any
of its subsidiaries or, so far as is known to such
counsel, violate any statute, order, rule or regulation of
any regulatory or governmental body having jurisdiction
over the Company or any of its subsidiaries; and
(11) to such counsel's knowledge, all offers and
sales of the Company's capital stock since the Company's
inception were at all relevant times exempt from the
registration requirements of the 1933 Act and were duly
registered or the subject of an available exemption from,
or subject to oral or written "no-action" position with
respect to, the registration requirements of the
applicable state securities or blue sky laws.
In rendering such opinion, such counsel may state
that they are relying upon the certificate of LaSalle National Bank,
Chicago, Illinois, the transfer agent for the Common Stock, as to
the number of shares of Common Stock at any time or times
outstanding, and that insofar as their opinion under clause (7)
above relates to the accuracy and completeness of the Prospectus and
Registration Statement, it is based upon a general review with the
Company's representatives and independent accountants of the
information contained therein, without independent verification by
such counsel of the accuracy or completeness of such information.
Such counsel may also rely upon the opinions of other competent
counsel and, as to factual matters, on certificates of officers of
the Company and of state officials, in which case their opinion is
to state that they are so doing and copies of said opinions or
certificates are to be attached to the opinion unless said opinions
or certificates (or, in the case of certificates, the information
therein) have been furnished to the Representatives in other form.
(ii) Such opinion or opinions of Xxxxxxx and Xxxxxx, counsel
for the Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, with respect to the incorporation
of the Company, the validity of the Shares, the Registration
Statement and the Prospectus and other related matters as you may
reasonably require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers
and records as they request for the purpose of enabling them to pass
upon such matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the
-17-
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness
of the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated
under the 1933 Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty
of the Company as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
(iv) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may
be, there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Ernst & Young, LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule B. There
shall not have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with
the public offering or purchase of the Shares as contemplated hereby.
(v) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may
be, there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from X.X. Xxxxxx & Company,
L.L.P., independent accountants, the first one to be dated the date
of the Pricing Agreement, the second one to be dated the First
Closing Date and the third one (in the event of a second closing) to
be dated the Second Closing Date, to the effect set forth in
Schedule C.
(vi) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may
be, there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Lindgren, Callihan, Van
Osdol & Co., Ltd., independent accountants, the first one to be
dated the date of the Pricing Agreement, the second one to be dated
the First Closing Date and the third one (in the event of a second
closing) to be dated the Second Closing Date, to the effect set
forth in Schedule D.
(vii) At the time the Pricing Agreement is executed and
also on the First Closing Date or the Second Closing Date, as the
case may be, there shall be delivered to you a letter addressed to
you, as Representatives of the
-18-
Underwriters, from Coopers & Xxxxxxx L.L.P., independent
accountants, the first one to be dated the date of the Pricing
Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a second closing) to be dated the Second
Closing Date, to the effect set forth in Schedule E.
(viii) At the time the Pricing Agreement is executed and
also on the First Closing Date or the Second Closing Date, as the
case may be, there shall be delivered to you a letter addressed to
you, as Representatives of the Underwriters, from Price Waterhouse
LLP, independent accountants, the first one to be dated the date of
the Pricing Agreement, the second one to be dated the First Closing
Date and the third one (in the event of a second closing) to be
dated the Second Closing Date, to the effect set forth in Schedule F.
(ix) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxxx and Xxxxxx, counsel for the Underwriters, which approval shall not be
unreasonably withheld. The Company shall furnish you with such manually signed
or conformed copies of such opinions, certificates, letters and documents as you
request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 6 and 8 hereof and except
to the extent provided in Section 10 hereof.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
the sale of the Shares. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section, Section 6
and Section 10 shall at all times be effective and shall apply.
SECTION 9. EFFECTIVENESS OF REGISTRATION STATEMENT. You and the
Company will use your and its best efforts to cause the Registration Statement
to become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
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SECTION 10. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information
deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A and/or Rule 434, if applicable, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that (i) any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the 1933 Act. In addition to its other obligations
under this Section 10(a), the Company 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 alleged statement
or omission, described in this Section 10(a), it will reimburse the Underwriters
on a monthly basis for all reasonable legal and other 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 Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or
-20-
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
preliminary prospectus, the Prospectus, or any amendment or supplement
thereto in reliance upon and in conformity with Section 3 of this Agreement
or any other written information furnished to the Company by such Underwriter
through the Representatives specifically for use in the preparation thereof;
and will reimburse any legal or other expenses reasonably incurred by the
Company, or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to their other obligations under this Section 10(b), the
Underwriters agree 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 alleged statement or omission,
described in this Section 10(b), they will reimburse the Company on a monthly
basis for all reasonable legal and other 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 Underwriters' obligation to
reimburse the Company for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under
this Section, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent
that the indemnifying party was prejudiced by such failure to notify. In
case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may
wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party; PROVIDED, HOWEVER, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, or the indemnified and
indemnifying parties may have conflicting interests which would make it
inappropriate for the same counsel to represent both of them, the indemnified
party or parties shall have the right to select separate counsel to assume
such legal defense and otherwise to participate in the defense of such action
on behalf of such indemnified party or parties. Upon receipt of notice from
the indemnifying party to such indemnified party of its election so to assume
the defense of such action and approval by the indemnified party of counsel,
the indemnifying party will not be liable to such indemnified party under
this Section for any legal or other
-21-
expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defense in accordance with
the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Representatives in the case of
paragraph (a) representing all indemnified parties not having different or
additional defenses or potential conflicting interest among themselves who
are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
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 or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters 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 the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
the Underwriters shall be deemed to be in the same proportion in the case of the
Company as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section, no
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Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) 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 are several
in proportion to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 11. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representatives may make arrangements satisfactory to the Company for
the purchase of such Shares by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such date. If any Underwriter or Underwriters so default
and the aggregate number of Shares with respect to which such default or
defaults occur is more than the above percentage and arrangements satisfactory
to the Representatives and the Company for the purchase of such Shares by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the
Company, except for the expenses to be paid by the Company pursuant to Section 6
hereof and except to the extent provided in Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 12. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 6, 8, 10 and 13 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall
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become effective at such hour on the business day next succeeding such
Saturday, Sunday or holiday); but this Agreement shall nevertheless become
effective at such earlier time after the Pricing Agreement is executed and
delivered as you may determine on and by notice to the Company or by release
of any Shares for sale to the public. For the purposes of this Section, the
Shares shall be deemed to have been so released upon the release for
publication of any newspaper advertisement relating to the Shares or upon the
release by you of telegrams (i) advising Underwriters that the Shares are
released for public offering, or (ii) offering the Shares for sale to
securities dealers, whichever may occur first.
SECTION 13. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 6 hereof and except to the extent provided in Section 10 hereof)
or of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may
be canceled at any time prior to the Second Closing Date, if (i) trading
in securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any change in
financial markets or in political, economic or financial conditions
which, in the opinion of the Representatives, either renders it
impracticable or inadvisable to proceed with the offering and sale of the
Shares on the terms set forth in the Prospectus or materially and
adversely affects the market for the Shares, or (iv) there shall have
been an outbreak of major armed hostilities between the United States and
any foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Shares. Any termination
pursuant to this paragraph (b) shall be without liability on the part of
any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid or reimbursed pursuant to
Section 6 hereof and except to the extent provided in Section 10 hereof).
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, principals,
members, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Shares sold hereunder.
SECTION 15. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, with a
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copy to Xxxxxxx X. Xxxxxxx, Esq., Xxxxxxx and Xxxxxx; and if sent to the
Company will be mailed, delivered or telegraphed and confirmed to the Company
at its corporate headquarters with a copy to Xxxxx X. Xxxx, Esq., Xxxxxxx,
Carton & Xxxxxxx.
SECTION 16. SUCCESSORS. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the
benefit of the officers and directors and controlling persons referred to in
Section 10, and no other person will have any right or obligation hereunder.
The term "successors" shall not include any purchaser of the Shares as such
from any of the Underwriters merely by reason of such purchase.
SECTION 17. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this
financing, and any action under or in respect of this Agreement taken by you
will be binding upon all the Underwriters. Any action under or in respect of
this Agreement taken by Xxxxxxx Xxxxx & Company, L.L.C. will be binding upon
the other Representatives.
SECTION 18. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 19. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State
of Illinois.
SECTION 20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
AMERICAN MEDSERVE CORPORATION
By
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
EQUITABLE SECURITIES CORPORATION
Acting as Representatives of the several
Underwriters named in Schedule A.
By XXXXXXX XXXXX & COMPANY, L.L.C.
By
-------------------------------------
Principal
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SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
----------- ---------
Xxxxxxx Xxxxx & Company, L.L.C. ................................
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Equitable Securities Corporation ...............................
---------
Total ........................................... 5,357,000
---------
---------
SCHEDULE B
Comfort Letter of Ernst & Young, LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries and the following companies: G.H.S.C., Inc. and the
Contract Services Division of Xxxxx X. Xxxxx, Inc. (Predecessor), Nihan &
Xxxxxx, Inc., Pharmed, Inc., Sterling Acquisition Partners, Inc., Good
Samaritan Supply Services, Inc. and Xxxxxxx Pharmacy and Medical Supply
(collectively, the "ACQUIRED COMPANIES") within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and
schedules of the Company and its subsidiaries and the financial statements of
the Acquired Companies included in the Registration Statement and the
consolidated financial statements of the Company from which the information
presented under the caption "Selected Consolidated Financial Information and
Operating Data" has been derived which are stated therein to have been
examined by them comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries
of certain officers of the Company and its subsidiaries responsible for
financial and accounting matters as to transactions and events subsequent to
December 31, 1995, a reading of minutes of meetings of the stockholders and
directors of the Company and its subsidiaries since December 31, 1995, a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its subsidiaries (with an indication of the
date thereof) and other procedures as specified in such letter, nothing came
to their attention which caused them to believe that (i) the unaudited
consolidated financial statements of the Company and its subsidiaries
included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
or that such unaudited financial statements are not fairly presented in
accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Registration Statement, (ii) the pro forma financial
statements included in the Prospectus are not properly prepared on the basis
set forth therein, do not present fairly the information shown therein, or
were not prepared in accordance with generally accepted accounting principles
and the rules and guidelines of the Commission with respect to pro forma
financial information; or that the assumptions used in the preparation
thereof are not reasonable or that the adjustments used therein are not
appropriate to give effect to the transactions or circumstances referred to
therein, and (iii) at a specified date not more than five days prior to the
date thereof in the case of the first letter and not more than two business
days prior to the date thereof in the case of the second and third letters,
there was any change in the capital stock or long-term debt or short-term
debt (other than normal payments) of the Company and its subsidiaries on a
consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the
latest unaudited balance sheet of the Company included in the Registration
Statement or for the period from the date of such balance sheet to a date not
more than five days prior to the date thereof in the case of the first letter
and
not more than two business days prior to the date thereof in the case of the
second and third letters, there were any decreases, as compared with the
corresponding period of the prior year, in consolidated net sales,
consolidated income before income taxes or in the total or per share amounts
of consolidated net income except, in all instances, for changes or decreases
which the Prospectus discloses have occurred or may occur or which are set
forth in such letter.
(4) They have carried out specified procedures, which have been agreed
to by the Representatives, with respect to certain information in the
Prospectus specified by the Representatives, and on the basis of such
procedures, they have found such information to be in agreement with the
general accounting records of the Company and its subsidiaries.
-2-
SCHEDULE C
Comfort Letter of X.X. Xxxxxx & Company, L.L.P.
(1) They are independent public accountants with respect to Extended
Care Associates, Inc., Xxxxxxxxxx'x Pharmacy -- Institutional Division and
Xxxxxxxxxx Drug Company, Inc. and the Company and its subsidiaries within the
meaning of the 1933 Act.
(2) In their opinion the financial statements of Extended Care
Associates, Inc., Xxxxxxxxxx'x Pharmacy -- Institutional Division and
Xxxxxxxxxx Drug Company, Inc. included in the Registration Statement and the
financial statements of Extended Care Associates, Inc., Xxxxxxxxxx'x Pharmacy
-- Institutional Division and Xxxxxxxxxx Drug Company, Inc. which are stated
therein to have been examined by them comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act.
SCHEDULE D
Comfort Letter of Lindgren, Callihan, Van Osdol & Co., Ltd.
(1) They are independent public accountants with respect to Xxxxx
Pharmacy, Inc. and the Company and its subsidiaries within the meaning of the
1933 Act.
(2) In their opinion the financial statements of Xxxxx Pharmacy, Inc.
included in the Registration Statement and the financial statements of Xxxxx
Pharmacy, Inc. which are stated therein to have been examined by them comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act.
SCHEDULE E
Comfort Letter of Coopers & Xxxxxxx L.L.P.
(1) They are independent public accountants with respect to Royal Care
of America, Inc. and the Company and its subsidiaries within the meaning of
the 1933 Act.
(2) In their opinion the consolidated financial statements of Royal
Care of America, Inc. included in the Registration Statement and the
consolidated financial statements of Royal Care of America, Inc. which are
stated therein to have been examined by them comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act.
SCHEDULE F
Comfort Letter of Price Waterhouse LLP
(1) They are independent public accountants with respect to Royal Care
of America, Inc. and the Company and its subsidiaries within the meaning of
the 1933 Act.
(2) In their opinion the consolidated financial statements of Royal
Care of America, Inc. included in the Registration Statement and the
consolidated financial statements of Royal Care of American, Inc. which are
stated therein to have been examined by them comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act.
EXHIBIT A
AMERICAN MEDSERVE CORPORATION
5,357,000 Shares Common Stock*
PRICING AGREEMENT
November ___, 1996
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Equitable Securities Corporation
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated November ___, 1996
(the "UNDERWRITING AGREEMENT") relating to the sale by the Company and the
purchase by the several Underwriters for whom Xxxxxxx Xxxxx & Company, L.L.C.,
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Equitable Securities
Corporation are acting as representatives (the "REPRESENTATIVES"), of the above
Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $__________, being an amount equal to the initial public
offering price set forth above less $__________ per share.
---------------------------
*Plus an option to acquire up to 803,550 additional shares to cover
overallotments.
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters, including you, all in accordance with its terms.
Very truly yours,
AMERICAN MEDSERVE CORPORATION
By
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
EQUITABLE SECURITIES CORPORATION
Acting as Representatives of the several
Underwriters.
By XXXXXXX XXXXX & COMPANY, L.L.C.
By
-------------------------------------
Principal
-2-
