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EXHIBIT 1.1
5,000,000 SHARES
PEDIATRIX MEDICAL GROUP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
July __, 1996
DEAN WITTER REYNOLDS INC.
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
HAMBRECHT & QUIST LLC
SMITH BARNEY INC.
As Representatives of the several Underwriters
c/o Dean Witter Reynolds Inc.
2 World Trade Center
65th Floor
New York, New York 10048
Dear Sirs:
1. Introductory. Pediatrix Medical Group, Inc., a Florida corporation
(the "Company"), and the selling shareholders named in Schedule B hereto (the
"Selling Shareholders") propose to sell, pursuant to the terms of this
Agreement, to the several Underwriters named in Schedule A hereto (the
"Underwriters"), an aggregate of 5,000,000 shares of common stock, par value
$.01 per share (the "Common Stock") of the Company. The aggregate of 5,000,000
shares so to be sold by the Company and the Selling Shareholders is herein
called the "Firm Stock". The selling shareholders named in Schedule C hereto
(the "Option Selling Shareholders") also propose to sell severally to the
Underwriters, on a pro rata basis, at the option of the Underwriters, an
aggregate of not more than 750,000 additional shares of Common Stock as
provided in Section 3 of this Agreement. The aggregate of 750,000 shares so
proposed to be sold is herein called the "Optional Stock". The Firm Stock and
the Optional Stock are collectively referred to herein as the "Stock". The
Selling Shareholders and the Option Selling Shareholders are sometimes
collectively referred to herein as the "Selling Securityholders". Dean Witter
Reynolds Inc. and the other Representatives are acting as representatives of
the several Underwriters and in such capacity are hereinafter referred to as
the "Representatives".
Before the purchase and public offering of the Stock by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form
of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take
the form of an exchange of any standard form of written telecommunication
between the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Stock
will be governed by this
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Agreement, as supplemented by the Pricing Agreement. From and after the date of
the execution and delivery of the Pricing Agreement,this Agreement shall be
deemed to incorporate the Pricing Agreement.
2. (a) Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters as of the
date hereof and as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date"), that:
(i) A registration statement on Form S-1 (File No. 333-____)
with respect to the Stock, a copy of which has heretofore been
delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the published rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") under the Act; and the Company has so prepared
and proposes so to file prior to the effective date of such
registration statement an amendment to such registration statement
including the final form of prospectus (which may omit such
information as permitted by Rule 430A of the Rules and
Regulations). Such registration statement as amended and the
prospectus constituting a part thereof (including in each case the
information, if any, deemed to be a part thereof pursuant to Rule
430A(b) or Rule 434 of the Rules and Regulations) are hereinafter
referred to as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be
provided to the Underwriters by the Company for use in connection
with the offering of the Stock which differs from the prospectus on
file at the Commission at the time the Registration Statement
becomes effective (whether or not such prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the
Underwriters for such use. If the Company elects to rely on Rule
434 under the Rules and Regulations, all references to the
Prospectus shall be deemed to include, without limitation, the form
of prospectus and the term sheet, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under Rules and
Regulations (the "Rule 434 Prospectus"). If the Company files a
registration statement to register a portion of the Securities and
relies on Rule 462(b) for such registration statement to become
effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-____) and the Rule 462
Registration Statement, as each such registration statement may be
amended pursuant to the Act.
(ii) When the Registration Statement becomes effective and as
of the Representation Date, the Registration Statement and the
Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations. At the time
the Registration Statement becomes effective and at the
Representation Date, the Registration Statement will not include
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, at the time
the Registration Statement becomes effective and as of the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the
Company for use in connection with the offering of the Stock which
differs from the prospectus on file at the Commission at the time
the Registration Statement becomes effective, in which case at the
time it is first provided to the Underwriters for such use) and at
the Closing Date (as hereinafter defined), will not include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations,
warranties and agreements shall not apply to information contained
in or omitted from the Registration Statement or Prospectus in
reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any
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Underwriter, directly or through the Representatives, or by any
Selling Securityholder, specifically for use in the preparation
thereof.
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus
and except as set forth or contemplated in the Prospectus, (A)
neither the Company nor any of its subsidiaries or the professional
associations and partnerships which are separate legal entities
that contract with the Company to provide physician services in
certain states and Puerto Rico (the "PA Contractors") has incurred
any liabilities or obligations (indirect, direct or contingent) or
entered into any oral or written agreements or other transactions
not in the ordinary course of business that, singly or in the
aggregate, are material to the Company and its subsidiaries and PA
Contractors considered as a whole or that result in a material
reduction in the earnings of the Company and its subsidiaries and
PA Contractors considered as a whole, (B) neither the Company nor
any of its subsidiaries or PA Contractors has sustained any loss or
interference with its business or properties from strike, fire,
flood, windstorm, accident or other calamity (whether or not
covered by insurance) that, singly or in the aggregate, is material
to the Company and its subsidiaries and PA Contractors considered
as a whole, (C) there has been no material change in the
indebtedness of the Company, no change in the capital stock of the
Company and no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock, and (D)
there has not been any material adverse change in the condition
(financial or other), business, prospects or results of operations
of the Company and its subsidiaries and PA Contractors considered
as a whole, whether or not arising in the ordinary course of
business.
(iv) The financial statements, together with the related notes
and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the (i) Company and
its consolidated subsidiaries and PA Contractors, (ii) Neonatal and
Pediatric Intensive Care Medical Group, Inc., (iii) Neonatal
Specialists, Ltd., (iv) Pediatric and Newborn Consultants, PC, (v)
Rocky Mountain Neonatology, P.C. and (vi) West Texas Neonatal
Associates at the respective dates or for the respective periods
therein specified. Such statements and related notes and schedules
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis except as may be set forth
in the Prospectus except for the omission of certain footnote
disclosures from the unaudited financial statements. The selected
financial data set forth in the Prospectus under the caption
"Selected Consolidated Financial Data" fairly presents, on the
basis stated in the Registration Statement, the information set
forth therein. The pro forma financial statements of the Company
and its consolidated subsidiaries and PA Contractors and the
related notes thereto included in the Registration Statement and
the Prospectus have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein.
(v) Coopers & Lybrand L.L.P., who have expressed their
opinions on the audited financial statements and related schedules
included in the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(vi) The Company and each of its subsidiaries and PA
Contractors have been duly organized and are validly existing and
in good standing as a corporations, partnerships or professional
corporations under the laws of their respective jurisdictions of
organization, with corporate power and authority to own, lease and
operate their properties and to conduct their businesses as
described in the Registration Statement and Prospectus; and the
Company is and
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each of such subsidiaries and PA Contractors are duly qualified to
do business and in good standing as a foreign corporations,
partnerships or professional corporations in all other
jurisdictions where their ownership or leasing of properties or
the conduct of their businesses requires such qualification,
except where the failure to be so qualified would not singly or
in the aggregate have a material adverse effect on the condition
(financial or other), business, prospects or results of operations
of the Company and its subsidiaries and PA Contractors considered
as a whole (a "Material Adverse Effect")
(vii) The Company has authorized, issued and outstanding
capital stock as set forth under the "Capitalization" section of
the Prospectus; the issued and outstanding shares of Common Stock
(including the outstanding shares of the Stock) of the Company
conform to the description thereof in the Prospectus and have been
duly authorized and validly issued and are fully paid and
nonassessable and are listed on the Nasdaq National Market System;
the stockholders of the Company have no preemptive rights with
respect to any shares of capital stock of the Company and all
outstanding shares of capital stock of each corporate subsidiary
and PA Contractor have been duly authorized and validly issued, and
are fully paid and nonassessable; and the outstanding shares of
capital stock of each corporate subsidiary are owned directly by
the Company or by another subsidiary of the Company free and clear
of any liens, encumbrances, equities or claims.
(viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and,
when issued and delivered against payment therefor as provided
herein and in the Pricing Agreement, will be duly and validly
issued and fully paid and nonassessable and will conform to the
description thereof in the Prospectus.
(ix) Except as disclosed in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of
its subsidiaries or PA Contractors is a party or of which any
property of the Company or any subsidiary or PA Contractor is the
subject, that are required to be disclosed in the Registration
Statement (other than as described therein), or which, if
determined adversely to the Company or any subsidiary or PA
Contractor, would individually or in the aggregate result in a
Material Adverse Effect or which might materially and adversely
affect the consummation of this Agreement; and to the best of the
Company's knowledge no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(x) The contractual relationships between (a) the Company and
its PA Contractors ("Management Services Contracts") and (b) the
Company and certain hospitals and the PA Contractors and certain
hospitals (collectively, "Hospital Contracts") do not , to the best
of the Company's knowledge, violate any federal or state health
care laws and regulations in such jurisdictions in which the
Company or the PA Contractors are doing business that are
applicable to such relationships, including but not limited to
those laws governing the corporate practice of medicine, medical
practices, professional corporations, fee splitting, fraud and
abuse and self-referral where such violation, singly or in the
aggregate would have a Material Adverse Effect.
(xi) Neither the Company nor any of its subsidiaries or PA
Contractors is, or with the giving of notice or passage of time or
both would be, in breach or violation of any of the terms or
provisions of or in default under (A) any statute, rule or
regulation applicable to the Company or any of its subsidiaries or
PA Contractors, (B) any indenture, lease, mortgage, deed of trust,
note or other material contract, agreement or instrument to which
the Company or such subsidiary or PA Contractor is a party or by
which it may be bound, (C) its certificate of incorporation,
by-laws or other organizational documents, and (D) any order,
decree or judgment of any court of governmental agency or body
having jurisdiction over the Company or any of its
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subsidiaries or PA Contractors, in each case (other than clause (C)
of this Section 2(a)(xi)), where such breach, violation or default
would result in a Material Adverse Effect. The performance of this
Agreement and the consummation of the transactions herein
contemplated will not, with the giving of notice or passage of time
or both, result in a breach or violation of any of the terms or
provisions of or constitute a default under (W) any statute, rule or
regulation, to the knowledge of the Company, that is applicable to
the Company or any of its subsidiaries or PA Contractors, (X) any
indenture, mortgage, lease, deed of trust, note or other material
contract, agreement or instrument to which the Company or any of its
subsidiaries or PA Contractors is a party or by which it is bound,
(Y) the Company's or any such subsidiary's or PA Contractor's
certificate of incorporation, by-laws or other organizational
documents, or (Z) any order, decree judgment of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or PA Contractors or any of their respective
properties.
(xii) No labor dispute with the employees of the Company or
any of its subsidiaries or PA Contractors exists or, to the
Company's knowledge, is imminent.
(xiii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the issuance
and sale of the Stock by the Company or for the consummation by the
Company of the transactions contemplated by this Agreement,
including, without limitation, the use of proceeds from the sale of
Stock to be sold by the Company in the manner contemplated in the
Prospectus under caption "Use of Proceeds," except such as may be
required by the National Association of Securities Dealers, Inc.
("NASD") or under the Act or the securities or Blue Sky laws of any
jurisdiction in connection with the purchase and distribution of
the Stock by the Underwriters.
(xiv) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Company.
(xv) The Company and its subsidiaries and PA Contractors own
or have obtained valid licenses for all trademarks, trademark
registrations, service marks, service mark registrations, trade
names and copyrights described in the Prospectus as being owned,
licensed or used by the Company or any of its subsidiaries or PA
Contractors or that are necessary for the conduct of their
respective business as described in the Prospectus (collectively,
"Intellectual Property") and neither the Company nor any of its
subsidiaries or PA Contractors is aware of any claim (or of any
facts that would form a reasonable basis for any claim) to the
contrary or any challenge by any third party to the rights of the
Company or any of its subsidiaries or PA Contractors with respect
to any such Intellectual Property or to the validity or scope of
any such Intellectual Property and neither the Company nor any of
its subsidiaries or PA Contractors has any claim against a third
party with respect to the infringement by such third party of any
such Intellectual Property, which claims or challenges, if
adversely determined, would, singly or in the aggregate, have a
Material Adverse Effect.
(xvi) The Company and its subsidiaries and PA Contractors have
such certificates, permits, licenses, franchises, consents,
approvals, authorizations and clearances as are necessary to own,
lease or operate their respective properties and to conduct their
respective businesses in the manner described in the Prospectus
("Licenses") and all such Licenses are valid and in full force and
effect, except where the failure to possess such Licenses would not
have a Material Adverse Effect. The Company and each of its
subsidiaries and PA Contractors are in compliance in all material
respects with their respective obligations under such Licenses and
no event has occurred that allows, or after notice or lapse of time
or both would allow, revocation, suspension or termination of any
such License, except where such revocation, suspension or
termination would not have a Material Adverse Effect. No such
License contains a burdensome restriction on the Company or any of
its subsidiaries or PA Contractors that is not adequately
disclosed in the Registration Statement and the Prospectus.
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(xvii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(xviii) The Company and its subsidiaries and PA Contractors
have good and marketable title to all real properties, and good
title to all personal property owned by the Company and its
subsidiaries and PA Contractors, free and clear of any mortgage,
pledge, lien, security interest, claim or encumbrance of any kind,
except as disclosed in the Prospectus, that materially interferes
with the use of such properties or the conduct of the business of
the Company and its subsidiaries or PA Contractors considered as a
whole; and all properties held under lease or sublease by the
Company or its subsidiaries or PA Contractors are held under valid,
subsisting and enforceable leases or subleases, with such exceptions
as are not material and do not interfere with the use made or
proposed to be made of such properties by the Company or its
subsidiaries or PA Contractors.
(xix) The Company and its subsidiaries and PA Contractors
maintain accurate books and records reflecting their respective
assets and maintain internal accounting controls which provide
reasonable assurance that (A) transactions are executed with
management's authorization, (B) transactions are recorded as
necessary to permit preparation of financial statements and to
maintain accountability for assets, (C) access to assets is
permitted only in accordance with management's authorization and
(D) the reported accountability of assets is compared with existing
assets at reasonable intervals.
(xx) The Company has complied, and will continue to comply, in
all material respects, with all provisions of Section 517.075 of
the Florida Statutes (Chapter 92-198, Laws of Florida) and the
rules thereunder.
(b) Any certificate signed by an officer of the Company and
delivered to the Representatives or counsel for the Underwriters pursuant
to this Agreement shall be deemed a representation and warranty of the
Company to each Underwriter as to the matters covered thereby.
(c) Representations, Warranties and Agreements of the Selling
Securityholders. Each Selling Securityholder represents and warrants to,
and agrees with, the several Underwriters that:
(i) Such Selling Securityholder has full right, power and
authority to enter into this Agreement, the Pricing Agreement, the
custody agreement (the "Custody Agreement") and the power of
attorney ("Power of Attorney"). Such Selling Securityholder has
duly executed and delivered this Agreement and the Pricing
Agreement. The Custody Agreement and the Power of Attorney have
been duly executed and delivered on behalf of each Selling
Securityholder and the Custody Agreement and the Power of Attorney
constitute the valid and binding agreements of such Selling
Securityholder enforceable against such Seller Securityholder in
accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principals of equity.
(ii) Such Selling Securityholder has full right, power and
authority to sell, transfer, assign and deliver the Stock being
sold by such Selling Securityholder hereunder. Immediately prior
to the delivery of the shares of Stock being sold by such Selling
Securityholder, such Selling Securityholder was the sole registered
owner of such shares of Stock and had good and valid title
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to such shares of Stock, free and clear of all adverse claims as
defined in Section 8-302 of the Uniform Commercial Code and, upon
registration of such shares of Stock in the names of the
Underwriters or their nominees, assuming that such purchasers
purchased such shares of Stock in good faith without notice of any
adverse claims as defined in Section 8-302 of the Uniform Commercial
Code, such purchasers will have acquired all the rights of such
Selling Securityholder in such shares of Stock free of any adverse
claim, any lien in favor of the Company or restrictions on transfer
imposed by the Company.
(iii) The performance of this Agreement, the Custody Agreement
and the Power of Attorney and the consummation of the transactions
Securityholder, or any indenture, mortgage, deed of trust, note or
herein and therein contemplated will not, with the giving of notice
other material contract, agreement or instrument to which such
or the passage of time or both, result in a breach or violation of
Selling Securityholder is a party or by which it is bound, or any
any of the terms or provisions of or constitute a default under any
judgment, order or decree of any court or governmental agency or
statute, rule or regulation applicable to such Selling body having
jurisdiction over such Selling Securityholder or any of its
properties, or, if such Selling Securityholder is a corporation,
the certificate or articles of incorporation or by-laws of such
Selling Securityholder.
(iv) Without the prior written consent of Dean Witter Reynolds
Inc. on behalf of the Underwriters, such Selling Securityholder
will not, during the period commencing on the date hereof and
ending 90 days after the date of the final prospectus relating to
the offering (the Prospectus"), (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer of dispose of, directly or
indirectly, any shares of Common Stock or any securities
convertible into or exercisable or directly or indirectly, any
shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (whether such shares
or any such securities are now owned by the undersigned or are
hereafter acquired), or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in
cash or otherwise, except for (a) the exercise of outstanding
options granted by the Company pursuant to any options granted or
to be granted pursuant to any employee or non-employee director
stock option plans (but not the sale, distribution, pledge,
hypothecation or other disposition of shares of Common Stock
received upon exercise of such option), (ii) the transfer of shares
of Common Stock by a Selling Shareholder that is a partnership or
any affiliated partner or to any partner of such Selling
Shareholder and (iii) the transfer of shares of Common Stock
disposed of as bona fide gifts.
(v) Such Selling Securityholder has duly executed and
delivered (A) the Power of Attorney appointing Roger J. Medel and
Cathy J. Lerman, and each of them, as attorney-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Securityholder, to authorize
the delivery of the shares of Stock to be sold by such Selling
Securityholder hereunder and otherwise to act on behalf of such
Selling Securityholder in connection with the transactions
contemplated by this Agreement, and (B) the Custody Agreement
appointing the Company, as Custodian, to hold in custody for
delivery under this Agreement certificates for the shares of Stock
to be sold by such Selling Securityholder hereunder.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
such Selling Securityholder of the transactions contemplated by
this Agreement, except such as may be required by the NASD or
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under the Act or the securities or Blue Sky laws of any
jurisdiction in connection with the purchase and distribution of
the Stock by the Underwriters.
(vii) Such Selling Securityholder has not (A) taken, directly
or indirectly, any action designed to cause or result in, or that
has constituted or could reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Stock or (B) since
the filing of the Registration Statement (1) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases
of, the Stock or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Company.
(viii) All information furnished or to be furnished to the
Company by or on behalf of such Selling Securityholder for use in
connection with the preparation of the Registration Statement and
the Prospectus, insofar as it relates to such Selling
Securityholder, is or will be true and correct in all respects and,
with respect to the Registration Statement, does not and will not
contain 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, and, with respect to the
Prospectus, does not and will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(ix) Nothing has come to such Selling Securityholder's
attention that has caused such Selling Securityholder to believe
that (A) at the time the Registration Statement becomes effective
and at the Representation Date, it will include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (B) the Prospectus, at the time the
Registration Statement becomes effective and as of the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the
Company for use in connection with the offering of the Stock which
differs from the prospectus on file at the Commission at the time
the Registration Statement becomes effective, in which case at the
time it is first provided to the Underwriters for such use) and at
the Closing Date, the Prospectus will include any untrue statement
of material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
foregoing representations, warranties and agreements in this
subsection (ix) shall not apply to information contained in or
omitted from the Registration Statement or the Prospectus 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.
Each Selling Securityholder agrees that the shares of Stock represented by
the certificates held in custody under the Custody Agreement are for the
benefit of and coupled with and subject to the interests of the Underwriters,
the other Selling Securityholders and the Company hereunder, and that the
arrangement for such custody and the appointment of the Attorneys-in-fact
(under the Power of Attorney) are irrevocable; that the obligations of such
Selling Securityholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of such Selling Securityholder, or any other
event, that if such Selling Securityholder should die or become incapacitated
or any other event occur, before the delivery of the Stock hereunder,
certificates for the Stock to be sold by such Selling Securityholder shall be
delivered on behalf of such Selling Securityholder in accordance with the terms
and conditions of this Agreement, the Custody Agreement and the Power of
Attorney, and action taken by the Attorneys-in-fact or any of them under the
Power of Attorney shall be as valid as if such death, incapacity or other event
had not occurred, whether or not the Custodian, the Attorneys-in-fact or any of
them shall have notice of such death, incapacity or other event.
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Each Selling Securityholder further agrees that neither such Selling
Securityholder nor any of its officers, directors, or affiliates will (a) take,
directly or indirectly, prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to cause or to result in,
or that could reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company to facilitate the
sale or resale of any of the shares of the Stock, (b) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of, the Stock or (c)
pay to or agree to pay any person any compensation for soliciting another to
purchase any other securities of the Company.
3. Purchase by, and Sale and Delivery to, Underwriters; Closing Date. On
the basis of the representations, warranties, covenants and agreements herein
contained, and subject to the terms and conditions herein set forth: (i) the
Company and the Selling Shareholders agree, severally and not jointly, to sell
to the Underwriters the Firm Stock, with the number of shares to be sold by
each Selling Shareholder being set opposite his name in Schedule B and (ii) the
Underwriters agree, severally and not jointly, to purchase from the Company and
the Selling Shareholders at the price per share set forth in the Pricing
Agreement, the number of shares of Firm Stock set forth opposite their names in
Schedule A (except as otherwise provided in the Pricing Agreement), subject to
adjustment in accordance with Section 11 hereof. The number of shares of Firm
Stock to be purchased by each Underwriter from each Selling Shareholder
hereunder shall bear the same proportion to the total number of shares of Firm
Stock to be purchased by such Underwriter hereunder as the number of shares of
Firm Stock being sold by each Selling Shareholder bears to the total number of
shares of Firm Stock, subject to adjustment by the Representatives to eliminate
fractions.
If the Company has elected not to rely upon Rule 430A under the Rules and
Regulations, the initial public offering price and the purchase price per share
to be paid by the several Underwriters for the Firm Stock each have been
determined and set forth in the Pricing Agreement, dated the date hereof, and an
amendment to the Registration Statement and the Prospectus will be filed before
the Registration Statement becomes effective.
If the Company has elected to rely upon Rule 430A under the Rules and
Regulations, the purchase price per share to be paid by the several
Underwriters for the Firm Stock shall be an amount equal to the initial public
offering price, less an amount per share to be determined by agreement between
the Representatives and the Company. The initial public offering price per
share of the Firm Stock sahll be a fixed price to be determined by agreement
between the Representatives, the Company and the Selling Shareholders. The
initial public offering price and the purchase price, when so determined, shall
be set forth in the Pricing Agreement. In the event that such prices have not
been agreed upon and the Pricing Agreement has not been executed and delivered
by all parties thereto by the close of business on the fourteenth business day
following the date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise agreed to by
the Company and the Representatives.
The Company and the Selling Securityholders will deliver the Firm Stock to
the Representatives for the respective accounts of the several Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company and the Selling Securityholders given at or prior to 12:00 Noon, New
York Time, on the business day preceding the Closing Date or, if no such
direction is received, in the names of the respective Underwriters in the
amount set forth opposite each Underwriter's name on Schedule A hereto),
against payment of the purchase price therefor by certified or official bank
check or checks in New York Clearing House or similar next day funds, payable
to the order of the Company, and the Company as custodian for the Selling
Securityholders, all at the offices of Latham & Watkins, 855 Third Avenue,
Suite 1000, New York, New York 10022. The time and date of delivery and
closing shall be at 10:00 a.m., New York Time, the fourth full business day
after the Registration Statement becomes effective (or, if the Company has
elected to rely upon Rule 430A, the third full business day after execution of
the Pricing Agreement); provided, however, that such date and time may be
accelerated or extended by agreement among the Company, the Selling
Securityholders and the Representatives or postponed pursuant to the provisions
of Section 12 hereof. The time and date of such payment and delivery are
herein referred to as the "First Closing Date." The Company and the Selling
Securityholders shall make the certificates for the Stock available to the
Representatives
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for examination on behalf of the Underwriters not later than 3:00 p.m., New York
Time, on the business day preceding the Closing Date.
In addition, for the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Stock as contemplated by the
Prospectus, the Option Selling Shareholders hereby grant the Underwriters an
option to purchase, severally and not jointly, up to 750,000 shares in the
aggregate of the Optional Stock. The purchase price per share to be paid for
the Optional Stock shall be the same price per share as the price per share for
the Firm Stock. The option granted hereby may be exercised as to all or any
part of the Optional Stock at any time not more than 30 days subsequent to the
effective date of this Agreement. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by the
Representatives to the Option Selling Shareholders.
The option granted hereby may be exercised by the Representatives on
behalf of the Underwriters by giving written notice to the Option Selling
Shareholders setting forth the number of shares of the Optional Stock to be
purchased by them and the date and time for delivery of and payment for the
Optional Stock. Such date and time for delivery of and payment for the
Optional Stock (which may be the First Closing Date) is herein called the
"Option Closing Date" and shall be not later than 10 days after written notice
is given. All purchases of Optional Stock from the Option Selling Shareholders
shall be made on a pro rata basis. Optional Stock shall be purchased for the
account of each Underwriter in the same proportion as the number of shares of
Firm Stock set forth opposite such Underwriters name in Schedule A hereto bears
to the total number of shares of Firm Stock, subject to adjustment by the
Representatives to eliminate odd lots. Upon exercise of the option by the
Representatives, the Option Selling Shareholders agree to sell to the
Underwriters the number of shares of Optional Stock set forth in the written
notice of exercise and the Underwriters agree, severally and not jointly,
subject to the terms and conditions herein set forth, to purchase such shares of
Optional Stock.
The Option Selling Shareholders will deliver the Optional Stock to the
Representatives for the respective accounts of the several Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Option Selling
Shareholders given at or prior to 12:00 Noon, New York Time, on the business
day preceding the Option Closing Date or, if no such direction is received, in
the names of the respective Underwriters), against payment of the purchase
price therefor by certified or official bank check or checks in New York
Clearing House or similar next day funds, payable to the order of the Company,
and the Company as custodian for the Option Selling Shareholders, all at the
offices of Latham & Watkins, 855 Third Avenue, Suite 1000, New York, New York
10022. The Option Selling Shareholders shall make the certificates for the
Optional Stock available to the Representatives for examination on behalf of
the Underwriters, not later than 3:00 p.m., New York Time, on the business day
preceding, the Option Closing Date.
It is understood that Dean Witter Reynolds Inc. or other Representatives,
individually and not as Representatives of the several Underwriters, may (but
shall not be obligated to) make payment to the Company or to the Selling
Securityholders on behalf of any Underwriter or Underwriters, for the Stock to
be purchased by such Underwriter or Underwriters. Any such payment by Dean
Witter Reynolds Inc. or other Representatives shall not relieve such
Underwriter or Underwriters from any of their other obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters propose to make an initial public offering of the Firm Stock at
the initial public offering price. The Representatives shall promptly advise
the Company and the Selling Securityholders of the making of the initial public
offering.
4. Covenants and Agreements of the Company. The Company covenants and
agrees with the several Underwriters that:
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(a) The Company will use its best efforts to cause the Registration
Statement to become effective under the Act, will advise the
Representatives promptly as to the time at which the Registration
Statement becomes effective, will advise the Representatives promptly of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose, and will use its best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible the
lifting thereof, if issued. If the Company elects to rely on Rule 434
under the Rules and Regulations, the Company will prepare a "term sheet"
that complies with the requirements of Rule 434 under the Rules and
Regulations. If the Company elects not to rely on Rule 434, the Company
will provide the Underwriters with copies of the form of Prospectus, in
such number as the Underwriters may reasonably request, and file or
transmit for filing with the Commission such Prospectus in accordance
with Rule 424(b) of the Rules and Regulations by the close of business in
New York in the business day immediately succeeding the date of the
Pricing Agreement. If the Company elects to rely on Rule 434, the
Company will provide the Underwriters with the copies of the form of Rule
434 Prospectus, in such number as the Underwriters may reasonably
request, and file or transmit for filing with the Commission the 434
Prospectus in accordance with Rule 424(b) of the Rules and Regulations by
the close of business in New York on the business day immediately
succeeding the date of the Pricing Agreement.
(b) The Company will advise the Representatives promptly of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for additional information,
and will not at any time file any amendment to the Registration Statement
or supplement to the Prospectus which shall not previously have been
submitted to the Representatives a reasonable time prior to the proposed
filings thereof or to which the Representatives shall reasonably object in
writing or which is not in compliance with the Act and the Rules and
Regulations.
(c) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus (including any revised
prospectus which the Company proposes for use by the Underwriters in
connection with the offering of the Stock which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424 of the Rules and Regulations or
any term sheet prepared in reliance on Rule 434 of the Rules and
Regulations) which in the opinion of the Representatives may be necessary
to enable the several Underwriters to continue the distribution of the
Stock and will use its best efforts to cause the same to become effective
as promptly as possible.
(d) If any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Act any event relating to or affecting the Company or
any of its subsidiaries or PA Contractors occurs as a result of which the
Prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact, or omit to state any material fact
to make the statements therein in light of the circumstances under which
they were made not misleading, or if it is necessary at any time to amend
the Prospectus to comply with the Act, the Company will promptly notify
the Representatives thereof and will prepare an amended or supplemented
prospectus (in form and substance satisfactory to counsel to the
Underwriters) which will correct such statement or omission; and, in case
any Underwriter is required to deliver a prospectus relating to the Stock
nine months or more after the effective date of the Registration
Statement, the Company upon the request of the Representatives and at the
expense of such Underwriter will prepare promptly such prospectus or
prospectuses as may he necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(e) The Company will deliver to the Representatives, at or before
the Closing Date, signed copies of the Registration Statement and all
amendments thereto including all financial statements and exhibits
thereto and will deliver to the Representatives such number of copies of
the Registration Statement, including such financial statements but
without exhibits, and of all amendments thereto, as the
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Representatives may reasonably request. The Company will deliver or mail
to or upon the order of the Representatives, from time to time until the
effective date of the Registration Statement, as many copies of the
Prospectus as the Representatives may reasonably request. The Company
will deliver or mail to or upon the order of the Representatives on the
date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Stock is
required under the Act, as many copies of the Prospectus, in final form or
as thereafter amended or supplemented as the Representatives may
reasonably request; provided, however, that the expense of the preparation
and delivery of any prospectus required for use nine months or more after
the effective date of the Registration Statement shall be borne by the
Underwriters required to deliver such prospectus.
(f) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 60 days
after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 under the Act) which will
be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Act, covering a period of at least
twelve months beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in Rule
158) of the Registration Statement.
(g) The Company will cooperate with the Representatives to enable
the Stock to be qualified for sale under the securities laws of such
jurisdictions as the Representatives may designate and at the request of
the Representatives will make such applications and furnish such
information as may be required of it as the issuer of the Stock for that
purpose; provided, however, that the Company shall not be required to
qualify to do business or to file a general consent to service of process
in any such jurisdiction. The Company will, from time to time, prepare
and file such statements and reports as are or may be required of it as
the issuer of the Stock to continue such qualifications in effect for so
long a period as the Representatives may reasonably request for the
distribution of the Stock.
(h) For so long as the Company is subject to the informational
requirements of the Exchange Act, the Company will furnish to its
shareholders annual reports containing financial statements certified by
independent public accountants and with quarterly summary financial
information in reasonable detail which may be unaudited. During the
period of five years from the date hereof, the Company will deliver to
the Representatives copies of each annual report of the Company and each
other report furnished by the Company to its shareholders; and will
deliver to the Representatives, as soon as they are available, copies of
any other reports (financial or other) which the Company shall publish or
otherwise make available to any of its security holders as such, and as
soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange or the NASD.
(i) The Company will file with the Nasdaq National Market all
documents and notices required by the Nasdaq National Market of companies
that have issued securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National
Market.
(j) The Company will use the net proceeds received by it from the
sale of the Stock in the manner specified in the Prospectus under "Use of
Proceeds."
(k) The Company will file with the Commission such reports on Form
SR as may be required pursuant to Rule 463 under the Act.
(l) During a period of 90 days from the date of the Pricing
Agreement, the Company will not, without the Representatives' prior
written consent, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Common Stock or any
security convertible into Common Stock except for options granted or
Common Stock issued pursuant to reservations, agreements or employee
benefit or stock plans disclosed in the Registration Statement.
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(m) At the time this Agreement is executed, the Company shall have
furnished to the Representatives a letter from each officer, director and
shareholder of the Company listed on Schedule D attached hereto addressed
to the Representatives, in which each such person agrees not to offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock
beneficially owned by such person at the time this Agreement is signed or
hereafter acquired or any securities convertible into, or exchangeable
for, shares of Common Stock for a period of 90 days following the date of
the Pricing Agreement without the prior written consent of the
Representatives, other than shares of Common Stock disposed of as bona
fide gifts.
5. Payment of Expenses. The Company will pay (directly or by
reimbursement) all expenses incident to the performance of the obligations of
the Company and of the Selling Securityholders under this Agreement, including
but not limited to all expenses and taxes incident to delivery of the Stock to
the Representatives, the underwriting commission, all expenses incident to the
registration of the Stock under the Act and the printing of copies of the
Registration Statement, each preliminary Prospectus, the Prospectus, any
amendments or supplements thereto including any term sheet delivered by the
Company pursuant to Rule 434 of the Rules and Regulations, the "Blue Sky"
memorandum, the Selling Securityholders' Powers of Attorney, the Custody
Agreement, the Agreement Among Underwriters and this Agreement and furnishing
the same to the Underwriters and dealers except as otherwise provided in
Sections 4(d) and 4(e) the fees and disbursements of the Company's counsel and
accountants, all filing and printing fees and expenses (including reasonable
legal fees and disbursements of counsel for the Underwriters) incurred in
connection with qualification of the Stock for sale under the laws of such
jurisdictions as the Representatives may designate, all fees and expenses
(including reasonable legal fees and disbursements of counsel for the
Underwriters) paid or incurred in connection with filings made with the NASD,
the fees and expenses incurred in connection with listing to the Stock on the
Nasdaq National Market System, the costs of preparing stock certificates, the
costs and fees of any registrar or transfer agent and all other costs and
expenses incident to the performance of its their obligations hereunder which
are not otherwise specifically provided for in this Section, provided, however,
that each of the Selling Securityholders will pay the underwriting commissions
incident to the performance of their obligations under this Agreement.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each employee, officer, partner, director and agent of the
Underwriter, and each person, if any, who controls such Underwriter
within the meaning of the Act, against any losses, claims, damages,
liabilities or expenses (including, except as otherwise provided below,
the reasonable cost of investigating and defending against any claims
therefor and reasonable counsel fees incurred in connection therewith),
joint or several, which may be based upon the Act, or any other federal
or state statute or at common law, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to
be a part of the Registration Statement pursuant to Rule 430A(b) or Rule
434 of the Rules and Regulations, if applicable, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, written information furnished to the
Company by any Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof; provided that the
Company shall not be liable with respect to any claims made against any
Underwriter or any such employee, officer, partner, director or agent or
any such controlling person under this subsection unless such
Underwriter, employee, officer, partner, director or agent or controlling
person shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
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Underwriter, employee, officer, partner, director or agent or controlling
person (such notification by an Underwriter shall suffice as notification
on behalf of its officers, partners, directors, employees, agents and
controlling persons), but failure to notify the Company of any such claim
shall not relieve it from any liability which it may have to such
Underwriter or controlling person otherwise than on account of the
indemnity agreement contained in this Section 6(a).
The Company shall be entitled to participate at its own expense in
the defense, or, if it so elects, to assume the defense for misstatements
or omissions in a Preliminary Prospectus of any suit brought to enforce
any such liability, but, if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to such Underwriter or indemnified person, as the case may
be. In the event the Company elects to assume the defense of any such
suit and retain such counsel, the Underwriter or Underwriters or other
indemnified person or persons, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such
counsel unless (i) the Company shall have specifically authorized the
retaining of such counsel or (ii) the parties to such suit include such
Underwriter or Underwriters or other indemnified person or persons, and
the Company and such Underwriter or Underwriters or other indemnified
person or persons have been advised by counsel that one or more legal
defenses may be available to them which may not be available to the
Company, in which case the Company shall not be entitled to assume the
defense of such suit notwithstanding its obligation to bear the fees and
expenses of such counsel, provided that the Company shall not be
responsible for the fees and expenses of more than one counsel for the
Underwriters. The Company shall not be liable to indemnify any person
for any settlement of such claim effected without the Company's consent,
which shall not be unreasonably withheld. The Company will not, without
the prior written consent, which shall not be unreasonably withheld, of
each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not
such Underwriter or other indemnified party is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
(i) includes an unconditional release of such Underwriter and each such
other indemnified person or persons from all liability arising out of such
claim, action, suit or proceeding, and (ii) does not include a statement
as to or as admission of fault, culpability or a failure to act by or on
behalf of any indemnified party. The Company agrees that a breach of the
preceding sentence shall cause irreparable harm to the Underwriters and
that the Underwriters shall be entitled to injunctive relief from any
appropriate court ordering specific performance of said provision. This
indemnity agreement will be in addition to any liability which the Company
might otherwise have.
(b) Each Selling Securityholder, severally and not jointly, agrees
to indemnify and hold harmless each Underwriter, each employee, officer,
partner, director and agent of the Underwriter and each person, if any,
who controls such Underwriter with the meaning of the Act, against any
losses, claims, damages, liabilities or expenses (including, except as
otherwise provided below, the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, as incurred, which may be based
upon the Act, or any other statute or at common law, arising out of any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) of the Rules and Regulations, if applicable, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company by such Underwriter,
directly or through the Representatives, specifically for use in the
preparation thereof; provided, however, that such Selling Securityholder
shall not be liable with respect to any claims made against any
Underwriter or any such employee, officer, partner, director or agent or
any
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such controlling person under this subsection unless such
Underwriter, or employee, officer, partner, director or agent or
controlling person shall have notified such Selling Securityholder in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Underwriter or employee or agent or controlling person
(such notification by an Underwriter shall suffice as notification on
behalf of its officers, partners, directors, employees, agents or
controlling persons), but failure to notify such Selling Securityholder
of such claims shall not relieve such Selling Securityholder from any
liability which such Selling Securityholder may have to such Underwriter
or employee or agent or controlling person otherwise than on account of
its indemnity agreement contained in this Section 6(b); and provided,
further, that each Selling Securityholder shall only be liable under this
paragraph for that proportion of any such losses, claims, damages,
liabilities or expenses which the number of shares of the Stock set forth
opposite such selling Securityholder's name in Schedule B and Schedule C
hereto bears to the total number of shares of Stock sold hereunder and in
no event shall such liability exceed the net proceeds received by such
Selling Securityholder from the sale of the Stock hereunder.
Such Selling Securityholder shall be entitled to participate at his
own expense in the defense, or, if he so elects, to assume the defense of
any suit brought to enforce any such liability, but, if such Selling
Securityholder elects to assume the defense, such defense shall be
conducted by counsel chosen by such Selling Securityholder and reasonably
satisfactory to such Underwriter or indemnified person, as the case may
be. In the event that any Selling Securityholder elects to assume the
defense of any such suit and retain such counsel, the Underwriter or
Underwriters or other indemnified person or persons, defendant or
defendants in the suit, may retain additional counsel but shall bear the
fees and expenses of such counsel unless (i) such Selling Securityholder
shall have specifically authorized the retaining of such counsel or (ii)
the parties to such suit include such Underwriter or Underwriters or
other indemnified person or persons and such Selling Securityholder and
such Underwriter or Underwriters or other indemnified person or persons
have been advised by counsel that one or more legal defenses may be
available to it or them which may not be available to such Selling
Securityholder, in which case such Selling Securityholder shall not be
entitled to assume the defense of such suit notwithstanding its obligation
to bear the fees and expenses of such counsel, provided the Selling
Securityholder shall not be responsible for the fees and expenses of more
than one such counsel. The Selling Securityholder against whom indemnity
may be sought shall not be liable to indemnify any person for any
settlement of such claim effected without such Selling Securityholder's
consent which shall not be unreasonably withheld. This indemnity
agreement will be in addition to any liability which such Selling
Securityholder might otherwise have.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed
the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act and each Selling Securityholder and
each person, if any, who controls a Selling Securityholder within the
meaning of the Act, against any losses, claims, damages, liabilities or
expenses (including the reasonable cost of investigating and defending
against any claims therefor and reasonable counsel fees incurred in
connection therewith), joint or several, which may be based upon the Act,
or any other statute or at common law, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) of the Rules and Regulations, if applicable, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only
insofar as any such statement or omission was made in reliance upon, and
in conformity with, written information furnished to the Company by such
Underwriter, directly or through the Representatives, specifically for
use in the preparation thereof;
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provided, however, that in no case is such Underwriter to be liable with
respect to any claims made against the Company or any person against whom
the action is brought unless the Company or such person shall have
notified such Underwriter in writing within a reasonable time after the
summons or other first legal process giving information of the nature of
the claim shall have been served upon the Company or such person, but
failure to notify such Underwriter of such claim shall not relieve it from
any liability which it may have to the Company or such person otherwise
than on account of its indemnity agreement contained in this paragraph.
Such Underwriter shall be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if such Underwriter elects to
assume the defense, such defense shall be conducted by counsel chosen by
it and reasonably satisfactory to the Company or such person, as the case
may be. In the event that any Underwriter elects to assume the defense
of any such suit and retain such counsel, the Company, said employees,
agents, officers and directors and any other Underwriter or Underwriters
or employee or employees or agent or agents or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, provided the
Underwriters shall not be responsible for the fees and expenses of more
than one such counsel. The Underwriter against whom indemnity may be
sought shall not be liable to indemnify any person for any settlement of
any such claim effected without such Underwriter's consent which shall
not be unreasonably withheld. This indemnity agreement will be in
addition to any liability which such Underwriter might otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) or (c) above in respect of any losses, claims,
damages, liabilities or expenses (or actions in respect thereof) referred
to herein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Securityholders on the one hand
and the Underwriters on the other from the offering of the Stock. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Selling
Securityholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Securityholders on the
one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the
Selling Securityholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling
Securityholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the shares of the Stock
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
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otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. Further, notwithstanding the
provisions of this subsection, no Selling Securityholder shall be required
to contribute any amount that, together with the amount of any damages
which such Selling Securityholder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, exceeds the limit of such Selling Securityholder's liability
prescribed by subsection (b) of this Section 6. 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 are several in proportion to their respective underwriting
obligations and not joint.
7. Survival of Indemnities, Representations, Warranties, etc. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, the Selling Securityholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter, the Selling
Securityholders, the Company or any of its officers or directors or any
controlling person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective obligations of
the several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof, the Representation
Date and the Closing Date or the Option Closing Date, as the case may be, of
the representations and warranties made herein by the Company and the Selling
Securityholders, to the accuracy of the statements of the Company's officers or
directors in any certificate furnished pursuant to the provisions hereof, to
compliance at and as of such Closing Date by the Company and the Selling
Securityholders with their covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to such Closing Date, and to the
following additional conditions:
(a) The Registration Statement shall become effective not later than
3:00 p.m., New York City time, on the date hereof or, with the consent of
the Representatives, at a later time and date, not later, however, than
5:30 p.m., New York City time on the first business day following the date
hereof, or at such later date as may be approved by a majority in interest
of the Underwriters, and at such Closing Date (i) no stop order suspending
the effectiveness thereof shall have been issued and no proceedings for
that purpose shall have been initiated or, to the knowledge of the Company
or the Representatives, threatened by the Commission, and any request for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives, and
(ii) there shall not have come to the attention of the Representatives any
facts that would cause them to believe that the Prospectus, at the time it
was required to be delivered to a purchaser of the Stock, contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
has elected to rely upon Rule 430A of the Rules and Regulations, the price
of the Stock and any price related information previously omitted from the
effective Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the
Rules and Regulations within the prescribed time period, and before the
Closing Date the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules
and Regulations.
(b) At the time of execution of this Agreement, the Representatives
shall have received from Coopers & Lybrand L.L.P. a letter, dated the
date of such execution, in form and substance previously approved by the
Representatives, and to the effect that:
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(i) They are independent certified public accountants with
respect to the Company and its subsidiaries and PA Contractors
within the meaning of the Act and the Rules and Regulations;
(ii) In their opinion, the consolidated financial statements
and supporting schedules audited by them and included in the
Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations thereunder;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years
included in the Prospectus agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for the five such fiscal years; and
(iv) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited consolidated interim
financial statements of the Company as included in the Registration
Statement and the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries
and PA Contractors, inspection of the minute books of the Company
and its subsidiaries and PA Contractors since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company
and its subsidiaries and PA Contractors responsible for financial
and accounting matters and such other inquiries and procedures as
may be specified in such letter, they have made the following
inquiries of certain officials of the Company:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus (I) are in conformity
with generally accepted accounting principles applied in a
basis substantially consistent with that of the audited
financial statements included in the Prospectus, and (II) and
comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations thereunder;
(B) as of a specified date not more than five days prior
to the date of such letter, there has been no change in the
consolidated capital stock of the Company (other than
issuances of capital stock upon exercise of options, and upon
conversions of convertible securities, in each case which
were outstanding on the date of the latest balance sheet
included in the Prospectus) or no increase in the
consolidated long-term debt of the Company and consolidated
subsidiaries and PA Contractors, any decrease in the
consolidated net current assets and stockholders' equity or
any change in any other items specified by the
Representatives, in each case as compared with amounts shown
in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(C) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (B) there was no decrease in
consolidated net patient service revenues or the total or per
share amounts of consolidated net income or other items
specified by the Representatives, or no increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by
the Representatives, except in each case for increases or
decreases
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which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(v) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting
records of the Company and its subsidiaries and PA Contractors,
which appear in the Prospectus or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the
Representatives and have compared certain of such amounts,
percentages and financial information with the accounting records
of the Company and its subsidiaries and PA Contractors and have
found them to be in agreement; and
(vi) In addition, they have carried out certain specified
procedures, not constituting an examination in accordance with
generally accepted auditing standards with respect to the pro forma
condensed consolidated financial statements including reading of
the unaudited pro forma condensed consolidated financial statements
included in the Registration Statement and the Prospectus, carrying
out certain specified procedures and inquiries of certain officials
of the Company and its consolidated subsidiaries and PA Contractors
who have responsibility for financial and accounting matters as to
whether all significant assumptions regarding the business
combination have been reflected in the pro forma adjustments and
whether the unaudited pro forma condensed consolidated financial
statements comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulations S-X
and proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the unaudited pro
forma condensed consolidated financial statements.
(c) The Representatives shall have received from Coopers & Lybrand,
L.L.P. a letter, dated the Closing Date, to the effect that such
accountants reaffirm, as of such Closing Date, and as though made on such
Closing Date, the statements made in the letter furnished by such
accountants pursuant to paragraph (b) of this Section 8, except that the
specified date will be a date not more than five business days prior to
the Closing Date.
(d) The Representatives shall have received from Greenberg, Traurig,
Hoffman, Lipoff Rosen & Quentel, counsel for the Company, an opinion
dated the Closing Date, to the effect that:
(i) The Company (a) has been incorporated under the Florida
Business Corporation Act (the "FBCA") and its status is active; (b)
was organized under the FBCA; and (c) has the corporate power to
conduct its business as described in the Prospectus. To our best
knowledge, the Company is in possession of and is operating in
compliance with all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders required for
the conduct of its business (collectively, the "Permits"), except
for such Permits the failure to so possess or comply with would,
not singly or in the aggregate, have a Material Adverse Effect; and
the Company is duly qualified as a foreign corporation in good
standing in all other jurisdictions where its ownership or leasing
of properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not,
singly or in the aggregate, have a Material Adverse Effect.
(ii) We have reviewed (i) the contractual relationships (a)
between the Company and its PA Contractors ("Management Services
Contracts") and (b) between the Company and certain hospitals and
between the PA Contractors and certain hospitals (collectively,
"Hospital
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Contracts") and (ii) the federal and state health care
laws and regulations in the jurisdictions in which the Company or
the PA Contractors are doing business that are applicable to such
relationships, including but not limited to those laws governing
the corporate practice of medicine, medical practices, professional
corporations, fee splitting, fraud and abuse and self-referral. We
are of the opinion as of the date hereof, that the Management
Services Contracts and the Hospital Contracts do not violate any
such federal or state law or present regulation in any jurisdiction
in which the Company or a PA Contractor is doing business, except
where such violation would not, singly or in the aggregate, have a
Material Adverse Effect.
(iii) The Company has authorized, and to the best knowledge of
such counsel, outstanding capital stock as set forth under the
heading "Capitalization" in the Prospectus; all outstanding shares
of Common Stock (including the shares of Firm Stock of Optional
Stock delivered on the date hereof) conform in all material
respects to the description thereof in the Prospectus and have been
duly authorized and validly issued and are fully paid and
nonassessable, and the stockholders of the Company have no
statutory preemptive rights or, to the best knowledge of such
counsel, similar rights with respect to any shares of capital stock
of the Company.
(iv) Except as disclosed in the Prospectus, to the best of
such counsel's knowledge, there are no legal or governmental
proceedings pending other than those set forth under the heading
"Business -- Proceedings" in the Prospectus to which the Company or
any of its subsidiaries or PA Contractors is a party or of which
any property of the Company or any subsidiary or PA Contractor is
the subject, which individually or in the aggregate, if adversely
determined, would have a Material Adverse Effect; and to the best
of such counsel's knowledge no such proceedings are threatened by
governmental authorities or others.
(v) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Company; and the
performance of this Agreement and the Pricing Agreement and the
consummation of the transactions herein and therein contemplated
will not result in a breach or violation of any of the terms or
provisions of or constitute a default under any Federal or Florida
statute, indenture, mortgage, deed of trust, loan agreement, note,
lease or other material agreement or instrument known to such
counsel to which the Company is a party or by which it is bound,
the Company's articles of incorporation or by-laws, or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties (except any state securities or "Blue Sky"
rules or regulations, as to which we render no opinion).
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement and
the Pricing Agreement, except such as may be required under the Act
or as may be required under the securities or Blue Sky laws of any
jurisdiction or by the NASD in connection with the purchase and
distribution of the Stock by the Underwriters.
(vii) The Registration Statement has become effective under
the Act, and to the best of the knowledge of such counsel, no stop
order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
(viii) The Common Stock has been approved for listing on the
Nasdaq National Market System. The Registration Statement on Form
8-A relating to the Common Stock has become effective under the
Securities Exchange Act of 1934, as amended.
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(ix) The Registration Statement and the Prospectus (other than
the financial statements and supporting schedules included therein,
as to which no opinions need be rendered), and each amendment or
supplement thereto, as of their respective effective or issue dates
and as of the Closing Date complied as to form in all materials
respects with the requirements of the Act and the Rules and
Regulations.
(x) The descriptions in the Registration Statement and
Prospectus of contracts and other documents are accurate in all
material respects and such descriptions fairly present in all
material respects the information required to be show; and such
counsel does not know of any legal or governmental proceedings or
of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus to be filed
as exhibits to the Registration Statement or Prospectus which are
not described and filed as required.
(xi) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended.
(xii) To such counsel's knowledge, the Registration Statement
(other than the financial statements and supporting schedules
included therein, as to which no opinions need be rendered), at the
time it became effective or at the Representation Date, did not
contain any untrue statement of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus which as been
provided to the Underwriters by the Company for use in connection
with the offering of the Stock which differs from the prospectus on
file at the Commission at the time the Registration Statement
became effective, in which case at the time it was first provided
to the Underwriters for such use) or at the Closing Date, included
any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(xiii) The subsidiaries of the Company (the "Subsidiaries")
and the PA Contractors, each (a) has been incorporated or organized
under the laws of its respective jurisdiction of incorporation or
organization and its status is active, (b) was organized under such
laws and (c) has corporate power to conduct its respective
businesses as described in the Prospectus, and each of such
Subsidiaries and PA Contractors are duly qualified as foreign
corporations, partnerships or professional corporations in good
standing in all other jurisdictions where their ownership or
leasing of properties or the conduct of their businesses requires
such qualification, except where the failure to be so qualified
would not singly or in the aggregate have a Material Adverse Effect.
(xiv) All outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and to such counsel's knowledge, are
owned by the Company free and clear of any liens, encumbrances,
equities and claims.
(e) The Representatives shall have received from (a) Hutchins,
Wheeler & Dittmar, counsel for Summit Partners and (b) Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel, counsel for the Selling
Securityholders other than Summit Partners, opinions dated the Closing
Date to the effect that:
(i) Each Selling Securityholder has full right, power and
authority to enter into this Agreement, the Pricing Agreement and
the Custody Agreement. Each Selling Securityholder has duly
executed and delivered this Agreement and the Pricing Agreement.
The Custody Agreement has been duly executed and delivered on
behalf of each Selling Securityholder and constitutes the valid and
binding agreement of such Selling Securityholder
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enforceable against such Selling Securityholder in accordance with
its terms subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws
affecting the enforcement of creditors' rights generally and to
equitable principles.
(ii) Each Selling Securityholder has full right, power and
authority to sell, transfer, assign and deliver the Stock being
sold by such Selling Securityholder hereunder. Immediately prior
to the delivery of the shares of Stock being sold by such Selling
Securityholder, such Selling Securityholder was the sole registered
owner of such shares of Stock and, upon registration of such shares
of Stock in the names of the Underwriters or their nominees,
assuming that such purchasers purchased such shares of Stock in
good faith without notice of any adverse claims as defined in
Section 8-302 of the Uniform Commercial Code, such purchasers will
have acquired all the rights of such Selling Securityholder in such
shares of Stock free of any adverse claim, or to the best of such
counsel's knowledge, any lien in favor of the Company or
restrictions on transfer imposed by the Company.
(iii) The performance of this Agreement, the Pricing Agreement
and the Custody Agreement and the consummation of the transactions
herein and therein contemplated will not, with the giving of notice
of passage of time or both, result in a breach or violation of any
of the terms or provisions of or constitute a default under any
statute, rule or regulation applicable to any Selling
Securityholder, or, to the best of such counsel's knowledge, any
indenture, mortgage, deed of trust, note agreement or other
material agreement or instrument to which any Selling
Securityholder is a party or by which it is bound, or any judgment,
order or decree known to such counsel after due inquiry of any
court or governmental agency or body having jurisdiction over the
Selling Securityholder or any of their properties (except any state
securities or "Blue Sky" rules or regulations, as to which we
render no opinion) or, (a) if the Selling Securityholder is a
corporation, the certificate or articles of incorporation and
by-laws of the Selling Securityholder or (b) if the Selling
Securityholder is a partnership, the partnership agreement or
certificate of limited partnership of the Selling Securityholder.
(iv) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
any of the Selling Securityholders of the transactions contemplated
by this Agreement and the Pricing Agreement.
(v) Any transfer taxes which are required to be paid in
connection with the sale and delivery of the Stock to the
Underwriters hereunder have been paid and all laws imposing such
taxes have been fully complied with.
(f) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, their opinion or opinions dated the Closing
Date with respect to the validity of the Stock, the Registration
Statement, the Prospectus and such other related matters as the
Representatives may require. In giving such opinion, such counsel may
rely, as to all matters governed by the laws of jurisdictions other than
the law of the State of New York and the federal law of the United
States, upon opinions of counsel satisfactory to the Representatives.
The Company and the Selling Securityholders shall have furnished to such
counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated
such Closing Date, of the Chief Executive Officer or the President and
the chief financial or accounting officer on behalf of the Company to
the effect that: (i) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act; (ii) subsequent to the respective dates as of which information is
given in the Prospectus and except as contemplated in the Prospectus,
neither the Company nor any of its subsidiaries or PA Contractors has
incurred any liabilities or obligations, direct or contingent, nor
entered into any transactions, not in the ordinary course of business,
which in either case are material to the Company and its subsidiaries and
PA Contractors considered as a whole, whether or not arising in the
ordinary course of business, and there has not been any material adverse
change in the condition (financial or otherwise), business, prospects or
results of operations of the Company and its subsidiaries and PA
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Contractors considered as a whole, or any change in the capital stock or
long-term debt of the Company and its subsidiaries and PA Contractors
considered as a whole; (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at
or before the Closing Date; (iv) the representations and warranties of
the Company in this Agreement are true and correct at and as of the
Closing Date; and (v) between the execution of this Agreement and the
Closing Date, the business operations conducted by the Company and its
subsidiaries and PA Contractors have not sustained a loss by strike,
fire, flood, accident or other calamity (whether or not insured) of such
a character as to interfere materially with the conduct of the business
and operations of the Company and its subsidiaries considered as a whole.
As used in this Section 8(g), the term "Prospectus" means the Prospectus
in the form first used to confirm sales of Stock.
(h) The Representatives shall have received a certificate or
certificates, dated such Closing Date, by or on behalf of each of the
Selling Securityholders to the effect that as of the Closing Date its
representations and warranties in this Agreement are true and correct as
if made on and as of the Closing Date, and that it has performed all its
obligations and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date.
(i) The Company and each of the Selling Securityholders shall have
furnished to the Representatives such additional certificates as the
Representatives may have reasonably requested as to the accuracy, at and
as of the Closing Date, of the representations and warranties made herein
by them as to compliance at and as of the Closing Date by it with their
covenants and agreements herein contained and other provisions hereof to
be satisfied at or prior to the Closing Date and as to other conditions
to the obligations of the Underwriters hereunder.
(j) The Stock shall have been approved for listing on Nasdaq
National Market System.
(k) In the event the Underwriters exercise the option granted in
Section 3 hereof to purchase all or any portion of the Optional Shares,
the representations and warranties of the Company and the Selling
Shareholders contained herein and the statements in any certificates
furnished by the Company hereunder shall be true and correct as of the
Option Closing Date, and you shall have received:
(i) A letter from Coopers & Lybrand L.L.P. in form and
substance satisfactory to you and dated the Option Closing Date,
substantially the same in scope and substance as the letter
furnished to you pursuant to Section 8(b), except that the
specified date in the letter furnished pursuant to this Section
8(k) shall be a date not more than five days prior to the Option
Closing Date.
(ii) A certificate, dated the Option Closing Date, of the
Chief Executive Officer or President and the chief financial or
accounting officer of the Company confirming that the certificate
delivered at the First Closing Date pursuant to Section 8(g)
remains true as of the Option Closing Date.
(iii) A certificate, dated the Option Closing Date, of the
Selling Shareholders confirming that the certificates delivered at
the First Closing Date pursuant to Section 8(h) remain true as of
the Option Closing Date.
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(iv) The opinion of Greenberg, Traurig, Hoffman, Lipoff Rosen
& Quentel, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated the Option
Closing Date, relating to the Optional Stock and otherwise to the
same effect as the opinion required by Section 8(d).
(v) The opinions of (a) Hutchins, Wheeler & Dittmar, counsel
for Summit Partners and (b) Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, counsel for the Selling Securityholders other than
Summit Partners, in form and substance satisfactory to counsel for
the Underwriters, dated the Option Closing Date, to the same effect
as the opinions required by Section 8(e).
(vi) The opinion of Latham & Watkins, counsel for the
Underwriters, dated the Option Closing Date, relating to the
Optional Stock and otherwise to the same effect as the opinion
required by Section 8(f).
If any of the conditions hereinabove provided for in this Section shall
not have been satisfied when and as required by this Agreement, this Agreement
may be terminated by the Representatives by notifying the Company of such
termination in writing or by telegram at or prior to the First Closing Date,
but the Representatives shall be entitled to waive any of such conditions.
9. Termination. This Agreement may be terminated by the Representatives
by notice to the Company and the Attorney-in-Fact for the Selling
Securityholders if at or prior to the First Closing Date or the Option Closing
Date, as the case may be, (i) trading in securities on the Nasdaq National
Market System shall have been suspended or minimum or maximum prices shall have
been established on such system, or a banking moratorium shall have been
declared by New York or United States authorities; (ii) there shall have been
any adverse change in the financial markets in the United States, Japan or
Europe or any outbreak or escalation of hostilities between the United States
and any foreign power, or of any other insurrection or armed conflict involving
the United States that, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer, sell or deliver the Firm Stock or the
Optional Stock as applicable, on the terms contemplated by the Prospectus or
this Agreement; (iii) there shall have been since the execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus any material adverse change in the condition (financial or
otherwise), or business, prospects or results of operations of the Company and
its subsidiaries and PA Contractors considered as a whole; (iv) there shall
have been any material adverse development involving the business or properties
or securities of the Company or any of its subsidiaries or PA Contractors or
the transactions contemplated by this Agreement, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer, sell or
deliver the Firm Stock or Option Stock, as applicable, on the terms
contemplated by the Prospectus or this Agreement; or (v) if there shall be any
litigation, pending or threatened, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver the
Firm Stock or the Optional Stock, as applicable, on the terms contemplated by
the Prospectus or this Agreement. As used in this Section 9, the term
"Prospectus" means the Prospectus in the form first used to confirm sales of
stock.
10. Reimbursement of Underwriters. Notwithstanding any other provisions
hereof, if this Agreement shall be terminated by the Representatives under
Section 8, Sections 9(iii), (iv) or (v) or Section 12, the Company will bear
and pay the expenses specified in Section 5 hereof and, in addition to its
obligation pursuant to Section 6, hereof, the Company will reimburse the
reasonable out-of-pocket expense of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives. In addition, the provisions of Section 6 shall survive any
such termination.
11. Default by Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder on
the First Closing Date or the Option Closing Date and the aggregate number of
shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does
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not exceed 10% of the total number of shares which the Underwriters are
obligated to purchase on such Closing Date, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than 10% of the total number of shares underwritten and arrangements
satisfactory to the Representatives and the Company and the Selling Shareholders
for the purchase of such shares by other persons are not made within 48 hours
after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or a part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 11, (i) the Company and
the Selling Shareholders shall have the right to postpone the First Closing
Date for a period of not more than five full business days, in order that the
Company and the Selling Shareholders may effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter
of its liability to the Company, the Selling Shareholders or the other
Underwriters for damages occasioned by its default hereunder. Any termination
of this Agreement pursuant to this Section 11 shall be without liability on the
part of any non-defaulting Underwriter, the Selling Shareholders or the
Company, except for expenses to be paid or reimbursed pursuant to Section 5 and
except for the provisions of Section 6.
12. Default By Selling Securityholders or the Company. If one or more of
the Selling Securityholders shall fail at the First Closing Date to sell and
deliver the number of shares of Firm Stock which such Selling Securityholders
are obligated to sell hereunder, and the remaining Selling Securityholders do
not exercise the right hereby granted to increase, pro rata or otherwise, the
number of shares of Stock to be sold by them hereunder to the total number to
be sold by all Selling Securityholders as set forth in Schedule B, then the
Underwriters may at the option of the Representatives, by notice from the
Representatives to the Company and the non-defaulting Selling Securityholders,
either (a) terminate this Agreement without any liability on the part of any
non-defaulting party or (b) elect to purchase the shares of Stock which this
Company and the non-defaulting Selling Securityholders have agreed to sell
hereunder; provided, however, that the Underwriters may not terminate this
Agreement pursuant to clause (a) of this Section if the number of shares of
Stock involved in that default does not exceed 10% of the total number of
shares of Firm Stock.
In the event of a default by any Selling Securityholders pursuant to this
Section, either the Representatives or the Company or the non-defaulting
Selling Securityholders shall have the right to postpone the First Closing Date
for a period not exceeding five full business days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
document or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver
the number of shares of Stock which it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the Company or any
Selling Securityholders so defaulting from liability, if any, in respect of
such default.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Dean Witter Reynolds Inc. at Two
World Trade Center, 65th Floor, New York, New York 10048, except that notices
given to an Underwriter pursuant to Section 6 hereof shall be sent to such
Underwriter at the address furnished by the Representative(s) or, if sent to
the Company or any of the Selling Securityholders, shall be mailed, delivered
or telegraphed and
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confirmed c/o Pediatrix Medical Group, Inc. at 1455 Northpark Drive, Ft.
Lauderdale, Florida 33326; Attention: Roger Medel.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and the Selling
Securityholders and their respective successors and legal representatives.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person other than the persons mentioned in the preceding
sentence any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person;
except that the representations, warranties, covenants, agreements and
indemnities of the Company and the Selling Securityholders contained in this
Agreement shall also be for the benefit of the person or persons, if any, who
control any Underwriter or Underwriters within the meaning of Section 15 of the
Act, and the indemnities of the several Underwriters shall also be for the
benefit of each director of the Company, each of its officers who has signed
the Registration Statement and the person or persons, if any, who control the
Company or any Selling Securityholder within the meaning of Section 15 of the
Act.
15. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS. The Company and the Selling Securityholders hereby
consent to personal jurisdiction in the State of New York and voluntarily
submit to the jurisdiction of the courts of such state, including the federal
district courts located in such state, in any proceeding with respect to this
Agreement.
16. Counterparts. This Agreement may be executed by one or more parties
hereto in any number of counterparts each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
17. Authority of the Representatives. In connection with this Agreement,
the Representatives will act for and on behalf of the several Underwriters, and
any action taken under this Agreement by the Representatives jointly or by Dean
Witter Reynolds Inc., as representatives of the several Underwriters, will be
binding on all the Underwriters; and any action taken under this Agreement by
any of the Attorneys-in-fact will be binding on all the Selling
Securityholders.
Any person executing and delivering this Agreement as Attorney-in-fact for
a Selling Securityholder represents by so doing that he has been duly appointed
as Attorney-in-fact by such Selling Securityholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-fact
to take such action.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
PEDIATRIX MEDICAL GROUP, INC.
By:
-------------------------------------------
Roger J. Medel
President and Chief Executive Officer
SELLING SECURITYHOLDERS LISTED IN
SCHEDULES B AND C
By:
-------------------------------------------
Roger J. Medel
Attorney-in-fact
By:
-------------------------------------------
Cathy J. Lerman
Attorney-in-fact
Acting on their own behalf and on behalf of
the Selling Securityholders listed in
Schedules B and C.
Accepted and delivered on and
as of the date first above written:
DEAN WITTER REYNOLDS INC.
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
HAMBRECHT & QUIST LLC
SMITH BARNEY INC.
Acting on their own behalf and as
Representatives of the several Underwriters
referred to in the foregoing Agreement.
By DEAN WITTER REYNOLDS INC.
By:
-----------------------------------
Authorized Signature
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SCHEDULE A
NUMBER OF
SHARES OF
COMMON
NAME STOCK TO BE
PURCHASED
- ----- -----------
Dean Witter Reynolds Inc.
Alex. Brown & Sons Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Hambrecht & Quist LLC
Smith Barney Inc.
---------
TOTAL............................................. 5,000,000
=========
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<Captio>
SCHEDULE B
SELLING SECURITYHOLDER
NUMBER OF
SHARES OF
COMMON STOCK TO
BE
SOLD
---------
Summit Investors II, L.P............................................................. 1,500,000
Summit Ventures III, L.P.............................................................
K. Steven Haskins, M.D............................................................... 300,000
Stefan R. Maxwell, M.D............................................................... 300,000
Gregory Melnick, M.D................................................................. 300,000
______________ Melnick...............................................................
Brian D. Udell, M.D.................................................................. 300,000
Carlos A. Perez, M.D................................................................. 300,000
Roger Medel, M.D..................................................................... 500,000
---------
3,500,000
Total............................................................... =========
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SCHEDULE C
NUMBER OF
SHARES OF
OPTION STOCK TO
OPTION SELLING SHAREHOLDERS BE SOLD
- ---------------------------- -----------------
Summit Investors II, L.P.... 500,000
Roger Medel, M.D............ 250,000
-------
TOTAL....................... 750,000
=======
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SCHEDULE D
SHAREHOLDER LOCKUP AGREEMENTS
Summit Investors II, L.P.
Summit Ventures III, L.P.
Roger J. Medel
Virginia B. Turnier
K. Steven Haskins
Stefan R. Maxwell
Gregory Melnick
_______ Melnick
Carlos A. Perez
Richard J. Stull
Lawrence M. Mullen
Cathy J. Lerman
Brian D. Udell
Fredrick V. Miller
E. Roe Stamps
Bruce R. Evans
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5,000,000 SHARES
PEDIATRIX MEDICAL GROUP, INC.
COMMON STOCK
PRICING AGREEMENT
July __, 1996
DEAN WITTER REYNOLDS INC.
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
HAMBRECHT & QUIST LLC
SMITH BARNEY INC.
As Representatives of the several Underwriters
c/o Dean Witter Reynolds Inc.
2 World Trade Center
65th Floor
New York, New York 10048
Dear Sirs:
Reference is made to the Underwriting Agreement, dated July __, 1996 (the
"Underwriting Agreement"), relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom Dean Witter Reynolds Inc., Alex. Brown &
Sons Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation,
Hambrecht & Quist LLC and Smith Barney Inc. are acting as representatives (the
"Representatives"), of the above shares of Common Stock (the "Common Stock") of
Pediatrix Medical Group, Inc. ("Company").
Pursuant to Section 3 of the Underwriting Agreement, the Company and each
Selling Securityholder agree with each Underwriter as follows:
1. The initial public offering price per share for the Stock, determined
as provided in Section 3, shall be $_____.
2. The purchase price per share for the Stock to be paid by the several
Underwriters shall be $_____ (the "Purchase Price").
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart thereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters, the Selling Securityholders and the Company
in accordance with its terms.
Very truly yours,
PEDIATRIX MEDICAL GROUP, INC.
By:
------------------------------------
Roger J. Medel
President and Chief Executive Officer
SELLING SECURITYHOLDERS LISTED IN
SCHEDULES B AND C
By:
------------------------------------
Roger J. Medel
Attorney-in-fact
By:
------------------------------------
Cathy J. Lerman
Attorney-in-fact
Acting on their own behalf and on behalf
of the Selling Securityholders listed in
Schedules B and C.
Accepted and delivered on and
as of the date first above written:
DEAN WITTER REYNOLDS INC.
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
HAMBRECHT & QUIST LLC
SMITH BARNEY INC.
Acting on their own behalf and as
Representatives of the several Underwriters
referred to in the foregoing Agreement.
By DEAN WITTER REYNOLDS INC.
By:
------------------------------
Authorized Signature
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