KMZ DRAFT
JULY 21, 1998
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LOGISTICARE, INC.
3,300,000 SHARES/1/
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COMMON STOCK
UNDERWRITING AGREEMENT
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July ___, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
EVEREN SECURITIES, INC.
▇/▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
LogistiCare, Inc., a Delaware corporation (herein called the "Company"),
proposes to issue and sell 2,300,000 shares (herein called the "Company
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Underwritten Stock") of its authorized but unissued common stock, $0.01 par
value (herein called the "Common Stock"), to the Underwriters (as hereinafter
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defined), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Weksel") proposes to sell 1,000,000 shares
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(herein called the "Weksel Underwritten Stock", and with the Company
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Underwritten Stock, herein collectively called the "Underwritten Stock") to the
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Underwriters. The shareholders of the Company named in Schedule II hereto
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(herein collectively called the "Option Selling Securityholders", and together
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with Weksel, herein collectively called the "Selling Securityholders") propose
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to grant to the Underwriters an option to purchase up to an aggregate of
300,000 additional shares of Common Stock , and the Company proposes to grant to
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the Underwriters an option to purchase up to an aggregate of 195,000 additional
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shares of Common Stock (the "Option Stock", and together with the Underwritten
====================== ========
Stock, herein collectively called the "Stock"). The Common Stock is more fully
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described in the Registration Statement and the Prospectus hereinafter
mentioned.
The Company and the Selling Securityholders severally hereby confirm 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 3(b) hereof). You represent
______________________
/1/ Plus options to purchase from the Option Selling Securityholders and the
Company up to an aggregate of 495,000 additional shares to cover over-
allotments.
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.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the "Commission") a registration statement on
Form SB-2 (No. 333-52327), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
"Securities Act"), of the Stock. Copies of such registration statement and of
each amendment thereto, 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, 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 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"), 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.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDERS.
(a) The Company and each of Weksel, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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(herein collectively called the "Affiliated Selling Securityholders
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hereby represent and warrant as follows:
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(i) The Company has been duly incorporated and 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 Prospectus and as being conducted, and is duly qualified
as a foreign corporation and in good standing in all jurisdictions in
which
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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, financial condition or results of operations of the
Company).
(ii) The Company has good and marketable title to all material
properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those, if any,
reflected in such financial statements (or elsewhere in the Prospectus) or
which are not material to the Company. The Company holds its leased
properties that are material to the Company under valid and binding leases.
(iii) The Company now holds and on the Closing Date and any later
date on which Option Stock is to be purchased, will hold, all material
licenses, certificates, permits, franchises, authorizations, clearances and
other approvals from any federal, state, local or other governmental or
regulatory authorities ("Licenses") which are necessary to own its
properties and conduct its business in the manner described in the
Prospectus; to the Company's knowledge, there are no current facts about
the Company that could reasonably be expected to cause any existing License
to be revoked, withdrawn, cancelled, suspended or restricted in a manner
that would restrict the Company carrying out its business in any material
respect as described in the Prospectus.
(iv) The Company owns and possesses all right, title and interest in
and to, or has duly licensed from third parties, all patents, trademarks,
copyrights and other proprietary rights (herein called "Trade Rights")
material to the business of the Company and, except as set forth on
SCHEDULE 2(A)(IV), the Company has not granted any lien or encumbrance on,
or granted any right of license (other than in the ordinary course of its
business) with respect to, any such Trade Rights. To the knowledge of the
Company and each of the Affiliated Selling Securityholders, except as set
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forth on SCHEDULE 2(A)(IV), no third party has infringed, misappropriated
or otherwise conflicted with Trade Rights of the Company, which
infringement, misappropriation or conflict could have a material adverse
effect on the condition (financial or otherwise), business, assets,
operations or prospects of the Company. The Company has not received any
notice of infringement, misappropriation or conflict from any third party
as to such Trade Rights that has not been resolved or disposed of and, to
the knowledge of the Company and each of the Affiliated Selling
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Securityholders, the Company has not infringed, misappropriated or
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otherwise conflicted with Trade Rights of any third parties, which
infringement, misappropriation or conflict would have a material adverse
effect upon the condition (financial or otherwise), business, assets or
operations of the Company.
(v) The conduct of the business of the Company is in compliance in all
respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not have a
material adverse effect upon the condition (financial or otherwise),
business, assets or operations of the Company.
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(vi) The Company is not in violation of its charter or by-laws or in
default under any consent decree, or in default with respect to any
provision of any lease, loan agreement, franchise, license, permit or other
contract obligation to which it is a party except for violations which
individually or in the aggregate are not material to the Company; and to
the knowledge of the Company and each of the Affiliated Selling
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Securityholders, there does not exist any state of facts that constitutes
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an event of default as defined in such documents or which, with notice or
lapse of time or both, would constitute such an event of default, in each
case, except for defaults which neither singly nor in the aggregate are
material to the Company.
(vii) The making and performance by the Company of this Agreement has
been duly authorized by all necessary corporate action and will not violate
any provision of the Company's charter or bylaws and will not result in the
breach, or be in contravention, of any provision of any agreement,
franchise, license, indenture, mortgage, deed of trust, or other instrument
to which the Company is a party or by which the Company or its property may
be bound or affected, or any order, rule or regulation applicable to the
Company of any court or regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its
properties, or any order of or qualification with any court or governmental
agency or authority entered in any proceeding to which the Company was or
is now a party or by which it is bound, except in any case for violations,
breaches and contraventions which neither singly or in the aggregate are
material to the Company. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated herein,
except for compliance with the Securities Act and blue sky laws applicable
to the public offering of the Stock by the several Underwriters and
clearance of such offering with the National Association of Securities
Dealers, Inc. (herein called the "NASD"). This Agreement has been duly
executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles
of public policy and subject to the qualification that the enforceability
of the Company's obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(viii) There are no material legal or governmental proceedings
pending, or to the Company's or any of the Affiliated Selling
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Securityholders' knowledge, threatened to which the Company is or may be a
================
party or of which material property owned or leased by the Company is or
may be the subject, or related to environmental or discrimination matters
that are not disclosed in the Prospectus, or which would materially
adversely affect the Company's ability to perform its obligations under
this Agreement or any action taken or to be taken pursuant hereto.
(ix) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
materially adverse
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change in the business, properties, financial condition or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, other than as set forth in the Registration
Statement and the Prospectus, and since such dates, except in the ordinary
course of business, the Company has not entered into any material
transaction not referred to in the Registration Statement and the
Prospectus.
(x) 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 Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the Securities
Exchange Act of 1934, as amended (herein called the "Exchange Act"), and
the rules and regulations of the Commission thereunder; on the Effective
Date, the Registration Statement did not contain any untrue statement of a
material fact and did not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date the Prospectus did not and, on the
date hereof does 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; provided, however, that none of the representations and
warranties in this subparagraph (vii) 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 inclusion in the
Registration Statement or the Prospectus.
(xi) The Stock is duly and validly authorized, is (or, in the case of
shares of the Stock to be sold by the Company, will be, when issued and
sold to the Underwriters as provided herein) duly and validly issued, fully
paid and nonassessable and conforms to the description thereof in the
Prospectus. No further approval or authority of the shareholders or the
Board of Directors of the Company will be required for the transfer and
sale of the Stock to be sold by the Selling Securityholders or the issuance
and sale of the Stock by the Company as contemplated herein. Except as set
forth on SCHEDULE 2(A)(XI); (A) the Company is not a party to any agreement
or understanding, and none of the Company or any of the Affiliated Selling
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Securityholders has knowledge of any agreement or understanding, granting
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any person or entity a right to acquire Stock or participate in the sale of
Stock pursuant to the Registration Statement; (B) no person or entity has
the right to require registration under the Securities Act of any
securities of the Company at any time; and (C) the Company is not a party
to any agreement or understanding, and none of the Company or any of the
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Affiliated Selling Securityholders has knowledge of any agreement or
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understanding, granting any person or entity a right to acquire Common
Stock or any other security of the Company at any time, upon any conditions
or upon the occurrence of any events.
(xii) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
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(xiii) PriceWaterhouseCoopers LLP, who have expressed their opinion
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with respect to certain of the financial statements and schedules included
in the Registration Statement, are independent accountants as required by
the Securities Act.
(xiv) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, and (C) access to
assets is permitted only in accordance with management's general or
specific authorization.
(xv) The combined financial statements and schedules of the Company
included in the Registration Statement present fairly, in all material
respects, the financial position of the Company as of the respective dates
of such financial statements, and the results of operations and cash flows
of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved; the supporting schedules included
in the Registration Statement present fairly, in all material respects, the
information required to be stated therein. The financial information set
forth in the Prospectus under the captions "Summary Financial Information"
and "Selected Financial Information" presents fairly, in all material
respects, on the basis stated in the Prospectus, the information set forth
therein; and the pro forma information included in the Prospectus presents
fairly, in all material respects, the information shown therein, has been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma information, has been properly compiled on the pro
forma basis described therein, and, in the opinion of the Company and each
of the Affiliated Selling Securityholders, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate under the circumstances.
(xvi) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times exempt from the registration
requirements of the Securities Act and were duly registered with or the
subject of an available exemption from the registration of the applicable
state securities or blue sky laws.
(xvii) None of the Company or any of its employees, directors,
shareholders, partners or affiliates (within the meaning of Rule 405 under
the Security Act) has taken, directly or indirectly, any action designed to
or that has constituted or that might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company, whether to
facilitate the sale or resale of the Stock or otherwise.
(xviii) Except as set forth in the Prospectus, there are no
agreements, claims, payment, issuances, arrangements or understandings,
whether oral or written, for services in the nature of finder's, consulting
or origination fees with respect to the sale of Stock hereunder or any
other arrangements, agreements, understandings, payments or issuances with
respect to the Company or, to the knowledge of the Company and each of the
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Affiliated Selling Securityholders, any of its officers, directors,
partners, employees or affiliates that may affect the Underwriters'
compensation, as determined by the NASD.
(xix) The Company has filed all federal, state and foreign income tax
returns which have been required to be filed (or has filed extensions
therefor or obtained any required extensions in connection therewith), and
has paid all taxes indicated by said returns to the extent that such taxes
have become due and are not being contested in good faith.
(xx) The Company is not involved in any material labor dispute nor, to
the knowledge of the Company, is any such dispute threatened.
(xxi) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Stock under the Exchange
Act, has filed an application to list the Stock on the Nasdaq National
Market, and has received notification that the listing has been approved,
subject to notice of issuance of the Stock.
(xxii) Except as described in the Prospectus, the Company does not
maintain, sponsor or contribute to any program or arrangement that is an
"employee welfare benefit plan," "employee pension benefit plan," or a
"multiemployer plan" as such terms are defined in Sections 3(1), 3(2) and
3(37), respectively, of the Employee Retirement Income Security Act of
1974, as amended (herein called ERISA) (herein collectively called the
ERISA Plans). The Company does not maintain or contribute, now or at any
time previously, to a defined benefit plan, as defined in Section 3(35) of
ERISA. No ERISA Plan (or any trust created thereunder) has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or
Section 4975 of the United States Internal Revenue Code of 1986, as amended
(herein called the Code), which could subject the Company to any tax
penalty on prohibited transactions and which has not adequately been
corrected. Each ERISA Plan is in compliance with all material reporting,
disclosure and other requirements of the Code and ERISA as they relate to
any such ERISA Plan. Determination letters have been received from the
Internal Revenue Service with respect to each ERISA Plan which is intended
to comply with Code Section 401(a), stating that such ERISA Plan and the
attendant trust are qualified thereunder. The Company has never completely
or partially withdrawn from a "multiemployer plan."
(xxiii) Except as set forth in the Prospectus, no officer, director
(to the extent required to be disclosed by applicable Commission
regulations) or shareholder (to the extent in excess of $25,000) of the
Company or any "affiliate" or "associate" (as these terms are defined in
Rule 405 under the Securities Act) of any of the foregoing persons or
entities has or has had, either directly or indirectly (A) an interest in
any person or entity that (x) furnishes or sells services or products which
are furnished or sold or that are proposed to be furnished or sold by the
Company, or (y) purchases from or sells or furnishes to the Company any
goods or services, or (B) a beneficial interest in any contract or
agreement to which the Company is a party or by which it may be bound or
affected. Except as set forth in the Prospectus under the captions
"Certain Transactions" and "Management" there are no existing or proposed
agreements, arrangements,
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understandings or transactions, between the Company and any officer,
director, principal shareholder of the Company or any partner, affiliate or
associate of any of the foregoing persons or entities.
(xxiv) The minute books of the Company have been made available to
the Underwriters and contain an accurate summary of all meetings with
respect to which minutes exist and contain all actions taken by the
directors and shareholders of the Company during such meetings since the
time of its incorporation, and reflect accurately and fairly in all
respects all transactions referred to in such minutes. No material actions
that would materially adversely affect the Company have been taken by the
directors and/or shareholders of the Company at a meeting for which minutes
do not exist.
(xxv) The Company is not now, and upon consummation of the
transactions contemplated by this Agreement and application of the net
proceeds from the sale of the Stock as described in the Prospectus under
the caption "Use of Proceeds" will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(xxvi) There is no material Medicare, Medicaid or other managed care
recoupment or recoupments of any third-party payor being sought, requested
or claimed, or to the Company's knowledge, threatened, against the Company.
(xxvii) None of the Company nor any employee or agent of the Company
has made any payment of funds or received or retained any funds that
constituted or constitutes a material violation of any healthcare law, rule
or regulation, including, without limitation, those regarding for the
referral of patients.
(xxviii) Subject to such qualifications set forth in the Prospectus,
the business of the Company does not violate in a material respect any
healthcare statute, administrative or governmental rule or regulation of
the United States of America applicable to the Company, including, without
limitation, 18 U.S.C. (S)669; 18 U.S.C. (S)1035; 18 U.S.C. (S)1347; 42
U.S.C. (S) 1395nn; 42 U.S.C. (S) 1396b(s); 42 U.S.C. (S)1320a-7a; 42 U.S.C.
(S) 1320a-7b; 31 U.S.C. (S)3729, or any healthcare judgment, injunction,
order or decree of any court or government entity or instrumentality of the
United States of America having jurisdiction over the Company.
(xxix) The statements in the Registration Statement and Prospectus
under the captions "Risk Factors -- Fraud and Abuse" and "Business --
Government Regulation and Supervision," insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize the matters referred to therein.
(xxx) The Company is not presently doing business with the government
of Cuba or with any person or affiliate located in Cuba and will notify the
Florida Department of Banking and Finance, Division of Securities and
Investor Protection, if the Company or
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any subsidiary commences doing business with the government of Cuba or any
person or affiliate located in Cuba.
(b) Each of the Selling Securityholders hereby represents and warrants as
follows:
(i) Such Selling Securityholder has good and marketable title to all the
shares of Stock to be sold by such Selling Securityholder hereunder, free
and clear of all liens, encumbrances, equities, security interests and
claims whatsoever, with full right and authority to deliver the same
hereunder, subject, in the case of each Selling Securityholder, to the
rights of ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Custodians (herein called
the "Custodians"), and that upon the delivery of and payment for such
shares of the Stock hereunder, the several Underwriters will receive good
and marketable title thereto, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever.
(ii) Certificates in negotiable form for the shares of the Stock to be
sold by such Selling Securityholder have been placed in custody under a
Custody Agreement for delivery under this Agreement with the Custodians;
such Selling Securityholder specifically agrees that the shares of the
Stock represented by the certificates so held in custody for such Selling
Securityholder are subject to the interests of the several Underwriters and
the Company, that the arrangements made by such Selling Securityholder for
such custody, including the Power of Attorney provided for in such Custody
Agreement, are irrevocable, and that the obligations of such Selling
Securityholder shall not be terminated by any act of such Selling
Securityholder or by operation of law, whether by the death or incapacity
of such Selling Securityholder (or, in the case of a Selling Securityholder
that is not an individual, the dissolution or liquidation of such Selling
Securityholder) or the occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or other such event should occur
before the delivery of such shares of the Stock hereunder, certificates for
such shares of the Stock shall be delivered by the Custodians in accordance
with the terms and conditions of this Agreement as if such death,
incapacity, dissolution, liquidation or other event had not occurred,
regardless of whether the Custodians shall have received notice of such
death, incapacity, dissolution, liquidation or other event.
(iii) This Agreement, the Power of Attorney and the Custody Agreement
have been duly authorized, executed and delivered by or on behalf of such
Selling Securityholder and constitute the valid and binding obligation and
agreements of such Selling Securityholder in accordance with their
respective terms and are enforceable against such Selling Securityholder in
accordance with their terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles
or public policy and subject to the qualifications that the enforceability
of such Selling Securityholder's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights generally and by
general equitable principles.
(iv) The execution and delivery by such Selling Securityholder of, and
the performance by such Selling Securityholder of its obligations under,
this Agreement, the
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Power of Attorney and the Custody Agreement will not contravene any
provision of applicable law, the Company's charter or by-laws or any
agreement or other instrument binding upon such Selling Securityholder, or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over such Selling Securityholder or the property of
such Selling Securityholder, and no consent, approval, authorization or
other order of or qualification with any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement, the Power of Attorney and the
Custody Agreement by such Selling Securityholder or the consummation of the
transactions contemplated herein or therein involving such Selling
Securityholder, except for compliance with the Securities Act and blue sky
laws applicable to the public offering of the Stock by the several
Underwriters and clearance of such offering with the NASD such as may be
required by the securities or blue sky laws of the various states in
connection with the offer and the sale of the Stock.
(v) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which has constituted, or which is designed to or
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of sale or resale of the Stock.
(vi) The information pertaining to such Selling Stockholder under the
caption "Principal and Selling Stockholders" in the Prospectus is complete
and accurate in all material respects.
(vii) Such Selling Securityholder has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement
which has adversely affected or may adversely affect the business of the
Company and the sale of the Stock by such Selling Securityholder pursuant
to this agreement is not prompted by any information concerning the Company
which is not set forth in the Registration Statement.
(c) Each of the Selling Securityholders (other than the Affiliated Selling
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Securityholders) hereby represents and warrants as follows:
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(i) Such Selling Securityholder has reviewed the Registration
Statement and Prospectus and, although such Selling Securityholder has not
independently verified the accuracy or completeness of all the information
contained therein, nothing has come to the attention of such Selling
Securityholder that would lead such Selling Securityholder to believe that
on the Effective Date, the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date the Prospectus contained and, on
the Closing Date and any later date on which Option Stock is to be
purchased, contains any untrue statement of a material fact or omitted or
omits 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.
(ii) Such Selling Securityholder does not know of any respect in which
the representation and warranties of the Company and the Affiliated Selling
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Securityholders contained in Section 2(a) hereof are not true and correct
================
in all material respects.
3. 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
2,300,000 shares of the Underwritten Stock and Weksel agrees to sell 1,000,000
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shares of the Underwritten Stock, respectively, to the several Underwriters, and
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each of the Underwriters agrees to purchase from the Company and Weksel that
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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 Weksel and purchased by the several Underwriters shall be $_______
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per share. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in paragraphs (b) and (c) of this Section 3,
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 8 or 9 hereof) to purchase and pay for
the number of shares of the 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 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 the 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
and portion, the number of shares of the Stock which 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 and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which 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 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion 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 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 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
11
the shares of the Stock which 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 or the Selling
Securityholders to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company or the Selling
Securityholders. 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
===========
and each of the Option Selling Securityholders grants an option to the several
=== ============= ===============
Underwriters to purchase, severally and not jointly, up to that number of shares
in the aggregate of the Option Stock set forth in Schedule II opposite the
===
name of the Company and such Option Selling Securityholder, all at the same
=============== =======
price per share as the Underwriters shall pay for the Underwritten Stock. Said
option 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 day after the
date of this Agreement upon written or telegraphic notice by you to the Company
=======
and the Custodian setting forth the aggregate number of shares of the Option
=======
Stock as to which the several Underwriters are exercising the option. Delivery
of certificates for the shares of Option Stock, and payment therefor, shall be
made as provided in Section 5 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. In the event
================================================================================
that said option is exercised in part, it shall first be exercised with respect
================================================================================
to the Option Stock to be sold by the Option Selling Securityholders and then
================================================================================
with respect to the Option Stock to be sold by the Company. In addition, in the
================================================================================
event that said option is exercised with respect to less than all of the Option
================================================================================
Stock held by the Option Selling Securityholders, it shall be exercised on a pro
================================================================================
rata basis based on the number of shares of Option Stock held by each Option
================================================================================
Selling Securityholder, as adjusted by you in such manner as you deem advisable
================================================================================
to avoid fractional shares.
===========================
4. 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.
12
(b) The information set forth in the last paragraph on the front cover page
and in the first, third and ninth paragraphs under "Underwriting" in the
Registration Statement, any Preliminary Prospectus and the Prospectus relating
to the Stock filed by the Company (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.
(c) Reference is made to the Lock-Up Agreements, each dated ___________,
1998, among the Underwriters and the Selling Securityholders (each, a "Lock-Up
Agreement"). Pursuant to each Lock-Up Agreement, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLC, on
behalf of the Underwriters, hereby consents to the sale of Option Stock by those
Selling Securityholders who executed a Lock-Up Agreement, it being understood
and agreed that this consent relates solely to the sale of Option Stock to the
Underwriters upon the exercise of the option granted to the Underwriters
pursuant to Section 3(c) hereof, contemplated by this Underwriting Agreement.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock and
the Option Stock (if the option granted by Section 3(c) hereof shall have been
exercised not later than 7:00 A.M., New York time, on the date two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Proskauer Rose LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 7:00 a.m.,
New York time, on the fourth 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 fourth business day, as shall be agreed upon in writing by the Company, the
Selling Securityholders and you. The date and hour of such delivery and payment
(which may be postponed as provided in Section 3(b) hereof are herein called the
"Closing Date").
(b) If the option granted by Section 3(c) hereof shall be exercised after
7:00 a.m., New York time, on the date two business days preceding the Closing
Date, delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made at the office of Proskauer Rose LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 7:00 a.m., New York 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, and payment for the Stock purchased from the Selling
Securityholders shall be made to the Custodian, for the account of the Selling
Securityholders, in each case by one or more certified or official bank check or
checks in same day funds or by a wire transfer of immediately available funds,
as the parties may agree. 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 one business day before the
Closing Date, in the case of Underwritten Stock, and at least one business day
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 Proskauer Rose LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, on the business day prior to the Closing Date or,
13
in the case of the Option Stock, by 3:00 p.m., New York time, on the business
day preceding the date of purchase.
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
and the Selling Securityholders 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.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING SECURITYHOLDERS.
The Company covenants and agrees, and each Selling Securityholder covenants and
agrees to the matters set forth in the last sentence of paragraph (i) and in
==================== === ==
paragraphs (k), (l) and (m) of this Section 6, as follows:
=============== =======
(a) The Company will (i) 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 and (ii)
not file 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.
(b) 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
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 it 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.
(c) The Company will (i) 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 one copy 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
14
amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) 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 the 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 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 the 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 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 a supplement to the Prospectus or
an amended 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.
(e) 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 to the Prospectus or any amended
prospectus proposed to be filed.
(f) 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.
(g) 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 of all periodic and special reports furnished to shareholders of
the Company and of all information, documents and reports filed with the
Commission.
(h) 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
15
securityholders an earnings statement in accordance with Section 11 (a)
===============
of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the 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 (c) of this Section 6 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 (d) of this Section 6, (v) the furnishing to
you and the Underwriters of the reports and information referred to in paragraph
(g) of this Section 6 and (vi) the printing and issuance of stock certificates,
including the transfer agent's fees. The Selling Securityholders will pay any
transfer taxes incident to the transfer to the Underwriters of the shares of
Stock being sold by the Selling Securityholders.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including reasonable
counsel fees and disbursements and 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 in the review
of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are intended
to relieve the Underwriters from the payment of the expenses and costs which the
Company hereby agrees to pay and shall not affect any agreement which the
Company and the Selling Securityholders may make, or may have made, for the
sharing of any such expenses and costs.
(l) The Company and each of the Selling Securityholders hereby agrees that,
without the prior written consent of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC on behalf of the
Underwriters, the Company or such Selling Securityholder, as the case may be,
will not, for a period of 180 days following the effective date of the
Registration Statement, 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 or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
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
stock option plans of the Company (the "Option Plans") prior to the date hereof,
and (C) the issuance under the Option Plans of up to __________ options to
purchase Common Stock having an exercise price of not less than the greater of
the public offering price and the then fair market value of the Common Stock
granted under the Option Plans.
16
(m) Notwithstanding the foregoing, if the Selling Securityholder is an
individual, he or she, may (i) pledge any shares of Common Stock of securities
=
convertible into or exchangeable or exercisable for the Company's Common Stock
("Convertible Securities") to third parties and may (ii) transfer any Common
Stock and/or Convertible Securities either during his or her lifetime or on
death by will or intestacy to his or her immediate family or to a trust the
beneficiaries of which are exclusively such Selling Securityholder and/or a
member or members of his or her immediate family; provided, however, that prior
to any such pledge or transfer described in (i) or (ii) above, each pledgee or
transferee, as applicable, shall execute an agreement, satisfactory to ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ LLC, pursuant to which such pledgee or transferee shall agree to receive
and hold such shares of Common Stock and/or Convertible Securities, as the case
may be, subject to the provisions hereof, and there shall be no further pledge
or transfer except in accordance with the provisions of this Section 6(m). For
the purposes hereof, "immediate family" shall mean spouse, lineal descendant,
father, mother, brother or sister of the transferor.
(n) The Company shall not take, nor shall it authorize any employee,
director, shareholder, partner, affiliate (within the meaning of Rule 405 under
the Security Act), agent or other person to take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result under
the Exchange Act or otherwise, in stabilization or manipulation of the price of
any security of the Company, whether to facilitate the sale or resale of the
Stock or otherwise.
(o) 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.
(p) 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.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and each of the Affiliated Selling Securityholders
=======
severally and not jointly agree 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 and all
employees, attorneys and agents of each Underwriter (herein collectively called,
the "Underwriter Indemnified Parties") from and against any and all losses,
claims, damages or liabilities, joint or several (herein collectively called
"Losses"), to which such Underwriter Indemnified Parties or any of them may
become subject under the Securities Act, the Exchange Act or the common law or
otherwise, and the Company and the Affiliated Selling
17
Securityholders severally and not jointly agree to reimburse each such
Underwriter Indemnified Party for any legal or other expenses (including, except
as otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective Underwriter Indemnified Parties in connection with
defending against any such Losses or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
Underwriter 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 as 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 therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (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, (iii) any inaccuracy
in the representations and warranties set forth in Section 2(a) hereof or in any
schedule, certificate or other document or agreement delivered in connection
herewith or (iv) the failure by the Company to perform any of its covenants or
obligations set forth in this Agreement or in any schedule, certificate or other
document or agreement delivered in connection herewith; provided, however, that
(1) the indemnity agreements of the Company and each of the Affiliated Selling
=======
Securityholders contained in this paragraph (a) shall not apply to the extent
that any such Loss, or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus or the Registration Statement or the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any Underwriter for inclusion in
the Prospectus as amended or supplemented, 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, 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 (c) of Section 6 hereof.
(b) Each Selling Securityholder agrees to indemnify and hold harmless each
Underwriter Indemnified Party from and against any Losses to which such
Underwriter Indemnified Party may become subject under the Securities Act, the
Exchange Act or the common law or otherwise, and each Selling Securityholder
agrees to reimburse each such Underwriter Indemnified Party for any legal and
other expenses (including except as otherwise hereinafter provided, reasonable
fees and disbursements of counsel) incurred by the respective Underwriter
Indemnified Party in connection with defending against any such Losses or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against the respective Underwriter Indemnified Party, in each case
arising out of or based upon (i) any inaccuracy in the representations and
warranties made by such Selling Securityholder in Section 2(b) or in any
schedule, certificate or other document or agreement delivered in connection
herewith or, with
18
respect solely to Selling Securityholders other than the Affiliated Selling
===
Securityholders, in Section 2(c) or (ii) the failure by such Selling
Securityholder to perform any of his, her or its covenants or obligations set
===========
forth in this Agreement or in any schedule, certificate or other document or
agreement delivered in connection herewith.
(c) Notwithstanding anything to the contrary set forth herein, the total
liability of any Option Selling Securityholder under Section 7(a), 7(b) and 7(h)
====== ====
shall not exceed the aggregate net proceeds received by such Option Selling
======
Securityholder, any member or members of such Option Selling Securityholder's
======
immediate family and any trust, the beneficiaries of which are such Option
===========
Selling Securityholder , and any member or members of such Option Selling
== ======
Securityholder's immediate family, in connection with the exercise, if any, by
the Underwriters, of the overallotment option set forth in Section 3(c).
(d) Notwithstanding anything to the contrary set forth herein, the total
=== ====================================================================
liability of Weksel under Section 7(a), 7(b) and 7(h) shall not exceed the
==========================================================================
aggregate net proceeds received by Weksel, any member or members of Weksel's
============================================================================
immediate family and any trust, the beneficiaries of which are Weksel and any
=============================================================================
member or members of Weksel's immediate family, from the sale of the Weksel
===========================================================================
Underwritten Stock.
===================
(e) The indemnity agreement of the Company and the Selling
===
Securityholders contained in Sections 7(a) through (d) hereof and the
===
representations and warranties of the Company and the Selling Securityholders
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 Underwriter
Indemnified Party and shall survive the delivery of and payment for the Stock.
(f) Each Underwriter severally and not jointly 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, 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, the Selling Securityholders and
each of their employees, attorneys and agents from and against any and all
Losses, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or 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 as 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
19
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 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 an Underwriter
shall be so liable under this paragraph (f) only if such statement or
===
omission was made in reliance upon and in conformity with information furnished
in writing by the Underwriter to the Company for inclusion in the Registration
Statement, any Preliminary Prospectus and the Prospectus or any such amendment
thereof or supplement thereto. The indemnity agreement of each Underwriter
contained in this paragraph (f) 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.
(g) Each party indemnified under the provision of paragraphs (a) through
===
(f) of this Section 7 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 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 (f) of this Section 7 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
20
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.
(h) If the indemnification provided for in this Section 7 is unavailable
===
or insufficient to hold harmless an indemnified party under paragraphs (a)
through (f) of this Section 7, 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, referred to in
paragraphs (a) through (f) of this Section 7, (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, 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 respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and the Selling Securityholders 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 (h) 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 (h). The
===
amount paid by an indemnified party as a result of the Losses, or actions in
respect thereof, referred to in the first sentence of this paragraph (h)
===
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigation, preparing to defend or
defending against any action or claim which is the subject of this paragraph
(h). Notwithstanding the provisions of this paragraph (h), 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 (h) 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
21
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 (g) of this Section
===
7).
(i) Neither the Company nor the Selling Securityholders will, 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.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders 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, or The Nasdaq Stock Market, or the imposition or
effectiveness of 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 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 8, there shall be no liability of the Company or the
Selling Securityholders to the Underwriters and no liability of the Underwriters
to the Company or the Selling Securityholders; 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 and the Selling Securityholders under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Securityholders of all their
respective obligations to be performed
22
hereunder at or prior to the Closing Date or 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; and no stop
order suspending the effectiveness thereof shall have been issued; no
proceedings therefor shall be pending or threatened by the Commission; the
Prospectus as amended or supplemented shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Securities Act and all requests
for additional information on the part of the Commission shall have been
complied with to the Representative's reasonable satisfaction.
(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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters.
(c) You shall have received from Proskauer Rose LLP, counsel to the Company
and Weksel an opinion, addressed to the Underwriters and dated the Closing Date,
==========
covering the matters set forth in ANNEX A hereto and, if Option Stock is
purchased at any date after the Closing Date, an additional opinion from such
counsel, addressed to the Underwriters and dated such later date, confirming
that the statement expressed as of the Closing Date in such opinion remains
valid as of such date.
(d) If the option granted by Section 3(c) is exercised, you shall have
received from Proskauer Rose LLP, counsel to the Selling Securityholders, an
opinion, addressed to the Underwriters and dated the Closing Date or, if Option
Stock is purchased at any date after the Closing Date, an opinion addressed to
the Underwriters and dated such later date, covering the matters set forth in
ANNEX B hereto.
(e) 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 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, (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, results or prospects of operations of the Company, whether or not
arising from transactions in the ordinary course of business, and, since such
dates, except in the ordinary course of business, the Company has not 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) the Company does not have 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
23
the Company is or may be a party or of which property of the Company is or may
be 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 or any later date on which Option Stock
is to be purchased, as the case may be, and (viii) there has not been any
material change in the market for securities in general or in political,
financial or economic conditions from those reasonably foreseeable as to render
it impracticable in your reasonable judgment to make a public offering of the
Stock, or a material adverse change in market levels for securities in general
(or those of companies in particular) or financial or economic conditions which
render it inadvisable to proceed.
(f) 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 President 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 9 are true and
correct.
(g) You shall have received on the Closing Date or such later date on which
Option Stock is purchased a certificate, dated the Closing Date on such later
date, and signed by the Secretary of the Company: (i) attaching and certifying
as to (A) the Certificate of Incorporation of the Company as certified by the
Secretary of State of the State of Delaware not less than five (5) business days
prior to the Closing Date or such later date, (B) the By-Laws of the Company,
(C) the resolution of the Company's Board of Directors and, if necessary,
shareholders authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, (D) a specimen stock
certificate and (E) a true and complete list of all correspondence between the
Company, its representatives, accountants and counsel and the Commission and
copies of such correspondence, and (ii) certifying that (A) all comments
received by the Company or its representatives, accountants or counsel from the
Commission relating to the Registration Statement (whether written or oral) have
been communicated to counsel for the Underwriters and (B) the minute books of
the Company that have been made available to counsel for the Underwriters are
the original minute books of the Company and are true and complete through the
date of such certificates.
(h) You shall have received from each Option Selling Securityholder a
======
certificate dated the date on which Option Stock is purchased to the effect that
the representations and warranties of such Option Selling Securityholder set
======
forth in this Agreement are true and correct as of such date and each Option
======
Selling Securityholder has complied with all the agreements and satisfied all
the conditions on the part of such Option Selling Securityholder to be
======
performed or satisfied at or prior to such date.
(i) You shall have received from PriceWaterhouseCoopers 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
24
respect to the Company within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and based upon the
procedures described in their letter delivered to you concurrently with the
execution of this Agreement (herein called the "Original Letter"), but carried
out to the Closing Date or such later date on which Option Stock is purchased
(i) confirming, to the extent true, that the statements 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 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.
(j) You shall have received from PriceWaterhouseCoopers LLP a letter
======================
stating that its review of the Company's system of internal accounting controls,
to the extent it deemed necessary in establishing the scope of its examination
of the Company's financial statements as of March 31, 1998, did not disclose any
weakness in internal controls that it considered to be a material weakness.
(k) 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 (f)
of Section 6 hereof.
(l) On or prior to the Closing Date, you shall have received from all
directors, officers, and beneficial holders of Common Stock, lock up agreements
in the form of EXHIBIT A.
(m) None of the contracts between the Company and either the State of
Georgia on behalf of the Georgia Department of Medical Assistance or the
Connecticut Department of Social Services shall have been terminated or not
renewed and the Company shall not have received with respect to any such
contracts, any notice of default, termination or nonrenewal or notice of intent
to terminate or not renew.
(n) You shall have received certificates, stating that the Company is in
good standing, issued not more than five (5) business days prior to the Closing
Date or such later date on which Option Stock is purchased by the Secretaries of
State of the states in which the character of the property owned or leased by
the Company on the nature of the business transacted by it makes qualification
necessary.
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters,
shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholders. Any such termination shall be
without liability of the Company or the Selling
25
Securityholders to the Underwriters and without liability of the Underwriters to
the Company or the Selling Securityholders; 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 and the Selling Securityholders under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company or the Selling
Securityholders 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.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The obligation of the Company and the Selling Securityholders
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 10 shall not be
fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Securityholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Securityholders; 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
and the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES.
(a) In addition to their other obligations under Section 7 of this
Agreement, the Company and each of the Affiliated Selling Securityholders hereby
=======
severally and not jointly (subject to the limitation on Securityholder
liability set forth in Section 7(c) and to the limitation on Weksel liability
=========================================
set forth in Section 7(d) agree 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 7 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 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.
26
(b) In addition to their other obligations under Section 7 of this
Agreement, the Selling Securityholders hereby severally and not jointly (subject
to the limitation of Selling Securityholder liability set forth in Section
7(c), and the limitation on Weksel liability set forth in Section 7(d) agree 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 (b) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 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.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, 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.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing and, if to the Underwriters, shall be mailed,
facsimilied or delivered to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department and if to the Company,
shall be mailed, facsimilied or delivered to it at its office, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number
(▇▇▇)▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief Executive
Officer; and if to the Selling Securityholders, shall be mailed, telegraphed or
delivered to the Selling Securityholders in care of the Custodian at
________________.
14. 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 the Selling Securityholders 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 paragraphs (l), (m) and (n),of Section 6 hereof 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.
27
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
[SIGNATURE PAGE FOLLOWS]
28
Please sign and return to the Company and to the Selling Securityholders in
care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
LOGISTICARE, INC.
By__________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
WEKSEL:
=======
================================================================================
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
=========================================================
SELLING SECURITYHOLDERS:
[LIST NAMES]
By__________________________________________
__________________________________________
ATTORNEY-IN-FACT
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
EVEREN SECURITIES, INC.,
by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By_________________________________________
Managing Director
Acting on behalf of the several Underwriters,
29
including themselves, named in Schedule I hereto.
30
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
OF UNDERWRITTEN STOCK
UNDERWRITERS TO BE PURCHASED
------------ ---------------
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
EVEREN Securities, Inc.
TOTAL ..................................... 3,300,000
=========
==========
31
SCHEDULE II
OPTION STOCK
NAME AND ADDRESS NUMBER OF SHARES
OF OPTION STOCK OFFEREES OF OPTION STOCK
-----------------------------------------------------------------------
TOTAL ....................................... 495,000
=======
==============
32
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF PROSKAUER ROSE LLP
COUNSEL FOR THE COMPANY AND WEKSEL
==========
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is duly
qualified as a foreign corporation and in good standing in each state of the
United States of America in which its ownership or leasing of property requires
such qualification, (except where the failure to be so qualified would not have
a material adverse effect on the business, properties, financial condition or
results of operations of the Company, taken as a whole) and has full corporate
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement.
(ii) The authorized capital stock of the Company consists of 1,000,000
=========
shares of Preferred Stock, of which there are no shares outstanding and
30,000,000 shares of Common Stock, $0.01 par value, of which there are
==========
outstanding [11,321,510] shares (including the Underwritten Stock); proper
============
corporate proceedings have been taken to validly authorize such authorized
capital stock; and the authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the designation thereof contained
in the Prospectus. All of the outstanding shares of capital stock of the Company
(including the Stock) have been validly issued and are fully paid and
nonassessable. No further approval or authority of the shareholders or the Board
of Directors of the Company will be required for the transfer and sale of the
Stock as contemplated herein.
(iii) No preemptive rights, rights of refusal, rights of co-sale or
similar rights in favor of any person, entity or holder of any security issued
by the Company exist with respect to the Common Stock (including the
Underwritten Stock), or the issue and sale thereof, pursuant to the Certificate
of Incorporation or Bylaws of the Company and, to such counsel's knowledge,
there are no contractual preemptive rights, rights of first refusal rights of
co-sale or similar rights which exist with respect to the Common Stock.
(iv) No rights with respect to the registration of shares exist pursuant to
the Certificate of Incorporation or the By-laws of the Company and, to such
counsel's knowledge, no contractual rights exist with respect to the
registration of shares of Common Stock or any other security issued by the
Company.
(v) The Registration Statement has become effective under the Securities
Act and no stop order suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus is in effect and, to such
counsel's knowledge, no proceedings for that purpose have been instituted or are
pending or contemplated by the Commission.
(vi) 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, the Exchange Act
and with the rules and regulations of the Commission thereunder.
A-1
(vii) Such counsel has no reason 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
the date hereof, contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(viii) The information required to be set forth in the Registration
Statement in answer to Item 12, Item 13 (insofar as it relates to such counsel)
and Item 9 of Form SB-2 is, to such counsel's knowledge, accurately and
adequately set forth in the Registration Statement and Prospectus 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 plans and the options granted and which may be granted thereunder set
forth in the Prospectus accurately and fairly presents the information required
to be shown with respect to said plans and options to the extent required by the
Securities Act and the rules and regulations of the Commission thereunder.
(ix) Such counsel does 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.
(x) To such counsel's knowledge after due inquiry, the Company is not in
breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), the
Certificate of Incorporation or By-Laws of the Company or any contract,
indenture, mortgage, deed of trust, credit agreement, joint venture or other
agreement or instrument to which the Company is a party or by which the Company
or its properties may be bound or affected, where such breach or default could
have a material adverse effect on the condition (financial or otherwise),
business, assets or operations or prospects of the Company.
(xi) to such counsel's knowledge, after due inquiry, and subject to such
qualification set forth in the Prospectus, the Company is not in violation of
any law, order, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign which violations
could have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company taken as a whole.
(xii) The Company has the corporate power and authority to enter into the
Underwriting Agreement and to issue, sell and deliver the Stock to be sold by
=============
the Company under the Underwriting Agreement. The Underwriting Agreement and the
============================================
performance of the Company's obligations thereunder have been duly authorized,
executed and delivered by the Company. The Underwriting Agreement constitutes
the valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to
A-2
indemnity and contribution hereunder may be limited by federal or state
securities laws or principles of public policy and subject to the qualification
that the enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
equitable principles.
(xiii) The issue and sale by the Company of the shares of Stock sold by
the Company as contemplated by the Underwriting Agreement, the execution,
delivery and performance of and compliance with the Underwriting Agreement and
the consummation of the transaction contemplated by the Underwriting Agreement
will not conflict with, or result in a breach or violation of, or constitute a
default or event of default under, the Certificate of Incorporation or Bylaws of
the Company or any contract, indenture, mortgage, credit agreement or other
agreement or instrument known to such counsel to which the Company is a party or
by which the property of the Company is bound or any applicable law or
regulation, or so far as is known to us, any order, writ, injunction or decree,
of any jurisdiction, court or governmental instrumentality.
(xiv) To the best of such counsel's knowledge, after due inquiry, the
Company holds all material licenses, certificates, permits, franchises,
authorizations, clearances and other approvals from any federal, state or other
regulatory authorities (herein called Licenses) which are necessary to own its
properties and to conduct its business in the manner described in the
Prospectus, including, without limitation, such Licenses as are required (x)
under such federal and state healthcare laws, statutes and regulations as are
applicable to the Company, (y) to receive reimbursement under Medicare/Medicaid
and (z) under such insurance laws and regulations as are applicable to the
Company, subject to such qualifications as may be set forth in the Prospectus.
(xv) 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 the Underwriting Agreement and the consummation by the Company of the
transactions therein contemplated (except as may be necessary to qualify the
Stock for public offering by the Underwriters under state securities laws) has
been obtained or made and is in full force and effect.
(xvi) The Stock issued and sold by the Company has been duly listed for
quotation by the Nasdaq National Market.
(xvii) The certificates for the Stock to be delivered hereunder are in due
and proper form, and when duly countersigned by the Company's transfer agent and
delivered to you or upon your order against payment of the agreed consideration
therefor in accordance with the provisions of this Agreement, the Stock
represented thereby will be duly authorized and validity issued, fully paid and
nonassessable and will be free of any pledge, lien, encumbrance, claim,
statutory preemptive rights or rights of first refusal.
(xviii) The statements in the Registration Statement and the Prospectus of
laws, regulations and rules, of legal and government proceedings and of
contracts, agreements, leases and other documents including, without limitation,
under the headings "Management -- Directors Compensation and Committees, --
Stock Option Plans, and -- Severance and Non-Competition
A-3
Agreements," "Certain Transactions," "Description of Capital Stock" and "Shares
Eligible for Future Sale" have been reviewed by such counsel and, to such
counsel's knowledge, are accurate in all material respects present fairly the
information required to be shown, and comply as to form in all material respects
with the applicable requirements of the Securities Act and the rules and
regulations thereunder.
(xix) The Company is not and upon receipt and pending application of the
net proceeds from the sale of the Stock to be sold by the Company in the manner
described in the Prospectus will not be, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(xx) The Underwriting Agreement and the Custody Agreement (and the Power of
===========================================================================
Attorney referred to in such agreement) have each been duly executed and
========================================================================
delivered by or on behalf of Weksel and constitutes valid and binding
=====================================================================
obligations and agreements of Weksel in accordance with their respective terms,
===============================================================================
except as enforcement of rights to indemnity and contribution under the
=======================================================================
Underwriting Agreement may be limited by federal and state securities laws or
=============================================================================
principles of public policy and subject to the qualification that the
=====================================================================
enforceability of Weksel's obligations thereunder may be limited by bankruptcy,
===============================================================================
fraudulent conveyance, insolvency, reorganization, moratorium and other laws
============================================================================
relating to or affecting creditors' rights generally and by general equitable
=============================================================================
principles.
===========
(xxi) To the knowledge of such counsel, after due inquiry, Weksel has full
===========================================================================
legal right, power and authority, and any approval required by law (other than
==============================================================================
any approval imposed by applicable state securities laws) to sell, assign,
==========================================================================
transfer and deliver the Weksel Underwritten Stock to be sold by Weksel under
=============================================================================
the Underwriting Agreement.
===========================
(xxii) Weksel has good and marketable title to all the shares of Weksel
========================================================================
Underwritten Stock to be sold by Weksel under the Underwriting Agreement, free
==============================================================================
and clear of all liens, encumbrances, equities, security interests and claims
=============================================================================
whatsoever, and upon delivery of such Weksel Underwritten Stock pursuant to the
===============================================================================
Underwriting Agreement and payment therefor as contemplated by the Underwriting
===============================================================================
Agreement, the several Underwriters will receive good and marketable title
==========================================================================
thereto, free and clear of all liens, encumbrances, equities, security interests
================================================================================
and claims whatsoever, assuming for purposes of this opinion that the
=====================================================================
Underwriters purchased such shares in good faith without notice of any adverse
==============================================================================
claims.
=======
(xxiii) To the knowledge of such counsel, the execution, delivery and
======================================================================
performance of the Underwriting Agreement and the Custody Agreement by Weksel
=============================================================================
and the consummation of the transactions contemplated therein will not result in
================================================================================
a breach or violation of any of the terms or provisions of, or constitute a
===========================================================================
default under, (A) any indenture, mortgage, deed of trust, loan agreement or
============================================================================
other agreement or instrument to which Weksel is a party or by which Weksel is
==============================================================================
bound, or (B) (assuming the due qualification of the Weksel Underwritten Stock
==============================================================================
for public offering by the Underwriters under state securities laws) any statute
================================================================================
or any order, rule or regulation of any court or governmental agency or body
============================================================================
having jurisdiction over Weksel or the property of Weksel.
=========================================================
(xxiv) To the knowledge of such counsel, all consents, approvals,
==================================================================
authorizations and orders necessary for the execution and delivery by Weksel of
===============================================================================
the Underwriting Agreement,
===========================
A-4
Weksel's Power of Attorney and the Custody Agreement, and (assuming the due
===========================================================================
qualification of the Weksel Underwritten Stock of public offering by the
========================================================================
Underwriters under state securities laws) for the sale and delivery of the
==========================================================================
Weksel Underwritten Stock to be sold by Weksel hereunder, have been
===================================================================
obtained.
=========
-------------------------------------------------
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of Delaware, the United States or of the State of 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.
A-5
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF
PROSKAUER ROSE LLP
COUNSEL FOR THE SELLING SECURITYHOLDERS
(i) The Underwriting Agreement and the Custody Agreement (and the Power of
Attorney referred to in such agreement) have each been duly executed and
delivered by or on behalf of each Selling Securityholder and constitute valid
and binding obligations and agreements of such Selling Securityholder in
accordance with their respective terms, except as enforcement of rights to
indemnity and contribution under the Underwriting Agreement may be limited be
federal and state securities laws or principles of public policy and subject to
the qualification that the enforceability of such Selling Securityholder's
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(ii) To the knowledge of such counsel, after due inquiry, each Selling
Securityholder has full legal right, power and authority, and any approval
required by law (other than any approval imposed by applicable state securities
laws) to sell, assign, transfer and deliver the Stock to be sold by such Selling
Securityholder under the Underwriting Agreement.
(iii) Each Selling Securityholder has good and marketable title to all the
shares of Stock to be sold by such Selling Securityholder under the Underwriting
Agreement, free and clear of all liens, encumbrances, equities, security
interests and claims whatsoever, and upon delivery of such Stock pursuant to the
Underwriting Agreement and payment therefor as contemplated by the Underwriting
Agreement, the several Underwriters will receive good and marketable title
thereto, free and clear of all liens, encumbrances, equities, security interests
and claims whatsoever, assuming for purposes of this opinion that the
Underwriters purchased such shares in good faith without notice of any adverse
claims.
(iv) To the knowledge of such counsel, the execution, delivery and
performance of the Underwriting Agreement and the Custody Agreement by each
Selling Securityholder and the consummation of the transactions contemplated
therein will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (A) any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which such Selling
Securityholder is a party or by which Selling Securityholder is bound, or (B)
(assuming the due qualification of the Stock for public offering by the
Underwriters under state securities laws) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Selling Securityholder or the property of such Selling Securityholder.
(v) To the knowledge of such counsel, all consents, approvals,
authorizations and orders necessary for the execution and delivery by each
Selling Securityholder of the Underwriting Agreement, the Selling
Securityholder's Power of Attorney and the Custody Agreement, and (assuming the
due qualification of the Stock of public offering by the Underwriters under
state
B-1
securities laws) for the sale and delivery of the Stock to be sold by such
Selling Securityholder hereunder, have been obtained.
B-2
------------------ COMPARISON OF FOOTNOTES ------------------
-FOOTNOTE 1-
Plus options to purchase from the Option Selling Securityholders and the
====== =======
Company up to an aggregate of 495,000 additional shares to cover over-
======= =======
allotments.
------------------ COMPARISON OF FOOTERS ------------------
-FOOTER 1-
DOCUMENT #=786709.09; AUTHOR=BRICHARD
=========
B-3
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