EXHIBIT 10.34
$125,000,000
PHYSICIANS RESOURCE GROUP, INC.
6% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001
PURCHASE AGREEMENT
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December 6, 1996
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇, Read & Co. Inc.
Salomon Brothers Inc
▇▇▇▇▇, ▇▇▇▇▇ & Company
As Initial Purchasers
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Physicians Resource Group, Inc., a Delaware corporation (the
"Company"), proposes, upon the terms and conditions set forth herein, to issue
and sell to you, as the initial purchasers (the "Initial Purchasers"),
$125,000,000 aggregate principal amount of its 6% Convertible Subordinated
Debentures due 2001 (the "Firm Debentures"). The Company also proposes, upon
the terms and conditions set forth herein, to issue and sell to the Initial
Purchasers up to an additional $18,750,000 aggregate principal amount of its 6%
Convertible Subordinated Debentures due 2001 (the "Additional Debentures"). The
Firm Debentures and the Additional Debentures are hereinafter collectively
referred to as the "Debentures." The Debentures will be issued pursuant to the
provisions of an Indenture, to be dated as of December 11, 1996 (the
"Indenture"), between the Company and U.S. Trust Company of New York, N.A., as
Trustee (the "Trustee"). The Company's common stock, $.01 par value, is
hereinafter referred to as the "Common Stock."
The Company wishes to confirm as follows its agreement with the
Initial Purchasers in connection with the purchase and resale of the Debentures.
1. Preliminary Offering Memorandum and Offering Memorandum. The
Debentures will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company has
prepared a preliminary offering memorandum, dated November 21, 1996 (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated December
6, 1996 (the "Offering Memorandum"), setting forth information regarding the
Company and the Debentures. Any references herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to include all amendments
and supplements thereto and any documents filed under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder (collectively, the "Exchange
Act") which are incorporated by reference therein. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Preliminary Offering Memorandum, the Offering Memorandum or
any amendment or supplement thereto. The Company hereby confirms that it has
authorized the use of the Preliminary Offering
Memorandum and the Offering Memorandum in connection with the offering and
resale of the Debentures by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to make
offers and sales (the "Exempt Resales") of the Debentures purchased by the
Initial Purchasers hereunder only on the terms and in the manner set forth in
the Offering Memorandum and Section 2 hereof, as soon as the Initial Purchasers
deem advisable after this Agreement has been executed and delivered, (i) to
persons whom the Initial Purchasers reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A
under the Act, as such rule may be amended from time to time ("Rule 144A"), in
transactions under Rule 144A, (ii) to a limited number of other "accredited
investors" (as defined in Rule 501(a)(1), (2), (3), or (7) under the Act) that
are institutional investors (the "Institutional Accredited Investors") and that
agree to comply with the transfer restrictions set forth in the letter
containing certain representations and agreements substantially in the form
attached hereto as Exhibit A, and (iii) outside the United States to non-U.S.
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persons in offshore transactions in reliance upon Regulation S (as those terms
are defined in Regulation S under the Act) ("Regulation S") under the Act (such
persons specified in clauses (i), (ii) and (iii) being referred to herein as the
"Eligible Purchasers"). As used herein the terms "offshore transactions,"
"United States" and "U.S. persons" have the meaning given them in Regulation S.
It is understood and acknowledged that upon original issuance thereof,
and until such time as the Debentures (and all securities issued in exchange
therefor, in substitution thereof or upon conversion thereof (including the
Common Stock)) have been (i) effectively registered under the Act and disposed
of in accordance with an effective registration statement under the Act, (ii)
distributed to the public pursuant to Rule 144 or (ii) sold or transferred
pursuant to Rule 144(k) under the Act (or any similar provisions then in force)
or otherwise, any certificate representing such securities shall bear the
following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT'), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT)
THAT IS AN INSTITUTIONAL INVESTOR AND THAT PRIOR TO SUCH TRANSFER, FURNISHES TO
U.S. TRUST COMPANY OF NEW YORK, N.A. OR ▇▇▇▇▇ ▇▇▇▇▇▇ SHAREHOLDER SERVICES,
L.L.C. A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (WHICH
FORM OF LETTER CAN BE OBTAINED FROM U.S. TRUST COMPANY OF NEW YORK, N.A. OR
▇▇▇▇▇ ▇▇▇▇▇▇ SHAREHOLDER
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SERVICES, L.L.C.), (E) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT TO THE COMPANY'S, U.S.
TRUST COMPANY OF NEW YORK, N.A.'S,AND ▇▇▇▇▇ ▇▇▇▇▇▇ SHAREHOLDER SERVICES,
L.L.C.'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(C), (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES PROVIDED THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO U.S.
TRUST COMPANY OF NEW YORK, N.A. AND ▇▇▇▇▇ ▇▇▇▇▇▇ SHAREHOLDER SERVICES, L.L.C.
AND SUBJECT TO ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE THEN HOLDER OF THIS SECURITY AFTER THE RESALE
RESTRICTION TERMINATION DATE.
It is also understood and acknowledged that holders (including
subsequent transferees) of the Debentures and, if such Debentures are
subsequently converted into Common Stock, the Common Stock, will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the date hereof, in substantially
the form of Exhibit B hereto, for so long as such Debentures and Common Stock
---------
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree (i) to file with the Commission under the circumstances set forth
therein, a registration statement on the appropriate form under the Act relating
to the resale of the Debentures and the Common Stock by certain holders thereof
from time to time in accordance with the methods of distribution set forth in
such registration statement and Rule 415 under the Act (the "Shelf Registration
Statement") and (ii) to use its best efforts to cause such Shelf Registration
Statement to be declared effective. This Agreement, the Indenture and the
Registration Rights Agreement are hereinafter referred to collectively as the
"Operative Documents."
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Indenture or the Offering Memorandum.
2. Agreements to Sell, Purchase and Resell. (a) The Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Initial Purchaser and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, each Initial Purchaser agrees to purchase
from the Company, at a purchase price of 97.50% of the principal amount thereof,
the principal amount of Firm Debentures set forth opposite the name of such
Initial Purchaser in Schedule I hereto.
(b) The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Initial Purchasers, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Initial Purchasers
shall have the right to purchase from the Company pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the Offering Memorandum (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to $18,750,000 principal amount of Additional Debentures
at the same purchase price as the Firm Debentures, plus accrued interest, if
any, from the date of issuance of the Firm Debentures to the date of delivery
and payment. Upon any exercise of the over-allotment option, each Initial
Purchaser, severally and not jointly, agrees to purchase that principal amount
of Additional Debentures which bears the same proportion to the aggregate
principal amount of Additional Debentures to be purchased by the Initial
Purchasers as the principal amount of Firm Debentures set forth opposite the
name of such Initial Purchaser bears to the aggregate principal amount of Firm
Debentures.
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(c) The Initial Purchasers have advised the Company that they propose
to offer the Debentures for sale upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum. Each Initial Purchaser hereby
represents and warrants to the Company that such Initial Purchaser (i) is a
Qualified Institutional Buyer within the meaning of Rule 144A and is purchasing
the Debentures pursuant to a private sale exempt from registration under the Act
and is not purchasing the Debentures with a view to or for offer or sale in
connection with any distribution that would be in violation of foreign or U.S.
federal or state securities laws, (ii) will not solicit offers for, or offer or
sell, the Debentures by means of any form of general solicitation or general
advertising or in any manner involving a public offering within the meaning of
Section 4(2) of the Act, and (iii) has solicited and will solicit offers for the
Debentures only from, and has offered and will offer, sell or deliver the
Debentures as part of its initial offering, only to (A) persons whom the Initial
Purchasers reasonably believe to be Qualified Institutional Buyers, or if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchaser that each such account is a Qualified Institutional Buyer,
to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, in each case, in transactions under Rule 144A, (B) to
Institutional Accredited Investors, and (C) outside the United States to certain
persons in offshore transactions in reliance on Regulation S. The Initial
Purchasers have advised the Company that they will offer the Debentures to
Eligible Purchasers at a price initially equal to 100% of the principal amount
thereof, plus accrued interest, if any, from the date of issuance of the Firm
Debentures. Such price may be changed by the Initial Purchasers at any time
thereafter without notice.
(d) The Initial Purchasers represent and warrant that they (i) have
not offered or sold and prior to the date that is six months after the closing
date with respect to the Offering will not offer or sell any Debentures to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which will not involve an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
(the "Regulations"); (ii) have complied with and will comply with all applicable
provisions of the Financial Services Act of 1986 and the Regulations with
respect to anything done by it in relation to the Debentures in, from, or
otherwise involving the United Kingdom; and (iii) have only issued or passed on
and will only issue or pass on to any person in the United Kingdom any document
received by it in connection with the offer of the Debentures if that person is
of a kind described in Article 11(3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(e) The Initial Purchasers represent and warrant that they have
offered and sold the Debentures and agree that they will offer and sell the
Debentures (i) as part of their distribution at any time, and (ii) otherwise
until 40 days after the later of the commencement of the offering of the
Debentures and the Closing Date, only in accordance with Rule 903 of Regulation
S or as otherwise permitted pursuant to paragraph (c) above. Accordingly, the
Initial Purchasers represent and agree that none of such Initial Purchasers,
their affiliates nor any persons acting on their behalf have engaged or will
engage in any directed selling efforts (as defined in Regulation S under the
Act) with respect to the Debentures, and they have complied and will comply with
the offering restrictions requirement of Regulation S. Such Initial Purchasers
agree that, at or prior to confirmation of the sale of Debentures to non-U.S.
persons (as defined in Regulation S under the Act) other than a sale pursuant to
Rule 144A, they will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Debentures from
such Initial Purchasers during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40
days after the later of the commencement of
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the offering and the closing date, except in either
case in accordance with Regulation S (or Rule 144A)
under the Securities Act. Terms used above have the
meaning given to them by Regulation S."
The Initial Purchasers understand that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Sections
7(c) and 7(d) hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and agreements and the Initial Purchasers hereby consent to such
reliance.
3. Delivery of the Debentures and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Firm Debentures shall be made at the
office of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00
A.M., New York City time, on December 11, 1996 (the "Closing Date"). The place
of closing for the Firm Debentures and the Closing Date may be varied by
agreement between the Initial Purchasers and the Company.
Delivery to the Initial Purchasers of and payment for any Additional
Debentures to be purchased by the Initial Purchasers shall be made at the
aforementioned office of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from the Initial Purchasers to the
Company of the Initial Purchasers' determination to purchase the principal
amount of Additional Debentures specified in such notice. The place of closing
for any Additional Debentures and the Option Closing Date for such Additional
Debentures may be varied by agreement between the Initial Purchasers and the
Company.
The Firm Debentures and any Additional Debentures which the Initial
Purchasers may elect to purchase will be delivered to the Initial Purchasers
against payment of the purchase price therefor in immediately available funds.
Debentures being sold by the Initial Purchasers in Exempt Resales to Qualified
Institutional Buyers in reliance on Rule 144A will be initially evidenced by one
or more global securities, and will be registered in the name of Cede & Co.
("Cede") as nominee of The Depository Trust Company ("DTC"). Debentures being
sold by the Initial Purchasers in Exempt Resales to certain persons in offshore
transactions in reliance on Regulation S will be initially evidenced by one or
more global securities which will be deposited with, or on behalf of DTC, and
registered in the name of Cede as DTC's nominee, for the account of ▇▇▇▇▇▇
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System and Cedel, S.A. The Debentures to be delivered to the Initial
Purchasers shall be made available to the Initial Purchasers in New York City
for inspection and packaging not later than 9:30 a.m., New York City time, on
the business day next preceding the Closing Date or the Option Closing Date, as
the case may be.
4. Agreements of the Company. The Company agrees with the Initial
Purchasers as follows:
(a) The Company will advise the Initial Purchasers promptly and, if
requested by them, will confirm such advice in writing, within the period of
time referred to in paragraph (e) below, of any material change in the Company's
business, financial condition or results of operations, or of the happening of
any event which makes any statement of a material fact made in the Offering
Memorandum (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Offering Memorandum (as then amended or
supplemented) in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Offering Memorandum (as then amended or
supplemented) to comply with any law.
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(b) The Company will furnish to the Initial Purchasers, without
charge, as of the date of the Offering Memorandum, such number of copies of the
Offering Memorandum (as then amended or supplemented) as they may reasonably
request.
(c) The Company will not make any amendment or supplement to the
Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they shall
reasonably object after being so advised or file any document which upon filing
becomes an Incorporated Document, without delivering a copy of such document to
the Initial Purchasers, prior to such filing.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Initial Purchasers, without charge,
in such quantities as the Initial Purchasers shall have requested or may
hereafter request, copies of the Preliminary Offering Memorandum. The Company
consents to the use, in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Debentures are offered by the Initial Purchasers and
by dealers, prior to the date of the Offering Memorandum, of each Preliminary
Offering Memorandum so furnished by the Company. The Company consents to the use
of the Offering Memorandum (and of any amendment or supplement thereto) in
accordance with the securities or Blue Sky laws of the jurisdictions in which
the Debentures are offered by the Initial Purchasers and by all dealers to whom
Debentures may be sold, in connection with the offering and sale of the
Debentures.
(e) If, at any time prior to completion of the distribution of the
Debentures by the Initial Purchasers to Eligible Purchasers, any event shall
occur that in the judgment of the Company or in the opinion of counsel for the
Initial Purchasers is required to be set forth in the Offering Memorandum (as
then amended or supplemented) or should be set forth in the Offering Memorandum
(as then amended or supplemented) in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary to supplement or amend the Offering Memorandum, or to file under
the Exchange Act any document which upon filing becomes an Incorporated
Document, to comply with any law, the Company will forthwith prepare an
appropriate supplement or amendment thereto or such document, and will
expeditiously furnish to the Initial Purchasers and dealers a reasonable number
of copies thereof. In the event that the Company and the Initial Purchasers
agree that the Offering Memorandum should be amended or supplemented, or that a
document should be filed under the Exchange Act which upon filing becomes an
Incorporated Document, the Company, if requested by the Initial Purchasers, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement or such document.
(f) The Company will cooperate with the Initial Purchasers and with
its counsel in connection with the registration or qualification of the
Debentures and the Common Stock issuable upon conversion of the Debentures for
offering and sale by the Initial Purchasers and by dealers under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may designate
and will file such consents to service of process or other documents necessary
or appropriate in order to effect such qualification; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Debentures, in any jurisdiction where it is not now so subject.
(g) So long as any of the Debentures are outstanding, the Company
will furnish to the Initial Purchasers (i) as soon as available, a copy of each
report of the Company mailed to stockholders or filed with the Commission or the
New York Stock Exchange, Inc. (the "NYSE") (excluding listing applications), and
(ii) from time to time, such other information concerning the Company as the
Initial Purchasers may reasonably request.
(h) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than
pursuant to Section 10 hereof or by notice given
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by the Initial Purchasers terminating this Agreement pursuant to Section 9 or
Section 11 hereof) or if this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Company to
comply with the terms or fulfill any of the conditions of this Agreement, the
Company agrees to reimburse the Initial Purchasers for all out-of-pocket
expenses (including reasonable fees and expenses of its counsel) incurred by it
in connection herewith.
(i) The Company will apply the net proceeds from the sale of the
Debentures to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum.
(j) Except as provided in this Agreement, the Company will not sell,
contract to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or grant any
options or warrants to purchase Common Stock, for a period of 90 days after the
date of the Offering Memorandum (the "90-Day Lockup Period"), without the prior
written consent of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., except that the Company may issue up to
4.5 million shares of Common Stock ("Acquisition Shares") during the 90-Day
Lockup Period in connection with acquisitions so long as no more than 450,000 of
such Acquisition Shares are issued to purchasers who have not agreed to be bound
by a lockup letter substantially in the form attached hereto as Exhibit C and,
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if more than 450,000 Acquisition Shares are issued, so long as the purchasers of
such additional Acquisition Shares agree to be bound by such lockup letter and
such Acquisition Shares bear a legend to such effect. The Company further
agrees for the express benefit of the Initial Purchasers that it will not waive
any provision of any registration rights agreement, stockholders agreement or
any Reorganization Agreement (as defined in that certain Underwriting Agreement,
dated June 23, 1995, between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇, ▇▇▇▇▇
& Company, as representatives of the several underwriters named therein), in
each case relating to any restriction imposed on the subsequent transfer or
other disposition of shares of Common Stock and will enforce any such provision
so as to limit the transfer or other disposition of shares of the Common Stock
during the 90-Day Lockup Period.
(k) The Company has furnished or will furnish to the Initial
Purchasers "lock-up" letters, in form and substance satisfactory to the Initial
Purchasers, signed by each of its current directors and executive officers for
the 90-Day Lockup Period.
(l) Except as stated in this Agreement, the Preliminary Offering
Memorandum and the Offering Memorandum, the Company has not taken, nor will it
take, directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Debentures to facilitate the sale or resale of the Debentures. Except as
permitted by the Act, the Company will not distribute any offering material in
connection with the Exempt Resales.
(m) The Company will use its reasonable best efforts to cause the
Debentures to be eligible for trading on The PORTAL Market.
(n) From and after the Closing Date, so long as any of the Debentures
are outstanding during any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, the Company will furnish to holders of the
Debentures and prospective purchasers of Debentures designated by such holders,
upon request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Act to permit
compliance with Rule 144A in connection with resale of the Debentures.
(o) The Company agrees not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Debentures in a manner that would
require the registration under the Act of the sale to the Initial Purchasers or
the Eligible Purchasers of the Debentures.
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(p) The Company agrees to comply with all of the terms and conditions
of the Registration Rights Agreement, and all agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Debentures by DTC for "book entry" transfer.
(q) The Company agrees that prior to any registration of the
Debentures pursuant to the Registration Rights Agreement, or at such earlier
time as may be so required, the Indenture shall be qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and will cause to be entered
into any necessary supplemental indentures in connection therewith.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and Offering Memorandum with
respect to the Debentures have been prepared by the Company for use by the
Initial Purchasers in connection with the Exempt Resales. No order or decree
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum or any amendment or supplement thereto, or any order asserting that
the transactions contemplated by this Agreement are subject to the registration
requirements of the Act has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering Memorandum
as of their respective dates and the Offering Memorandum as of the Closing Date,
did not or will not at any such times contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein in light of the circumstances under which they
are made not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Preliminary Offering Memorandum and
Offering Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein.
(c) The Incorporated Documents heretofore filed were filed in a
timely manner and, when they were filed (or, if any amendment with respect to
any such document was filed, when such document was filed), conformed in all
material respects to the requirements of the Exchange Act and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and any further Incorporated Documents will, when so filed, be filed in a timely
manner and conform in all material respects to the requirements of the Exchange
Act and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) The Indenture has been duly and validly authorized by the Company
and, upon its execution, delivery and performance by the Company and assuming
due authorization, execution, delivery and performance by the Trustee, will be a
valid and binding agreement of the Company, enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by general
equitable principles, and the Indenture conforms in all material respects to the
description thereof in the Offering Memorandum; no qualification of the
Indenture under the 1939 Act is required in connection with the offer and sale
of the Debentures contemplated hereby or in connection with the Exempt Resales.
(e) The Debentures have been duly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with the
Indenture and delivered to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
and will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights
8
generally and by general equitable principles, and the Debentures will conform
in all material respects to the description thereof in the Offering Memorandum.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights and were issued and sold in
compliance with all applicable federal and state securities laws; the shares of
Common Stock issuable upon conversion of the Debentures have been duly
authorized and reserved for issuance and, when delivered upon conversion of the
Debentures, will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights; The authorized capital stock of the Company
conforms in all material respects to the description thereof in the Offering
Memorandum and the authorized and outstanding capital stock of the company is as
set forth under the caption "Capitalization" in the Offering Memorandum."
(g) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to
register or qualify does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company and the Subsidiaries (as hereinafter defined), taken as a whole
(a "Material Adverse Effect").
(h) The subsidiaries listed on Schedule II hereto constitute all of
the Company's subsidiaries (as defined in the Act). Such subsidiaries are
referred to herein individually as a "Subsidiary" and collectively as the
"Subsidiaries." Each Subsidiary that is a corporation (a "Corporate Subsidiary")
has been duly organized, is validly existing and in good standing in the
jurisdiction of its incorporation; each Subsidiary that is a limited liability
company (a "LLC Subsidiary") has been duly organized and is validly existing
under the laws in the jurisdiction of its organization; each Subsidiary that is
a partnership (a "Partnership Subsidiary") has been duly organized and is an
existing partnership under the laws of the jurisdiction of its organization.
Each Subsidiary has full corporate, limited liability company, or partnership,
as the case may be, power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum. Each
Corporate Subsidiary and LLC Subsidiary is duly registered and each Subsidiary
is qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not have a Material Adverse Effect. All the
outstanding shares of capital stock of each of the Corporate Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable, and
are owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity, or other encumbrance, except as disclosed in the Offering Memorandum or
on Schedule II hereto; all the outstanding membership interests in the LLC
Subsidiaries have been duly authorized and validly issued and such interests are
owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance, except as disclosed in the Offering Memorandum or
on Schedule II hereto; and all the outstanding partnership interests in the
Partnership Subsidiaries are owned by the Company directly, or indirectly
through one of the other Subsidiaries, free and clear of any lien, adverse
claim, security interest, equity or other encumbrance, except as disclosed in
the Offering Memorandum or on Schedule II hereto.
(i) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties, is subject, that are not disclosed in the
Offering Memorandum which, if adversely decided, could have a Material Adverse
Effect, or materially affect the issuance of the Debentures or the consummation
of the transactions contemplated by the Operative Documents. There are no
agreements, contracts, indentures, leases or other instruments that
9
would be required to be described in the Offering Memorandum if it were a
prospectus included in a registration statement on Form S-3 under the Act but
are not described as required, or that are required to be filed as an exhibit to
any Incorporated Document that are not so described or filed as required. The
descriptions of the terms of any such contracts or documents contained in the
Offering Memorandum are correct and complete in all material respects.
(j) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, except where any such
violation or violations in the aggregate would not have a Material Adverse
Effect, or (ii) in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound, except
where such default does not and will not, individually or in the aggregate, have
a Material Adverse Effect.
(k) Neither the issuance, offer, sale or delivery of the Debentures,
the issuance of Common Stock upon conversion of the Debentures, the execution,
delivery or performance of this Agreement, the Indenture or the Registration
Rights Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby or thereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required in connection with the registration
under the Act of the Debentures and the Common Stock in accordance with the
Registration Rights Agreement, the qualification of the Indenture under the 1939
Act and except for compliance with the securities or Blue Sky laws of various
jurisdictions) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties may be
bound, any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of the Subsidiaries or any of their
respective properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, except where such conflict,
default or lien (other than in the case of a conflict or default under the
certificate or articles of incorporation or bylaws), individually or in the
aggregate, does and would not have a Material Adverse Effect.
(l) The accountants, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇ & ▇▇▇▇▇ LLP,
Wallingford, McDonald, Fox & Co., P.C. and Coopers and ▇▇▇▇▇▇▇ LLP, who each
have certified or shall certify the financial statements included as part of the
Offering Memorandum (or any amendment or supplement thereto), are, to the best
of the Company's knowledge, independent public accountants under Rule 101 of the
AICPA'a Code of Professional Conduct, and its interpretation and rulings.
(m) The financial statements (historical and pro forma), together
with related schedules and notes forming part of the Offering Memorandum (and
any amendment or supplement thereto), and the financial information of the
acquired companies or companies the acquisition of which is probable
("Acquisition Companies") included in the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company, the
Subsidiaries and the Acquisition Companies, as the case may be, on the basis
stated in the Offering Memorandum at the respective dates or for the respective
periods to which they apply; such statements and related schedules and notes
have been prepared in accordance with
10
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein and all adjustments necessary for
a fair presentation of results for such periods have been made; the pro forma
financial information and the assumptions used in preparing such information,
and the related notes and schedules included or incorporated by reference in the
Offering Memorandum have been prepared in accordance with the requirements of
the Act (including Articles II, III and XI of Regulation S-X) applicable to a
prospectus included in a registration statement on Form S-3 and have been
computed on this basis described therein. The assumptions used in preparation of
the pro forma financial statements and other pro forma financial information
included in the Offering Memorandum are reasonable, and the other financial and
statistical information and data set forth in or incorporated by reference in
the Offering Memorandum (and any amendment or supplement thereto) is accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company, the Subsidiaries and the Acquisition
Companies, as the case may be.
(n) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and the Registration
Rights Agreement; the execution and delivery of, and the performance by the
Company of its obligations under, this Agreement and the Registration Rights
Agreement have been duly and validly authorized by the Company, and this
Agreement and the Registration Rights Agreement have been duly executed and
delivered by the Company and constitute the valid and legally binding agreements
of the Company, enforceable against the Company in accordance with their terms,
except as the enforcement hereof and thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and subject to the applicability of general equitable principles, and
except as rights to indemnity and contribution hereunder and thereunder may be
limited by Federal or state securities laws.
(o) Except as disclosed in the Offering Memorandum (or any amendment
or supplement thereto), subsequent to the date as of which such information is
given in the Offering Memorandum (or any amendment or supplement thereto),
neither the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is or would be material to the Company and the
Subsidiaries, taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term or long-term debt, of the Company
or any of the Subsidiaries, or any material adverse change, or any development
involving or which could reasonably be expected to involve a prospective
material adverse change, in the condition (financial or other), business, net
worth or results of operations of the Company and the Subsidiaries, taken as a
whole.
(p) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Offering Memorandum
as being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except such as are (i) not materially important or
significant in relation to the Company and the Subsidiaries, taken as a whole,
or (ii) described in the Offering Memorandum or in a document filed as an
exhibit to an Incorporated Document, and all the property described in the
Offering Memorandum as being held under lease by the Company and each Subsidiary
is held by such entity under valid, subsisting and enforceable leases.
(q) Except as permitted by the Act, the Company has not distributed
and, prior to the later to occur of (i) the Closing Date or the Option Closing
Date, if any, and (ii) completion of the distribution of the Debentures, will
not distribute any offering material in connection with the offering and sale of
the Debentures other than the Preliminary Offering Memorandum and Offering
Memorandum.
(r) The Company and each of the Subsidiaries have such permits,
licenses, franchises, certificates and authorizations of governmental or
regulatory authorities ("Permits"), as are necessary to own their respective
properties and to conduct their respective businesses in the manner now being
conducted and as described in the Offering Memorandum or in an Incorporated
Document, subject to such qualifications as may be set forth in the Offering
Memorandum, except where the failure to have any such Permit would not have a
material adverse effect on the condition (financial or other), business,
11
properties, net worth, results of operations or prospects of the Company and the
Subsidiaries taken as a whole; the Company and each of the Subsidiaries have
each fulfilled and performed all of their respective material obligations with
respect to such Permits, and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of any such Permit,
subject in each case to such qualification as may be set forth in the Offering
Memorandum; and, except as described in the Offering Memorandum, such Permits
contain no restrictions that are materially burdensome to the Company or any of
the Subsidiaries.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) To the Company's knowledge, neither the Company nor any of its
Subsidiaries, nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character that would be required to be
disclosed in the Offering Memorandum if it were in a prospectus included in a
registration statement.
(u) There are no material Medicare or Medicaid recoupment or
recoupments of any third-party payor being sought, requested or claimed, or to
the Company's knowledge, threatened against the Company or any of the
Subsidiaries.
(v) The Company and each Subsidiary is in material compliance with
all applicable Federal, state and local environmental laws and regulations
including, without limitation, those applicable to emissions to the environment,
waste management and waste disposal (collectively, the "Environmental Laws"),
and to the Company's knowledge under current law, there are no existing
circumstances that would prevent, interfere with, or materially increase the
cost of such compliance in the future.
(w) Except as set forth in the Offering Memorandum, there is no
material claim under any Environmental Law, including common law, pending or, to
the Company's knowledge, threatened against the Company or any of the
Subsidiaries (an "Environmental Claim") and, to the Company's best knowledge,
under applicable law, there are no past or present actions, activities,
circumstances, events or incidents, including, without limitation, releases of
any material into the environment that would reasonably be expected to form the
basis of any material claim against the Company or any of the Subsidiaries.
(x) Except as described in the Offering Memorandum, no holder of any
security of the Company (other than holders of the Debentures and holders of
shares of Common Stock received upon conversion thereof) has any right to have
any Common Stock or other securities of the Company included in the Shelf
Registration Statement or to request or demand registration of shares of Common
Stock or any other security of the Company because of the consummation of the
transactions contemplated by this Agreement or the Registration Rights
Agreement. Except as described in the Offering Memorandum and the Registration
Rights Agreement, no person has the right, contractual or otherwise, to cause
the Company to sell or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Debentures. Except as described in or contemplated by
the Offering Memorandum, there are no outstanding options, warrants or other
rights calling for the issuance of, and, there are no commitments, plans or
arrangements to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable or exercisable for capital stock of
the Company.
12
(y) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Offering Memorandum as being owned by any of them or necessary
for the conduct of their respective businesses, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the rights of
the Company and the Subsidiaries with respect to the foregoing.
(z) The Company is not now, and after sale of the Debentures to be
sold by it hereunder and application of the net proceeds from such sale as
described in the Offering Memorandum under the caption "Use of Proceeds" will
not be, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(aa) Based upon the assumptions and subject to the qualifications set
forth therein, the statements made in the Offering Memorandum under the caption
"Certain United States Federal Income Tax Consequences" accurately summarize the
material United States federal income tax consequences of the ownership,
conversion and disposition of the Debentures for United States holders who
acquire Debentures on original issue and who hold Debentures as "capital assets"
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended.
(ab) The Company and each of the Subsidiaries have filed all tax
returns required to be filed or have filed for and have obtained extensions. All
tax returns filed by the Company and the Subsidiaries are complete and correct,
and neither the Company nor any of the Subsidiaries is in default in the payment
of any taxes which are payable pursuant to said returns or any assessments with
respect thereto. There have been no tax deficiencies asserted and, to the best
knowledge of the Company, no tax deficiency might be reasonably asserted or
threatened against the Company or any of the Subsidiaries that could,
individually or in the aggregate, have a Material Adverse Effect.
(ac) Except as otherwise disclosed in the Offering Memorandum, neither
the execution, delivery or performance of any agreement by the Company and, as
applicable, the Subsidiaries to acquire, merge into or consolidate with any
natural person, corporation, division of a corporation, partnership, trust,
joint venture, association, company or unincorporated corporation existing on
the date hereof (the "Acquisition Agreements") nor the consummation by the
Company and, as applicable, the Subsidiaries of the transactions contemplated
thereby (i) requires or required any consent, approval, authorization or other
order of, or registration with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as have been
obtained by the Company or the Subsidiaries in a timely fashion) or conflicted,
conflicts or will conflict with or constituted, constitutes or will constitute a
breach of, or a default under the certificate or articles of incorporation or
bylaws, or other organizational documents, of the Company or any of the
Subsidiaries or (ii) conflicted, conflicts or will conflict with or constituted,
constitutes or will constitute a material breach of, or a material default
under, any agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate any statute,
law, regulation or filing or judgment, injunction, order or decree applicable to
the Company or any of the Subsidiaries or any of their respective properties, or
will result in the creation or imposition of any lien, charge or incumbrance
upon any property or assets of the Company or any of the Subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of the property or assets of
any of them is subject.
(ad) To the best knowledge of the Company, and except as to any of the
following that, individually or in the aggregate would not have a material
adverse effect on the condition (financial or other), business, properties, net
worth or results of operations of the Company and the Subsidiaries taken as a
whole (i) there are no legal or governmental proceedings pending or threatened
against the Affiliated Practices (as defined in the Offering Memorandum) or
those ophthalmic and optometric practices which, upon completion of the
transactions contemplated by the Acquisition Agreements, will become Affiliated
Practices (together with the Affiliated Practices, the "Practices"); (ii) none
of the Practices is in
13
violation of its certificate or articles of incorporation or bylaws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Practices or of any decree of
any court or governmental agency or body having jurisdiction over the Practices
or in default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any agreement, indenture, lease or other instrument to which the Company or
any of the Subsidiaries is a party or by which any of their respective
properties may be bound, (iii) each Practice has such Permits as are necessary
to own such Practice's properties and to conduct such Practice's business in the
manner described in the Offering Memorandum, subject to such qualifications as
may be set forth in the Offering Memorandum; each Practice has fulfilled and
performed all its obligations with respect to such Permits, and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other impairment of the rights of the
holder of any such Permit, subject in each case to such qualifications as may be
set forth in the Offering Memorandum; and, except as described in the Offering
Memorandum, none of such Permits contains any restriction that is burdensome to
such Practice; and (iv) there are no Medicare or Medicaid recoupment or
recoupments of any third-party payor being sought, requested, claimed or
threatened against any of the Practices.
(ae) When the Debentures are issued and delivered pursuant to this
Agreement, such Debentures will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Act) as any security of the Company that is listed on
a national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated interdealer quotation system.
(af) After giving effect to the intended use of proceeds from the
offering of the Debentures as described in the Offering Memorandum under the
caption "Use of Proceeds," the Debentures do not constitute "corporate
acquisition indebtedness" within the meaning of Section 279 of the Internal
Revenue Code.
(ag) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D ("Regulation D") under the Act) of the Company has directly, or
through any agent (provided that no representation is made as to the Initial
Purchasers or any person acting on their behalf), (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Act) which is or will be integrated with the offering and sale of
the Debentures in a manner that would require the registration of the Debentures
under the Act or (ii) engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offering
of the Debentures.
(ah) The Company is not required to deliver the information specified
in Rule 144A(d)(4) in connection with the offering and resale of the Debentures
by the Initial Purchasers.
(ai) Assuming (i) that the representations and warranties in Section 2
hereof are true, (ii) the Initial Purchasers comply with the covenants set forth
in Section 2 hereof and (iii) that each person to whom the Initial Purchasers
offer, sell or deliver the Debentures is a Qualified Institutional Buyer, an
Institutional Accredited Investor or a person other than a U.S. person outside
the United States in reliance on Regulation S under the Act, the purchase and
sale of the Debentures pursuant hereto (including the Initial Purchasers'
proposed offering of the Debentures on the terms and in the manner set forth in
the Offering Memorandum and Section 2 hereof) is exempt from the registration
requirements of the Act. None of the Company, its Subsidiaries or affiliates or
any person acting on its or their behalf (provided that no representation is
made as to the Initial Purchasers or any person acting on their behalf) has
engaged in any directed selling efforts (as that term is defined in Regulation
S) with respect to the Debentures and the Company, its Subsidiaries and each
person acting on their behalf (provided that no representation is made as to the
Initial Purchasers or any person acting on their behalf) have complied with the
offering restrictions requirement of Regulation S.
(aj) The execution and delivery of this Agreement, the other Operative
Documents and the sale of the Debentures to the Initial Purchasers or by the
Initial Purchasers to Eligible Purchasers
14
will not involve any prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code. The representation made by the Company in the
preceding sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum under the section
entitled "Notice to Investors."
(ak) The Company is not required to obtain stockholder consent or
approval pursuant to the rules of the NYSE or any other securities exchange or
trading facility in connection with the offering and sale of the Debentures.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or Offering
Memorandum or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such Initial
Purchaser furnished in writing to the Company by or on behalf of any Initial
Purchaser expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of any Initial Purchaser (or
to the benefit of any person controlling any Initial Purchaser) on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Debentures by such Initial Purchaser to any person if the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in the Preliminary Offering Memorandum was corrected in the Offering
Memorandum and such Initial Purchaser sold Debentures to that person without
sending or giving at or prior to the written confirmation of such sale, a copy
of the Offering Memorandum (as then amended or supplemented) if the Company has
previously furnished sufficient copies thereof to the several Initial
Purchasers. The foregoing indemnity agreement shall be in addition to any
liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Initial Purchaser or any person controlling any Initial Purchaser in respect of
which indemnity may be sought against the Company, such Initial Purchaser or
such controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses; provided, however, that the omission so to notify the
Company shall not relieve the Company from any liability that it may have to any
Initial Purchaser (except to the extent that the Company is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). Such Initial Purchaser or any such controlling person shall have
the right to employ separate counsel in any such action, suit or proceeding and
to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Initial Purchaser or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Initial Purchaser or such controlling person and the
Company and representation of the Company by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Company shall not
have the right to assume the defense of such action, suit or proceeding on
behalf of such Initial Purchaser or such controlling person). It is understood,
however, that the Company shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all
15
such Initial Purchasers and controlling persons not having actual or potential
differing interests with the Initial Purchasers or among themselves, which firm
shall be designated in writing by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., and that all such
reasonable fees and expenses shall be reimbursed as they are incurred. The
Company shall not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Company agrees to indemnify and hold harmless
any Initial Purchaser, to the extent provided in paragraph (a), and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Initial Purchaser agrees to indemnify and hold harmless the
Company, and its directors and officers, and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the indemnity from the Company to each Initial Purchaser set
forth in paragraph (a) hereof, but only with respect to information relating to
such Initial Purchaser furnished in writing by or on behalf of such Initial
Purchaser expressly for use in the Preliminary Offering Memorandum or Offering
Memorandum or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors or
officers, or any such controlling person based on the Preliminary Offering
Memorandum or Offering Memorandum, or any amendment or supplement thereto, and
in respect of which indemnity may be sought against any Initial Purchaser
pursuant to this paragraph (c), such Initial Purchaser shall have the rights and
duties given to the Company by paragraph (b) above (except that if the Company
shall have assumed the defense thereof such Initial Purchaser shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at such
Initial Purchaser's expense), and the Company, its directors and officers, and
any such controlling person shall have the rights and duties given to the
Initial Purchasers by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Initial Purchasers may otherwise
have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Debentures, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial
Purchasers on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Initial Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Initial Purchasers, in each case as set forth in
the table on the cover page of the Offering Memorandum; provided that, in the
event that the Initial Purchasers shall have purchased any Additional Debentures
hereunder, any determination of the relative benefits received by the Company or
the Initial Purchasers from the offering of the Debentures shall include the net
proceeds (before deducting expenses) received by the Company, and the discounts
and commissions received by the Initial Purchasers, from the sale of such
Additional Debentures, in each case computed on the basis of the respective
amounts set forth in the notes to the table on the cover page of the Offering
Memorandum. The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Initial Purchasers on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
16
(e) The Company and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 6, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price of the Debentures sold by it to Eligible Purchasers
exceeds the amount of any damages which such Initial Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute pursuant to
this Section 6 are several in proportion to the respective numbers of Firm
Debentures set forth opposite their names in Schedule I hereto and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser, the Company, its directors or officers or any
person controlling the Company, (ii) acceptance of any Debentures and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Initial Purchaser or any person controlling any Initial Purchaser, or to the
Company, its directors or officers or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 6.
7. Conditions of the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Firm Debentures hereunder
are subject to the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, be
contemplated. No stop order suspending the sale of the Debentures in any
jurisdiction designated by the Initial Purchasers shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Company, shall be contemplated.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the business, financial condition or results of
operations of the Company or the Subsidiaries not contemplated by the Offering
Memorandum, which in the opinion of the Initial Purchasers, would materially
adversely affect the market for the Debentures, or (ii) any event or development
relating to or involving the Company or any officer or director of the Company
which makes any statement made in the Offering Memorandum untrue or which, in
the opinion of the Company and its counsel or the Initial Purchasers and their
counsel, requires the making of any addition to or change in the Offering
Memorandum in order to state a material fact
17
required by any law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Offering
Memorandum to reflect such event or development would, in the opinion of the
Initial Purchasers, materially adversely affect the market for the Debentures.
(c) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Company, dated the Closing
Date and addressed to the Initial Purchasers, to the effect that:
(i) The Incorporated Documents (except for the financial
statements and the notes thereto and the schedules and other financial and
statistical data included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements of the
Exchange Act;
(ii) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum (and any
amendment or supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or
qualify does not have a Material Adverse Effect;
(iii) All of the Company's Subsidiaries, including the
Corporate Subsidiaries, LLC Subsidiaries and Partnership Subsidiaries, that
would be required to be listed as an exhibit pursuant to Item 601(b)(21) of
Regulation S-K are referred to herein individually as a "Material Subsidiary"
and collectively as the "Material Subsidiaries." Each Material Subsidiary that
is a corporation has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its organization; each Material
Subsidiary that is a limited liability company is duly organized and validly
existing under the laws in the jurisdiction of its organization; and each
Material Subsidiary that is a partnership has been duly organized and is an
existing partnership under the laws of the jurisdiction of its organization.
Each Material Subsidiary has full corporate, limited liability company, or
partnership, as the case may be, power and authority to own, lease, and operate
its properties and to conduct its business as described in the Offering
Memorandum (and any amendment or supplement thereto); all the outstanding shares
of capital stock of each of the Material Subsidiaries that is a corporation have
been duly authorized and validly issued, are fully paid and nonassessable, and
are owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any perfected security interest, or, to the best
knowledge of such counsel after reasonable inquiry, any other security interest,
lien, adverse claim, equity or other encumbrance, except as described in the
Offering Memorandum or on Schedule II hereto; all the outstanding membership
interests in the Material Subsidiaries that are limited liability companies have
been duly authorized and validly issued and such interests are owned by the
Company directly, or indirectly through one of the other Subsidiaries, free and
clear of any lien, adverse claim, security interest, equity or other
encumbrance, except as disclosed in the Offering Memorandum or on Schedule II
hereto; and all the outstanding partnership interests in the Material
Subsidiaries are owned by the Company directly, or indirectly through one of the
other Subsidiaries free and clear of any lien, adverse claim, security interest,
equity or other encumbrances, except as disclosed in the Offering Memorandum or
on Schedule II hereto.
(iv) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and the Registration Rights
Agreement and to issue, sell and deliver the Debentures to be sold by it to the
Initial Purchasers as provided herein, and this Agreement and the Registration
Rights Agreement have each been duly authorized, executed and delivered by the
Company and each constitutes a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as enforcement of rights to
indemnity and contribution under each agreement may be limited by Federal or
state securities laws or principles of public policy and except to the extent
that enforceability of each agreement is subject to (i) applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization,
18
moratorium or other similar laws now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of equity;
(v) The Indenture has been duly and validly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as enforcement of rights to
indemnity and contribution thereunder may be limited by Federal or state
securities laws or principles of public policy and except to the extent that
enforceability thereof is subject to (i) applicable bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting creditors' rights generally and (ii) general
principles of equity (including, without limitation, standards of materiality,
good faith, fair dealing and reasonableness) whether such principles are
considered in a proceeding at law or in equity;
(vi) The Debentures have been duly and validly authorized by
the Company and when executed by the Company in accordance with the Indenture
and, assuming due authentication of the Debentures by the Trustee, upon delivery
to the Initial Purchasers against payment therefor in accordance with the terms
hereof, will have been validly issued and delivered, and will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture, except to the extent that enforceability thereof is subject to (i)
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of equity (including, without
limitation, standards of materiality, good faith, fair dealing and
reasonableness), whether such principles are considered in a proceeding at law
or in equity;
(vii) The shares of Common Stock issuable upon conversion of
the Debentures have been duly authorized and reserved for issuance and, when
issued and delivered upon conversion of the Debentures, in accordance with the
terms thereof, will be validly issued, fully paid and nonassessable and will be
free of any preemptive, or to the best knowledge of such counsel after
reasonable inquiry, similar rights ;
(viii) The authorized and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the Offering
Memorandum; and the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Offering Memorandum under the caption "Description of Capital Stock";
(ix) All the shares of capital stock of the Company
outstanding prior to the issuance of the Debentures to be issued and sold by the
Company hereunder have been duly authorized and validly issued and are fully
paid and nonassessable;
(x) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Company (except as have been obtained under the Exchange Act, or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Debentures, or such as may be required to qualify the
Indenture under the 1939 Act, and such as may be required in connection with the
performance by the Company of its obligations under the Registration Rights
Agreement, as to which counsel need not express any opinion) for the valid
issuance and sale of the Debentures to the Initial Purchasers as contemplated by
this Agreement;
(xi) Neither the offer, sale or delivery of the Debentures,
nor the issuance of Common Stock upon conversion of the Debentures in accordance
with the terms of the Debentures, nor the execution, delivery or performance by
the Company of this Agreement, the Registration Rights Agreement or the
Indenture, nor compliance by the Company with the provisions hereof or thereof,
nor consummation by the Company of the transactions contemplated hereby or
thereby, (A) conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under the certificate or articles of incorporation or
bylaws or other organizational documents of the Company or any of the Material
19
Subsidiaries or any agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or any of
their respective properties is bound that is an exhibit to any Incorporated
Document or is known to such counsel after reasonable inquiry, or (B) will
result in the creation or imposition of any material lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries, nor will
any such action result in any violation of any existing law, or any regulation,
ruling (assuming compliance with all applicable state securities and Blue Sky
laws and, in the case of the Registration Rights Agreement, the Act, the
Exchange Act and the 1939 Act), judgment, injunction, order or decree known to
such counsel, and applicable to the Company, the Subsidiaries or any of their
respective properties;
(xii) To the best knowledge of such counsel, (A) other than as
described or contemplated in the Offering Memorandum (or any supplement
thereto), there are no legal or governmental proceedings pending or threatened
against the Company or any of the Subsidiaries, or to which the Company or any
of the Subsidiaries, or any of their property, are subject, which are of the
type that would be required to be described in any of the Incorporated Documents
and (B) there are no agreements, contracts, indentures, leases or other
instruments, that are of the type that would be required to be described in the
Offering Memorandum if it were a prospectus included in a registration statement
on Form S-3 under the Act but are not described would be as required, or that
are required to be filed as an exhibit to any of the Incorporated Documents that
are not so filed as required;
(xiii) No registration of the Debentures under the Act nor
qualification of the Indenture under the 1939 Act is required for the sale of
the Debentures to the Initial Purchasers as contemplated in this Agreement or
for the Exempt Resales (assuming (A) that all representations and warranties
made by the Initial Purchasers and the Company in this Agreement and in the
Offering Memorandum are true, correct and accurate (including but not limited to
the representations by the Initial Purchasers and the Company regarding the
absence of general solicitation in connection with the Exempt Resales and
regarding offers and sales outside the United States in reliance on Regulation
S), (B) the Initial Purchasers comply with all of the covenants set forth in
this Agreement (including but not limited to the covenants set forth in Section
2 hereof), (C) none of the Company, its Subsidiaries and each person acting on
its or their behalf have complied with the offering restrictions requirements of
Regulation S, (D) that each person to whom the Initial Purchasers offer, sell or
deliver the Debentures in the Exempt Resales is (x) a Qualified Institutional
Buyer, (y) an Institutional Accredited Investor or (z) a person other than a
U.S. person outside the United States in reliance on Regulation S under the Act,
and (E) that the representations made by each person to whom Debentures are sold
in reliance on Rule 144A or Regulation S are true, correct and accurate);
(xiv) To the best knowledge of such counsel after reasonable
inquiry, neither the Company, nor any of the Subsidiaries is in violation of any
law, ordinance, administrative or governmental rule or regulation applicable to
the Company, or any of the Subsidiaries, or of any decree of any court or
governmental agency or body having jurisdiction over the Company, or any of the
Subsidiaries, the effect of which could have a Material Adverse Effect on the
Company and the Subsidiaries, taken as a whole;
(xv) The statements in the Offering Memorandum, insofar as
they are descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, are accurate and present fairly
the information shown;
(xvi) Except as disclosed in the Offering Memorandum or
permitted pursuant to this Agreement, such counsel does not know of any
outstanding option, warrant or other right calling for the issuance of, and such
counsel does not know of any commitment, plan or arrangement to issue, any share
of capital stock of the Company or any security convertible into or exchangeable
or exercisable for capital stock of the Company; and, except as described in the
Offering Memorandum, such counsel does not know of any holder of any security of
the Company (except for holders of the Debentures and the Common Stock issuable
upon conversion thereof) or any other person who has the right, contractual or
20
otherwise, to cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Debentures or the right to have any
Common Stock or other securities of the Company included in the Shelf
Registration Statement or the right, as a result of the consummation of the
transactions contemplated by the Operative Documents, to require registration
under the Act of any shares of Common Stock or other securities of the Company;
(xvii) To the knowledge of such counsel, the Company, and each
Subsidiary, is in material compliance with all Environmental Laws and there are
no circumstances that would prevent or materially interfere with such compliance
in the future;
(xviii) Except as set forth in the Offering Memorandum, to the
knowledge of such counsel, there is no material Environmental Claim pending
against the Company, or the Subsidiaries, and there are no past or present
actions, activities, circumstances, events or incidents, including, without
limitation, releases of any material into the environment that could form the
basis of any Environmental Claim against the Company, or the Subsidiaries;
(xix) To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the Subsidiaries is in violation in any
material respect of its respective certificate or articles of incorporation or
bylaws, or other organizational documents, or is in default in the performance
of any material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness, except as may be disclosed in
the Offering Memorandum;
(xx) Neither the execution, delivery or performance of the
Acquisition Agreements, compliance by the Company and the Subsidiaries with the
provisions thereof nor consummation by the Company and the Subsidiaries of the
transactions contemplated thereby conflicted, conflicts or will conflict with or
constituted, constitutes or will constitute a breach of, or a default under, the
certificates or articles of incorporation or bylaws or other organizational
documents of the Company or any of the Subsidiaries or any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties is bound
that is an exhibit to an Incorporated Document or is known to such counsel after
reasonable inquiry (except where appropriate waivers or consents thereto have
heretofore been obtained by the Company), or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries, nor will any such action result in any
violation of any existing law, regulation, ruling, judgment, injunction, order
or decree known to such counsel after reasonable inquiry, applicable to the
Company, the Subsidiaries or any of their respective properties;
(xxi) When the Debentures are issued and delivered pursuant to
this Agreement, such Debentures will not be of the same class (within the
meaning of Rule 144A(d)(3) under the Act) as any security of the Company that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated interdealer
quotation system;
(xxii) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of the
Debentures by the Initial Purchasers; and
(xxiii) Based upon the assumptions and subject to the
qualifications set forth therein, the statements made in the Offering Memorandum
under the caption "Certain United States Federal Income Tax Consequences"
accurately summarize the material United States federal income tax consequences
of the ownership, conversion and disposition of the Debentures for United States
holders who acquire Debentures on original issue and who hold Debentures as
"capital assets" within the meaning of Section 1221 of the Internal Revenue Code
of 1986, as amended;
(xxiv) The Company is not required to obtain stockholder consent
or approval pursuant to the rules of the NYSE in connection with the issuance,
offering and resale of the Debentures.
21
In addition, such counsel shall state that, although such counsel has
not undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Offering Memorandum, such
counsel has participated in the preparation of the Offering Memorandum,
including review and discussion of the content thereof, and nothing has come to
the attention of such counsel that has caused it to believe that the Offering
Memorandum, as of its date, and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that any amendment or supplement to the Offering
Memorandum, as of its date, and as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an 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 (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto and the
schedules and other financial and statistical data included or incorporated by
reference in the Offering Memorandum).
In rendering their opinion as aforesaid, counsel may rely, as to
factual matters, upon certificates of officers of the Company attached to such
opinion, and may rely upon an opinion or opinions, each dated the Closing Date
or the Option Closing Date, as the case may be, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the corporation law of the State of Delaware; provided, that, (1) each such
local counsel is acceptable to the Initial Purchasers, (2) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Initial Purchasers and is, in form and substance,
satisfactory to them and counsel of the Initial Purchasers and (3) counsel shall
state in their opinion that they believe that they and the Initial Purchasers
are justified in relying thereon.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, dated the
Closing Date, and addressed to the Initial Purchasers, with respect to the
matters referred to in clauses (i), (iv), (v), (vi), (vii) and (xiii) of the
foregoing paragraph (c), and the penultimate paragraph of the foregoing
paragraph (c) and such other related matters as the Initial Purchasers may
request.
(e) The Initial Purchasers shall have received letters addressed to
the Initial Purchasers, and dated the date hereof from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
▇▇▇▇▇ & ▇▇▇▇▇ LLP, Wallingford McDonald, Fox & Co., P.C. and Coopers and ▇▇▇▇▇▇▇
LLP, independent certified public accountants, and a letter dated the Closing
Date from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, substantially in the forms heretofore approved by
the Initial Purchasers.
(f)(i) There shall not have been any material change in the capital
stock of the Company nor any material increase in the short-term or long-term
debt of the Company (other than in the ordinary course of business) from that
set forth or contemplated in the Offering Memorandum (or any amendment or
supplement thereto); (ii) there shall not have been, since the respective dates
as of which information is given in the Offering Memorandum (or any amendment or
supplement thereto), except as may otherwise be stated in the Offering
Memorandum (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole; (iii) the
Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and the Subsidiaries, taken as a whole, other than
those reflected in the Offering Memorandum (or any amendment or supplement
thereto); and (iv) all the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date, and the Initial Purchasers shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to the Initial Purchasers), to the effect set forth in this Section
7(f) and in Section 7(g) hereof.
22
(g) The Company shall not have failed in any material respect at or
prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(h) The Initial Purchasers shall have received a certificate dated the
Closing Date signed by the chief financial officer of the Company substantially
in the form approved by the Initial Purchasers, respecting the Company's
compliance with the financial covenants set forth in its credit agreements (the
"Credit Agreements") with NationsBank of Tennessee, N.A.
(i) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of Rule
436(g) under the Act, that (i) it is downgrading its rating assigned to any
class of securities of the Company, or (ii) it is reviewing its ratings assigned
to any class of securities of the Company with a view to possible downgrading,
or with negative implications, or direction not determined.
(j) The Debentures shall have been designated for trading on PORTAL.
(k) The Company shall have executed and delivered the Indenture and
the Registration Rights Agreement.
(l) The Company shall have received at or prior to the Closing Date
the requisite written consent of NationsBank of Tennessee, N.A. with respect to
the Credit Agreements to the consummation by the Company of the transactions
contemplated by the Operative Documents and the Offering Memorandum.
(m) The Company shall have furnished or caused to be furnished to the
Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers.
Any certificate or document signed by any officer of the Company and
delivered to the Initial Purchasers, or to counsel for the Initial Purchasers,
shall be deemed a representation and warranty by the Company to the Initial
Purchasers as to the statements made therein.
The obligations of the Initial Purchasers to purchase any Additional
Debentures hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 7, except that, if any
Option Closing Date is other than the Closing Date, the certificates, opinions
and letters referred to in paragraphs (c) through (f) and paragraphs (h) and (m)
shall be dated the Option Closing Date in question and the opinion called for by
paragraphs (c) and (d) shall be revised to reflect the sale of Additional
Debentures.
8. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction of the
Offering Memorandum (including financial statements thereto), and each amendment
or supplement thereto; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Offering Memorandum, the Preliminary Offering Memorandum,
the Incorporated Documents, and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale of
the Debentures; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Debentures, including any stamp taxes in
connection with the original issuance and sale of the Debentures; (iv) the
printing (or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection
23
with the offering of the Debentures; (v) the application for designation of the
Debentures on PORTAL; (vi) the registration of the Common Stock and the listing
of the shares of Common Stock issuable upon conversion of the Debentures on the
NYSE; (vii) the qualification of the Debentures and the shares of Common Stock
issuable upon conversion of the Debentures for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 4(f)
hereof (including the reasonable fees and expenses and disbursements of counsel
for the Initial Purchasers relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such qualification); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Debentures; (ix) the performance
by the Company of its obligations under the Registration Rights Agreement; and
(x) the fees and expenses of the Company's accountants and the fees and expenses
of counsel (including local and special counsel) for the Company.
9. Effective Date of Agreement. This Agreement shall become
effective upon the execution and delivery hereof by all the parties hereto.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company, by notifying the Initial Purchasers, or by the
Initial Purchasers, by notifying the Company.
Any notice under this Section 9 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
10. Default by an Initial Purchaser. If any one or more of the
Initial Purchasers shall fail or refuse to purchase the Debentures which it is
obligated to purchase on the Closing Date, and arrangements satisfactory to the
non-defaulting Initial Purchasers or by another party or parties satisfactory to
the non-defaulting Initial Purchasers and the Company for the purchase of such
Debentures by the non-defaulting Initial Purchasers and the Company are not made
within thirty-six (36) hours after such default, this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchasers or the
Company. In any such case which does not result in termination of this
Agreement, either the non-defaulting Initial Purchasers or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven (7) days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve the defaulting Initial Purchasers
from liability in respect of such default under this Agreement. The term
"Initial Purchaser" as used in this Agreement includes, for all purposes of this
Agreement, any party not identified in this Agreement who purchases Debentures
which a defaulting Initial Purchaser is obligated, but fails or refuses to
purchase.
11. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Company, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Debentures), as the
case may be, (i) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or The Nasdaq Stock Market's National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either federal or
state authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Initial Purchasers, impracticable or inadvisable to commence or continue the
offering of the Debentures on the terms set forth on the cover page of the
Offering Memorandum or to enforce contracts for the resale of the Debentures by
the Initial Purchasers. Notice of such termination may be given to the Company
by telegram, telecopy or telephone and shall be subsequently confirmed by
letter.
12. Information Furnished by the Initial Purchasers. The statements
set forth in the stabilization legend on the inside front cover, the last
paragraph on the cover page and in the third, fourth and fifth paragraphs under
the caption "Plan of Distribution" in the Preliminary Offering Memorandum
24
and Offering Memorandum, constitute the only information furnished by or on
behalf of the Initial Purchasers, as such information is referred to in Sections
5(b) and 6 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 4, 9 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at Three Lincoln Center, Suite 1540, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Senior Vice President or (ii) if to the
Initial Purchasers, to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, the Company, its directors, its officers and the controlling
persons referred to in Section 6 hereof and their respective successors and
assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Initial Purchasers of any of the Debentures
in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York without giving
effect to the choice of laws or conflict of laws principles thereof.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
25
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchasers.
Very truly yours,
Physicians Resource Group, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
----------------------
Confirmed as of the date first
above mentioned.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇, Read & Co. Inc.
Salomon Brothers Inc
▇▇▇▇▇, ▇▇▇▇▇ & Company
By: ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
MANAGING DIRECTOR
26
SCHEDULE I
PHYSICIANS RESOURCE GROUP, INC.
Principal Amount
Initial Purchaser of Firm Debentures
----------------- ------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.................... $62,500,000
Alex. ▇▇▇▇▇ & Sons Incorporated..... 21,250,000
▇▇▇▇▇▇, Read & Co. Inc.............. 18,750,000
Salomon Brothers Inc................ 18,750,000
▇▇▇▇▇, ▇▇▇▇▇ & Company.............. 3,750,000
------------
Total $125,000,000
============
SCHEDULE II
CORPORATIONS:
1. EyeCorp, Inc.
2. The EyePA, Inc.
3. Eyecare Resource, Inc.
4. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
5. Rivergate Anesthesia, Inc.
6. Rivergate Surgical Center, Inc.
7. Creve Coeur Surgery Center, Inc.*
8. PRG Acquisition Corporation
9. PRG Arizona, Inc.
10. Mohave Surgery Center, Inc.*
11. PRG Arizona II, Inc.
12. PRG Arkansas, Inc.
13. PRG California, Inc.
14. PRG California I, Inc.
15. PRG California II, Inc.
16. PRG California III, Inc.
17. PRG California IV, Inc.
18. Superior Eye Care, Inc.
19. PRG Florida, Inc.
20. PRG Florida I, Inc.
21. PRG Florida II, Inc.
22. PRG Florida III, Inc.
23. PRG Florida IV, Inc.
24. PRG Florida V, Inc.
25. PRG Florida VI, Inc.
26. PRG Florida VII, Inc.
27. PRG Florida VIII, Inc.
28. PRG Florida IX, Inc.
29. PRG Florida X, Inc.
30. PRG Florida XI, Inc.
31. PRG Florida XII, Inc.
32. Melbourne Eye Associates, Inc.
33. Melbourne Eye Associates of Brevard, Inc.
34. PRG Georgia, Inc.
35. PRG Illinois, Inc.
36. PRG Illinois I, Inc.
37. PRG Illinois II, Inc.
38. PRG Illinois III, Inc.
39. PRG Kentucky, Inc.
40. PRG Nevada, Inc.
41. PRG Nevada, I, Inc.
42. PRG Nevada II, Inc.
43. PRG Nevada III, Inc.
44. PRG New Jersey, Inc.
45. PRG North Carolina, Inc.
46. PRG Ohio, Inc.
47. PRG Ohio, II, Inc.
48. PRG Ohio III, Inc.
49. PRG Ohio IV, Inc.
50. PRG Ohio V, Inc.
51. PRG Oklahoma, Inc.
52. PRG Oklahoma I, Inc.
53. PRG South Carolina, Inc.
54. PRG Tennessee, Inc.
55. PRG Tennessee I, Inc.
56. PRG Tennessee II, Inc.
57. PRG Tennessee III, Inc.
58. ▇▇▇ ▇▇▇▇ Ambulatory Surgery Center, Inc.*
59. Sun Valley Acquisition Corporation
60. Texas PRG, Inc.
61. Texas PRG I, Inc.
62. Texas PRG II, Inc.
63. Texas PRG III, Inc.
64. Texas PRG IV, Inc.
65. Texas PRG V, Inc.
66. Texas PRG VI, Inc.
67. Texas PRG VII, Inc.
68. Texas PRG VIII, Inc.
69. Texas PRG IX, Inc.
60. Texas PRG X, Inc.
71. Texas PRG XI, Inc.
72. Texas PRG XII, Inc.
73. Texas PRG XIII, Inc.
74. Texas PRG XIV, Inc.
75. Texas PRG XV, Inc.
76. Texas PRG XVI, Inc.
77. Physicians Resource Group Investments, Inc.
78. Physicians Resource Group Realty, Inc.
79. PRG Realty II, Inc.
80. PRG Payroll, Inc.
81. American Ophthalmic, Inc.
82. Fort Lauderdale Eye Institute, Inc., d/b/a Ft. Lauderdale Eye Institute
83. American Surgery Centers of South Florida, Inc.
84. American Surgery Centers of Sarasota, Inc.
85. American Ophthalmic of Coral Gables, Inc., d/b/a The Gables Eye ▇▇▇▇▇▇▇▇▇
▇▇. American Surgery Centers of Coral Gables, Inc., d/b/a American Surgery
Centers of Coral Gables, d/b/a The Gables Eye Surgical Center
87. American Ophthalmic of Central Florida, Inc., d/b/a Guber Eye Center
88. Central Florida Eye Surgery Associates, Inc, d/b/a ▇▇▇▇▇▇▇▇ Eye
Institute, d/b/a Eye Foundation
89. AOI Network, Inc.
90. American Ophthalmic of Tallahassee, Inc., d/b/a Tallahassee Laser &
Cataract Institute
91. American Surgery Centers of Tallahassee, Inc.
92. American Ophthalmic of Lake County, Inc., d/b/a Lake Eye Associates
93. American Ophthalmic of Miami, Inc., d/b/a Eye Institute of South Florida
94. American Ophthalmic of Texas, Inc., d/b/a Texan Eye Center, d/b/a Eye
Care Austin
95. American Ophthalmic of San Antonio, Inc., d/b/a South Texas Family Eye
Centers, d/b/a Southwest Eye Clinic
96. American Surgery Centers of San Antonio, Inc.
97. American Ophthalmic of Southeast Texas, Inc., d/b/a Eye Institute of San
Antonio
98. American Surgery Centers of Temple, Inc.
99. American Ophthalmic of Temple, Inc., d/b/a Eye Center of Central Texas
100. AOI Surgery Centers of Charleston, Inc.
101. American Ophthalmic of Alabama Inc., d/b/a Eye Institute of the South,
previously d/b/a Eye Center of the South
102. American Surgery Centers of Alabama, Inc.
103. American Ophthalmic of Dothan, Inc., d/b/a Southeast Eye Clinic
104. Glendale Eye, Inc., d/b/a Glendale Eye Medical Group
105. American Surgery Centers of Glendale, Inc.
106. American Ophthalmic of Los Angeles, Inc., d/b/a Tri County Eye Institute
107. American Ophthalmic of Nevada, Inc., d/b/a Shearing Eye Institute
108. American Ophthalmic of Reno, Inc., d/b/a Nevada Medical Eye Center
109. American Ophthalmic of Las Vegas, Inc., d/b/a Ophthalmic Associates
110. American Surgery Centers of Las vegas, Inc.
111. Vision International, Inc., a/k/a VI, Inc. *
LIMITED PARTNERSHIPS:
1. Eye Surgery Center of the Desert, Ltd. *
2. PRG Ohio, L.P.
3. Ambulatory Eye Surgery Center of Louisiana Limited Partnership *
4. Eye Surgery Center of Central Illinois Limited Partnership *
5. American Surgery Centers of Alabama, Ltd., d/b/a American Surgery Center *
6. American Surgery Centers of Glendale, Ltd. *
7. Center for Advanced Eye Surgery, Ltd., d/b/a Center for Advanced Eye
Surgery *
8. American Surgery Center of South Florida, Ltd., d/b/a Foundation for
Advanced Eye Care *
9. American Surgery Centers of Coral Gables, Ltd. *
10. American Surgery Centers of Tallahassee, Ltd.
11. American Surgery Centers of Las Vegas, Ltd., d/b/a Sahara-▇▇▇▇▇▇▇ Surgery
Center *
12. American Surgery Centers of South Texas, Ltd., previously d/b/a South
Texas Institute of Eye Surgery *
13. Central Texas Day Surgery Center, Ltd., d/b/a Central Texas Day Surgery
Center
14. AOI Surgery Centers of Charleston, Ltd.
15. Vision International Refractive Surgery Limited Partnership *
16. Vision International Limited Partnership *
17. Vision International Florida I, Limited Partnership *
18. Vision International North Carolina I, Limited Partnership *
GENERAL PARTNERSHIPS:
1. G.C.R. Investors
2. Central Florida Eye Associates
3. Manatee Ophthalmic Joint Venture *
LIMITED LIABILITY COMPANIES:
1. Ophthalmic Laser Center, L.L.C. *
2. Lebec, L.C. *
NOTE: * - subsidiary is not wholly owned subsidiary of PRG or a PRG
subsidiary
EXHIBIT A
FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
--------------------------------------------------------------------
Physicians Resource Group. Inc.
Three Lincoln Center, Suite 1540
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇, Read & Co. Inc.
Salomon Brothers Inc
▇▇▇▇▇, ▇▇▇▇▇ & Company
As Initial Purchasers
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
We are delivering this letter in connection with an offering of 6%
Convertible Subordinated Debentures due 2001 (the "Debentures"), which are
convertible into shares of the Common Stock, $0.01 par value (the "Common
Stock"), of Physicians Resource Group, Inc. (the "Company"), all as described in
the Offering Memorandum (the "Offering Memorandum") relating to the offering.
We hereby confirm that:
(i) we are an institution that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (the "Securities Act"), or an entity in which all of the
equity owners are accredited investors within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor");
(ii)(A) any purchase of Debentures by us will be for our own account
or for the account of one or more other Institutional Accredited Investors
or as fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring
Debentures as fiduciary for the account of one or more institutions for
which we exercise sole investment discretion;
(iii) in the event that we purchase any Debentures, we will acquire
Debentures having a minimum principal amount of not less than $100,000 for
our own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing the Debentures;
(v) we are not acquiring Debentures with a view to distribution
thereof or with any present intention of offering or selling Debentures or
the Common Stock issuable upon conversion thereof, except as permitted
below; provided that the disposition of our property and property of any
accounts for which we are acting as fiduciary shall remain at all times
within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Debentures.
We understand that the Debentures are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and any applicable state securities laws and that the Debentures
and the shares of Common Stock issuable upon conversion thereof have not been
registered under such laws, and we agree, on our own behalf and on behalf of
each account for which we acquire any Debentures, that if in the future we
decide to resell or otherwise transfer such Debentures or the Common Stock
issuable upon conversion thereof, such Debentures or Common Stock may be resold
or otherwise transferred only (a) to the Company, or any of its subsidiaries or
(b) pursuant to a registration statement which has been declared effective under
the Securities Act or (c) for so long as the Debentures are eligible for resale
pursuant to Rule 144A under the Securities Act, to a person the holder
reasonably believes is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act ("QIB") that purchases for its own account or
for the account of a QIB and to whom notice is given that the transfer is being
made in reliance on Rule 144A, (d) to an Institutional Accredited Investor that,
prior to such transfer, furnishes to the transfer agent or registrar for such
securities a signed letter containing certain representations and agreements
relating to the restrictions on transfer of such securities (the form of which
letter can be obtained from such transfer agent or registrar), (e) pursuant to
offers and sales to non-U.S. persons that occur outside the United States within
the meaning of Regulation S under the Securities Act, or (f) pursuant to any
other available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of its property or the property of such investor account or accounts
be at all times within its or their control and subject to any applicable
securities laws. We further agree to provide any person purchasing from us any
of the Debentures or the Common Stock issuable upon conversion thereof other
than pursuant to clause (b) above a notice advising such purchaser that resales
of such securities are restricted as stated herein. We understand that the
registrar and transfer agent for the Debentures and the Common Stock will not be
required to accept for registration of transfer any Debentures or any shares of
Common Stock issued upon conversion of the Debentures except upon presentation
of evidence satisfactory to the Company that the foregoing restrictions on
transfer have been complied with. We further understand that any Debentures and
any certificates representing Common Stock will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph other than certificates representing Common
Stock transferred pursuant to clause (b) above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
______________________________
(Name of Purchaser)
______________________________
By:
Name:
Title:
Address:
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
-----------------------------
EXHIBIT C
LOCK-UP AGREEMENT
-----------------
EXHIBIT C
PHYSICIANS RESOURCE GROUP, INC.
LOCK-UP AGREEMENT
, 1996
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇, ▇▇▇▇▇ & SONS, INCORPORATED
▇▇▇▇▇▇, READ & CO. INC.
SALOMON BROTHERS INC
▇▇▇▇▇, ▇▇▇▇▇ & COMPANY
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned has been advised that ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇ ▇▇▇▇▇ & Sons
Incorporated, ▇▇▇▇▇▇, Read & Co. Inc., Salomon Brothers Inc and ▇▇▇▇▇, ▇▇▇▇▇ &
Company (collectively, the "Initial Purchasers") propose to enter into a
Purchase Agreement with Physicians Resource Group, Inc., a Delaware corporation
(the "Company"), with respect to the offering (the "Offering") of the
Convertible Subordinated Debentures, due 2001, of the Company (the
"Debentures"). In consideration of the Initial Purchasers' agreement to purchase
the Debentures and to participate in the Offering, and for other good and
valuable consideration, the undersigned hereby irrevocably agrees that the
undersigned will not, directly or indirectly, without the prior written consent
of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,(i) for a period of 90 days after the date of the Offering
Memorandum relating to the Offering sell, offer to sell, solicit an offer to
buy, contract to sell, pledge, grant any option for the sale of, or otherwise
transfer or dispose of, or cause the transfer or disposition of, any of the
common stock, par value $.01 per share, of the Company ("Common Stock") or any
securities convertible into or exchangeable or exercisable for Common Stock or
(ii) in connection with the Offering and for 90 days after the date of the
Offering Memorandum relating thereto exercise any registration rights, whether
held by the undersigned on the date hereof or hereafter acquired, with respect
to any Common Stock or any securities convertible into or exchangeable or
exercisable for any Common Stock. Prior to the expiration of such 90-day period,
the undersigned will not announce or disclose any intention to do anything after
the expiration of such 90-day period, the undersigned will not announce or
disclose any intention to do anything after the expiration of such period which
the undersigned is prohibited, as provided in the preceding sentence, from doing
such period.
The undersigned agrees that the provisions of this agreement shall be
binding also upon the successors, assigns, heirs and personal representatives of
the undersigned.
In furtherance of the foregoing, the Company and ChaseMellon Shareholder
Services, L.L.C., the Company's transfer agent and registrar, are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this agreement.
Very truly yours,
___________________________________
Signature
___________________________________
Printed Name