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FORM OF UNDERWRITING AGREEMENT
INTENSIVA HEALTHCARE CORPORATION
2,500,000 Shares *
Common Stock
, 1996
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▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
▇▇▇▇▇▇▇ & COMPANY, INC.
as Representatives of the Several Underwriters
▇/▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Intensiva HealthCare Corporation, a Delaware corporation (herein called
the Company), proposes to issue and sell 2,500,000 shares (said shares being
herein called the Underwritten Stock) of its authorized but unissued Common
Stock, $0.001 par value per share (herein called the Common Stock). The Company
proposes to grant to the Underwriters (as hereinafter defined) an option to
purchase up to 375,000 additional shares of Common Stock (herein called the
Option Stock and with the Underwritten Stock herein collectively called the
Stock). The Common Stock is more fully described in the Registration Statement
and the Prospectus hereinafter described.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the Underwriters, which
term shall also include any underwriter purchasing Stock pursuant to Section
4(b) hereof). You represent and warrant that you have been authorized by each
of the other Underwriters to enter into this Agreement on its behalf and to act
for it in the manner herein provided.
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* Plus an option to purchase from the Company up to 375,000 additional
shares to cover over-allotments.
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1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-1 (No. 333-08899), including the related preliminary prospectus, for the
registration of the Stock under the Securities Act of 1933, as amended (herein
called the Securities Act). Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus
(meeting the requirements of Rule 430A of the rules and regulations of the
Commission) heretofore filed by the Company with the Commission have been
delivered to you. The term Registration Statement as used in this Agreement
shall mean such registration statement, including all exhibits and financial
statements and all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, in the form in which it became
effective, and any registration statement increasing the size of the offering
filed pursuant to Rule 462(b) of the rules and regulations of the Commission
with respect to the Stock (herein called a Rule 462(b) Registration Statement),
and, in the event of any amendment thereto after the effective date of such
registration statement (herein called the Effective Date), the term
Registration Statement shall also mean (from and after the effectiveness of
such amendment) such registration statement as so amended (including any Rule
462(b) Registration Statement). The term Prospectus as used in this Agreement
shall mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A or (if no such filing is required) as
included in the Registration Statement, and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from
and after the filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used in this Agreement shall mean each
preliminary prospectus included in such registration statement prior to the
time it becomes effective.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Underwriters as follows:
(a) The Registration Statement, in the form delivered to you, has been
declared effective under the Securities Act, and other than a 462(b)
Registration Statement, if any, no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. No stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been initiated or, to the knowledge of the
Company, threatened by the Commission. The Company has caused to be delivered
to you copies of the Registration Statement and each Preliminary Prospectus and
has consented to the use of such copies for the purposes permitted by the
Securities Act.
(b) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21.1 of the Registration Statement. The Company and each of its
subsidiaries have been duly incorporated and each is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement
and the
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Prospectus and as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted by it
makes qualification necessary (except where the failure to be so qualified
would not have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company and its subsidiaries, taken as a whole). The outstanding shares of
capital stock of each such subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable and are owned by the Company free and
clear of all liens, encumbrances and security interests; and no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
ownership interests in any such subsidiary are outstanding. The Company and
each of its subsidiaries has all requisite power and authority, and now hold,
and at the Closing Date (as defined in Section 6(a) hereof) will hold, all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses, certificates and permits of and from all federal,
state and other regulatory and governmental agencies and bodies necessary to
own, lease and operate their properties and conduct their business, taken as a
whole, as now being conducted as described in the Registration Statement and
the Prospectus (except where the failure to hold such consent, approval,
authorization, order, registration, qualification, license, certificate or
permit would not have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company and its subsidiaries, taken as a whole). No such consent, approval,
authorization, order, registration, qualification, license, certificate or
permit contain a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus. Neither the Company nor any of
its subsidiaries has provided or provides monetary compensation to the medical
community in return for patient referrals in violation of any applicable law,
rule or regulation.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the business, properties, operations, financial condition or
results of operations or prospects of the Company and its subsidiaries taken as
a whole, whether or not arising from transactions in the ordinary course of
business, other than as set forth in the Registration Statement and the
Prospectus. Since such dates neither the Company nor any of its subsidiaries
has entered into any material transaction not referred to in the Registration
Statement and the Prospectus other than in the ordinary course of business.
(d) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, nor instituted
proceedings for that purpose. The Registration Statement and the Prospectus
comply, and on the Closing Date (as hereinafter defined) and any later date on
which Option Stock is to be purchased, the Registration Statement and the
Prospectus will comply, in all material respects, with the provisions of the
Securities Act and the rules and regulations of the Commission thereunder. On
the Effective Date and on the Closing Date and any later date on which Option
Stock may be purchased, neither the Registration Statement nor any amendment
thereto, and neither the Prospectus nor any supplements thereto, contains or
will contain any untrue statement of a
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material fact or omits or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which such statements were made, not misleading.
None of the representations and warranties in this subparagraph (d) shall apply
to statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of the Underwriters for use in the
Registration Statement or the Prospectus. There are no contracts or documents
of the Company or any of its subsidiaries which would be required by the
Securities Act or by the rules and regulations of the Commission to be filed as
exhibits to the Registration Statement which have not been so filed.
(e) The authorized, issued and outstanding capital stock of the Company
and the outstanding long-term debt of the Company and its subsidiaries is as
described in the Prospectus. All of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable, and conform to the description thereof contained in the
Prospectus. All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, security interests and claims whatsoever. The
Stock is duly and validly authorized and will be, when issued and sold to the
Underwriters as provided herein duly and validly issued, fully paid,
nonassessable, free of pre-emptive rights and conforms to the description
thereof in the Prospectus. There are no outstanding options, warrants or other
rights granted to or by the Company to purchase shares of Common Stock or other
securities of the Company other than as described in the Prospectus; and no
such option, warrant or other right has been granted to any person, the
exercise of which would cause such person to own more than five percent of the
Common Stock outstanding immediately after the offering other than as described
in the Prospectus. No Person or entity holds a right to require or participate
in the registration under the Securities Act of shares of Common Stock of the
Company which right has not been waived by the holder thereof as of the date
hereof with respect to the registration of shares pursuant to the Registration
Statement, and except as described in the Prospectus, no person holds a right
to require registration under the Securities Act of shares of Common Stock of
the Company at any other time. No person or entity has a right of participation
with respect to the sale of shares of the Stock by the Company. No further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Stock by the Company
as contemplated herein.
(f) The Company and its subsidiaries now hold, and at the Closing Date
(as defined in Section 6(a) hereof) will hold, all material licenses,
certificates and permits from state, federal and other regulatory authorities
which are necessary for the conduct of the business of the Company and its
subsidiaries, taken as a whole; neither the Company nor any of its subsidiaries
is in violation of its corporate charter or by-laws, or in default in the
performance or observance of any provision of any obligation, agreement,
covenant or condition contained in any bond, debenture or material contract,
lease, indenture, mortgage, loan agreement, joint venture or other agreement or
instrument to which the Company or such subsidiary is a party or by which it or
any of its properties is bound or is in violation of any
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law, order, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, including without
limitation, all applicable local, stated and federal environmental regulations.
(g) Except as disclosed in the Prospectus, the Company and its
subsidiaries have all necessary trademarks, trade names, patent rights, mask
works, copyrights, licenses, approvals and governmental authorizations to
conduct their businesses as now conducted and as proposed to be conducted,
without any conflicts with the rights of others; and the Company has no
knowledge of any material infringement by the Company or its subsidiaries of
trademark, trade name rights, patent rights, mask works, copyrights, licenses,
trade secret or other similar rights of others, and there is no litigation or
other proceedings pending or threatened against the Company or its subsidiaries
regarding trademark, trade name, patent, mask work, copyright, license, trade
secret or other infringement which singly or in the aggregate could have a
material adverse effect on the condition (financial or otherwise), business,
results of operations or prospects of the Company and its subsidiaries, nor, to
the best of the Company's knowledge, is there any basis therefor.
(h) This Agreement has been duly authorized, executed and delivered by
the Company; the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (i) any
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the property of the Company or any of the subsidiaries is bound, (ii) the
corporate charter or by-laws of the Company or any of the subsidiaries or (iii)
(assuming the making of all filings required under Rule 424(b) or Rule 430A and
the due qualification of the Stock for public offering by the Underwriters
under state and foreign securities laws) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or over the properties of the Company.
(i) Except as set forth in the Prospectus, there is not any action,
suit or proceeding before any court or administrative agency, at law or in
equity, pending against the Company or any subsidiary or of which any property
of the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any subsidiary, would individually or in the
aggregate materially adversely affect the business, properties, operations,
financial condition, income or business prospects of the Company and the
subsidiaries, taken as a whole, or prevent consummation of the transactions
contemplated hereby; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(j) The consolidated financial statements of the Company and its
subsidiaries, together with the related notes and schedules as set forth in the
Registration Statement, present fairly the consolidated financial position and
the results of operations of the Company and its subsidiaries, at the indicated
dates and for the indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting
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principles consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such periods have
been made. The summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements presented
therein.
(k) The Company and its subsidiaries have filed all federal, state and
foreign income tax returns which have been required to be filed (or have filed
extensions therefor or obtained any required extensions in connection
therewith), and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith.
(l) Each approval, consent, order authorization, designation,
declaration or filing by or with any United States regulatory, administrative
or other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation by the Company
of the transactions herein contemplated (except (i) such additional steps as
may be required by the National Association of Securities Dealers, Inc. (the
"NASD"), (ii) as may be necessary to make the Registration Statement effective
(and to maintain such effectiveness) and to qualify the Stock for public
offering by the Underwriters under state and foreign securities laws or (iii)
filings required under Rule 424(b) or Rule 430(A)) has been obtained or made
and is in full force and effect.
(m) KPMG Peat Marwick LLP, who have certified the financial statements
of the Company and its subsidiaries filed with the Commission as part of the
Registration Statement, are independent public accountants as required by the
Securities Act and the rules and regulations of the Commission thereunder.
(n) The Company and the subsidiaries have good and marketable title or
leasehold title, as the case may be, to all of the properties and assets
reflected in the financial statements (or as described in the Registration
Statement) hereinabove described, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those reflected in such financial statements
(or as described in the Registration Statement) or which are not material in
amount.
(o) Neither the Company nor any of its subsidiaries is involved in any
material labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.
(p) The Company and each of its subsidiaries maintain insurance of the
types and in the amounts generally deemed adequate for their business,
including, but not limited to, medical malpractice insurance and insurance
covering real and personal property owned or leased by the Company or any of
its subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect.
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(q) The Company is not aware that (A) any executive officer, key
employee or significant group of employees of the Company or any of its
subsidiaries plans to terminate employment with the Company or any of its
subsidiaries or (B) any such executive officer or key employee is subject to
any non-competition, non-disclosure, confidentiality, employment, consulting or
similar agreement that would be violated by the present or proposed business
activities of the Company or any of its subsidiaries.
(r) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, are an accurate and complete description of such
terms in all material respects.
(s) The Company is not and, after giving effect to the offering and
sale of the Stock, will not be 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.
(t) The Company has filed a registration statement pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (hereinafter the
Exchange Act), to register the Stock, has filed an application to list the
Stock on the Nasdaq National Market, and has received notification that such
listing has been approved, subject to official notice of issuance and sale.
(u) Neither the Company nor its subsidiaries are engaged in the
practice of medicine. Neither the Company nor any of its subsidiaries exercises
any influence or control over the practice of medicine by the physicians
attending patients at the facilities of the Company or of its subsidiaries in
violation of any law, rule or regulation.
(v) Neither the Company nor any of its subsidiaries nor any employee or
agent of the Company or any physician has made any payment of funds of the
Company or any subsidiary of the Company or received or retained any funds in
violation of any law, rule or regulation, including laws and regulations
prohibiting fee-splitting or fees for the referral of patients.
(w) There are no material Medicare, Medicaid or other managed care
recoupment or recoupments of any third-party payor being sought, threatened,
requested or claimed against the Company or any of its subsidiaries.
(x) The Company and its subsidiaries conduct the business now operated
by them in the manner required pursuant to Federal law, including without
limitation 42 U.S.C. Section 1886(1)(B)(iv) of the Social Security Act, in
order to be exempt and to preserve their exemption as general long term care
hospitals.
3. [INTENTIONALLY OMITTED]
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4. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
2,500,000 shares of the Underwritten Stock to the several Underwriters, and
each of the Underwriters agrees to purchase from the Company the respective
aggregate number of shares of Underwritten Stock set forth opposite its name in
Schedule I. The price at which such shares of Underwritten Stock shall be sold
by the Company and purchased by the several Underwriters shall be
__________________ per share. The obligation of each Underwriter to the Company
shall be to purchase from the Company that number of shares of the Underwritten
Stock which represents the same proportion of the total number of shares of the
Underwritten Stock to be sold by the Company pursuant to this Agreement as the
number of shares of the Underwritten Stock set forth opposite the name of such
Underwriter in Schedule I hereto represents of the total number of shares of
the Underwritten Stock to be purchased by all Underwriters pursuant to this
Agreement, as adjusted by you in such manner as you deem advisable to avoid
fractional shares. In making this Agreement, each Underwriter is contracting
severally and not jointly; except as provided in paragraphs (b) and (c) of this
Section 4, the agreement of each Underwriter is to purchase only the respective
number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 9 or Section 10 hereof) to
purchase and pay for the number of shares of Stock agreed to be purchased by
such Underwriter or Underwriters, the Company shall immediately give notice
thereof to you, and the non-defaulting Underwriters shall have the right within
twenty-four (24) hours after the receipt by you of such notice to purchase, or
procure one or more other Underwriters to purchase, in such proportions as may
be agreed upon between you and such purchasing Underwriter or Underwriters and
upon the terms herein set forth, all or any part of the shares of Stock which
such defaulting Underwriter or Underwriters agreed to purchase. If the
non-defaulting Underwriters fail so to make such arrangements with respect to
all such shares, the number of shares of Stock that each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares
which the defaulting Underwriter or Underwriters agreed to purchase; provided,
however, that the non-defaulting Underwriters shall not be obligated to
purchase the shares which the defaulting Underwriter or Underwriters agreed to
purchase if the aggregate number of such shares of Stock exceeds 10% of the
total number of shares of Stock that all Underwriters agreed to purchase
hereunder. If the total number of shares of Stock that the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company shall have
the right, within twenty-four (24) hours next succeeding the 24-hour period
referred to above to make arrangements with other underwriters or purchasers
satisfactory to you for the purchase of such shares on the terms herein set
forth. In any such case, either you, or the Company, shall have the right to
postpone the Closing Date determined as provided in Section 6 hereof for not
more than seven business days after the
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date originally fixed as the Closing Date pursuant to said Section 6 in order
that any necessary changes in the Registration Statement, the Prospectus or any
other documents or arrangements may be made. If neither the non-defaulting
Underwriters nor the Company shall make arrangements within the 24-hour periods
stated above for the purchase of all the shares of Stock that the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph (b), and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 375,000 shares in the aggregate, of the Option Stock from
the Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said options may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the
thirtieth (30th) day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
shares of the Option Stock as to which the several Underwriters are exercising
the option(s). Delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made as provided in Section 6 hereof. The number of
shares of the Option Stock to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Stock to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Stock, as adjusted by you in such manner as you deem advisable to
avoid fractional shares.
5. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover
page and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus (insofar as such information relates to the
Underwriters) constitutes the only information furnished by the Underwriters to
the Company for inclusion in the Registration Statement, any Preliminary
Prospectus, and the Prospectus, and you on behalf of the respective
Underwriters represent and warrant to the Company that the statements made
therein are correct.
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6. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the options granted by Section 4(c) hereof shall have
been exercised not later than 7:00 a.m., San Francisco time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 7:00 a.m., San Francisco time, on the third business day
after the date of this Agreement, or at such time on such other day, not later
than seven full business days after such third business day, as shall be agreed
upon in writing by the Company and you. The date and hour of such delivery and
payment (which may be postponed as provided in Section 4(b) hereof) are herein
called the Closing Date.
(b) If the options granted by Section 4(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days preceding
the Closing Date, and on or before the 30th day after the date of this
Agreement, delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made at the office of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 7:00 a.m., San Francisco time, on
the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order by one or more certified or official bank check or
checks in next day funds (and the Company agrees not to deposit any such check
in the bank on which drawn until the day following the date of its delivery to
the Company). Such payment shall be made upon delivery of certificates for the
Stock to you for the respective accounts of the several Underwriters against
receipt therefor signed by you. Certificates for the Stock to be delivered to
you shall be registered in such name or names and shall be in such
denominations as you may request at least two business days before the Closing
Date, in the case of Underwritten Stock, and at least two business days prior
to the purchase thereof, in the case of the Option Stock. Such certificates
will be made available to the Underwriters for inspection, checking and
packaging at the offices of Lewco Securities Corporation, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at least two business days prior to the Closing Date or, in the
case of the Option Stock, by 3:00 p.m., New York time, at least two business
days preceding the date of purchase. Time shall be of the essence and delivery
at the time and place specified above is a further condition to the obligations
of the Underwriters.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall
not relieve such Underwriter from any of its obligations hereunder.
7. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees as
follows:
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(a) The Company will prepare and timely file with the Commission under
Rule 424(b) a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A;
provided, however, that the Company will not file such Prospectus under Rule
424(b) or any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the rules and regulations of
the Commission. The Company will provide evidence satisfactory to the
Underwriters of the timely filing of the Prospectus filed under Rule 424(b) and
any registration statement filed under Rule 462(b).
(b) If the Company elects to rely on Rule 462(b), the Company shall
file a 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(c) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement
or for any supplement to the Prospectus or for any additional information, (ii)
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, (iii) the institution or notice of intended
institution of any action or proceeding for that purpose, (iv) the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Stock for sale in any jurisdiction, or (v) the receipt by
the Company of notice of the initiation or threatening of any proceeding for
such purpose. The Company will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be
issued, to obtain the withdrawal thereof at the earliest possible moment.
(d) The Company will (i) on or before the date hereof and, with respect
to documents filed after the date hereof, on or before the Closing Date,
deliver to you a signed copy of the Registration Statement as originally filed
and of each amendment thereto filed prior to the time the Registration
Statement becomes effective and, promptly upon the filing thereof, a signed
copy of each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously furnished
to you) and will also deliver to you, for distribution to the Underwriters, a
sufficient number of additional conformed copies of each of the foregoing (but
without exhibits) so that a sufficient number of copies of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver to you
and send to the several Underwriters, at such office or offices as you may
designate, as many copies of the Prospectus as you may reasonably request, and
(iii) thereafter from time to time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, likewise send to
the Underwriters as many additional copies of the Prospectus and as many copies
of any supplement to the Prospectus and of any amended
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prospectus, filed by the Company with the Commission, as you may reasonably
request for the purposes contemplated by the Securities Act.
(e) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in light of
the circumstances existing at the time it is delivered to a purchaser of the
Stock, the Company will forthwith prepare and file with the Commission, at its
own expense, a supplement to the Prospectus or an amended prospectus so that
the Prospectus as so supplemented or amended 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 light of the circumstances existing at
the time such Prospectus is delivered to such purchaser, not misleading. If,
after the initial public offering of the Stock by the Underwriters and during
such period, the Underwriters shall propose to vary the terms of the offering
thereof by reason of changes in general market conditions or otherwise, you
will advise the Company in writing of the proposed variation, and, if in the
opinion either of counsel for the Company or of counsel for the Underwriters
such proposed variation requires that the Prospectus be supplemented or
amended, the Company will forthwith prepare and file with the Commission, at
its own expense, a supplement or amendment to the Prospectus setting forth such
variation. The Company authorizes the Underwriters and all dealers to whom any
of the Stock may be sold by the several Underwriters to use the Prospectus, as
from time to time amended or supplemented, in connection with the sale of the
Stock in accordance with the applicable provisions of the Securities Act and
the applicable rules and regulations thereunder for such period.
(f) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement or amendment to the Prospectus
proposed to be filed.
(g) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time
to time, prepare and file such statements, reports, and other documents as are
or may be required to continue such qualifications in effect for so long a
period as you may reasonably request for distribution of the Stock.
(h) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies
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of all periodic and special reports furnished to stockholders of the Company
and of all information, documents and reports filed with the Commission
(including the Report on Form SR required by Rule 463 of the Commission under
the Securities Act).
(i) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its securityholders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(j) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company agrees to pay all
costs and expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses incident to (i)
the preparation, printing and filing with the Commission and the National
Association of Securities Dealers, Inc. ("NASD") of the Registration Statement,
any Preliminary Prospectus and the Prospectus, (ii) the furnishing to the
Underwriters of copies of any Preliminary Prospectus and of the several
documents required by paragraph (d) of this Section 7 to be so furnished, (iii)
the printing of this Agreement and related documents delivered to the
Underwriters, (iv) the preparation, printing and filing of all supplements and
amendments to the Prospectus referred to in paragraph (e) of this Section 7,
(v) the furnishing to you and the Underwriters of the reports and information
referred to in paragraph (h) of this Section 7 and (vi) the printing and
issuance of stock certificates, including the transfer agent's fees.
(k) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including, without
limitation, filing fees, counsel fees and disbursements and the cost of
printing memoranda for the Underwriters) paid by or for the account of the
Underwriters or their counsel in qualifying the Stock under state securities or
blue sky laws and for filing fees incident to the review of the offering by the
NASD.
(l) The provisions of paragraphs (j) and (k) of this Section are
intended to relieve the Underwriters from the payment of the expenses and costs
which the Company hereby agrees to pay.
(m) The Company agrees that, without the prior written consent of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC on behalf of the Underwriters, the Company will not for a
period of 180 days following the Closing Date, directly or indirectly, (i)
issue, sell, offer, contract to sell, make any short sale, pledge, issue or
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right, warrant to purchase or otherwise transfer or
dispose of any of the Company's equity securities or any securities convertible
into or exchangeable or exercisable for or any rights to purchase or acquire
any of the Company's equity securities or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
or ownership of any other Company's equity securities, whether any such
transaction described in clause (i) or (ii) above is to be settled by
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delivery of any of the Company's equity securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Stock to be sold to the
Underwriters pursuant to this Agreement, (B) shares of Common Stock issued by
the Company upon the exercise of options granted under the stock option plans
of the Company, as described in the Prospectus (the "Option Plans"), and (C)
options to purchase Common Stock granted under the Option Plans as described in
the Prospectus. For purposes of this paragraph (1), a sale, offer, or other
disposition shall be deemed to include any sale to an institution which can,
following such sale, sell Common Stock to the public in reliance on Rule 144A.
(n) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
(o) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(p) The Company will apply the net proceeds of the sale of the Stock
sold by it substantially in accordance with its statements under the caption
"Use of Proceeds" in the Prospectus.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities, joint or several,
to which such indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act, the common law or otherwise, and the Company
agrees to reimburse each such Underwriter and controlling person for any legal
or other expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus constituting a part thereof
and any Rule 462(b)
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Registration Statement) or any post-effective amendment thereto (including any
Rule 462(b) Registration Statement), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or the Prospectus (as amended or as supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein 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 (1) the indemnity agreements of the Company contained in this paragraph
(a) shall not apply to any such losses, claims, damages, liabilities or
expenses if such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter for use in any Preliminary Prospectus or the Registration
Statement or the Prospectus or any such amendment thereof or supplement
thereto, and (2) the indemnity agreement contained in this paragraph (a) with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (d) of Section 7 hereof. The indemnity agreements of
the Company contained in this paragraph (a) and the representations and
warranties of the Company contained in Section 2 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified party and shall survive the delivery of and payment
for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, and each of its directors, each
other Underwriter and each person (including each partner or officer thereof)
who controls the Company or any such other Underwriter within the meaning of
Section 15 of the Securities Act, from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, the
common law or otherwise and to reimburse each of them for any legal or other
expenses (including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus constituting a part thereof and any Rule 462(b)
Registration Statement) or any post-effective amendment thereto (including any
Rule 462(b) Registration Statement) or the omission or alleged omission to
state
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therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus (as amended or
as supplemented if the Company shall have filed with the Commission any
amendment thereof or supplement thereto) or the omission or alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, if such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of such indemnifying Underwriter for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The indemnity
agreement of each Underwriter contained in this paragraph (b) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of and
payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 8 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall
not relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of such indemnity agreement. Any indemnifying party shall be entitled
at its own expense to participate in the defense of any action, suit or
proceeding against, or investigation or inquiry of, an indemnified party. Any
indemnifying party shall be entitled, if it so elects within a reasonable time
after receipt of the Notice by giving written notice (herein called the Notice
of Defense) to the indemnified party, to assume (alone or in conjunction with
any other indemnifying party or parties) the entire defense of such action,
suit, investigation, inquiry or proceeding, in which event such defense shall
be conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or
parties shall be entitled to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties and (ii) in any event, the indemnified party or
parties shall be entitled to have counsel chosen by such indemnified party or
parties participate in, but not
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conduct, the defense. If, within a reasonable time after receipt of the Notice,
an indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
paragraphs (a) through (c) of this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding, except
that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized
to be incurred by the indemnified party or parties. If, within a reasonable
time after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 8, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 8 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received
by the Company and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. 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 each indemnifying
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be 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 into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparation to defend or defense against
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any action or claim which is the subject of this paragraph (d). Notwithstanding
the provisions of this paragraph (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount applicable to the
Stock purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this paragraph
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give
written notice of such service to the party or parties from whom contribution
may be sought, but the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be sought from
any obligation it may have hereunder or otherwise (except as specifically
provided in paragraph (c) of this Section 8).
(e) The Company will not without the prior written consent 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 any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or
proceeding.
9. TERMINATION. This Agreement may be terminated by you at any time prior
to the Closing Date by giving written notice to the Company if after the date
of this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (i) the engagement in hostilities or an escalation of
major hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof, (ii) any outbreak
of hostilities or other national or international calamity or crisis or change
in economic or political conditions if the effect of such outbreak, calamity,
crisis or change in economic or political conditions in the financial markets
of the United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, the NASD
Automated Quotation System or the Nasdaq National Market, or limitations on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such exchange or system, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by
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any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this
Agreement shall be terminated pursuant to this Section 9, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of
the Company under this Agreement, including all costs and expenses referred to
in paragraphs (j) and (k) of Section 7 hereof.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
accuracy of the representations and warranties on the part of the Company
herein set forth and the performance by the Company of all of their respective
obligations to be performed hereunder, in each case at or prior to the Closing
Date and on any later date on which Option Stock is to be purchased, as the
case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective no later
than 2 p.m., San Francisco time, on the date of this Agreement; if the
filing of the Prospectus is required pursuant to Rule 424(b), the
Prospectus shall have been filed in the manner and within the time period
required by Rule 424(b); if a registration statement is required under
Rule 462(b), such registration statement shall have been filed and become
effective in accordance with Rule 462(b) by 10:00 p.m., Washington D.C.
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and
the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration Statement and of the Prospectus (except
as to the financial statements contained therein), shall have been
approved at or prior to the Closing Date by ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP,
counsel for the Underwriters.
(c) You shall have received from Suelthaus & ▇▇▇▇▇, P.C., counsel for
the Company, an opinion, addressed to the Underwriters and dated the
Closing Date, covering the matters set forth in Annex A hereto. If Option
Stock is purchased at any date after the Closing Date, you shall receive
additional opinions from each such counsel, addressed to the Underwriters
and dated such later date, confirming that the opinions expressed as of
the Closing Date in each such opinion letter remain valid as of such later
date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact
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required to be stated therein or necessary in order to make the statements
therein, respectively, not misleading, (ii) since the Effective Date, no
event has occurred which should have been set forth in a supplement or
amendment to the Prospectus which has not been set forth in such a
supplement or amendment filed with the Commission, (iii) since the
respective dates as of which information is given in the Registration
Statement in the form in which it originally became effective and the
Prospectus contained therein, there has not been any material adverse
change or any development involving a prospective material adverse change
in or affecting the business, properties, financial condition or results
of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, and, since such dates, except in the ordinary course of
business, neither the Company nor any of its subsidiaries has entered into
any material transaction not referred to in the Registration Statement in
the form in which it originally became effective and the Prospectus
contained therein, (iv) neither the Company nor any of its subsidiaries
has any material contingent obligations which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not any pending
or known threatened legal proceedings to which the Company or any of its
subsidiaries is a party or of which property of the Company or any of its
subsidiaries is the subject which are material and which are not disclosed
in the Registration Statement and the Prospectus, (vi) there are not any
franchises, contracts, leases or other documents which are required to be
filed as exhibits to the Registration Statement which have not been filed
as required, (vii) the representations and warranties of the Company
herein are true and correct in all material respects as of the Closing
Date and on any later date on which Option Stock is to be purchased, as
the case may be, and (viii) there has not occurred any circumstance
described in clauses (i), (ii), (iii), (iv), (v) or (vi) of Section 9
hereof.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date
or such later date, as the case may be, and signed by the Chief Executive
Officer and the Chief Financial officer of the Company, stating that the
respective signers of said certificate have carefully examined the
Registration Statement in the form in which it originally became effective
and the Prospectus contained therein and any supplements or amendments
thereto, and that the statements included in clauses (i) through (vii) of
paragraph (d) of this Section 10 are true and correct.
(f) You shall have received from KPMG Peat Marwick LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any
later date on which Option Stock is purchased, confirming that they are
independent public accountants with respect to the Company and this
subsidiaries within the meaning of the Securities Act and the applicable
published rules and regulations thereunder and based upon the procedures
described in its letter delivered to you concurrently with the execution
of this Agreement (herein called the Original Letter), but carried out to
a date not more than three business days prior to the Closing Date or such
later date on which Option Stock is purchased (i) confirming, to the
extent true, that the statements
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and conclusions set forth in the Original Letter are accurate as of the
Closing Date or such later date, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in
the facts described in the Original Letter since the date of the Original
Letter or to reflect the availability of more recent financial statements,
data or information. The letters shall not disclose any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company or any of its subsidiaries which, in your
sole judgment, makes it impractical or inadvisable to proceed with the
public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(g) You shall have received from KPMG Peat Marwick LLP, a letter
stating that their review of the Company's system of internal accounting
controls, to the extent they deemed necessary in establishing the scope of
their examination of the Company's financial statements as of and as at
June 30, 1996, did not disclose any weakness in internal controls that
they considered to be material weaknesses.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the qualification
referred to in paragraph (k) of Section 7 hereof.
(i) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for inclusion on the Nasdaq
National Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from all
holders of the outstanding Common Stock or options therefor, stockholders
agreements in form reasonably satisfactory to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC,
stating that without the prior written consent of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC on
behalf of the Underwriters, each such holder will not, for a period of 180
days following the commencement of the public offering of the Stock by the
Underwriters, directly or indirectly, (i) sell, offer, contract to sell,
make any short sale, pledge, 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 or dispose of any shares of
Common Stock or any securities convertible into or exchangeable or
exercisable for or any rights to purchase or acquire Common Stock any of
the Company's equity securities or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences or ownership of any other Company's equity securities,
whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of any of the Company's equity securities, in cash
or otherwise. Notwithstanding the foregoing, such holder may transfer any
shares of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock either during his or her lifetime or on death
(i) by gift, will or intestacy or (ii) to his or her immediate family or
to a trust the beneficiaries of which are exclusively the undersigned
and/or a member or members of
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his or her immediate family; provided, however, that prior to any such
transfer each transferee shall execute an agreement, reasonably
satisfactory to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, pursuant to which each transferee
shall agree to receive and hold such shares of Common Stock, or securities
exercisable or convertible into or exchangeable for Common Stock, subject
to identical restrictions on transfer, and there shall be no further
transfer except in accordance with such agreement.
For the purposes of this paragraph, "immediate family" shall mean spouse,
lineal descendant, father, mother, brother, sister, niece or nephew of the
transferor.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, counsel for the
Underwriters, shall be reasonably satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company;
provided, however, that (i) in the event of such termination, the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs (j)
and (k) of Section 7 hereof and (ii) if this Agreement is terminated by you
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein, to fulfill any of the conditions herein, or to
comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
11. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission. In case either of
the conditions specified in this Section 11 shall not be fulfilled, this
Agreement may be terminated by the Company by giving notice to you and such
failure of condition is not because of any refusal, inability or failure of the
Company to perform any agreement herein, to fulfill any condition herein or to
comply with any provisions hereof. Any such termination shall be without
liability of the Company to the Underwriters and without liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination (I) the Company agrees to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (j) and (k) of Section 7 hereof.
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12. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 8 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (a) of Section 8 of this Agreement, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 12 and the possibility that such payments
might later be held to be improper; provided, however, that (i) to the extent
any such payment is ultimately held to be improper, the persons receiving such
payments shall promptly refund them, and (ii) such persons shall provide to the
Company, upon request, reasonable assurances of their ability to effect any
refund, when and if due.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 8 hereof, the several parties (in addition to the
Company, and the several Underwriters) indemnified under the provisions of said
Section 8, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser,
as such purchaser, of any of the Stock from any of the several Underwriters.
14. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and if to the Company, shall be
mailed, telegraphed or delivered to it at its office, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President.
All notices given by telegraph shall be promptly confirmed by letter.
15. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; provided, however, that if this
Agreement is terminated prior to the Closing Date, the provisions of Section 7
hereof (other than paragraphs (j) and (k) thereof) shall be of no further force
or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
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Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
INTENSIVA HEALTHCARE
CORPORATION
By:
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
▇▇▇▇▇▇▇ & COMPANY, INC.
By ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By:
--------------------------------------
Managing Director
Acting on behalf of the several
Underwriters, including themselves, named
in Schedule I hereto.
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SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC . . . . . . . .
▇▇▇▇▇▇▇ & Company, Inc. . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . .
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ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
COUNSEL FOR THE COMPANY
(i) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each jurisdiction in which the character of the
property owned or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified would not
have a material adverse effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company and its
subsidiaries, taken as a whole), and has full corporate power and authority to
own or lease its properties and to conduct its business as described in the
Registration Statement, the Prospectus and as being conducted; all the issued
and outstanding capital stock of each of the subsidiaries of the Company has
been duly authorized and validly issued and is fully paid and nonassessable,
and is owned by the Company free and clear of all liens, encumbrances and
security interests, and to the best of such counsel's knowledge, no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
ownership interests in such subsidiaries are outstanding;
(ii) the authorized capital stock of the Company will consist of
30,000,000 shares of Preferred Stock, no par value, of which no shares will be
outstanding, and 70,000,000 shares of Common Stock, $0.001 par value, of which
[__________________] shares will be outstanding (including the Underwritten
Stock and the Option Stock); proper corporate proceedings have been taken to
validly authorize such authorized capital stock; all of the outstanding shares
of such capital stock (including the Underwritten Stock and the shares of
Option Stock issued, if any) have been duly and validly issued and are fully
paid and nonassessable; any Option Stock purchased after the Closing Date, when
issued and delivered to and paid for by the Underwriters as provided in the
Underwriting Agreement, would have been duly and validly issued and be fully
paid and nonassessable; and no preemptive rights of, or rights of refusal in
favor of, stockholders exist with respect to the Stock, or the issue and sale
thereof, pursuant to the Certificate of Incorporation or By-laws of the Company
and, to the knowledge of such counsel, there will be no contractual preemptive
rights that have not been waived or rights of first refusal or rights of
co-sale which exist with respect to the issue and sale of the Stock;
(iii) except as disclosed in or specifically contemplated by the
Registration Statement, to the knowledge of such counsel, there are no
outstanding options, warrants or other rights calling for the issuance of, and
no commitments, plans or arrangements to issue, any shares of Capital Stock of
the Company or any security convertible or exchangeable for Capital Stock of
the Company;
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(iv) the Registration Statement has become effective under the
Securities Act and, to the knowledge of such counsel, (A) no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and (B) no proceedings for
that purpose have been instituted or are pending or contemplated by the
Commission;
(v) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and with the
rules and regulations of the Commission thereunder;
(vi) the information required to be set forth in the Registration
Statement in answer to Item 9, Item 10 (insofar as it relates to such counsel)
and Item 11(c) of Form S-1 is to the best of such counsel's knowledge
accurately and adequately set forth therein in all material respects or no
response is required with respect to such Items; and, to the best of such
counsel's knowledge the description of the Company's stock option plan and the
options granted and which may be granted thereunder and the options granted
otherwise than under such plan set forth in the Prospectus accurately and
fairly presents in all material respects the information required to be shown
with respect to said plan and options to the extent required by the Securities
Act and the rules and regulations of the Commission thereunder;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal or governmental proceedings, pending or threatened, which in
the opinion of such counsel are of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement, which are not described and filed as required; and each
of the Company and its subsidiaries has and is in compliance with all material
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business, all of which
are valid and in full force and effect;
(viii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(ix) the issuance and sale by the Company of the shares of Stock sold by
the Company and the consummation of the transactions as contemplated by the
Underwriting Agreement will not conflict with or result in a breach of, or a
default under, the Certificate of Incorporation or By-laws of the Company or
any of its subsidiaries or any indenture, mortgage, deed of trust, agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, or any applicable law or regulation, insofar as is
known to such counsel, any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality;
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(x) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company have waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement;
(xi) no consent, approval, authorization or order of any court or
governmental agency or body is required for the issuance or sale of the Stock
or the consummation of the transactions contemplated in the Underwriting
Agreement, except such as have been obtained under the Securities Act and such
as may be required under state securities or blue sky laws in connection with
the purchase and distribution of the Stock by the Underwriters;
(xii) the Stock issued and sold by the Company has been duly authorized
for listing by the Nasdaq National Market upon official notice of issuance and
sale;
(xiii) the Company and its subsidiaries are in all material respects in
compliance with and conduct their business in conformity with all applicable
Federal and state laws, rules and regulations; otherwise than are set forth in
the Registration Statement and the Prospectus, no respective change in any of
such Federal or state laws, rules or regulations has been adopted which, when
made effective would have a material adverse effect on the operations of the
Company and its subsidiaries prospective; and the statements made in the
Registration Statement under the caption "Regulation" are true and correct and
fairly represent the information required to be disclosed; and
(xiv) neither the Company nor any of its subsidiaries is an "investment
company" or an entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that (it being
understood that such counsel will not have independently verified the accuracy
or completeness of the information contained in the Registration Statement or
the Prospectus, and except as otherwise expressly set forth in such counsels
opinion letter, is not responsible for, and need not pass upon, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus) nothing has come to the attention of such counsel
that leads them to believe that the Registration Statement (except as to the
financial statements and schedules and other financial data contained or
incorporated by reference therein, as to which such counsel need not express
any opinion or belief) at the Effective Date contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus (except as to the financial statements and schedules and other
financial data contained or incorporated by reference therein as to which such
counsel need not express any opinion or belief) as of its date or at the
Closing Date (or any later date on which Option Stock is purchased), contained
or contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in
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order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States, the State of Delaware or of the
State of Missouri, upon opinions of local counsel satisfactory in form and
scope to counsel for the Underwriters. Copies of any opinions so relied upon
shall be delivered to the Representatives and to counsel for the Underwriters
and the foregoing opinion shall also state that counsel knows of no reason the
Underwriters are not entitled to rely upon the opinions of such local counsel.
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