EXHIBIT 1.1
2,100,000 Shares
HealthCare Financial Partners, Inc.
Common Stock
UNDERWRITING AGREEMENT
__________, 1996
XXXXXXXXXX SECURITIES
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1.
Introductory. HealthCare Financial Partners, Inc., a Delaware
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corporation (the "Company"), proposes to issue and sell 2,100,000 pursuant to
the terms of this Agreement shares of its authorized but unissued Common Stock
(the "Common Stock") to the several underwriters named in Schedule A annexed
hereto (the "Underwriters"). Said aggregate of 2,100,000 shares are herein
called the "Firm Common Shares." In addition, the Company proposes to grant to
the Underwriters an option to purchase up to 315,000 additional shares of Common
Stock (the "Optional Common Shares"), as provided in Section 4 hereof. The Firm
Common Shares and, to the extent such option is exercised, the Optional Common
Shares are hereinafter collectively referred to as the "Common Shares."
Xxxxxxxxxx Securities and Xxxxxx, Xxxxxxxx & Company, Incorporated are acting as
representatives of the Underwriters and in such capacity are hereinafter
referred to the "Representatives."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Common Shares on the
effective date of the registration statement hereinafter referred to, or as soon
thereafter as in your judgment is advisable.
The Company hereby confirms its agreements with respect to the
purchase of the Common Shares by the Underwriters as follows:
SECTION 2.
Representations and Warranties of the Company The Company hereby
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represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-12479) with
respect to the Common Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The Company has prepared and has filed or proposes to file prior to
the effective date of such registration statement an amendment or amendments to
such registration statement, which amendment or amendments have been or will be
similarly prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each exhibit
filed therewith. Conformed copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each of
the Underwriters. The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement, a further
amendment thereto, including the form of final prospectus, or (ii) a final
prospectus in accordance with Rules 430A and 424(b) of the Rules and
Regulations. As filed, such amendment and form of final prospectus, or such
final prospectus, shall include all Rule 430A Information (as hereinafter
defined) and, except to the extent that you shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the date and time that this Agreement was executed and delivered by the
parties hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus (as hereinafter defined)) as the
Company shall have previously advised you in writing would be included or made
therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include (i) all Rule 430A Information deemed to be included in
such registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations and (ii) any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations relating to the Common Shares. The term "Preliminary Prospectus"
shall mean any preliminary prospectus referred to in the preceding paragraph and
any preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the Common Shares
in the form in which it is first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or, if no filing pursuant to Rule 424(b) of
the Rules and Regulations is required, shall mean the form of final prospectus
included in the Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule 430A
of the Rules and Regulations.
(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
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material respects to the requirements of the Act and the Rules and Regulations
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, in
the light of the circumstances under which they were made, not misleading; and
at the time the Registration Statement becomes effective, and at all times
subsequent thereto up to and including each Closing Date hereinafter mentioned,
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, will contain all material statements and information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will include any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that no
representation or warranty contained in this subsection 2(b) shall be applicable
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, directly or through the
Representatives, specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or indirectly,
any corporation, partnership, joint venture, association or other entity other
than [insert names of subsidiaries]. The Company and each of its subsidiaries
have been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation, with
full power and authority (corporate and other) to own and lease their properties
and conduct their respective businesses; the Company owns all of the outstanding
capital stock of its subsidiaries free and clear of all claims, liens, charges
and encumbrances; the Company and each of its subsidiaries is in possession of
and operating in compliance with all authorizations, licenses, permits,
consents, certificates and orders material to the conduct of their respective
businesses, all of which are valid and in full force and effect; the Company and
each of its subsidiaries are duly qualified to do business and in good standing
as foreign corporations in each jurisdiction in which the ownership or leasing
of properties or the conduct of their respective businesses requires such
qualification, except for jurisdictions in which the failure to so qualify would
not have a material adverse impact upon the condition (financial or otherwise),
business, properties, results of operations or prospects of the Company or the
subsidiary; and to the knowledge of the Company no proceeding 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) The Company has an authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and conform to the description thereof contained in the Prospectus. All issued
and outstanding shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company, and the related notes thereto, included in the
Prospectus, neither the Company nor any subsidiary has outstanding any options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the HealthCare
Financial Partners, Inc. 1996 Stock Incentive Plan and the HealthCare Financial
Partners, Inc. 1996 Director Incentive Plan (collectively, the "Plans"), and the
options or other rights granted and exercised thereunder, set forth in the
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Prospectus, accurately and fairly presents the information required to be shown
with respect to such plans, options and rights.
(e) Each of the Company and its subsidiaries is conducting its
business so as to comply in all material respects with all applicable federal
and state laws, rules, regulations, decisions, directives and orders (including,
without limitation, the Social Security Act of 1935, as amended (the "Social
Security Act") and all rules and regulations, decisions, directives, rulings and
guidelines adopted thereunder).
(f) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Common Shares by the Company
pursuant to this Agreement. No stockholder of the Company has any right which
has not been waived to require the Company to register the sale of any shares
owned by such stockholder under the Act in the public offering contemplated by
this Agreement. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the issuance and sale of
the Common Shares to be sold by the Company as contemplated herein.
(g) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally. The making and performance of
this Agreement by the Company and the consummation of the transactions herein
contemplated will not violate any provisions of the certificate of incorporation
or bylaws, or other organizational documents, of the Company or any of its
subsidiaries, and will not conflict with, result in the breach or violation of,
or constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of its properties may be bound or affected, any statute or any authori-
zation, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or any of its subsidiaries or any of its properties. 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 by the Company of this Agreement or the consummation by the Company
of the transactions contemplated by this Agreement, except for compliance with
the Act, the Blue Sky laws applicable to the public offering of the Common
Shares by the several Underwriters and the clearance of such offering with the
National Association of Securities Dealers, Inc. (the "NASD").
(h) Ernst & Young, LLP and McGladrey & Xxxxxx, LLP, who have
expressed their opinion with respect to the financial statements and schedules
filed with the Commission as a part of the Registration Statement and included
in the Prospectus and in the Registration Statement, are independent accountants
as required by the Act and the Rules and Regulations.
(i) The financial statements and schedules of the Company and
HealthPartners Funding, L.P. and the related notes thereto, included in the
Registration Statement and the Prospectus present fairly the financial position
of the Company and
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HealthPartners DEL, L.P. and of HealthPartners Funding, L.P. as of the
respective dates of such financial statements and schedules, and the results of
operations and changes in financial position of the Company and HealthPartners
DEL, L.P. and HealthPartners Funding, L.P. for the respective periods covered
thereby. Such statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis as certified by the independent accountants named in subsection 2(h). No
other financial statements or schedules are required to be included in the
Registration Statement. The selected financial data set forth in the Prospectus
under the captions "Capitalization," "Pro Forma Financial Information" and
"Selected Historical Financial Data" fairly present the information set forth
therein on the basis stated in the Registration Statement. The statistical and
financial information presented in tabular form included in the Prospectus
present fairly the information purported to be shown thereby at the respective
dates thereof and for the respective periods covered thereby and are consistent
with the consolidated financial statements included therein to the extent they
are derived from such statements.
(j) Neither the Company nor any of its subsidiaries is in violation
or default of any provision of its certificate of incorporation or bylaws, or
other organizational documents, or, except as to breaches or defaults which
individually or in the aggregate would not be material to the Company, is in
breach of or default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which it is a party or by which it or any of its
properties are bound; and there does not exist any state of facts which
constitutes an event of default on the part of the Company or any such
subsidiary as defined in such documents or which, with notice or lapse of time
or both, would constitute such an event of default.
(k) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have not
been described or filed as required. The contracts so described in the
Prospectus are in full force and effect on the date hereof; and neither the
Company nor any of its subsidiaries, nor to the best of the Company's knowledge,
any other party, is in breach of or default under any of such contracts.
(l) There are no legal or regulatory, administrative or
governmental investigations, audits, actions, suits or proceedings pending or,
to the best of the Company's knowledge, threatened or contemplated to which the
Company or any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be the
subject, or discrimination matters, which investigations, audits, actions, suits
or proceedings might, individually or in the aggregate, prevent or adversely
affect the transactions contemplated by this Agreement or have a material
adverse impact on the condition (financial or otherwise), properties, business,
results of operations or prospects of the Company and its subsidiaries taken as
a whole; and no labor disturbance by the employees of the Company or any of its
subsidiaries exists or is imminent which might be expected to have a material
adverse impact on the condition (financial or otherwise), properties, business,
results of operations or prospects of the Company and its subsidiaries taken as
a whole. Neither the Company nor any of its subsidiaries is a party or subject
to the provisions of any material injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental body.
(m) The Company or the applicable subsidiary has good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or described in the Prospectus),
including the Receivables Tracking System, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except (i) those, if any, reflected in such
financial statements (or described in the Prospectus), or (ii) those which are
not material in amount and do not adversely affect the use made and proposed to
be made of
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such property by the Company and its subsidiaries. The Company or the
applicable subsidiary holds its leased properties under valid and binding
leases, with such exceptions as are not materially significant in relation to
the business of the Company. Except as disclosed in the Prospectus, the Company
owns or leases all such properties as are necessary to its operations as now
conducted or as proposed to be conducted.
(n) Since the respective dates as of which information is given
in the Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its subsidi-
aries have not incurred any material liabilities or obligations, indirect,
direct or contingent, or entered into any material verbal or written agreement
or other transaction which is not in the ordinary course of business; (ii) the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance;
(iii) the Company has not paid or declared any dividends or other distributions
with respect to its capital stock and neither the Company nor any of its
subsidiaries is not in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the capital
stock (other than upon the sale of the Common Shares hereunder) or indebtedness
material to the Company and its subsidiaries (other than in the ordinary course
of business); and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties, results of operations
or prospects of the Company and its subsidiaries taken as a whole.
(o) The Company and its subsidiaries have sufficient trademarks,
trade names, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses as now conducted; the
expiration of any trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals or governmental authorizations would not have a
material adverse impact on the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries; and the Company has no knowledge of any material infringement by
it of trademark, trade name rights, patent rights, mask works, copyrights,
licenses, trade secret or other similar rights of others, and to the knowledge
of the Company there is no claim being made against the Company or its
subsidiaries taken as a whole regarding trademark, trade name, patent, mask
work, copyright, license, trade secret or other infringement which could have a
material adverse impact on the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries taken as a whole.
(p) The Company and its subsidiaries have all governmental
licenses, certifications, permits, consents, orders, approvals and other
authorizations necessary to carry on their respective businesses, and all such
licenses, certifications, permits, consents, orders, approvals and
authorizations are in full force and effect and the Company and its subsidiaries
are in compliance therewith and neither the Company nor any subsidiary has
received notice of any proceeding or action relating to the revocation or
modification of any such license, certification, permit, consent, order,
approval or authorization. The Company has not been advised, and has no reason
to believe, that either it or any of its subsidiaries is not conducting business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and regulations;
except where failure to be so in compliance would not have a material adverse
impact on the condition (financial or otherwise), business, properties, results
of operations or prospects of the Company and its subsidiaries taken as a whole.
(q) As of the First Closing Date, each of the transactions
described in the Prospectus under the caption "Prospectus Summary -- The
Reorganization" (collectively, the "Reorganization Transactions") shall have
been consummated, and the Company and its
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subsidiaries shall have complied with each of their obligations in connection
therewith and satisfied all conditions thereto and neither the Company nor any
subsidiary shall have received notice of any proceeding or action challenging or
relating to revocation, rescission, modification or amendment of any of the
Reorganization Transactions. Neither the Company nor any of its subsidiaries
shall have assumed, in connection with any of the Reorganization Transactions,
any liabilities other than those expressly assumed by the Company under (i) the
bank facility described in the Prospectus under the caption "Management's
Discussion and Analysis of Pro Forma Financial Condition and Pro Forma Results
of Operations" (the "Bank Facility") and (ii) the commercial paper facility
described in the Prospectus under the caption "Business -- Capital Resources"
(the "CP Facility"). The Reorganization Transactions will qualify as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended.
As of the First Closing Date, the CP Facility shall be in place and
all agreements relating to the CP Facility (including those described in the
Prospectus) shall have been executed and the closing thereof consummated, and
the CP Facility shall be in full force and effect and available for borrowings
by the Company pursuant to the terms thereof in amounts up to an aggregate of
$100 million. As of the First Closing Date, the Bank Facility shall be in full
force and effect and available for borrowings by the Company pursuant to the
terms thereof in amounts up to an aggregate of $50 million. Neither the Company
nor any of its subsidiaries as of each Closing Date shall be in violation or
default of any provision of the CP Facility or the Bank Facility.
As of the First Closing Date, the intercreditor arrangements described
in the Prospectus under the caption "Management's Discussion and Analysis of Pro
Forma Financial Condition and Pro Forma Results of Operations" shall have been
executed and shall be in full force and effect and the Company and its
subsidiaries shall be in compliance therewith and neither the Company nor any
subsidiary shall have received notice of any proceeding or action relating to
the revocation, rescission, modification or amendment of any such intercreditor
arrangement.
As of each Closing Date, the Company and its subsidiaries shall have
obtained all consents, approvals and other authorizations of any party necessary
to consummate the Reorganization Transactions and the transactions contemplated
by this Agreement and to permit performance by the Company and its subsidiaries
of each of their respective obligations in connection therewith (including but
not limited to consent from Fleet Financial Corporation), and all such consents,
approvals and authorizations shall be in full force and effect and the Company
and its subsidiaries shall be in compliance therewith and neither the Company
nor any subsidiary shall have received notice of any proceeding or action
relating to the revocation, rescission, modification or amendment of any such
consent, approval or authorization.
(r) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown as due thereon or have received valid extension with respect to such
filings; and the Company has no knowledge of any tax deficiency which has been
or might be asserted or threatened against the Company which could have a
material adverse impact on the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries.
(s) The Company is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(t) The Company has not distributed and will not distribute prior
to the First Closing Date (as defined herein) any offering material in
connection with the offering and sale
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of the Common Shares other than the Prospectus, the Registration Statement and
the other materials permitted by the Act.
(u) Each of the Company and its subsidiaries maintains insurance of
the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(v) Neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
(w) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(x) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except for loans, advances or guarantees disclosed in the Prospectus or not
required to be disclosed in the Prospectus which meet the standards set forth in
Instruction 3 to paragraph (c) of Item 404 of Regulation S-K.
(y) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(z) The Company has obtained (i) from each of the stockholders
listed on Schedule B hereto a Lock-Up Agreement (as defined in Section 7(c)(v)
hereof), in a form approved by you and your counsel, and (ii) from each of the
stockholders listed on Schedule C hereto a Rule 144 Sale Agreement (as defined
in Section 7(c)(v) hereof), in a form approved by you and your counsel.
(aa) The Common Shares have been approved for listing, subject to
official notice of issuance, on the Nasdaq National Market.
(bb) Any certificate signed by any officer of the Company and
delivered to you or counsel for the Representatives shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
SECTION 3.
Representations and Warranties of the Underwriters. The
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Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information
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set forth (i) on the cover page of the Prospectus with respect to price,
underwriting discounts and commissions and terms of offering, (ii) in the
stabilization legend on the inside front cover page of the Prospectus, and
(iii) under "Underwriting" in the Prospectus was furnished to the Company
by and on behalf of the Underwriters for use in connection with the prepa-
ration of the Registration Statement and the Prospectus and is correct in
all material respects. The Representatives represent and warrant that they
have been authorized by each of the other Underwriters as the Representatives
to enter into this Agreement on its behalf and to act for it in the manner
herein provided.
SECTION 4.
Purchase, Sale and Delivery of Common Shares. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the Underwriters 2,100,000 of the Firm Common Shares. The Underwriters agree,
severally and not jointly, to purchase from the Company the number of Firm
Common Shares described below. The purchase price per share to be paid by the
several Underwriters to the Company shall be equal to the initial price to the
public per share less an amount per share equal to the per share underwriting
discount. The initial price to the public, which shall be a fixed price, and
the underwriting discount will be determined by separate agreement between the
Company and the Representatives in substantially the form set forth as Schedule
D hereto (the "Price Determination Agreement"). The Price Determination
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 indicated in Schedule D hereto. From and after
the date of the execution and delivery of the Price Determination Agreement,
this Agreement shall be deemed to incorporate the Price Determination Agreement.
Except as provided in Section 11 hereof, the obligation of each
Underwriter to the Company shall be to purchase from the Company at the price
set forth in the Price Determination Agreement, the number of Firm Common Shares
set forth opposite the name of such Underwriter in Schedule A hereto.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at the offices of Xxxxxxxxxx
Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other
place as may be agreed upon by the Company and the Representatives) at such time
and date, not later than the third (or, if the Firm Common Shares are priced, as
contemplated by Rule 15c6-1(c) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after 4:30 p.m. Washington, D.C. Time, the fourth)
full business day following the first date that any of the Common Shares are
released by you for sale to the public, as you shall designate by at least 48
hours prior notice to the Company (or at such other time and date, not later
than one week after such third, or fourth, as the case may be, full business day
as may be agreed upon by the Company and the Representatives) (the "First
Closing Date"); provided, however, that if the Prospectus is at any time prior
to the First Closing Date recirculated to the public, the First Closing Date
shall occur upon the later of the third full business day following the first
date that any of the Common Shares are released by you for sale to the public or
the date that is 48 hours after the date on which the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for the respective accounts of the
Underwriters with respect to the Firm Common Shares to be sold by the Company,
against payment by you, for the accounts of the several Underwriters, of the
purchase price therefor by wire transfer of immediately available funds to the
order of the Company. The certificates for the Firm
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Common Shares shall be registered in such names and denominations as you shall
have requested at least two full business days prior to the First Closing Date,
and shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
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 315,000 Optional
Common Shares at the purchase price per share to be paid for the Firm Common
Shares, for use solely in covering any over-allotments made by you for the
account of the Underwriters in the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time (but not more
than once) within 30 days after the first date that any of the Common Shares are
released by you for sale to the public, upon notice by you to the Company
setting forth the aggregate number of Optional Common 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 five full
business days after delivery of such notice of exercise. The number of Optional
Common Shares to be purchased by each Underwriter shall be determined by
multiplying the number of Optional Common Shares to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Common Shares to be purchased by such Underwriter as set forth
opposite its name in Schedule A and the denominator of which is 315,000 (subject
to such adjustments to eliminate any fractional share purchases as you in your
discretion may make). Certificates for the Optional Common Shares will be made
available for checking and packaging on the business day preceding the Second
Closing Date at a location in New York, New York, as may be designated by you.
The manner of payment for and delivery of the Optional Common Shares shall be
the same as for the Firm Common Shares purchased from the Company as specified
in the two preceding paragraphs. At any time before lapse of the option, you
may cancel such option by giving written notice of such cancellation to the
Company. If the option is canceled or expires unexercised in whole or in part,
the Company will deregister under the Act the number of Option Shares as to
which the option has not been exercised.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Common Shares, to make payment and to receipt
therefor. You, individually and not as the Representatives of the Underwriters,
may (but shall not be obligated to) make payment for any Common 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 of its obligations under this Agreement.
Delivery of the Common Shares by the Company to the several Under-
writers and acceptance of payment therefor from the several Underwriters by
the Company shall constitute a representation and warranty of the Company that
the representations and warranties set forth in this Agreement were true and
correct as of the date hereof and that such representations and warranties
remain true and correct as of the First Closing Date and as of the Second
Closing Date (with the same force and effect as if such representations and
warranties were made on each such date).
10
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the judgment
of the Representatives is advisable and at the public offering price set forth
on the cover page of and on the terms set forth in the Prospectus.
SECTION 5.
Covenants of the Company. The Company covenants and agrees that:
------------------------
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before or after
it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective, and (iv) 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. If the Commission shall enter any such
stop order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. The Company will not
file any amendment or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus of
which you have not been furnished with a copy a reasonable time prior to such
filing or to which you reasonably object or which is not in compliance with the
Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or the Prospectus which in your judgment may be necessary or advisable to enable
the several Underwriters to continue the distribution of the Common Shares and
will use its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the provisions of
Rule 430A of the Rules and Regulations with respect to information omitted from
the Registration Statement in reliance upon such Rule.
(c) If at any time during the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the Common
Shares is required to be delivered under the 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 not
misleading, or if it is necessary at any time to amend the Prospectus, including
any amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible; and, in case any
Underwriter is required to deliver a prospectus after such nine-month period,
the Company upon request, but at the expense of such Underwriter, will promptly
prepare such amendment or amendments to the Registration Statement and such
Prospectus or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
11
(d) As soon as practicable, but not later than 45 days after the end
of the first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and Regulations)
or 90 days if the first quarter ending after such one year period is the fourth
quarter of the Company's fiscal year, the Company will make generally available
to its security holders an earnings statement (which need not be audited)
covering a period of 12 consecutive 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 Act.
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company, at
its expense, but only for the nine-month period referred to in Section 10(a)(3)
of the Act, will furnish to you or mail to your order copies of the Registration
Statement, the Prospectus, the 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 request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in order
to qualify or register the Common Shares for sale under (or obtain exemptions
from the application of) the Blue Sky laws of such jurisdictions as you
designate, will comply with such laws and will continue such qualifications,
registrations and exemptions in effect so long as reasonably required for the
distribution of the Common 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 presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise you
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company, with your cooperation, will use its best
efforts to obtain the withdrawal thereof.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request of the Representatives, to each
of the other Underwriters: (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the balance
sheet of the Company as of the close of such fiscal year and statements of
income, stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
(h) During the period of 180 days after the first date that any of
the Common Shares are released by you for sale to the public, without the prior
written consent of either Xxxxxxxxxx Securities or each of the Representatives
(which consent may be withheld at the sole discretion of the Xxxxxxxxxx
Securities or the Representatives, as the case may be), the Company will not,
directly or indirectly, offer to sell, sell, contract to sell, issue, grant
options to purchase or otherwise dispose of any shares of Common Stock or other
equity securities of the Company, or any securities convertible into or
exchangeable for any shares of Common Stock or other equity securities of the
Company, or publicly announce any intention to do any of the foregoing, except
for issuances of shares of Common Stock by the Company pursuant to the exercise
of outstanding options or similar rights to purchase shares of Common Stock
under the stock compensation plans and arrangements disclosed in the Prospectus.
12
(i) The Company will apply the net proceeds of the sale of the
Common Shares sold by it in accordance with its statements under the caption
"Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or register its
Common Stock for sale in non-issuer transactions under (or obtain exemptions
from the application of) the Blue Sky laws of the State of California (and
thereby permit market making transactions and secondary trading in the Company's
Common Stock in California), will comply with such Blue Sky laws and will
continue such qualifications, registrations and exemptions in effect for a
period of five years after the date hereof.
(k) The Company and its subsidiaries will conduct their business in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders.
(l) The Company will use its best efforts to (i) have the Common
Shares registered under the Exchange Act concurrently with the effectiveness of
the Registration Statement; (ii) list, subject to official notice of issuance,
the Common Shares on the Nasdaq National Market concurrently with the
effectiveness of the Registration Statement; and (iii) maintain the listing of
the Common Shares on the Nasdaq National Market subsequent to the Closing Date.
(m) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(n) The Company will use its best efforts to comply with, or cause
to be complied with, the conditions precedent to the several obligations of the
Underwriters specified in Section 7 hereof.
(o) The Company will file with the Commission such reports on Form
SR as may be required pursuant to Rule 463 under the Act.
The foregoing covenants and agreements shall apply to any
successor of the Company.
SECTION 6.
Payment of Expenses. Whether or not the transactions contemplated
-------------------
hereunder are consummated or this Agreement becomes effective or is terminated,
the Company agrees to pay all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel and the Company's independent accountants, (v) all costs
and expenses incurred in connection with the preparation, printing, filing,
shipping 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
Agreement Among Underwriters, the Selected Dealers Agreement (if applicable),
the Underwriters' Questionnaire, the Underwriters' Power of Attorney and the
Blue Sky memoranda, (vi) all filing fees, attorneys' fees and expenses incurred
by the Company or the Underwriters in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any
part of the Common Shares for offer and sale under the Blue Sky
13
laws, (vii) the filing fee of the NASD, and (viii) all other fees, costs and
expenses referred to in Item 13 of the Registration Statement. Except as
provided in this Section 6, Section 8 and Section 10 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
their counsel (excluding those relating to qualification, registration or
exemption under the Blue Sky laws and the Blue Sky memoranda referred to above).
SECTION 7.
Conditions of the Obligations of the Underwriters. The obligations of
-------------------------------------------------
the several Underwriters to purchase and pay for the Firm Common Shares on the
First Closing Date and the Optional Common 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 Company officers 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 not later
than 5:00 p.m., (or, in the case of a registration statement filed pursuant to
Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10:00 p.m.), Washington, D.C. Time, on the date of this Agreement, or
at such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
and prior to such Closing Date, 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; and any request of
the Commission for inclusion of additional information in the Registration
Statement, or otherwise, shall have been complied with to your satisfaction.
(b) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, (i) there shall not have been any
change in the capital stock of the Company or any of its subsidiaries or any
material change in the indebtedness (other than in the ordinary course of
business) of the Company or any of its subsidiaries, (ii) except as set forth or
contemplated by the Registration Statement or the Prospectus, no material verbal
or written agreement or other transaction shall have been entered into by the
Company or any of its subsidiaries, which is not in the ordinary course of
business or which could reasonably be expected to result in a material reduction
in the future earnings of the Company and its subsidiaries, (iii) no loss or
damage (whether or not insured) to the property of the Company or any of its
subsidiaries shall have been sustained which materially and adversely affects
the condition (financial or otherwise), business, properties, results of
operations or prospects of the Company and its subsidiaries, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any of its
subsidiaries which is material to the Company and its subsidiaries or which
affects or may affect the transactions contemplated by this Agreement shall have
been instituted or threatened, and (v) there shall not have been any material
change in the condition (financial or otherwise), business, properties, results
of operations, prospects or management of the Company and its subsidiaries which
makes it impractical or inadvisable in the judgment of the Representatives to
proceed with the public offering or purchase the Common Shares as contemplated
hereby.
(c) There shall have been furnished to you, as Representatives of
the Underwriters, on each Closing Date, in form and substance satisfactory to
you, except as otherwise expressly provided below:
14
(i) An opinion of Powell, Goldstein, Xxxxxx & Xxxxxx, 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) Each of the Company and [list subsidiaries] (the
"Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business
as a foreign corporation and is in good standing in all other
jurisdictions where the ownership or leasing of properties or the
conduct of its business requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the business or financial condition of
the Company and its Subsidiaries taken as a whole (a "Materail
Adverse Effect"), and has full corporate power and authority to
own its properties and conduct its business as described in
the Prospectus;
(2) The authorized, issued and outstanding capital stock
of the Company is as set forth under the caption "Capitalization"
in the Prospectus; all necessary and proper corporate proceedings
have been taken in order to authorize validly such authorized
Common Stock; all outstanding shares of Common Stock (including
the Firm Common Shares and any Optional Common Shares) have been
duly and validly authorized and issued, are fully paid and
nonassessable, have been issued in compliance with federal and
state securities laws, were not issued in violation of or subject
to any preemptive rights or other rights to subscribe for or
purchase any securities and conform to the description thereof
contained in the Prospectus; without limiting the foregoing,
there are no preemptive or other rights to subscribe for or
purchase any of the Common Shares to be sold by the Company
hereunder; and the Common Shares have been authorized for listing
on the Nasdaq National Market;
(3) All of the issued and outstanding shares of the
Subsidiaries have been duly and validly authorized and issued,
are fully paid and nonassessable and are owned of record by the
Company to the knowledge of such counsel free and clear of all
liens, encumbrances, equities, claims, security interests, voting
trusts or other defects of title whatsoever;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Delaware
law, and when duly countersigned by the Company's transfer agent
and registrar, and delivered to you or upon your order against
payment of the agreed consideration therefor in accordance with
the provisions of this Agreement, the Common Shares represented
thereby will be duly authorized and validly issued, fully paid
and nonassessable and will conform in all respects to the
description thereof contained in the Prospectus;
(5) Except as disclosed in the Prospectus, to the best of
such counsel's knowledge there are no outstanding options,
warrants or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any shares of
capital stock of the Company or any
15
security convertible into or exchangeable for capital stock of
the Company;
(6)(a) The Registration Statement has become effective
under the Act, and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated
by the Commission; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules
and Regulations has been made in the manner and within the
time period required by such Rule 424(b);
(b) The Registration Statement, the Prospectus and
each amendment or supplement thereto (except for the
financial statements and schedules included therein as to
which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Act and the Rules and Regulations;
(c) To the best of such counsel's knowledge, no
franchises, leases, contracts, agreements or documents of a
character required to be disclosed in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not disclosed or filed, as
required; and
(d) To the best of such counsel's knowledge, there
are no legal or governmental actions, suits or proceedings
pending or threatened against the Company which are required
to be described in the Prospectus which are not described as
required.
(7) The Company has full right, power and authority
to enter into this Agreement and to sell and deliver the
Common Shares to be sold by it to the several Underwriters;
this Agreement has been duly and validly authorized by all
necessary corporate action by the Company, has been duly and
validly executed and delivered by and on behalf of the
Company, and is a valid and binding agreement of the Company
in accordance with its terms, except as enforceability may
be limited by (i) general equitable principles and the
discretion of the court before any proceeding therefor may
be brought (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (ii)
bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and except as to
any rights to indemnity or contribution for liabilities
arising under the Act as to which no opinion need be
expressed; and no approval, authorization, order, consent,
registration, filing, qualification, license or permit of or
with any court, regulatory, administrative or other
governmental body is required for the execution and delivery
of this Agreement by the Company or the consummation of the
transactions contemplated by this Agreement, except such as
have been obtained and are in full force and effect under
the Act and such as may be required under applicable Blue
Sky laws in connection with the purchase and distribution of
the Common Shares by the Underwriters and the clearance of
such offering with the NASD;
16
(8) The execution and performance of this Agreement
and the consummation of the transactions herein contemplated
will not conflict with, result in the breach of, or
constitute, either by itself or upon notice or the passage
of time or both, a default under, any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit
or other instrument identified to such counsel in a
certificate of the President of the Company as being
material to the Company and the Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or
violate any of the provisions of the certificate of
incorporation or bylaws, of the Company or any of its
Subsidiaries or, so far as is known to such counsel, violate
any statute, judgment, decree, order, rule or regulation of
any court or governmental body having jurisdiction over the
Company or any of its subsidiaries or any of its or their
property;
(9) Neither the Company nor any Subsidiary is in
violation of its certificate of incorporation or its bylaws,
or other organizational documents, or to the best of such
counsel's knowledge, in breach of or default with respect to
any provision of any agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other
instrument identified to such counsel in a certificate of
the President of the Company as being material to the
Company and the Subsidiaries, except where such breach or
default would not have a Materially Adverse Effect, and the
Company and its subsidiaries are in compliance with the
Social Security Act and, to the best of such counsel's
knowledge, are in compliance with all other laws and all
rules, regulations, judgments, decrees, orders and statutes
of any court or jurisdiction to which they are subject,
except where noncompliance would not materially adversely
affect the Company and its Subsidiaries;
(10) To the best of such counsel's knowledge, no
holders of securities of the Company have rights which have
not been waived to the registration of shares of Common
Stock or other securities, because of the filing of the
Registration Statement by the Company or the offering
contemplated hereby;
(11) No transfer taxes are required to be paid in
connection with the sale and delivery of the Common Shares
to the Underwriters hereunder;
(12) The Company has all governmental licenses,
permits, consents, orders, approvals and other
authorizations necessary to carry on its business as
described in the Prospectus, except where failure to have
such governmental licenses, permits, consents, orders,
approvals and other authorizations could not reasonably be
expected to have a Material Adverse Effect; such licenses,
permits, consents, orders, approvals and authorizations are
in full force and effect, and the Company and the
Subsidiaries are in compliance therewith;
(13) The information in the Prospectus under the
captions "Risk Factors--Government Regulations", "Risk
Factors--Inability to Collect Healthcare Receivables
Directly from Medicare and Medicaid," "Xxxx Factors--
Dilution of Client Receivables; Government Right of Offset,"
"Business--Government Regulation" and "Description of
17
Capital Stock" has been reviewed by counsel and, to the
extent that such information constitutes matters of law or
legal conclusions, is correct in all material respects.
In rendering such opinion, such counsel may rely, as to
matters of local law, on opinions of local counsel, and as to matters
of fact, on certificates of officers of the Company and of
governmental officials, in which case their opinion is to state that
they are so doing and that the Underwriters are justified in relying
on such opinions or certificates and copies of said opinions or
certificates are to be attached to the opinion or delivered
concurrently therewith. Such counsel shall also include a statement to
the effect that nothing has come to such counsel's attention that
would cause such counsel to believe that either at the effective date
of the Registration Statement or at the applicable Closing Date the
Registration Statement or the Prospectus, or any such amendment or
supplement, contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(ii) Such opinion or opinions of Xxxxxx, Xxxx & Xxxxxxxx
LLP, 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 sufficiency of all corporate
proceedings and other legal matters relating to this Agreement, the
validity of the Common 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 may
reasonably request for the purpose of enabling them to pass upon such
matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and
governmental officials.
(iii) A certificate of the Company executed by the
Chairman, President and Chief Executive Officer and Senior Vice
President--Legal and Financial Affairs 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 hereof 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 agreements and satisfied all the conditions
on its part to be performed or satisfied on or prior to such
Closing Date;
(2) The Commission has not issued any 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 of the knowledge of the respective signers, no
proceedings for that purpose have been instituted or are pending
or contemplated under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration Statement and
the Prospectus; in his or her opinion and to the best of his or
her knowledge, the Registration Statement and the Prospectus and
any amendments or supplements
18
thereto contain all statements required to be stated therein
regarding the Company and its subsidiaries; and neither the
Registration Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, or
transaction has been entered into, and no event has occurred
which should have been set forth in an amendment to the
Registration Statement or in a supplement to or amendment of any
prospectus which has not been disclosed in such a supplement or
amendment;
(5) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, there
has not been any material adverse change or any development
involving a material adverse change in the condition (financial
or otherwise), business, properties, results of operations,
prospects or management of the Company and its subsidiaries; and
no legal or governmental action, suit or proceeding is pending or
threatened against the Company or its subsidiaries which is
material to the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, or
which may adversely affect the transactions contemplated by this
Agreement; since such dates and except as so disclosed, neither
the Company nor any of its subsidiaries has entered into any
verbal or written agreement or other transaction which is not in
the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings
of the Company or incurred any material liability or obligation,
direct, contingent or indirect, made any change in its capital
stock, made any material change in its short-term debt or funded
debt or repurchased or otherwise acquired any of the Company's
capital stock; and the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
capital stock payable to stockholders of record on a date prior
to the First Closing Date or Second Closing Date; and
(6) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus and except
as disclosed in or contemplated by the Prospectus, the Company
and its subsidiaries have not sustained a material loss or damage
by strike, fire, flood, windstorm, accident or other calamity
(whether or not insured).
(iv) On the date this Agreement is executed and also on the First
Closing Date and the Second Closing Date, a letter addressed to you,
as Representatives of the Underwriters, from Ernst & Young LLP and
McGladrey & Xxxxxx, LLP, independent accountants, the first one to be
dated the date of this 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, in form and substance satisfactory
to you.
(v) On or before the First Closing Date, agreements from
19
(a) the stockholders listed on Schedule B hereto, in form
and substance satisfactory to you, confirming that for a period of 180
days after the first date that any of the Common Shares are released
by you for sale to the public, such person will not, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to
sell (including, without limitation, any short sale), pledge,
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) of the Exchange Act, transfer, assign or otherwise dispose of
any shares of Common Stock or any securities convertible into or
exchangeable for any shares of Common Stock, or any option, warrant or
other right to acquire any shares of Common Stock, or publicly
announce any intention to do any of the foregoing, without the prior
written consent of either Xxxxxxxxxx Securities or each of the
Representatives, which consent may be withheld at the sole discretion
of Xxxxxxxxxx Securities or each of the Representatives, as the case
may be (the "Lock-Up Agreements"), and
(b) the stockholders listed in Schedule C hereto, in form
and substance satisfactory to you, confirming that for a period of 180
days after expiration of the Lock-Up Agreement, such person will not,
directly or indirectly, effect any sales of Common Stock in excess of
the volume limitation provided in Rule 144(c) under the Act, without
the prior written consent of either Xxxxxxxxxx Securities or each of
the Representatives, which consent may be withheld at the sole
discretion of Xxxxxxxxxx Securities or each of the Representatives, as
the case may be (the "Rule 144 Sale Agreements").
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request. Any certificate signed by
any officer of the Company and delivered to the Representatives or to counsel
for the Underwriters shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the statements made therein.
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 by you as
Representatives 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. Notwithstanding any other
---------------------------------------
provisions hereof, if this Agreement shall be terminated by you pursuant to
Section 7 hereof, or if the sale to the Underwriters of the Common Shares at the
First Closing is not consummated 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, the Company agrees to reimburse you and the other Underwriters
upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by you and them in connection with the proposed purchase and the sale
of the Common Shares, including but not limited reasonable fees and
disbursements of counsel, printing expenses, travel expenses, postage, telegraph
charges and telephone charges relating directly to the offering contemplated by
the Prospectus. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section 8, Section 6 and
Section 10 shall at all times be effective and shall apply.
20
SECTION 9.
Effectiveness of Registration Statement. Each of you and the Company
---------------------------------------
will use its respective best efforts to cause the Registration Statement to
become effective, 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.
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 Act against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Underwriter or such controlling person may
become subject, under the Act, the Exchange Act or other federal or state
statutory law or regulation, or 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, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or the omission or alleged omission to state in any of them a material fact
required to be stated therein or necessary to make the statements in any of them
not misleading, or (ii) any inaccuracy in the representations and warranties of
the Company contained herein or (iii) any failure of the Company to perform its
obligations hereunder or under law; and will reimburse each Underwriter and each
such controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense 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 the
information furnished to the Company pursuant to Section 3 hereof. 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, or any inaccuracy in the
representations and warranties of the Company herein or failure to perform its
obligations hereunder, all as described in this Section 10(a), it will reimburse
each Underwriter on a quarterly basis for all reasonable legal or 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 each Underwriter for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, each Underwriter shall promptly return
it to the Company together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Bank of America NT&SA,
San Francisco, California (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement will be in addition to any liability which the
Company may otherwise have to the Underwriters.
21
(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 Act, against any losses, claims, damages, liabilities or expenses to
which the Company, or any such director, officer or controlling person may
become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or 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,
liabilities or expenses (or actions in respect thereof as contemplated below)
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 the information furnished to the Company pursuant to Section 3
hereof; and will reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. In addition to its other obligations
under this Section 10(b), each Underwriter severally agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 10(b) which relates to
information furnished to the Company pursuant to Section 3 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director,
controlling person) on a quarterly basis for all reasonable legal or 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 (and, to the extent
applicable, each officer, director or controlling person thereof) for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, or controlling person
thereof) shall promptly return such payment to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within 30 days
of a request for reimbursement, shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have to the Company.
(c) Promptly after receipt by an indemnified party under this Section
10 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 10, notify the indemnifying party in writing 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 for
contribution or otherwise than under the indemnity agreement contained in this
Section 10 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, 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 reasonably 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
22
concluded that there may be a conflict between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
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, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
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 10 for any legal or other 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 defenses in accordance with the proviso
to the immediately 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 the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the fees
and expenses of counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 10 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Underwriters from the offering of the Common 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
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, 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 Common
Shares sold by it to the Underwriters (net of underwriting commissions but
before deducting expenses) bears to the total price to the public set forth on
the cover of the Prospectus, and in the case of the Underwriters as the
underwriting commissions received by them bears to the total price to the public
set forth on the cover of 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 or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in subparagraph (c) of
this Section 10, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in subparagraph (c) of this Section 10 with respect to
notice of commencement of any action shall apply if a claim for contribution is
to be made under this subparagraph (d); provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under subparagraph (c) for purposes of indemnification. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 10 were determined solely by pro rata
23
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 10(a) and 10(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the Board of Governors of
the New York Stock Exchange, Inc. or pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced by service of a
written demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 10(a) and 10(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 10(a) and 10(b) hereof.
SECTION 11.
Default of Underwriters. It shall be a condition to this Agreement
-----------------------
and the obligation of the Company to sell and deliver the Common Shares
hereunder, and of each Underwriter to purchase the Common Shares in the manner
as described herein, that, except as hereinafter in this paragraph provided,
each of the Underwriters shall purchase and pay for all the Common 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 Common Shares hereunder on
either the First or Second Closing Date and the aggregate number of Common
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Common
Shares with respect to which such default occurs is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
for the purchase of such Common Shares by other persons are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company 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 Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five 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
24
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, 13 and 15 and, as to all other provisions, (i) if at the
time of execution of this Agreement the Registration Statement has not become
effective, at 2:00 P.M., California time, on the first full business day
following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the Company
or by release of any of the Common Shares for sale to the public. For the
purposes of this Section 12, the Common Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common 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 by the Company pursuant to Sections 6 and
8 hereof and except to the extent provided in Section 10 hereof) or of any
Underwriter to the Company (except to the extent provided in Section 10 hereof).
(b) This Agreement may also be terminated by you prior to the First
Closing Date by notice to the Company (i) if additional material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
Exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Representatives, to affect
adversely the marketability of the Common Shares, (iii) if any adverse event
shall have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or there
shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the reasonable judgment
of the Representatives, may materially and adversely affect the Company's
business or earnings and makes it impracticable or inadvisable to offer or sell
the Common Shares.
25
Any termination pursuant to this subsection (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 by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof.
(c) This Agreement shall also terminate at 5:00 P.M., California
time, on the tenth full business day after the Registration Statement shall have
become effective if the initial public offering price of the Common Shares shall
not then as yet have been determined as provided in Section 4 hereof. Any
termination pursuant to this subsection (c) shall 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 by the Company
pursuant to Sections 6 and 8 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, officers or directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 15.
Notices. All communications hereunder shall be in writing and, if
-------
sent to the Representatives shall be mailed, delivered or telegraphed and
confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxxx Xxxxxx, with a copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, Xxx
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxx,
Esq.; and if sent to the Company shall be mailed, delivered or telegraphed and
confirmed to the Company at 0 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxx, with a copy to Powell, Goldstein, Xxxxxx & Xxxxxx,
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: G. Xxxxxxx
Xxxxx. The Company or you may change the address for receipt of communications
hereunder by giving notice to the others.
SECTION 16.
Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 11 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 10, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party
of its obligations hereunder. The term "successors" shall not include any
purchaser of the Common 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 all dealings hereunder, and any
action under or in respect of this Agreement taken by you jointly or by
Xxxxxxxxxx Securities, as Representatives, will be binding upon all the
Underwriters.
SECTION 18.
Partial Unenforceability. The invalidity or unenforceability of any
------------------------
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION 19.
Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the internal laws (and not the laws pertaining to conflicts of
laws) of the State of California.
SECTION 20.
General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and you.
27
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement between among the Company and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
-----------------------------------
HealthCare Financial Partners, Inc.
By
--------------------------------
President
28
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
XXXXXXXXXX SECURITIES
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By XXXXXXXXXX SECURITIES
By:
------------------------------
Managing Director
29
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities ...........................
Xxxxxx, Xxxxxxxx & Company Incorporated .........
TOTAL 2,100,000
30
SCHEDULE B
Stockholders of the Company that will
sign Lock-Up Agreements
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx, Xx.
HealthPartners Investors, LLC
JMR Capital Partners, Inc.
Creative Information Systems, LLC
31
SCHEDULE C
Stockholders of the Company that will
sign Rule 144 Sale Agreements
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx, Xx.
JMR Capital Partners, Inc.
Creative Information Systems, LLC
32
SCHEDULE D
__________, 19__
PRICE DETERMINATION AGREEMENT
Referring to Section 4 of the Underwriting Agreement dated
__________, 19__, between the Company and the Underwriters as therein defined
with respect to the purchase and sale of the Common Shares, we hereby confirm
our agreement that the initial public offering price of the Common Shares shall
be $_____ per share; that the underwriting discount shall be $_____ per share;
and that the purchase price to be paid by the several Underwriters for the
Common Shares to be purchased from the Company shall be $_____ per share.
This Agreement may be executed in various counterparts which together
shall constitute one and the same Agreement.
XXXXXXXXXX SECURITIES
XXXXXX, XXXXXXXX & COMPANY, INC.
By Xxxxxxxxxx Securities]
By
-------------------------------------
Acting on behalf of the several Underwriters
named in Schedule A to the Underwriting
Agreement
----------------------------------------
By
-------------------------------------
Acting on behalf of the Company
33
